Illinois 2025-2026 Regular Session

Illinois House Bill HB1458 Compare Versions

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

Old	New	Differences
1	1	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1458 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED: 35 ILCS 105/2 from Ch. 120, par. 439.235 ILCS 110/2 from Ch. 120, par. 439.3235 ILCS 115/2 from Ch. 120, par. 439.10235 ILCS 120/135 ILCS 120/2-55 from Ch. 120, par. 441-55 Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not considered retailers or servicemen within the meaning of those Acts. Effective immediately. LRB104 03259 HLH 13281 b A BILL FOR 104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1458 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED: 35 ILCS 105/2 from Ch. 120, par. 439.235 ILCS 110/2 from Ch. 120, par. 439.3235 ILCS 115/2 from Ch. 120, par. 439.10235 ILCS 120/135 ILCS 120/2-55 from Ch. 120, par. 441-55 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 35 ILCS 120/2-55 from Ch. 120, par. 441-55 Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not considered retailers or servicemen within the meaning of those Acts. Effective immediately. LRB104 03259 HLH 13281 b LRB104 03259 HLH 13281 b A BILL FOR
2	2	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1458 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED:
3	3	35 ILCS 105/2 from Ch. 120, par. 439.235 ILCS 110/2 from Ch. 120, par. 439.3235 ILCS 115/2 from Ch. 120, par. 439.10235 ILCS 120/135 ILCS 120/2-55 from Ch. 120, par. 441-55 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 35 ILCS 120/2-55 from Ch. 120, par. 441-55
4	4	35 ILCS 105/2 from Ch. 120, par. 439.2
5	5	35 ILCS 110/2 from Ch. 120, par. 439.32
6	6	35 ILCS 115/2 from Ch. 120, par. 439.102
7	7	35 ILCS 120/1
8	8	35 ILCS 120/2-55 from Ch. 120, par. 441-55
9	9	Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not considered retailers or servicemen within the meaning of those Acts. Effective immediately.
10	10	LRB104 03259 HLH 13281 b LRB104 03259 HLH 13281 b
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12	12	A BILL FOR
13	13	HB1458LRB104 03259 HLH 13281 b HB1458 LRB104 03259 HLH 13281 b
14	14	HB1458 LRB104 03259 HLH 13281 b
15	15	1 AN ACT concerning revenue.
16	16	2 Be it enacted by the People of the State of Illinois,
17	17	3 represented in the General Assembly:
18	18	4 Section 5. The Use Tax Act is amended by changing Section 2
19	19	5 as follows:
20	20	6 (35 ILCS 105/2) (from Ch. 120, par. 439.2)
21	21	7 Sec. 2. Definitions. As used in this Act:
22	22	8 "Use" means the exercise by any person of any right or
23	23	9 power over tangible personal property incident to the
24	24	10 ownership of that property, or, on and after January 1, 2025,
25	25	11 incident to the possession or control of, the right to possess
26	26	12 or control, or a license to use that property through a lease,
27	27	13 except that it does not include the sale of such property in
28	28	14 any form as tangible personal property in the regular course
29	29	15 of business to the extent that such property is not first
30	30	16 subjected to a use for which it was purchased, and does not
31	31	17 include the use of such property by its owner for
32	32	18 demonstration purposes: Provided that the property purchased
33	33	19 is deemed to be purchased for the purpose of resale, despite
34	34	20 first being used, to the extent to which it is resold as an
35	35	21 ingredient of an intentionally produced product or by-product
36	36	22 of manufacturing. "Use" does not mean the demonstration use or
37	37	23 interim use of tangible personal property by a retailer before
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41	41	104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 HB1458 Introduced , by Rep. Norine K. Hammond SYNOPSIS AS INTRODUCED:
42	42	35 ILCS 105/2 from Ch. 120, par. 439.235 ILCS 110/2 from Ch. 120, par. 439.3235 ILCS 115/2 from Ch. 120, par. 439.10235 ILCS 120/135 ILCS 120/2-55 from Ch. 120, par. 441-55 35 ILCS 105/2 from Ch. 120, par. 439.2 35 ILCS 110/2 from Ch. 120, par. 439.32 35 ILCS 115/2 from Ch. 120, par. 439.102 35 ILCS 120/1 35 ILCS 120/2-55 from Ch. 120, par. 441-55
43	43	35 ILCS 105/2 from Ch. 120, par. 439.2
44	44	35 ILCS 110/2 from Ch. 120, par. 439.32
45	45	35 ILCS 115/2 from Ch. 120, par. 439.102
46	46	35 ILCS 120/1
47	47	35 ILCS 120/2-55 from Ch. 120, par. 441-55
48	48	Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that motor carriers that sell items of tangible personal property to purchasers for use or consumption in addition to rendering service as a motor carrier are engaged in a profession or service occupation as a motor carrier and are not considered retailers or servicemen within the meaning of those Acts. Effective immediately.
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51	51	A BILL FOR
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57	57	35 ILCS 105/2 from Ch. 120, par. 439.2
58	58	35 ILCS 110/2 from Ch. 120, par. 439.32
59	59	35 ILCS 115/2 from Ch. 120, par. 439.102
60	60	35 ILCS 120/1
61	61	35 ILCS 120/2-55 from Ch. 120, par. 441-55
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80	80	1 he sells that tangible personal property. On and after January
81	81	2 1, 2025, the lease of tangible personal property to a lessee by
82	82	3 a retailer who is subject to tax on lease receipts under Public
83	83	4 Act 103-592 this amendatory Act of the 103rd General Assembly
84	84	5 does not qualify as demonstration use or interim use of that
85	85	6 property. For watercraft or aircraft, if the period of
86	86	7 demonstration use or interim use by the retailer exceeds 18
87	87	8 months, the retailer shall pay on the retailers' original cost
88	88	9 price the tax imposed by this Act, and no credit for that tax
89	89	10 is permitted if the watercraft or aircraft is subsequently
90	90	11 sold by the retailer. "Use" does not mean the physical
91	91	12 incorporation of tangible personal property, to the extent not
92	92	13 first subjected to a use for which it was purchased, as an
93	93	14 ingredient or constituent, into other tangible personal
94	94	15 property (a) which is sold in the regular course of business or
95	95	16 (b) which the person incorporating such ingredient or
96	96	17 constituent therein has undertaken at the time of such
97	97	18 purchase to cause to be transported in interstate commerce to
98	98	19 destinations outside the State of Illinois: Provided that the
99	99	20 property purchased is deemed to be purchased for the purpose
100	100	21 of resale, despite first being used, to the extent to which it
101	101	22 is resold as an ingredient of an intentionally produced
102	102	23 product or by-product of manufacturing.
103	103	24 "Lease" means a transfer of the possession or control of,
104	104	25 the right to possess or control, or a license to use, but not
105	105	26 title to, tangible personal property for a fixed or
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116	116	1 indeterminate term for consideration, regardless of the name
117	117	2 by which the transaction is called. "Lease" does not include a
118	118	3 lease entered into merely as a security agreement that does
119	119	4 not involve a transfer of possession or control from the
120	120	5 lessor to the lessee.
121	121	6 On and after January 1, 2025, the term "sale", when used in
122	122	7 this Act, includes a lease.
123	123	8 "Watercraft" means a Class 2, Class 3, or Class 4
124	124	9 watercraft as defined in Section 3-2 of the Boat Registration
125	125	10 and Safety Act, a personal watercraft, or any boat equipped
126	126	11 with an inboard motor.
127	127	12 "Purchase at retail" means the acquisition of the
128	128	13 ownership of, the title to, the possession or control of, the
129	129	14 right to possess or control, or a license to use, tangible
130	130	15 personal property through a sale at retail.
131	131	16 "Purchaser" means anyone who, through a sale at retail,
132	132	17 acquires the ownership of, the title to, the possession or
133	133	18 control of, the right to possess or control, or a license to
134	134	19 use, tangible personal property for a valuable consideration.
135	135	20 "Sale at retail" means any transfer of the ownership of or
136	136	21 title to tangible personal property to a purchaser, for the
137	137	22 purpose of use, and not for the purpose of resale in any form
138	138	23 as tangible personal property to the extent not first
139	139	24 subjected to a use for which it was purchased, for a valuable
140	140	25 consideration: Provided that the property purchased is deemed
141	141	26 to be purchased for the purpose of resale, despite first being
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152	152	1 used, to the extent to which it is resold as an ingredient of
153	153	2 an intentionally produced product or by-product of
154	154	3 manufacturing. For this purpose, slag produced as an incident
155	155	4 to manufacturing pig iron or steel and sold is considered to be
156	156	5 an intentionally produced by-product of manufacturing. "Sale
157	157	6 at retail" includes any such transfer made for resale unless
158	158	7 made in compliance with Section 2c of the Retailers'
159	159	8 Occupation Tax Act, as incorporated by reference into Section
160	160	9 12 of this Act. Transactions whereby the possession of the
161	161	10 property is transferred but the seller retains the title as
162	162	11 security for payment of the selling price are sales.
163	163	12 "Sale at retail" shall also be construed to include any
164	164	13 Illinois florist's sales transaction in which the purchase
165	165	14 order is received in Illinois by a florist and the sale is for
166	166	15 use or consumption, but the Illinois florist has a florist in
167	167	16 another state deliver the property to the purchaser or the
168	168	17 purchaser's donee in such other state.
169	169	18 Nonreusable tangible personal property that is used by
170	170	19 persons engaged in the business of operating a restaurant,
171	171	20 cafeteria, or drive-in is a sale for resale when it is
172	172	21 transferred to customers in the ordinary course of business as
173	173	22 part of the sale of food or beverages and is used to deliver,
174	174	23 package, or consume food or beverages, regardless of where
175	175	24 consumption of the food or beverages occurs. Examples of those
176	176	25 items include, but are not limited to nonreusable, paper and
177	177	26 plastic cups, plates, baskets, boxes, sleeves, buckets or
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188	188	1 other containers, utensils, straws, placemats, napkins, doggie
189	189	2 bags, and wrapping or packaging materials that are transferred
190	190	3 to customers as part of the sale of food or beverages in the
191	191	4 ordinary course of business.
192	192	5 The purchase, employment, and transfer of such tangible
193	193	6 personal property as newsprint and ink for the primary purpose
194	194	7 of conveying news (with or without other information) is not a
195	195	8 purchase, use, or sale of tangible personal property.
196	196	9 "Selling price" means the consideration for a sale valued
197	197	10 in money whether received in money or otherwise, including
198	198	11 cash, credits, property other than as hereinafter provided,
199	199	12 and services, but, prior to January 1, 2020 and beginning
200	200	13 again on January 1, 2022, not including the value of or credit
201	201	14 given for traded-in tangible personal property where the item
202	202	15 that is traded-in is of like kind and character as that which
203	203	16 is being sold; beginning January 1, 2020 and until January 1,
204	204	17 2022, "selling price" includes the portion of the value of or
205	205	18 credit given for traded-in motor vehicles of the First
206	206	19 Division as defined in Section 1-146 of the Illinois Vehicle
207	207	20 Code of like kind and character as that which is being sold
208	208	21 that exceeds $10,000. "Selling price" shall be determined
209	209	22 without any deduction on account of the cost of the property
210	210	23 sold, the cost of materials used, labor or service cost, or any
211	211	24 other expense whatsoever, but does not include interest or
212	212	25 finance charges which appear as separate items on the bill of
213	213	26 sale or sales contract nor charges that are added to prices by
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224	224	1 sellers on account of the seller's tax liability under the
225	225	2 Retailers' Occupation Tax Act, or on account of the seller's
226	226	3 duty to collect, from the purchaser, the tax that is imposed by
227	227	4 this Act, or, except as otherwise provided with respect to any
228	228	5 cigarette tax imposed by a home rule unit, on account of the
229	229	6 seller's tax liability under any local occupation tax
230	230	7 administered by the Department, or, except as otherwise
231	231	8 provided with respect to any cigarette tax imposed by a home
232	232	9 rule unit on account of the seller's duty to collect, from the
233	233	10 purchasers, the tax that is imposed under any local use tax
234	234	11 administered by the Department. Effective December 1, 1985,
235	235	12 "selling price" shall include charges that are added to prices
236	236	13 by sellers on account of the seller's tax liability under the
237	237	14 Cigarette Tax Act, on account of the seller's duty to collect,
238	238	15 from the purchaser, the tax imposed under the Cigarette Use
239	239	16 Tax Act, and on account of the seller's duty to collect, from
240	240	17 the purchaser, any cigarette tax imposed by a home rule unit.
241	241	18 The provisions of this paragraph, which provides only for
242	242	19 an alternative meaning of "selling price" with respect to the
243	243	20 sale of certain motor vehicles incident to the contemporaneous
244	244	21 lease of those motor vehicles, continue in effect and are not
245	245	22 changed by the tax on leases implemented by Public Act 103-592
246	246	23 this amendatory Act of the 103rd General Assembly.
247	247	24 Notwithstanding any law to the contrary, for any motor
248	248	25 vehicle, as defined in Section 1-146 of the Vehicle Code, that
249	249	26 is sold on or after January 1, 2015 for the purpose of leasing
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260	260	1 the vehicle for a defined period that is longer than one year
261	261	2 and (1) is a motor vehicle of the second division that: (A) is
262	262	3 a self-contained motor vehicle designed or permanently
263	263	4 converted to provide living quarters for recreational,
264	264	5 camping, or travel use, with direct walk through access to the
265	265	6 living quarters from the driver's seat; (B) is of the van
266	266	7 configuration designed for the transportation of not less than
267	267	8 7 nor more than 16 passengers; or (C) has a gross vehicle
268	268	9 weight rating of 8,000 pounds or less or (2) is a motor vehicle
269	269	10 of the first division, "selling price" or "amount of sale"
270	270	11 means the consideration received by the lessor pursuant to the
271	271	12 lease contract, including amounts due at lease signing and all
272	272	13 monthly or other regular payments charged over the term of the
273	273	14 lease. Also included in the selling price is any amount
274	274	15 received by the lessor from the lessee for the leased vehicle
275	275	16 that is not calculated at the time the lease is executed,
276	276	17 including, but not limited to, excess mileage charges and
277	277	18 charges for excess wear and tear. For sales that occur in
278	278	19 Illinois, with respect to any amount received by the lessor
279	279	20 from the lessee for the leased vehicle that is not calculated
280	280	21 at the time the lease is executed, the lessor who purchased the
281	281	22 motor vehicle does not incur the tax imposed by the Use Tax Act
282	282	23 on those amounts, and the retailer who makes the retail sale of
283	283	24 the motor vehicle to the lessor is not required to collect the
284	284	25 tax imposed by this Act or to pay the tax imposed by the
285	285	26 Retailers' Occupation Tax Act on those amounts. However, the
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296	296	1 lessor who purchased the motor vehicle assumes the liability
297	297	2 for reporting and paying the tax on those amounts directly to
298	298	3 the Department in the same form (Illinois Retailers'
299	299	4 Occupation Tax, and local retailers' occupation taxes, if
300	300	5 applicable) in which the retailer would have reported and paid
301	301	6 such tax if the retailer had accounted for the tax to the
302	302	7 Department. For amounts received by the lessor from the lessee
303	303	8 that are not calculated at the time the lease is executed, the
304	304	9 lessor must file the return and pay the tax to the Department
305	305	10 by the due date otherwise required by this Act for returns
306	306	11 other than transaction returns. If the retailer is entitled
307	307	12 under this Act to a discount for collecting and remitting the
308	308	13 tax imposed under this Act to the Department with respect to
309	309	14 the sale of the motor vehicle to the lessor, then the right to
310	310	15 the discount provided in this Act shall be transferred to the
311	311	16 lessor with respect to the tax paid by the lessor for any
312	312	17 amount received by the lessor from the lessee for the leased
313	313	18 vehicle that is not calculated at the time the lease is
314	314	19 executed; provided that the discount is only allowed if the
315	315	20 return is timely filed and for amounts timely paid. The
316	316	21 "selling price" of a motor vehicle that is sold on or after
317	317	22 January 1, 2015 for the purpose of leasing for a defined period
318	318	23 of longer than one year shall not be reduced by the value of or
319	319	24 credit given for traded-in tangible personal property owned by
320	320	25 the lessor, nor shall it be reduced by the value of or credit
321	321	26 given for traded-in tangible personal property owned by the
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332	332	1 lessee, regardless of whether the trade-in value thereof is
333	333	2 assigned by the lessee to the lessor. In the case of a motor
334	334	3 vehicle that is sold for the purpose of leasing for a defined
335	335	4 period of longer than one year, the sale occurs at the time of
336	336	5 the delivery of the vehicle, regardless of the due date of any
337	337	6 lease payments. A lessor who incurs a Retailers' Occupation
338	338	7 Tax liability on the sale of a motor vehicle coming off lease
339	339	8 may not take a credit against that liability for the Use Tax
340	340	9 the lessor paid upon the purchase of the motor vehicle (or for
341	341	10 any tax the lessor paid with respect to any amount received by
342	342	11 the lessor from the lessee for the leased vehicle that was not
343	343	12 calculated at the time the lease was executed) if the selling
344	344	13 price of the motor vehicle at the time of purchase was
345	345	14 calculated using the definition of "selling price" as defined
346	346	15 in this paragraph. Notwithstanding any other provision of this
347	347	16 Act to the contrary, lessors shall file all returns and make
348	348	17 all payments required under this paragraph to the Department
349	349	18 by electronic means in the manner and form as required by the
350	350	19 Department. This paragraph does not apply to leases of motor
351	351	20 vehicles for which, at the time the lease is entered into, the
352	352	21 term of the lease is not a defined period, including leases
353	353	22 with a defined initial period with the option to continue the
354	354	23 lease on a month-to-month or other basis beyond the initial
355	355	24 defined period.
356	356	25 The phrase "like kind and character" shall be liberally
357	357	26 construed (including, but not limited to, any form of motor
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368	368	1 vehicle for any form of motor vehicle, or any kind of farm or
369	369	2 agricultural implement for any other kind of farm or
370	370	3 agricultural implement), while not including a kind of item
371	371	4 which, if sold at retail by that retailer, would be exempt from
372	372	5 retailers' occupation tax and use tax as an isolated or
373	373	6 occasional sale.
374	374	7 "Department" means the Department of Revenue.
375	375	8 "Person" means any natural individual, firm, partnership,
376	376	9 association, joint stock company, joint adventure, public or
377	377	10 private corporation, limited liability company, or a receiver,
378	378	11 executor, trustee, guardian, or other representative appointed
379	379	12 by order of any court.
380	380	13 "Retailer" means and includes every person engaged in the
381	381	14 business of making sales, including, on and after January 1,
382	382	15 2025, leases, at retail as defined in this Section. With
383	383	16 respect to leases, a "retailer" also means a "lessor", except
384	384	17 as otherwise provided in this Act.
385	385	18 A person who holds himself or herself out as being engaged
386	386	19 (or who habitually engages) in selling tangible personal
387	387	20 property at retail is a retailer hereunder with respect to
388	388	21 such sales (and not primarily in a service occupation)
389	389	22 notwithstanding the fact that such person designs and produces
390	390	23 such tangible personal property on special order for the
391	391	24 purchaser and in such a way as to render the property of value
392	392	25 only to such purchaser, if such tangible personal property so
393	393	26 produced on special order serves substantially the same
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404	404	1 function as stock or standard items of tangible personal
405	405	2 property that are sold at retail.
406	406	3 A person whose activities are organized and conducted
407	407	4 primarily as a not-for-profit service enterprise, and who
408	408	5 engages in selling tangible personal property at retail
409	409	6 (whether to the public or merely to members and their guests)
410	410	7 is a retailer with respect to such transactions, excepting
411	411	8 only a person organized and operated exclusively for
412	412	9 charitable, religious or educational purposes either (1), to
413	413	10 the extent of sales by such person to its members, students,
414	414	11 patients, or inmates of tangible personal property to be used
415	415	12 primarily for the purposes of such person, or (2), to the
416	416	13 extent of sales by such person of tangible personal property
417	417	14 which is not sold or offered for sale by persons organized for
418	418	15 profit. The selling of school books and school supplies by
419	419	16 schools at retail to students is not "primarily for the
420	420	17 purposes of" the school which does such selling. This
421	421	18 paragraph does not apply to nor subject to taxation occasional
422	422	19 dinners, social, or similar activities of a person organized
423	423	20 and operated exclusively for charitable, religious, or
424	424	21 educational purposes, whether or not such activities are open
425	425	22 to the public.
426	426	23 A person who is the recipient of a grant or contract under
427	427	24 Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
428	428	25 serves meals to participants in the federal Nutrition Program
429	429	26 for the Elderly in return for contributions established in
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433	433
434	434
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436	436
437	437
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439	439	HB1458 - 12 - LRB104 03259 HLH 13281 b
440	440	1 amount by the individual participant pursuant to a schedule of
441	441	2 suggested fees as provided for in the federal Act is not a
442	442	3 retailer under this Act with respect to such transactions.
443	443	4 Persons who engage in the business of transferring
444	444	5 tangible personal property upon the redemption of trading
445	445	6 stamps are retailers hereunder when engaged in such business.
446	446	7 The isolated or occasional sale of tangible personal
447	447	8 property at retail by a person who does not hold himself out as
448	448	9 being engaged (or who does not habitually engage) in selling
449	449	10 such tangible personal property at retail or a sale through a
450	450	11 bulk vending machine does not make such person a retailer
451	451	12 hereunder. However, any person who is engaged in a business
452	452	13 which is not subject to the tax imposed by the Retailers'
453	453	14 Occupation Tax Act because of involving the sale of or a
454	454	15 contract to sell real estate or a construction contract to
455	455	16 improve real estate, but who, in the course of conducting such
456	456	17 business, transfers tangible personal property to users or
457	457	18 consumers in the finished form in which it was purchased, and
458	458	19 which does not become real estate, under any provision of a
459	459	20 construction contract or real estate sale or real estate sales
460	460	21 agreement entered into with some other person arising out of
461	461	22 or because of such nontaxable business, is a retailer to the
462	462	23 extent of the value of the tangible personal property so
463	463	24 transferred. If, in such transaction, a separate charge is
464	464	25 made for the tangible personal property so transferred, the
465	465	26 value of such property, for the purposes of this Act, is the
466	466
467	467
468	468
469	469
470	470
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472	472
473	473
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475	475	HB1458 - 13 - LRB104 03259 HLH 13281 b
476	476	1 amount so separately charged, but not less than the cost of
477	477	2 such property to the transferor; if no separate charge is
478	478	3 made, the value of such property, for the purposes of this Act,
479	479	4 is the cost to the transferor of such tangible personal
480	480	5 property.
481	481	6 "Retailer maintaining a place of business in this State",
482	482	7 or any like term, means and includes any of the following
483	483	8 retailers:
484	484	9 (1) A retailer having or maintaining within this
485	485	10 State, directly or by a subsidiary, an office,
486	486	11 distribution house, sales house, warehouse, or other place
487	487	12 of business, or any agent or other representative
488	488	13 operating within this State under the authority of the
489	489	14 retailer or its subsidiary, irrespective of whether such
490	490	15 place of business or agent or other representative is
491	491	16 located here permanently or temporarily, or whether such
492	492	17 retailer or subsidiary is licensed to do business in this
493	493	18 State. However, the ownership of property that is located
494	494	19 at the premises of a printer with which the retailer has
495	495	20 contracted for printing and that consists of the final
496	496	21 printed product, property that becomes a part of the final
497	497	22 printed product, or copy from which the printed product is
498	498	23 produced shall not result in the retailer being deemed to
499	499	24 have or maintain an office, distribution house, sales
500	500	25 house, warehouse, or other place of business within this
501	501	26 State.
502	502
503	503
504	504
505	505
506	506
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508	508
509	509
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511	511	HB1458 - 14 - LRB104 03259 HLH 13281 b
512	512	1 (1.1) A retailer having a contract with a person
513	513	2 located in this State under which the person, for a
514	514	3 commission or other consideration based upon the sale of
515	515	4 tangible personal property by the retailer, directly or
516	516	5 indirectly refers potential customers to the retailer by
517	517	6 providing to the potential customers a promotional code or
518	518	7 other mechanism that allows the retailer to track
519	519	8 purchases referred by such persons. Examples of mechanisms
520	520	9 that allow the retailer to track purchases referred by
521	521	10 such persons include, but are not limited to, the use of a
522	522	11 link on the person's Internet website, promotional codes
523	523	12 distributed through the person's hand-delivered or mailed
524	524	13 material, and promotional codes distributed by the person
525	525	14 through radio or other broadcast media. The provisions of
526	526	15 this paragraph (1.1) shall apply only if the cumulative
527	527	16 gross receipts from sales of tangible personal property by
528	528	17 the retailer to customers who are referred to the retailer
529	529	18 by all persons in this State under such contracts exceed
530	530	19 $10,000 during the preceding 4 quarterly periods ending on
531	531	20 the last day of March, June, September, and December. A
532	532	21 retailer meeting the requirements of this paragraph (1.1)
533	533	22 shall be presumed to be maintaining a place of business in
534	534	23 this State but may rebut this presumption by submitting
535	535	24 proof that the referrals or other activities pursued
536	536	25 within this State by such persons were not sufficient to
537	537	26 meet the nexus standards of the United States Constitution
538	538
539	539
540	540
541	541
542	542
543	543	HB1458 - 14 - LRB104 03259 HLH 13281 b
544	544
545	545
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547	547	HB1458 - 15 - LRB104 03259 HLH 13281 b
548	548	1 during the preceding 4 quarterly periods.
549	549	2 (1.2) Beginning July 1, 2011, a retailer having a
550	550	3 contract with a person located in this State under which:
551	551	4 (A) the retailer sells the same or substantially
552	552	5 similar line of products as the person located in this
553	553	6 State and does so using an identical or substantially
554	554	7 similar name, trade name, or trademark as the person
555	555	8 located in this State; and
556	556	9 (B) the retailer provides a commission or other
557	557	10 consideration to the person located in this State
558	558	11 based upon the sale of tangible personal property by
559	559	12 the retailer.
560	560	13 The provisions of this paragraph (1.2) shall apply
561	561	14 only if the cumulative gross receipts from sales of
562	562	15 tangible personal property by the retailer to customers in
563	563	16 this State under all such contracts exceed $10,000 during
564	564	17 the preceding 4 quarterly periods ending on the last day
565	565	18 of March, June, September, and December.
566	566	19 (2) (Blank).
567	567	20 (3) (Blank).
568	568	21 (4) (Blank).
569	569	22 (5) (Blank).
570	570	23 (6) (Blank).
571	571	24 (7) (Blank).
572	572	25 (8) (Blank).
573	573	26 (9) Beginning October 1, 2018, a retailer making sales
574	574
575	575
576	576
577	577
578	578
579	579	HB1458 - 15 - LRB104 03259 HLH 13281 b
580	580
581	581
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583	583	HB1458 - 16 - LRB104 03259 HLH 13281 b
584	584	1 of tangible personal property to purchasers in Illinois
585	585	2 from outside of Illinois if:
586	586	3 (A) the cumulative gross receipts from sales of
587	587	4 tangible personal property to purchasers in Illinois
588	588	5 are $100,000 or more; or
589	589	6 (B) the retailer enters into 200 or more separate
590	590	7 transactions for the sale of tangible personal
591	591	8 property to purchasers in Illinois.
592	592	9 The retailer shall determine on a quarterly basis,
593	593	10 ending on the last day of March, June, September, and
594	594	11 December, whether he or she meets the criteria of either
595	595	12 subparagraph (A) or (B) of this paragraph (9) for the
596	596	13 preceding 12-month period. If the retailer meets the
597	597	14 threshold of either subparagraph (A) or (B) for a 12-month
598	598	15 period, he or she is considered a retailer maintaining a
599	599	16 place of business in this State and is required to collect
600	600	17 and remit the tax imposed under this Act and file returns
601	601	18 for one year. At the end of that one-year period, the
602	602	19 retailer shall determine whether he or she met the
603	603	20 threshold of either subparagraph (A) or (B) during the
604	604	21 preceding 12-month period. If the retailer met the
605	605	22 criteria in either subparagraph (A) or (B) for the
606	606	23 preceding 12-month period, he or she is considered a
607	607	24 retailer maintaining a place of business in this State and
608	608	25 is required to collect and remit the tax imposed under
609	609	26 this Act and file returns for the subsequent year. If at
610	610
611	611
612	612
613	613
614	614
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616	616
617	617
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619	619	HB1458 - 17 - LRB104 03259 HLH 13281 b
620	620	1 the end of a one-year period a retailer that was required
621	621	2 to collect and remit the tax imposed under this Act
622	622	3 determines that he or she did not meet the threshold in
623	623	4 either subparagraph (A) or (B) during the preceding
624	624	5 12-month period, the retailer shall subsequently determine
625	625	6 on a quarterly basis, ending on the last day of March,
626	626	7 June, September, and December, whether he or she meets the
627	627	8 threshold of either subparagraph (A) or (B) for the
628	628	9 preceding 12-month period.
629	629	10 Beginning January 1, 2020, neither the gross receipts
630	630	11 from nor the number of separate transactions for sales of
631	631	12 tangible personal property to purchasers in Illinois that
632	632	13 a retailer makes through a marketplace facilitator and for
633	633	14 which the retailer has received a certification from the
634	634	15 marketplace facilitator pursuant to Section 2d of this Act
635	635	16 shall be included for purposes of determining whether he
636	636	17 or she has met the thresholds of this paragraph (9).
637	637	18 (10) Beginning January 1, 2020, a marketplace
638	638	19 facilitator that meets a threshold set forth in subsection
639	639	20 (b) of Section 2d of this Act.
640	640	21 Motor carriers, as defined in Section 18c-1104 of the
641	641	22 Vehicle Code, that sell items of tangible personal property to
642	642	23 purchasers for use or consumption in addition to rendering
643	643	24 service as a motor carrier are engaged in a profession or
644	644	25 service occupation as a motor carrier and are not retailers
645	645	26 maintaining a place of business in this State within the
646	646
647	647
648	648
649	649
650	650
651	651	HB1458 - 17 - LRB104 03259 HLH 13281 b
652	652
653	653
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655	655	HB1458 - 18 - LRB104 03259 HLH 13281 b
656	656	1 meaning of this Act when they sell items of tangible personal
657	657	2 property to purchasers incident to the rendering of service as
658	658	3 a motor carrier. Those motor carriers are not required to
659	659	4 collect or remit the tax imposed by this Act on the sale of
660	660	5 that tangible personal property.
661	661	6 "Bulk vending machine" means a vending machine, containing
662	662	7 unsorted confections, nuts, toys, or other items designed
663	663	8 primarily to be used or played with by children which, when a
664	664	9 coin or coins of a denomination not larger than $0.50 are
665	665	10 inserted, are dispensed in equal portions, at random and
666	666	11 without selection by the customer.
667	667	12 (Source: P.A. 102-353, eff. 1-1-22; 103-592, eff. 1-1-25;
668	668	13 revised 11-22-24.)
669	669	14 Section 10. The Service Use Tax Act is amended by changing
670	670	15 Section 2 as follows:
671	671	16 (35 ILCS 110/2) (from Ch. 120, par. 439.32)
672	672	17 Sec. 2. Definitions. In this Act:
673	673	18 "Use" means the exercise by any person of any right or
674	674	19 power over tangible personal property incident to the
675	675	20 ownership of that property, or, on and after January 1, 2025,
676	676	21 incident to the possession or control of, the right to possess
677	677	22 or control, or a license to use that property through a lease,
678	678	23 but does not include the sale or use for demonstration by him
679	679	24 of that property in any form as tangible personal property in
680	680
681	681
682	682
683	683
684	684
685	685	HB1458 - 18 - LRB104 03259 HLH 13281 b
686	686
687	687
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689	689	HB1458 - 19 - LRB104 03259 HLH 13281 b
690	690	1 the regular course of business. "Use" does not mean the
691	691	2 interim use of tangible personal property. On and after
692	692	3 January 1, 2025, the lease of tangible personal property to a
693	693	4 lessee by a serviceman who is subject to tax on lease receipts
694	694	5 under this amendatory Act of the 103rd General Assembly does
695	695	6 not qualify as demonstration use or interim use of that
696	696	7 property. "Use" does not mean the physical incorporation of
697	697	8 tangible personal property, as an ingredient or constituent,
698	698	9 into other tangible personal property, (a) which is sold in
699	699	10 the regular course of business or (b) which the person
700	700	11 incorporating such ingredient or constituent therein has
701	701	12 undertaken at the time of such purchase to cause to be
702	702	13 transported in interstate commerce to destinations outside the
703	703	14 State of Illinois.
704	704	15 "Lease" means a transfer of the possession or control of,
705	705	16 the right to possess or control, or a license to use, but not
706	706	17 title to, tangible personal property for a fixed or
707	707	18 indeterminate term for consideration, regardless of the name
708	708	19 by which the transaction is called. "Lease" does not include a
709	709	20 lease entered into merely as a security agreement that does
710	710	21 not involve a transfer of possession from the lessor to the
711	711	22 lessee.
712	712	23 On and after January 1, 2025, the term "sale", when used in
713	713	24 this Act with respect to tangible personal property, includes
714	714	25 a lease.
715	715	26 "Purchased from a serviceman" means the acquisition of the
716	716
717	717
718	718
719	719
720	720
721	721	HB1458 - 19 - LRB104 03259 HLH 13281 b
722	722
723	723
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725	725	HB1458 - 20 - LRB104 03259 HLH 13281 b
726	726	1 ownership of, the title to, the possession or control of, the
727	727	2 right to possess or control, or a license to use, tangible
728	728	3 personal property through a sale of service.
729	729	4 "Purchaser" means any person who, through a sale of
730	730	5 service, acquires the ownership of, the title to, the
731	731	6 possession or control of, the right to possess or control, or a
732	732	7 license to use, any tangible personal property.
733	733	8 "Cost price" means the consideration paid by the
734	734	9 serviceman for a purchase, including, on and after January 1,
735	735	10 2025, a lease, valued in money, whether paid in money or
736	736	11 otherwise, including cash, credits and services, and shall be
737	737	12 determined without any deduction on account of the supplier's
738	738	13 cost of the property sold or on account of any other expense
739	739	14 incurred by the supplier. When a serviceman contracts out part
740	740	15 or all of the services required in his sale of service, it
741	741	16 shall be presumed that the cost price to the serviceman of the
742	742	17 property transferred to him or her by his or her subcontractor
743	743	18 is equal to 50% of the subcontractor's charges to the
744	744	19 serviceman in the absence of proof of the consideration paid
745	745	20 by the subcontractor for the purchase of such property.
746	746	21 "Selling price" means the consideration for a sale,
747	747	22 including, on and after January 1, 2025, a lease, valued in
748	748	23 money whether received in money or otherwise, including cash,
749	749	24 credits and service, and shall be determined without any
750	750	25 deduction on account of the serviceman's cost of the property
751	751	26 sold, the cost of materials used, labor or service cost or any
752	752
753	753
754	754
755	755
756	756
757	757	HB1458 - 20 - LRB104 03259 HLH 13281 b
758	758
759	759
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761	761	HB1458 - 21 - LRB104 03259 HLH 13281 b
762	762	1 other expense whatsoever, but does not include interest or
763	763	2 finance charges which appear as separate items on the bill of
764	764	3 sale or sales contract nor charges that are added to prices by
765	765	4 sellers on account of the seller's duty to collect, from the
766	766	5 purchaser, the tax that is imposed by this Act.
767	767	6 "Department" means the Department of Revenue.
768	768	7 "Person" means any natural individual, firm, partnership,
769	769	8 association, joint stock company, joint venture, public or
770	770	9 private corporation, limited liability company, and any
771	771	10 receiver, executor, trustee, guardian or other representative
772	772	11 appointed by order of any court.
773	773	12 "Sale of service" means any transaction except:
774	774	13 (1) a retail sale of tangible personal property
775	775	14 taxable under the Retailers' Occupation Tax Act or under
776	776	15 the Use Tax Act.
777	777	16 (2) a sale of tangible personal property for the
778	778	17 purpose of resale made in compliance with Section 2c of
779	779	18 the Retailers' Occupation Tax Act.
780	780	19 (3) except as hereinafter provided, a sale or transfer
781	781	20 of tangible personal property as an incident to the
782	782	21 rendering of service for or by any governmental body, or
783	783	22 for or by any corporation, society, association,
784	784	23 foundation or institution organized and operated
785	785	24 exclusively for charitable, religious or educational
786	786	25 purposes or any not-for-profit corporation, society,
787	787	26 association, foundation, institution or organization which
788	788
789	789
790	790
791	791
792	792
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794	794
795	795
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797	797	HB1458 - 22 - LRB104 03259 HLH 13281 b
798	798	1 has no compensated officers or employees and which is
799	799	2 organized and operated primarily for the recreation of
800	800	3 persons 55 years of age or older. A limited liability
801	801	4 company may qualify for the exemption under this paragraph
802	802	5 only if the limited liability company is organized and
803	803	6 operated exclusively for educational purposes.
804	804	7 (4) (blank).
805	805	8 (4a) a sale or transfer of tangible personal property
806	806	9 as an incident to the rendering of service for owners or
807	807	10 lessors, lessees, or shippers of tangible personal
808	808	11 property which is utilized by interstate carriers for hire
809	809	12 for use as rolling stock moving in interstate commerce so
810	810	13 long as so used by interstate carriers for hire, and
811	811	14 equipment operated by a telecommunications provider,
812	812	15 licensed as a common carrier by the Federal Communications
813	813	16 Commission, which is permanently installed in or affixed
814	814	17 to aircraft moving in interstate commerce.
815	815	18 (4a-5) on and after July 1, 2003 and through June 30,
816	816	19 2004, a sale or transfer of a motor vehicle of the second
817	817	20 division with a gross vehicle weight in excess of 8,000
818	818	21 pounds as an incident to the rendering of service if that
819	819	22 motor vehicle is subject to the commercial distribution
820	820	23 fee imposed under Section 3-815.1 of the Illinois Vehicle
821	821	24 Code. Beginning on July 1, 2004 and through June 30, 2005,
822	822	25 the use in this State of motor vehicles of the second
823	823	26 division: (i) with a gross vehicle weight rating in excess
824	824
825	825
826	826
827	827
828	828
829	829	HB1458 - 22 - LRB104 03259 HLH 13281 b
830	830
831	831
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833	833	HB1458 - 23 - LRB104 03259 HLH 13281 b
834	834	1 of 8,000 pounds; (ii) that are subject to the commercial
835	835	2 distribution fee imposed under Section 3-815.1 of the
836	836	3 Illinois Vehicle Code; and (iii) that are primarily used
837	837	4 for commercial purposes. Through June 30, 2005, this
838	838	5 exemption applies to repair and replacement parts added
839	839	6 after the initial purchase of such a motor vehicle if that
840	840	7 motor vehicle is used in a manner that would qualify for
841	841	8 the rolling stock exemption otherwise provided for in this
842	842	9 Act. For purposes of this paragraph, "used for commercial
843	843	10 purposes" means the transportation of persons or property
844	844	11 in furtherance of any commercial or industrial enterprise
845	845	12 whether for-hire or not.
846	846	13 (5) a sale or transfer of machinery and equipment used
847	847	14 primarily in the process of the manufacturing or
848	848	15 assembling, either in an existing, an expanded or a new
849	849	16 manufacturing facility, of tangible personal property for
850	850	17 wholesale or retail sale or lease, whether such sale or
851	851	18 lease is made directly by the manufacturer or by some
852	852	19 other person, whether the materials used in the process
853	853	20 are owned by the manufacturer or some other person, or
854	854	21 whether such sale or lease is made apart from or as an
855	855	22 incident to the seller's engaging in a service occupation
856	856	23 and the applicable tax is a Service Use Tax or Service
857	857	24 Occupation Tax, rather than Use Tax or Retailers'
858	858	25 Occupation Tax. The exemption provided by this paragraph
859	859	26 (5) includes production related tangible personal
860	860
861	861
862	862
863	863
864	864
865	865	HB1458 - 23 - LRB104 03259 HLH 13281 b
866	866
867	867
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869	869	HB1458 - 24 - LRB104 03259 HLH 13281 b
870	870	1 property, as defined in Section 3-50 of the Use Tax Act,
871	871	2 purchased on or after July 1, 2019. The exemption provided
872	872	3 by this paragraph (5) does not include machinery and
873	873	4 equipment used in (i) the generation of electricity for
874	874	5 wholesale or retail sale; (ii) the generation or treatment
875	875	6 of natural or artificial gas for wholesale or retail sale
876	876	7 that is delivered to customers through pipes, pipelines,
877	877	8 or mains; or (iii) the treatment of water for wholesale or
878	878	9 retail sale that is delivered to customers through pipes,
879	879	10 pipelines, or mains. The provisions of Public Act 98-583
880	880	11 are declaratory of existing law as to the meaning and
881	881	12 scope of this exemption. The exemption under this
882	882	13 paragraph (5) is exempt from the provisions of Section
883	883	14 3-75.
884	884	15 (5a) the repairing, reconditioning or remodeling, for
885	885	16 a common carrier by rail, of tangible personal property
886	886	17 which belongs to such carrier for hire, and as to which
887	887	18 such carrier receives the physical possession of the
888	888	19 repaired, reconditioned or remodeled item of tangible
889	889	20 personal property in Illinois, and which such carrier
890	890	21 transports, or shares with another common carrier in the
891	891	22 transportation of such property, out of Illinois on a
892	892	23 standard uniform bill of lading showing the person who
893	893	24 repaired, reconditioned or remodeled the property to a
894	894	25 destination outside Illinois, for use outside Illinois.
895	895	26 (5b) a sale or transfer of tangible personal property
896	896
897	897
898	898
899	899
900	900
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902	902
903	903
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905	905	HB1458 - 25 - LRB104 03259 HLH 13281 b
906	906	1 which is produced by the seller thereof on special order
907	907	2 in such a way as to have made the applicable tax the
908	908	3 Service Occupation Tax or the Service Use Tax, rather than
909	909	4 the Retailers' Occupation Tax or the Use Tax, for an
910	910	5 interstate carrier by rail which receives the physical
911	911	6 possession of such property in Illinois, and which
912	912	7 transports such property, or shares with another common
913	913	8 carrier in the transportation of such property, out of
914	914	9 Illinois on a standard uniform bill of lading showing the
915	915	10 seller of the property as the shipper or consignor of such
916	916	11 property to a destination outside Illinois, for use
917	917	12 outside Illinois.
918	918	13 (6) until July 1, 2003, a sale or transfer of
919	919	14 distillation machinery and equipment, sold as a unit or
920	920	15 kit and assembled or installed by the retailer, which
921	921	16 machinery and equipment is certified by the user to be
922	922	17 used only for the production of ethyl alcohol that will be
923	923	18 used for consumption as motor fuel or as a component of
924	924	19 motor fuel for the personal use of such user and not
925	925	20 subject to sale or resale.
926	926	21 (7) at the election of any serviceman not required to
927	927	22 be otherwise registered as a retailer under Section 2a of
928	928	23 the Retailers' Occupation Tax Act, made for each fiscal
929	929	24 year sales of service in which the aggregate annual cost
930	930	25 price of tangible personal property transferred as an
931	931	26 incident to the sales of service is less than 35%, or 75%
932	932
933	933
934	934
935	935
936	936
937	937	HB1458 - 25 - LRB104 03259 HLH 13281 b
938	938
939	939
940	940	HB1458- 26 -LRB104 03259 HLH 13281 b HB1458 - 26 - LRB104 03259 HLH 13281 b
941	941	HB1458 - 26 - LRB104 03259 HLH 13281 b
942	942	1 in the case of servicemen transferring prescription drugs
943	943	2 or servicemen engaged in graphic arts production, of the
944	944	3 aggregate annual total gross receipts from all sales of
945	945	4 service. The purchase of such tangible personal property
946	946	5 by the serviceman shall be subject to tax under the
947	947	6 Retailers' Occupation Tax Act and the Use Tax Act.
948	948	7 However, if a primary serviceman who has made the election
949	949	8 described in this paragraph subcontracts service work to a
950	950	9 secondary serviceman who has also made the election
951	951	10 described in this paragraph, the primary serviceman does
952	952	11 not incur a Use Tax liability if the secondary serviceman
953	953	12 (i) has paid or will pay Use Tax on his or her cost price
954	954	13 of any tangible personal property transferred to the
955	955	14 primary serviceman and (ii) certifies that fact in writing
956	956	15 to the primary serviceman.
957	957	16 Tangible personal property transferred incident to the
958	958	17 completion of a maintenance agreement is exempt from the tax
959	959	18 imposed pursuant to this Act.
960	960	19 Exemption (5) also includes machinery and equipment used
961	961	20 in the general maintenance or repair of such exempt machinery
962	962	21 and equipment or for in-house manufacture of exempt machinery
963	963	22 and equipment. On and after July 1, 2017, exemption (5) also
964	964	23 includes graphic arts machinery and equipment, as defined in
965	965	24 paragraph (5) of Section 3-5. The machinery and equipment
966	966	25 exemption does not include machinery and equipment used in (i)
967	967	26 the generation of electricity for wholesale or retail sale;
968	968
969	969
970	970
971	971
972	972
973	973	HB1458 - 26 - LRB104 03259 HLH 13281 b
974	974
975	975
976	976	HB1458- 27 -LRB104 03259 HLH 13281 b HB1458 - 27 - LRB104 03259 HLH 13281 b
977	977	HB1458 - 27 - LRB104 03259 HLH 13281 b
978	978	1 (ii) the generation or treatment of natural or artificial gas
979	979	2 for wholesale or retail sale that is delivered to customers
980	980	3 through pipes, pipelines, or mains; or (iii) the treatment of
981	981	4 water for wholesale or retail sale that is delivered to
982	982	5 customers through pipes, pipelines, or mains. The provisions
983	983	6 of Public Act 98-583 are declaratory of existing law as to the
984	984	7 meaning and scope of this exemption. For the purposes of
985	985	8 exemption (5), each of these terms shall have the following
986	986	9 meanings: (1) "manufacturing process" shall mean the
987	987	10 production of any article of tangible personal property,
988	988	11 whether such article is a finished product or an article for
989	989	12 use in the process of manufacturing or assembling a different
990	990	13 article of tangible personal property, by procedures commonly
991	991	14 regarded as manufacturing, processing, fabricating, or
992	992	15 refining which changes some existing material or materials
993	993	16 into a material with a different form, use or name. In relation
994	994	17 to a recognized integrated business composed of a series of
995	995	18 operations which collectively constitute manufacturing, or
996	996	19 individually constitute manufacturing operations, the
997	997	20 manufacturing process shall be deemed to commence with the
998	998	21 first operation or stage of production in the series, and
999	999	22 shall not be deemed to end until the completion of the final
1000	1000	23 product in the last operation or stage of production in the
1001	1001	24 series; and further, for purposes of exemption (5),
1002	1002	25 photoprocessing is deemed to be a manufacturing process of
1003	1003	26 tangible personal property for wholesale or retail sale; (2)
1004	1004
1005	1005
1006	1006
1007	1007
1008	1008
1009	1009	HB1458 - 27 - LRB104 03259 HLH 13281 b
1010	1010
1011	1011
1012	1012	HB1458- 28 -LRB104 03259 HLH 13281 b HB1458 - 28 - LRB104 03259 HLH 13281 b
1013	1013	HB1458 - 28 - LRB104 03259 HLH 13281 b
1014	1014	1 "assembling process" shall mean the production of any article
1015	1015	2 of tangible personal property, whether such article is a
1016	1016	3 finished product or an article for use in the process of
1017	1017	4 manufacturing or assembling a different article of tangible
1018	1018	5 personal property, by the combination of existing materials in
1019	1019	6 a manner commonly regarded as assembling which results in a
1020	1020	7 material of a different form, use or name; (3) "machinery"
1021	1021	8 shall mean major mechanical machines or major components of
1022	1022	9 such machines contributing to a manufacturing or assembling
1023	1023	10 process; and (4) "equipment" shall include any independent
1024	1024	11 device or tool separate from any machinery but essential to an
1025	1025	12 integrated manufacturing or assembly process; including
1026	1026	13 computers used primarily in a manufacturer's computer assisted
1027	1027	14 design, computer assisted manufacturing (CAD/CAM) system; or
1028	1028	15 any subunit or assembly comprising a component of any
1029	1029	16 machinery or auxiliary, adjunct or attachment parts of
1030	1030	17 machinery, such as tools, dies, jigs, fixtures, patterns and
1031	1031	18 molds; or any parts which require periodic replacement in the
1032	1032	19 course of normal operation; but shall not include hand tools.
1033	1033	20 Equipment includes chemicals or chemicals acting as catalysts
1034	1034	21 but only if the chemicals or chemicals acting as catalysts
1035	1035	22 effect a direct and immediate change upon a product being
1036	1036	23 manufactured or assembled for wholesale or retail sale or
1037	1037	24 lease. The purchaser of such machinery and equipment who has
1038	1038	25 an active resale registration number shall furnish such number
1039	1039	26 to the seller at the time of purchase. The purchaser of such
1040	1040
1041	1041
1042	1042
1043	1043
1044	1044
1045	1045	HB1458 - 28 - LRB104 03259 HLH 13281 b
1046	1046
1047	1047
1048	1048	HB1458- 29 -LRB104 03259 HLH 13281 b HB1458 - 29 - LRB104 03259 HLH 13281 b
1049	1049	HB1458 - 29 - LRB104 03259 HLH 13281 b
1050	1050	1 machinery and equipment and tools without an active resale
1051	1051	2 registration number shall prepare a certificate of exemption
1052	1052	3 stating facts establishing the exemption, which certificate
1053	1053	4 shall be available to the Department for inspection or audit.
1054	1054	5 The Department shall prescribe the form of the certificate.
1055	1055	6 Any informal rulings, opinions or letters issued by the
1056	1056	7 Department in response to an inquiry or request for any
1057	1057	8 opinion from any person regarding the coverage and
1058	1058	9 applicability of exemption (5) to specific devices shall be
1059	1059	10 published, maintained as a public record, and made available
1060	1060	11 for public inspection and copying. If the informal ruling,
1061	1061	12 opinion or letter contains trade secrets or other confidential
1062	1062	13 information, where possible the Department shall delete such
1063	1063	14 information prior to publication. Whenever such informal
1064	1064	15 rulings, opinions, or letters contain any policy of general
1065	1065	16 applicability, the Department shall formulate and adopt such
1066	1066	17 policy as a rule in accordance with the provisions of the
1067	1067	18 Illinois Administrative Procedure Act.
1068	1068	19 On and after July 1, 1987, no entity otherwise eligible
1069	1069	20 under exemption (3) of this Section shall make tax-free
1070	1070	21 purchases unless it has an active exemption identification
1071	1071	22 number issued by the Department.
1072	1072	23 The purchase, employment and transfer of such tangible
1073	1073	24 personal property as newsprint and ink for the primary purpose
1074	1074	25 of conveying news (with or without other information) is not a
1075	1075	26 purchase, use or sale of service or of tangible personal
1076	1076
1077	1077
1078	1078
1079	1079
1080	1080
1081	1081	HB1458 - 29 - LRB104 03259 HLH 13281 b
1082	1082
1083	1083
1084	1084	HB1458- 30 -LRB104 03259 HLH 13281 b HB1458 - 30 - LRB104 03259 HLH 13281 b
1085	1085	HB1458 - 30 - LRB104 03259 HLH 13281 b
1086	1086	1 property within the meaning of this Act.
1087	1087	2 "Serviceman" means any person who is engaged in the
1088	1088	3 occupation of making sales of service.
1089	1089	4 Motor carriers, as defined in Section 18c-1104 of the
1090	1090	5 Vehicle Code, that sell items of tangible personal property to
1091	1091	6 purchasers for use or consumption in addition to rendering
1092	1092	7 service as a motor carrier are engaged in a profession or
1093	1093	8 service occupation as a motor carrier and are not servicemen
1094	1094	9 within the meaning of this Act when they sell items of tangible
1095	1095	10 personal property to purchasers incident to the rendering of
1096	1096	11 service as a motor carrier. Those motor carriers are not
1097	1097	12 required to collect or remit the tax imposed by this Act on the
1098	1098	13 sale of that tangible personal property.
1099	1099	14 "Sale at retail" means "sale at retail" as defined in the
1100	1100	15 Retailers' Occupation Tax Act, which, on and after January 1,
1101	1101	16 2025, is defined to include leases.
1102	1102	17 "Supplier" means any person who makes sales of tangible
1103	1103	18 personal property to servicemen for the purpose of resale as
1104	1104	19 an incident to a sale of service.
1105	1105	20 "Serviceman maintaining a place of business in this
1106	1106	21 State", or any like term, means and includes any serviceman:
1107	1107	22 (1) having or maintaining within this State, directly
1108	1108	23 or by a subsidiary, an office, distribution house, sales
1109	1109	24 house, warehouse or other place of business, or any agent
1110	1110	25 or other representative operating within this State under
1111	1111	26 the authority of the serviceman or its subsidiary,
1112	1112
1113	1113
1114	1114
1115	1115
1116	1116
1117	1117	HB1458 - 30 - LRB104 03259 HLH 13281 b
1118	1118
1119	1119
1120	1120	HB1458- 31 -LRB104 03259 HLH 13281 b HB1458 - 31 - LRB104 03259 HLH 13281 b
1121	1121	HB1458 - 31 - LRB104 03259 HLH 13281 b
1122	1122	1 irrespective of whether such place of business or agent or
1123	1123	2 other representative is located here permanently or
1124	1124	3 temporarily, or whether such serviceman or subsidiary is
1125	1125	4 licensed to do business in this State;
1126	1126	5 (1.1) having a contract with a person located in this
1127	1127	6 State under which the person, for a commission or other
1128	1128	7 consideration based on the sale of service by the
1129	1129	8 serviceman, directly or indirectly refers potential
1130	1130	9 customers to the serviceman by providing to the potential
1131	1131	10 customers a promotional code or other mechanism that
1132	1132	11 allows the serviceman to track purchases referred by such
1133	1133	12 persons. Examples of mechanisms that allow the serviceman
1134	1134	13 to track purchases referred by such persons include but
1135	1135	14 are not limited to the use of a link on the person's
1136	1136	15 Internet website, promotional codes distributed through
1137	1137	16 the person's hand-delivered or mailed material, and
1138	1138	17 promotional codes distributed by the person through radio
1139	1139	18 or other broadcast media. The provisions of this paragraph
1140	1140	19 (1.1) shall apply only if the cumulative gross receipts
1141	1141	20 from sales of service by the serviceman to customers who
1142	1142	21 are referred to the serviceman by all persons in this
1143	1143	22 State under such contracts exceed $10,000 during the
1144	1144	23 preceding 4 quarterly periods ending on the last day of
1145	1145	24 March, June, September, and December; a serviceman meeting
1146	1146	25 the requirements of this paragraph (1.1) shall be presumed
1147	1147	26 to be maintaining a place of business in this State but may
1148	1148
1149	1149
1150	1150
1151	1151
1152	1152
1153	1153	HB1458 - 31 - LRB104 03259 HLH 13281 b
1154	1154
1155	1155
1156	1156	HB1458- 32 -LRB104 03259 HLH 13281 b HB1458 - 32 - LRB104 03259 HLH 13281 b
1157	1157	HB1458 - 32 - LRB104 03259 HLH 13281 b
1158	1158	1 rebut this presumption by submitting proof that the
1159	1159	2 referrals or other activities pursued within this State by
1160	1160	3 such persons were not sufficient to meet the nexus
1161	1161	4 standards of the United States Constitution during the
1162	1162	5 preceding 4 quarterly periods;
1163	1163	6 (1.2) beginning July 1, 2011, having a contract with a
1164	1164	7 person located in this State under which:
1165	1165	8 (A) the serviceman sells the same or substantially
1166	1166	9 similar line of services as the person located in this
1167	1167	10 State and does so using an identical or substantially
1168	1168	11 similar name, trade name, or trademark as the person
1169	1169	12 located in this State; and
1170	1170	13 (B) the serviceman provides a commission or other
1171	1171	14 consideration to the person located in this State
1172	1172	15 based upon the sale of services by the serviceman.
1173	1173	16 The provisions of this paragraph (1.2) shall apply only if
1174	1174	17 the cumulative gross receipts from sales of service by the
1175	1175	18 serviceman to customers in this State under all such
1176	1176	19 contracts exceed $10,000 during the preceding 4 quarterly
1177	1177	20 periods ending on the last day of March, June, September,
1178	1178	21 and December;
1179	1179	22 (2) soliciting orders for tangible personal property
1180	1180	23 by means of a telecommunication or television shopping
1181	1181	24 system (which utilizes toll free numbers) which is
1182	1182	25 intended by the retailer to be broadcast by cable
1183	1183	26 television or other means of broadcasting, to consumers
1184	1184
1185	1185
1186	1186
1187	1187
1188	1188
1189	1189	HB1458 - 32 - LRB104 03259 HLH 13281 b
1190	1190
1191	1191
1192	1192	HB1458- 33 -LRB104 03259 HLH 13281 b HB1458 - 33 - LRB104 03259 HLH 13281 b
1193	1193	HB1458 - 33 - LRB104 03259 HLH 13281 b
1194	1194	1 located in this State;
1195	1195	2 (3) pursuant to a contract with a broadcaster or
1196	1196	3 publisher located in this State, soliciting orders for
1197	1197	4 tangible personal property by means of advertising which
1198	1198	5 is disseminated primarily to consumers located in this
1199	1199	6 State and only secondarily to bordering jurisdictions;
1200	1200	7 (4) soliciting orders for tangible personal property
1201	1201	8 by mail if the solicitations are substantial and recurring
1202	1202	9 and if the retailer benefits from any banking, financing,
1203	1203	10 debt collection, telecommunication, or marketing
1204	1204	11 activities occurring in this State or benefits from the
1205	1205	12 location in this State of authorized installation,
1206	1206	13 servicing, or repair facilities;
1207	1207	14 (5) being owned or controlled by the same interests
1208	1208	15 which own or control any retailer engaging in business in
1209	1209	16 the same or similar line of business in this State;
1210	1210	17 (6) having a franchisee or licensee operating under
1211	1211	18 its trade name if the franchisee or licensee is required
1212	1212	19 to collect the tax under this Section;
1213	1213	20 (7) pursuant to a contract with a cable television
1214	1214	21 operator located in this State, soliciting orders for
1215	1215	22 tangible personal property by means of advertising which
1216	1216	23 is transmitted or distributed over a cable television
1217	1217	24 system in this State;
1218	1218	25 (8) engaging in activities in Illinois, which
1219	1219	26 activities in the state in which the supply business
1220	1220
1221	1221
1222	1222
1223	1223
1224	1224
1225	1225	HB1458 - 33 - LRB104 03259 HLH 13281 b
1226	1226
1227	1227
1228	1228	HB1458- 34 -LRB104 03259 HLH 13281 b HB1458 - 34 - LRB104 03259 HLH 13281 b
1229	1229	HB1458 - 34 - LRB104 03259 HLH 13281 b
1230	1230	1 engaging in such activities is located would constitute
1231	1231	2 maintaining a place of business in that state; or
1232	1232	3 (9) beginning October 1, 2018, making sales of service
1233	1233	4 to purchasers in Illinois from outside of Illinois if:
1234	1234	5 (A) the cumulative gross receipts from sales of
1235	1235	6 service to purchasers in Illinois are $100,000 or
1236	1236	7 more; or
1237	1237	8 (B) the serviceman enters into 200 or more
1238	1238	9 separate transactions for sales of service to
1239	1239	10 purchasers in Illinois.
1240	1240	11 The serviceman shall determine on a quarterly basis,
1241	1241	12 ending on the last day of March, June, September, and
1242	1242	13 December, whether he or she meets the criteria of either
1243	1243	14 subparagraph (A) or (B) of this paragraph (9) for the
1244	1244	15 preceding 12-month period. If the serviceman meets the
1245	1245	16 criteria of either subparagraph (A) or (B) for a 12-month
1246	1246	17 period, he or she is considered a serviceman maintaining a
1247	1247	18 place of business in this State and is required to collect
1248	1248	19 and remit the tax imposed under this Act and file returns
1249	1249	20 for one year. At the end of that one-year period, the
1250	1250	21 serviceman shall determine whether the serviceman met the
1251	1251	22 criteria of either subparagraph (A) or (B) during the
1252	1252	23 preceding 12-month period. If the serviceman met the
1253	1253	24 criteria in either subparagraph (A) or (B) for the
1254	1254	25 preceding 12-month period, he or she is considered a
1255	1255	26 serviceman maintaining a place of business in this State
1256	1256
1257	1257
1258	1258
1259	1259
1260	1260
1261	1261	HB1458 - 34 - LRB104 03259 HLH 13281 b
1262	1262
1263	1263
1264	1264	HB1458- 35 -LRB104 03259 HLH 13281 b HB1458 - 35 - LRB104 03259 HLH 13281 b
1265	1265	HB1458 - 35 - LRB104 03259 HLH 13281 b
1266	1266	1 and is required to collect and remit the tax imposed under
1267	1267	2 this Act and file returns for the subsequent year. If at
1268	1268	3 the end of a one-year period a serviceman that was
1269	1269	4 required to collect and remit the tax imposed under this
1270	1270	5 Act determines that he or she did not meet the criteria in
1271	1271	6 either subparagraph (A) or (B) during the preceding
1272	1272	7 12-month period, the serviceman subsequently shall
1273	1273	8 determine on a quarterly basis, ending on the last day of
1274	1274	9 March, June, September, and December, whether he or she
1275	1275	10 meets the criteria of either subparagraph (A) or (B) for
1276	1276	11 the preceding 12-month period.
1277	1277	12 Beginning January 1, 2020, neither the gross receipts
1278	1278	13 from nor the number of separate transactions for sales of
1279	1279	14 service to purchasers in Illinois that a serviceman makes
1280	1280	15 through a marketplace facilitator and for which the
1281	1281	16 serviceman has received a certification from the
1282	1282	17 marketplace facilitator pursuant to Section 2d of this Act
1283	1283	18 shall be included for purposes of determining whether he
1284	1284	19 or she has met the thresholds of this paragraph (9).
1285	1285	20 (10) Beginning January 1, 2020, a marketplace
1286	1286	21 facilitator, as defined in Section 2d of this Act.
1287	1287	22 (Source: P.A. 103-592, eff. 1-1-25.)
1288	1288	23 Section 15. The Service Occupation Tax Act is amended by
1289	1289	24 changing Section 2 as follows:
1290	1290
1291	1291
1292	1292
1293	1293
1294	1294
1295	1295	HB1458 - 35 - LRB104 03259 HLH 13281 b
1296	1296
1297	1297
1298	1298	HB1458- 36 -LRB104 03259 HLH 13281 b HB1458 - 36 - LRB104 03259 HLH 13281 b
1299	1299	HB1458 - 36 - LRB104 03259 HLH 13281 b
1300	1300	1 (35 ILCS 115/2) (from Ch. 120, par. 439.102)
1301	1301	2 Sec. 2. In this Act:
1302	1302	3 "Transfer" means any transfer of the title to property or
1303	1303	4 of the ownership of property whether or not the transferor
1304	1304	5 retains title as security for the payment of amounts due him
1305	1305	6 from the transferee. On and after January 1, 2025, "transfer"
1306	1306	7 also means any transfer of the possession or control of, the
1307	1307	8 right to possess or control, or a license to use, but not title
1308	1308	9 to, tangible personal property.
1309	1309	10 "Lease" means a transfer of the possession or control of,
1310	1310	11 the right to possess or control, or a license to use, but not
1311	1311	12 title to, tangible personal property for a fixed or
1312	1312	13 indeterminate term for consideration, regardless of the name
1313	1313	14 by which the transaction is called. "Lease" does not include a
1314	1314	15 lease entered into merely as a security agreement that does
1315	1315	16 not involve a transfer of possession or control from the
1316	1316	17 lessor to the lessee.
1317	1317	18 On and after January 1, 2025, the term "sale", when used in
1318	1318	19 this Act with respect to tangible personal property, includes
1319	1319	20 a lease.
1320	1320	21 "Cost Price" means the consideration paid by the
1321	1321	22 serviceman for a purchase, including, on and after January 1,
1322	1322	23 2025, a lease, valued in money, whether paid in money or
1323	1323	24 otherwise, including cash, credits and services, and shall be
1324	1324	25 determined without any deduction on account of the supplier's
1325	1325	26 cost of the property sold or on account of any other expense
1326	1326
1327	1327
1328	1328
1329	1329
1330	1330
1331	1331	HB1458 - 36 - LRB104 03259 HLH 13281 b
1332	1332
1333	1333
1334	1334	HB1458- 37 -LRB104 03259 HLH 13281 b HB1458 - 37 - LRB104 03259 HLH 13281 b
1335	1335	HB1458 - 37 - LRB104 03259 HLH 13281 b
1336	1336	1 incurred by the supplier. When a serviceman contracts out part
1337	1337	2 or all of the services required in his sale of service, it
1338	1338	3 shall be presumed that the cost price to the serviceman of the
1339	1339	4 property transferred to him by his or her subcontractor is
1340	1340	5 equal to 50% of the subcontractor's charges to the serviceman
1341	1341	6 in the absence of proof of the consideration paid by the
1342	1342	7 subcontractor for the purchase of such property.
1343	1343	8 "Department" means the Department of Revenue.
1344	1344	9 "Person" means any natural individual, firm, partnership,
1345	1345	10 association, joint stock company, joint venture, public or
1346	1346	11 private corporation, limited liability company, and any
1347	1347	12 receiver, executor, trustee, guardian or other representative
1348	1348	13 appointed by order of any court.
1349	1349	14 "Sale of Service" means any transaction except:
1350	1350	15 (a) A retail sale of tangible personal property taxable
1351	1351	16 under the Retailers' Occupation Tax Act or under the Use Tax
1352	1352	17 Act.
1353	1353	18 (b) A sale of tangible personal property for the purpose
1354	1354	19 of resale made in compliance with Section 2c of the Retailers'
1355	1355	20 Occupation Tax Act.
1356	1356	21 (c) Except as hereinafter provided, a sale or transfer of
1357	1357	22 tangible personal property as an incident to the rendering of
1358	1358	23 service for or by any governmental body or for or by any
1359	1359	24 corporation, society, association, foundation or institution
1360	1360	25 organized and operated exclusively for charitable, religious
1361	1361	26 or educational purposes or any not-for-profit corporation,
1362	1362
1363	1363
1364	1364
1365	1365
1366	1366
1367	1367	HB1458 - 37 - LRB104 03259 HLH 13281 b
1368	1368
1369	1369
1370	1370	HB1458- 38 -LRB104 03259 HLH 13281 b HB1458 - 38 - LRB104 03259 HLH 13281 b
1371	1371	HB1458 - 38 - LRB104 03259 HLH 13281 b
1372	1372	1 society, association, foundation, institution or organization
1373	1373	2 which has no compensated officers or employees and which is
1374	1374	3 organized and operated primarily for the recreation of persons
1375	1375	4 55 years of age or older. A limited liability company may
1376	1376	5 qualify for the exemption under this paragraph only if the
1377	1377	6 limited liability company is organized and operated
1378	1378	7 exclusively for educational purposes.
1379	1379	8 (d) (Blank).
1380	1380	9 (d-1) A sale or transfer of tangible personal property as
1381	1381	10 an incident to the rendering of service for owners or lessors,
1382	1382	11 lessees, or shippers of tangible personal property which is
1383	1383	12 utilized by interstate carriers for hire for use as rolling
1384	1384	13 stock moving in interstate commerce, and equipment operated by
1385	1385	14 a telecommunications provider, licensed as a common carrier by
1386	1386	15 the Federal Communications Commission, which is permanently
1387	1387	16 installed in or affixed to aircraft moving in interstate
1388	1388	17 commerce.
1389	1389	18 (d-1.1) On and after July 1, 2003 and through June 30,
1390	1390	19 2004, a sale or transfer of a motor vehicle of the second
1391	1391	20 division with a gross vehicle weight in excess of 8,000 pounds
1392	1392	21 as an incident to the rendering of service if that motor
1393	1393	22 vehicle is subject to the commercial distribution fee imposed
1394	1394	23 under Section 3-815.1 of the Illinois Vehicle Code. Beginning
1395	1395	24 on July 1, 2004 and through June 30, 2005, the use in this
1396	1396	25 State of motor vehicles of the second division: (i) with a
1397	1397	26 gross vehicle weight rating in excess of 8,000 pounds; (ii)
1398	1398
1399	1399
1400	1400
1401	1401
1402	1402
1403	1403	HB1458 - 38 - LRB104 03259 HLH 13281 b
1404	1404
1405	1405
1406	1406	HB1458- 39 -LRB104 03259 HLH 13281 b HB1458 - 39 - LRB104 03259 HLH 13281 b
1407	1407	HB1458 - 39 - LRB104 03259 HLH 13281 b
1408	1408	1 that are subject to the commercial distribution fee imposed
1409	1409	2 under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
1410	1410	3 that are primarily used for commercial purposes. Through June
1411	1411	4 30, 2005, this exemption applies to repair and replacement
1412	1412	5 parts added after the initial purchase of such a motor vehicle
1413	1413	6 if that motor vehicle is used in a manner that would qualify
1414	1414	7 for the rolling stock exemption otherwise provided for in this
1415	1415	8 Act. For purposes of this paragraph, "used for commercial
1416	1416	9 purposes" means the transportation of persons or property in
1417	1417	10 furtherance of any commercial or industrial enterprise whether
1418	1418	11 for-hire or not.
1419	1419	12 (d-2) The repairing, reconditioning or remodeling, for a
1420	1420	13 common carrier by rail, of tangible personal property which
1421	1421	14 belongs to such carrier for hire, and as to which such carrier
1422	1422	15 receives the physical possession of the repaired,
1423	1423	16 reconditioned or remodeled item of tangible personal property
1424	1424	17 in Illinois, and which such carrier transports, or shares with
1425	1425	18 another common carrier in the transportation of such property,
1426	1426	19 out of Illinois on a standard uniform bill of lading showing
1427	1427	20 the person who repaired, reconditioned or remodeled the
1428	1428	21 property as the shipper or consignor of such property to a
1429	1429	22 destination outside Illinois, for use outside Illinois.
1430	1430	23 (d-3) A sale or transfer of tangible personal property
1431	1431	24 which is produced by the seller thereof on special order in
1432	1432	25 such a way as to have made the applicable tax the Service
1433	1433	26 Occupation Tax or the Service Use Tax, rather than the
1434	1434
1435	1435
1436	1436
1437	1437
1438	1438
1439	1439	HB1458 - 39 - LRB104 03259 HLH 13281 b
1440	1440
1441	1441
1442	1442	HB1458- 40 -LRB104 03259 HLH 13281 b HB1458 - 40 - LRB104 03259 HLH 13281 b
1443	1443	HB1458 - 40 - LRB104 03259 HLH 13281 b
1444	1444	1 Retailers' Occupation Tax or the Use Tax, for an interstate
1445	1445	2 carrier by rail which receives the physical possession of such
1446	1446	3 property in Illinois, and which transports such property, or
1447	1447	4 shares with another common carrier in the transportation of
1448	1448	5 such property, out of Illinois on a standard uniform bill of
1449	1449	6 lading showing the seller of the property as the shipper or
1450	1450	7 consignor of such property to a destination outside Illinois,
1451	1451	8 for use outside Illinois.
1452	1452	9 (d-4) Until January 1, 1997, a sale, by a registered
1453	1453	10 serviceman paying tax under this Act to the Department, of
1454	1454	11 special order printed materials delivered outside Illinois and
1455	1455	12 which are not returned to this State, if delivery is made by
1456	1456	13 the seller or agent of the seller, including an agent who
1457	1457	14 causes the product to be delivered outside Illinois by a
1458	1458	15 common carrier or the U.S. postal service.
1459	1459	16 (e) A sale or transfer of machinery and equipment used
1460	1460	17 primarily in the process of the manufacturing or assembling,
1461	1461	18 either in an existing, an expanded or a new manufacturing
1462	1462	19 facility, of tangible personal property for wholesale or
1463	1463	20 retail sale or lease, whether such sale or lease is made
1464	1464	21 directly by the manufacturer or by some other person, whether
1465	1465	22 the materials used in the process are owned by the
1466	1466	23 manufacturer or some other person, or whether such sale or
1467	1467	24 lease is made apart from or as an incident to the seller's
1468	1468	25 engaging in a service occupation and the applicable tax is a
1469	1469	26 Service Occupation Tax or Service Use Tax, rather than
1470	1470
1471	1471
1472	1472
1473	1473
1474	1474
1475	1475	HB1458 - 40 - LRB104 03259 HLH 13281 b
1476	1476
1477	1477
1478	1478	HB1458- 41 -LRB104 03259 HLH 13281 b HB1458 - 41 - LRB104 03259 HLH 13281 b
1479	1479	HB1458 - 41 - LRB104 03259 HLH 13281 b
1480	1480	1 Retailers' Occupation Tax or Use Tax. The exemption provided
1481	1481	2 by this paragraph (e) includes production related tangible
1482	1482	3 personal property, as defined in Section 3-50 of the Use Tax
1483	1483	4 Act, purchased on or after July 1, 2019. The exemption
1484	1484	5 provided by this paragraph (e) does not include machinery and
1485	1485	6 equipment used in (i) the generation of electricity for
1486	1486	7 wholesale or retail sale; (ii) the generation or treatment of
1487	1487	8 natural or artificial gas for wholesale or retail sale that is
1488	1488	9 delivered to customers through pipes, pipelines, or mains; or
1489	1489	10 (iii) the treatment of water for wholesale or retail sale that
1490	1490	11 is delivered to customers through pipes, pipelines, or mains.
1491	1491	12 The provisions of Public Act 98-583 are declaratory of
1492	1492	13 existing law as to the meaning and scope of this exemption. The
1493	1493	14 exemption under this subsection (e) is exempt from the
1494	1494	15 provisions of Section 3-75.
1495	1495	16 (f) Until July 1, 2003, the sale or transfer of
1496	1496	17 distillation machinery and equipment, sold as a unit or kit
1497	1497	18 and assembled or installed by the retailer, which machinery
1498	1498	19 and equipment is certified by the user to be used only for the
1499	1499	20 production of ethyl alcohol that will be used for consumption
1500	1500	21 as motor fuel or as a component of motor fuel for the personal
1501	1501	22 use of such user and not subject to sale or resale.
1502	1502	23 (g) At the election of any serviceman not required to be
1503	1503	24 otherwise registered as a retailer under Section 2a of the
1504	1504	25 Retailers' Occupation Tax Act, made for each fiscal year sales
1505	1505	26 of service in which the aggregate annual cost price of
1506	1506
1507	1507
1508	1508
1509	1509
1510	1510
1511	1511	HB1458 - 41 - LRB104 03259 HLH 13281 b
1512	1512
1513	1513
1514	1514	HB1458- 42 -LRB104 03259 HLH 13281 b HB1458 - 42 - LRB104 03259 HLH 13281 b
1515	1515	HB1458 - 42 - LRB104 03259 HLH 13281 b
1516	1516	1 tangible personal property transferred as an incident to the
1517	1517	2 sales of service is less than 35% (75% in the case of
1518	1518	3 servicemen transferring prescription drugs or servicemen
1519	1519	4 engaged in graphic arts production) of the aggregate annual
1520	1520	5 total gross receipts from all sales of service. The purchase
1521	1521	6 of such tangible personal property by the serviceman shall be
1522	1522	7 subject to tax under the Retailers' Occupation Tax Act and the
1523	1523	8 Use Tax Act. However, if a primary serviceman who has made the
1524	1524	9 election described in this paragraph subcontracts service work
1525	1525	10 to a secondary serviceman who has also made the election
1526	1526	11 described in this paragraph, the primary serviceman does not
1527	1527	12 incur a Use Tax liability if the secondary serviceman (i) has
1528	1528	13 paid or will pay Use Tax on his or her cost price of any
1529	1529	14 tangible personal property transferred to the primary
1530	1530	15 serviceman and (ii) certifies that fact in writing to the
1531	1531	16 primary serviceman.
1532	1532	17 Tangible personal property transferred incident to the
1533	1533	18 completion of a maintenance agreement is exempt from the tax
1534	1534	19 imposed pursuant to this Act.
1535	1535	20 Exemption (e) also includes machinery and equipment used
1536	1536	21 in the general maintenance or repair of such exempt machinery
1537	1537	22 and equipment or for in-house manufacture of exempt machinery
1538	1538	23 and equipment. On and after July 1, 2017, exemption (e) also
1539	1539	24 includes graphic arts machinery and equipment, as defined in
1540	1540	25 paragraph (5) of Section 3-5. The machinery and equipment
1541	1541	26 exemption does not include machinery and equipment used in (i)
1542	1542
1543	1543
1544	1544
1545	1545
1546	1546
1547	1547	HB1458 - 42 - LRB104 03259 HLH 13281 b
1548	1548
1549	1549
1550	1550	HB1458- 43 -LRB104 03259 HLH 13281 b HB1458 - 43 - LRB104 03259 HLH 13281 b
1551	1551	HB1458 - 43 - LRB104 03259 HLH 13281 b
1552	1552	1 the generation of electricity for wholesale or retail sale;
1553	1553	2 (ii) the generation or treatment of natural or artificial gas
1554	1554	3 for wholesale or retail sale that is delivered to customers
1555	1555	4 through pipes, pipelines, or mains; or (iii) the treatment of
1556	1556	5 water for wholesale or retail sale that is delivered to
1557	1557	6 customers through pipes, pipelines, or mains. The provisions
1558	1558	7 of Public Act 98-583 are declaratory of existing law as to the
1559	1559	8 meaning and scope of this exemption. For the purposes of
1560	1560	9 exemption (e), each of these terms shall have the following
1561	1561	10 meanings: (1) "manufacturing process" shall mean the
1562	1562	11 production of any article of tangible personal property,
1563	1563	12 whether such article is a finished product or an article for
1564	1564	13 use in the process of manufacturing or assembling a different
1565	1565	14 article of tangible personal property, by procedures commonly
1566	1566	15 regarded as manufacturing, processing, fabricating, or
1567	1567	16 refining which changes some existing material or materials
1568	1568	17 into a material with a different form, use or name. In relation
1569	1569	18 to a recognized integrated business composed of a series of
1570	1570	19 operations which collectively constitute manufacturing, or
1571	1571	20 individually constitute manufacturing operations, the
1572	1572	21 manufacturing process shall be deemed to commence with the
1573	1573	22 first operation or stage of production in the series, and
1574	1574	23 shall not be deemed to end until the completion of the final
1575	1575	24 product in the last operation or stage of production in the
1576	1576	25 series; and further for purposes of exemption (e),
1577	1577	26 photoprocessing is deemed to be a manufacturing process of
1578	1578
1579	1579
1580	1580
1581	1581
1582	1582
1583	1583	HB1458 - 43 - LRB104 03259 HLH 13281 b
1584	1584
1585	1585
1586	1586	HB1458- 44 -LRB104 03259 HLH 13281 b HB1458 - 44 - LRB104 03259 HLH 13281 b
1587	1587	HB1458 - 44 - LRB104 03259 HLH 13281 b
1588	1588	1 tangible personal property for wholesale or retail sale; (2)
1589	1589	2 "assembling process" shall mean the production of any article
1590	1590	3 of tangible personal property, whether such article is a
1591	1591	4 finished product or an article for use in the process of
1592	1592	5 manufacturing or assembling a different article of tangible
1593	1593	6 personal property, by the combination of existing materials in
1594	1594	7 a manner commonly regarded as assembling which results in a
1595	1595	8 material of a different form, use or name; (3) "machinery"
1596	1596	9 shall mean major mechanical machines or major components of
1597	1597	10 such machines contributing to a manufacturing or assembling
1598	1598	11 process; and (4) "equipment" shall include any independent
1599	1599	12 device or tool separate from any machinery but essential to an
1600	1600	13 integrated manufacturing or assembly process; including
1601	1601	14 computers used primarily in a manufacturer's computer assisted
1602	1602	15 design, computer assisted manufacturing (CAD/CAM) system; or
1603	1603	16 any subunit or assembly comprising a component of any
1604	1604	17 machinery or auxiliary, adjunct or attachment parts of
1605	1605	18 machinery, such as tools, dies, jigs, fixtures, patterns and
1606	1606	19 molds; or any parts which require periodic replacement in the
1607	1607	20 course of normal operation; but shall not include hand tools.
1608	1608	21 Equipment includes chemicals or chemicals acting as catalysts
1609	1609	22 but only if the chemicals or chemicals acting as catalysts
1610	1610	23 effect a direct and immediate change upon a product being
1611	1611	24 manufactured or assembled for wholesale or retail sale or
1612	1612	25 lease. The purchaser of such machinery and equipment who has
1613	1613	26 an active resale registration number shall furnish such number
1614	1614
1615	1615
1616	1616
1617	1617
1618	1618
1619	1619	HB1458 - 44 - LRB104 03259 HLH 13281 b
1620	1620
1621	1621
1622	1622	HB1458- 45 -LRB104 03259 HLH 13281 b HB1458 - 45 - LRB104 03259 HLH 13281 b
1623	1623	HB1458 - 45 - LRB104 03259 HLH 13281 b
1624	1624	1 to the seller at the time of purchase. The purchaser of such
1625	1625	2 machinery and equipment and tools without an active resale
1626	1626	3 registration number shall furnish to the seller a certificate
1627	1627	4 of exemption stating facts establishing the exemption, which
1628	1628	5 certificate shall be available to the Department for
1629	1629	6 inspection or audit.
1630	1630	7 Except as provided in Section 2d of this Act, the rolling
1631	1631	8 stock exemption applies to rolling stock used by an interstate
1632	1632	9 carrier for hire, even just between points in Illinois, if
1633	1633	10 such rolling stock transports, for hire, persons whose
1634	1634	11 journeys or property whose shipments originate or terminate
1635	1635	12 outside Illinois.
1636	1636	13 Any informal rulings, opinions or letters issued by the
1637	1637	14 Department in response to an inquiry or request for any
1638	1638	15 opinion from any person regarding the coverage and
1639	1639	16 applicability of exemption (e) to specific devices shall be
1640	1640	17 published, maintained as a public record, and made available
1641	1641	18 for public inspection and copying. If the informal ruling,
1642	1642	19 opinion or letter contains trade secrets or other confidential
1643	1643	20 information, where possible the Department shall delete such
1644	1644	21 information prior to publication. Whenever such informal
1645	1645	22 rulings, opinions, or letters contain any policy of general
1646	1646	23 applicability, the Department shall formulate and adopt such
1647	1647	24 policy as a rule in accordance with the provisions of the
1648	1648	25 Illinois Administrative Procedure Act.
1649	1649	26 On and after July 1, 1987, no entity otherwise eligible
1650	1650
1651	1651
1652	1652
1653	1653
1654	1654
1655	1655	HB1458 - 45 - LRB104 03259 HLH 13281 b
1656	1656
1657	1657
1658	1658	HB1458- 46 -LRB104 03259 HLH 13281 b HB1458 - 46 - LRB104 03259 HLH 13281 b
1659	1659	HB1458 - 46 - LRB104 03259 HLH 13281 b
1660	1660	1 under exemption (c) of this Section shall make tax-free
1661	1661	2 purchases unless it has an active exemption identification
1662	1662	3 number issued by the Department.
1663	1663	4 "Serviceman" means any person who is engaged in the
1664	1664	5 occupation of making sales of service.
1665	1665	6 Motor carriers, as defined in Section 18c-1104 of the
1666	1666	7 Vehicle Code, that sell items of tangible personal property to
1667	1667	8 purchasers for use or consumption in addition to rendering
1668	1668	9 service as a motor carrier are engaged in a profession or
1669	1669	10 service occupation as a motor carrier and are not servicemen
1670	1670	11 within the meaning of this Act when they sell items of tangible
1671	1671	12 personal property to purchasers incident to the rendering of
1672	1672	13 service as a motor carrier. Those motor carriers are not
1673	1673	14 required to collect or remit the tax imposed by this Act on the
1674	1674	15 sale of that tangible personal property.
1675	1675	16 "Sale at Retail" means "sale at retail" as defined in the
1676	1676	17 Retailers' Occupation Tax Act, which, on and after January 1,
1677	1677	18 2025, is defined to include leases.
1678	1678	19 "Supplier" means any person who makes sales of tangible
1679	1679	20 personal property to servicemen for the purpose of resale as
1680	1680	21 an incident to a sale of service.
1681	1681	22 (Source: P.A. 103-592, eff. 1-1-25.)
1682	1682	23 Section 20. The Retailers' Occupation Tax Act is amended
1683	1683	24 by changing Sections 1 and 2-55 as follows:
1684	1684
1685	1685
1686	1686
1687	1687
1688	1688
1689	1689	HB1458 - 46 - LRB104 03259 HLH 13281 b
1690	1690
1691	1691
1692	1692	HB1458- 47 -LRB104 03259 HLH 13281 b HB1458 - 47 - LRB104 03259 HLH 13281 b
1693	1693	HB1458 - 47 - LRB104 03259 HLH 13281 b
1694	1694	1 (35 ILCS 120/1)
1695	1695	2 Sec. 1. Definitions. As used in this Act:
1696	1696	3 "Sale at retail" means any transfer of the ownership of,
1697	1697	4 the title to, the possession or control of, the right to
1698	1698	5 possess or control, or a license to use tangible personal
1699	1699	6 property to a purchaser, for the purpose of use or
1700	1700	7 consumption, and not for the purpose of resale in any form as
1701	1701	8 tangible personal property to the extent not first subjected
1702	1702	9 to a use for which it was purchased, for a valuable
1703	1703	10 consideration: Provided that the property purchased is deemed
1704	1704	11 to be purchased for the purpose of resale, despite first being
1705	1705	12 used, to the extent to which it is resold as an ingredient of
1706	1706	13 an intentionally produced product or byproduct of
1707	1707	14 manufacturing. For this purpose, slag produced as an incident
1708	1708	15 to manufacturing pig iron or steel and sold is considered to be
1709	1709	16 an intentionally produced byproduct of manufacturing.
1710	1710	17 Transactions whereby the possession of the property is
1711	1711	18 transferred but the seller retains the title as security for
1712	1712	19 payment of the selling price shall be deemed to be sales.
1713	1713	20 "Sale at retail" shall be construed to include any
1714	1714	21 transfer of the ownership of, the title to, the possession or
1715	1715	22 control of, the right to possess or control, or a license to
1716	1716	23 use tangible personal property to a purchaser, for use or
1717	1717	24 consumption by any other person to whom such purchaser may
1718	1718	25 transfer the tangible personal property without a valuable
1719	1719	26 consideration, and to include any transfer, whether made for
1720	1720
1721	1721
1722	1722
1723	1723
1724	1724
1725	1725	HB1458 - 47 - LRB104 03259 HLH 13281 b
1726	1726
1727	1727
1728	1728	HB1458- 48 -LRB104 03259 HLH 13281 b HB1458 - 48 - LRB104 03259 HLH 13281 b
1729	1729	HB1458 - 48 - LRB104 03259 HLH 13281 b
1730	1730	1 or without a valuable consideration, for resale in any form as
1731	1731	2 tangible personal property unless made in compliance with
1732	1732	3 Section 2c of this Act.
1733	1733	4 Sales of tangible personal property, which property, to
1734	1734	5 the extent not first subjected to a use for which it was
1735	1735	6 purchased, as an ingredient or constituent, goes into and
1736	1736	7 forms a part of tangible personal property subsequently the
1737	1737	8 subject of a "Sale at retail", are not sales at retail as
1738	1738	9 defined in this Act: Provided that the property purchased is
1739	1739	10 deemed to be purchased for the purpose of resale, despite
1740	1740	11 first being used, to the extent to which it is resold as an
1741	1741	12 ingredient of an intentionally produced product or byproduct
1742	1742	13 of manufacturing.
1743	1743	14 "Sale at retail" shall be construed to include any
1744	1744	15 Illinois florist's sales transaction in which the purchase
1745	1745	16 order is received in Illinois by a florist and the sale is for
1746	1746	17 use or consumption, but the Illinois florist has a florist in
1747	1747	18 another state deliver the property to the purchaser or the
1748	1748	19 purchaser's donee in such other state.
1749	1749	20 Nonreusable tangible personal property that is used by
1750	1750	21 persons engaged in the business of operating a restaurant,
1751	1751	22 cafeteria, or drive-in is a sale for resale when it is
1752	1752	23 transferred to customers in the ordinary course of business as
1753	1753	24 part of the sale of food or beverages and is used to deliver,
1754	1754	25 package, or consume food or beverages, regardless of where
1755	1755	26 consumption of the food or beverages occurs. Examples of those
1756	1756
1757	1757
1758	1758
1759	1759
1760	1760
1761	1761	HB1458 - 48 - LRB104 03259 HLH 13281 b
1762	1762
1763	1763
1764	1764	HB1458- 49 -LRB104 03259 HLH 13281 b HB1458 - 49 - LRB104 03259 HLH 13281 b
1765	1765	HB1458 - 49 - LRB104 03259 HLH 13281 b
1766	1766	1 items include, but are not limited to nonreusable, paper and
1767	1767	2 plastic cups, plates, baskets, boxes, sleeves, buckets or
1768	1768	3 other containers, utensils, straws, placemats, napkins, doggie
1769	1769	4 bags, and wrapping or packaging materials that are transferred
1770	1770	5 to customers as part of the sale of food or beverages in the
1771	1771	6 ordinary course of business.
1772	1772	7 The purchase, employment and transfer of such tangible
1773	1773	8 personal property as newsprint and ink for the primary purpose
1774	1774	9 of conveying news (with or without other information) is not a
1775	1775	10 purchase, use or sale of tangible personal property.
1776	1776	11 A person whose activities are organized and conducted
1777	1777	12 primarily as a not-for-profit service enterprise, and who
1778	1778	13 engages in selling tangible personal property at retail
1779	1779	14 (whether to the public or merely to members and their guests)
1780	1780	15 is engaged in the business of selling tangible personal
1781	1781	16 property at retail with respect to such transactions,
1782	1782	17 excepting only a person organized and operated exclusively for
1783	1783	18 charitable, religious or educational purposes either (1), to
1784	1784	19 the extent of sales by such person to its members, students,
1785	1785	20 patients or inmates of tangible personal property to be used
1786	1786	21 primarily for the purposes of such person, or (2), to the
1787	1787	22 extent of sales by such person of tangible personal property
1788	1788	23 which is not sold or offered for sale by persons organized for
1789	1789	24 profit. The selling of school books and school supplies by
1790	1790	25 schools at retail to students is not "primarily for the
1791	1791	26 purposes of" the school which does such selling. The
1792	1792
1793	1793
1794	1794
1795	1795
1796	1796
1797	1797	HB1458 - 49 - LRB104 03259 HLH 13281 b
1798	1798
1799	1799
1800	1800	HB1458- 50 -LRB104 03259 HLH 13281 b HB1458 - 50 - LRB104 03259 HLH 13281 b
1801	1801	HB1458 - 50 - LRB104 03259 HLH 13281 b
1802	1802	1 provisions of this paragraph shall not apply to nor subject to
1803	1803	2 taxation occasional dinners, socials or similar activities of
1804	1804	3 a person organized and operated exclusively for charitable,
1805	1805	4 religious or educational purposes, whether or not such
1806	1806	5 activities are open to the public.
1807	1807	6 A person who is the recipient of a grant or contract under
1808	1808	7 Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
1809	1809	8 serves meals to participants in the federal Nutrition Program
1810	1810	9 for the Elderly in return for contributions established in
1811	1811	10 amount by the individual participant pursuant to a schedule of
1812	1812	11 suggested fees as provided for in the federal Act is not
1813	1813	12 engaged in the business of selling tangible personal property
1814	1814	13 at retail with respect to such transactions.
1815	1815	14 "Lease" means a transfer of the possession or control of,
1816	1816	15 the right to possess or control, or a license to use, but not
1817	1817	16 title to, tangible personal property for a fixed or
1818	1818	17 indeterminate term for consideration, regardless of the name
1819	1819	18 by which the transaction is called. "Lease" does not include a
1820	1820	19 lease entered into merely as a security agreement that does
1821	1821	20 not involve a transfer of possession or control from the
1822	1822	21 lessor to the lessee.
1823	1823	22 On and after January 1, 2025, the term "sale", when used in
1824	1824	23 this Act, includes a lease.
1825	1825	24 "Purchaser" means anyone who, through a sale at retail,
1826	1826	25 acquires the ownership of, the title to, the possession or
1827	1827	26 control of, the right to possess or control, or a license to
1828	1828
1829	1829
1830	1830
1831	1831
1832	1832
1833	1833	HB1458 - 50 - LRB104 03259 HLH 13281 b
1834	1834
1835	1835
1836	1836	HB1458- 51 -LRB104 03259 HLH 13281 b HB1458 - 51 - LRB104 03259 HLH 13281 b
1837	1837	HB1458 - 51 - LRB104 03259 HLH 13281 b
1838	1838	1 use tangible personal property for a valuable consideration.
1839	1839	2 "Reseller of motor fuel" means any person engaged in the
1840	1840	3 business of selling or delivering or transferring title of
1841	1841	4 motor fuel to another person other than for use or
1842	1842	5 consumption. No person shall act as a reseller of motor fuel
1843	1843	6 within this State without first being registered as a reseller
1844	1844	7 pursuant to Section 2c or a retailer pursuant to Section 2a.
1845	1845	8 "Selling price" or the "amount of sale" means the
1846	1846	9 consideration for a sale valued in money whether received in
1847	1847	10 money or otherwise, including cash, credits, property, other
1848	1848	11 than as hereinafter provided, and services, but, prior to
1849	1849	12 January 1, 2020 and beginning again on January 1, 2022, not
1850	1850	13 including the value of or credit given for traded-in tangible
1851	1851	14 personal property where the item that is traded-in is of like
1852	1852	15 kind and character as that which is being sold; beginning
1853	1853	16 January 1, 2020 and until January 1, 2022, "selling price"
1854	1854	17 includes the portion of the value of or credit given for
1855	1855	18 traded-in motor vehicles of the First Division as defined in
1856	1856	19 Section 1-146 of the Illinois Vehicle Code of like kind and
1857	1857	20 character as that which is being sold that exceeds $10,000.
1858	1858	21 "Selling price" shall be determined without any deduction on
1859	1859	22 account of the cost of the property sold, the cost of materials
1860	1860	23 used, labor or service cost or any other expense whatsoever,
1861	1861	24 but does not include charges that are added to prices by
1862	1862	25 sellers on account of the seller's tax liability under this
1863	1863	26 Act, or on account of the seller's duty to collect, from the
1864	1864
1865	1865
1866	1866
1867	1867
1868	1868
1869	1869	HB1458 - 51 - LRB104 03259 HLH 13281 b
1870	1870
1871	1871
1872	1872	HB1458- 52 -LRB104 03259 HLH 13281 b HB1458 - 52 - LRB104 03259 HLH 13281 b
1873	1873	HB1458 - 52 - LRB104 03259 HLH 13281 b
1874	1874	1 purchaser, the tax that is imposed by the Use Tax Act, or,
1875	1875	2 except as otherwise provided with respect to any cigarette tax
1876	1876	3 imposed by a home rule unit, on account of the seller's tax
1877	1877	4 liability under any local occupation tax administered by the
1878	1878	5 Department, or, except as otherwise provided with respect to
1879	1879	6 any cigarette tax imposed by a home rule unit on account of the
1880	1880	7 seller's duty to collect, from the purchasers, the tax that is
1881	1881	8 imposed under any local use tax administered by the
1882	1882	9 Department. Effective December 1, 1985, "selling price" shall
1883	1883	10 include charges that are added to prices by sellers on account
1884	1884	11 of the seller's tax liability under the Cigarette Tax Act, on
1885	1885	12 account of the sellers' duty to collect, from the purchaser,
1886	1886	13 the tax imposed under the Cigarette Use Tax Act, and on account
1887	1887	14 of the seller's duty to collect, from the purchaser, any
1888	1888	15 cigarette tax imposed by a home rule unit.
1889	1889	16 The provisions of this paragraph, which provides only for
1890	1890	17 an alternative meaning of "selling price" with respect to the
1891	1891	18 sale of certain motor vehicles incident to the contemporaneous
1892	1892	19 lease of those motor vehicles, continue in effect and are not
1893	1893	20 changed by the tax on leases implemented by Public Act 103-592
1894	1894	21 this amendatory Act of the 103rd General Assembly.
1895	1895	22 Notwithstanding any law to the contrary, for any motor
1896	1896	23 vehicle, as defined in Section 1-146 of the Illinois Vehicle
1897	1897	24 Code, that is sold on or after January 1, 2015 for the purpose
1898	1898	25 of leasing the vehicle for a defined period that is longer than
1899	1899	26 one year and (1) is a motor vehicle of the second division
1900	1900
1901	1901
1902	1902
1903	1903
1904	1904
1905	1905	HB1458 - 52 - LRB104 03259 HLH 13281 b
1906	1906
1907	1907
1908	1908	HB1458- 53 -LRB104 03259 HLH 13281 b HB1458 - 53 - LRB104 03259 HLH 13281 b
1909	1909	HB1458 - 53 - LRB104 03259 HLH 13281 b
1910	1910	1 that: (A) is a self-contained motor vehicle designed or
1911	1911	2 permanently converted to provide living quarters for
1912	1912	3 recreational, camping, or travel use, with direct walk through
1913	1913	4 access to the living quarters from the driver's seat; (B) is of
1914	1914	5 the van configuration designed for the transportation of not
1915	1915	6 less than 7 nor more than 16 passengers; or (C) has a gross
1916	1916	7 vehicle weight rating of 8,000 pounds or less or (2) is a motor
1917	1917	8 vehicle of the first division, "selling price" or "amount of
1918	1918	9 sale" means the consideration received by the lessor pursuant
1919	1919	10 to the lease contract, including amounts due at lease signing
1920	1920	11 and all monthly or other regular payments charged over the
1921	1921	12 term of the lease. Also included in the selling price is any
1922	1922	13 amount received by the lessor from the lessee for the leased
1923	1923	14 vehicle that is not calculated at the time the lease is
1924	1924	15 executed, including, but not limited to, excess mileage
1925	1925	16 charges and charges for excess wear and tear. For sales that
1926	1926	17 occur in Illinois, with respect to any amount received by the
1927	1927	18 lessor from the lessee for the leased vehicle that is not
1928	1928	19 calculated at the time the lease is executed, the lessor who
1929	1929	20 purchased the motor vehicle does not incur the tax imposed by
1930	1930	21 the Use Tax Act on those amounts, and the retailer who makes
1931	1931	22 the retail sale of the motor vehicle to the lessor is not
1932	1932	23 required to collect the tax imposed by the Use Tax Act or to
1933	1933	24 pay the tax imposed by this Act on those amounts. However, the
1934	1934	25 lessor who purchased the motor vehicle assumes the liability
1935	1935	26 for reporting and paying the tax on those amounts directly to
1936	1936
1937	1937
1938	1938
1939	1939
1940	1940
1941	1941	HB1458 - 53 - LRB104 03259 HLH 13281 b
1942	1942
1943	1943
1944	1944	HB1458- 54 -LRB104 03259 HLH 13281 b HB1458 - 54 - LRB104 03259 HLH 13281 b
1945	1945	HB1458 - 54 - LRB104 03259 HLH 13281 b
1946	1946	1 the Department in the same form (Illinois Retailers'
1947	1947	2 Occupation Tax, and local retailers' occupation taxes, if
1948	1948	3 applicable) in which the retailer would have reported and paid
1949	1949	4 such tax if the retailer had accounted for the tax to the
1950	1950	5 Department. For amounts received by the lessor from the lessee
1951	1951	6 that are not calculated at the time the lease is executed, the
1952	1952	7 lessor must file the return and pay the tax to the Department
1953	1953	8 by the due date otherwise required by this Act for returns
1954	1954	9 other than transaction returns. If the retailer is entitled
1955	1955	10 under this Act to a discount for collecting and remitting the
1956	1956	11 tax imposed under this Act to the Department with respect to
1957	1957	12 the sale of the motor vehicle to the lessor, then the right to
1958	1958	13 the discount provided in this Act shall be transferred to the
1959	1959	14 lessor with respect to the tax paid by the lessor for any
1960	1960	15 amount received by the lessor from the lessee for the leased
1961	1961	16 vehicle that is not calculated at the time the lease is
1962	1962	17 executed; provided that the discount is only allowed if the
1963	1963	18 return is timely filed and for amounts timely paid. The
1964	1964	19 "selling price" of a motor vehicle that is sold on or after
1965	1965	20 January 1, 2015 for the purpose of leasing for a defined period
1966	1966	21 of longer than one year shall not be reduced by the value of or
1967	1967	22 credit given for traded-in tangible personal property owned by
1968	1968	23 the lessor, nor shall it be reduced by the value of or credit
1969	1969	24 given for traded-in tangible personal property owned by the
1970	1970	25 lessee, regardless of whether the trade-in value thereof is
1971	1971	26 assigned by the lessee to the lessor. In the case of a motor
1972	1972
1973	1973
1974	1974
1975	1975
1976	1976
1977	1977	HB1458 - 54 - LRB104 03259 HLH 13281 b
1978	1978
1979	1979
1980	1980	HB1458- 55 -LRB104 03259 HLH 13281 b HB1458 - 55 - LRB104 03259 HLH 13281 b
1981	1981	HB1458 - 55 - LRB104 03259 HLH 13281 b
1982	1982	1 vehicle that is sold for the purpose of leasing for a defined
1983	1983	2 period of longer than one year, the sale occurs at the time of
1984	1984	3 the delivery of the vehicle, regardless of the due date of any
1985	1985	4 lease payments. A lessor who incurs a Retailers' Occupation
1986	1986	5 Tax liability on the sale of a motor vehicle coming off lease
1987	1987	6 may not take a credit against that liability for the Use Tax
1988	1988	7 the lessor paid upon the purchase of the motor vehicle (or for
1989	1989	8 any tax the lessor paid with respect to any amount received by
1990	1990	9 the lessor from the lessee for the leased vehicle that was not
1991	1991	10 calculated at the time the lease was executed) if the selling
1992	1992	11 price of the motor vehicle at the time of purchase was
1993	1993	12 calculated using the definition of "selling price" as defined
1994	1994	13 in this paragraph. Notwithstanding any other provision of this
1995	1995	14 Act to the contrary, lessors shall file all returns and make
1996	1996	15 all payments required under this paragraph to the Department
1997	1997	16 by electronic means in the manner and form as required by the
1998	1998	17 Department. This paragraph does not apply to leases of motor
1999	1999	18 vehicles for which, at the time the lease is entered into, the
2000	2000	19 term of the lease is not a defined period, including leases
2001	2001	20 with a defined initial period with the option to continue the
2002	2002	21 lease on a month-to-month or other basis beyond the initial
2003	2003	22 defined period.
2004	2004	23 The phrase "like kind and character" shall be liberally
2005	2005	24 construed (including but not limited to any form of motor
2006	2006	25 vehicle for any form of motor vehicle, or any kind of farm or
2007	2007	26 agricultural implement for any other kind of farm or
2008	2008
2009	2009
2010	2010
2011	2011
2012	2012
2013	2013	HB1458 - 55 - LRB104 03259 HLH 13281 b
2014	2014
2015	2015
2016	2016	HB1458- 56 -LRB104 03259 HLH 13281 b HB1458 - 56 - LRB104 03259 HLH 13281 b
2017	2017	HB1458 - 56 - LRB104 03259 HLH 13281 b
2018	2018	1 agricultural implement), while not including a kind of item
2019	2019	2 which, if sold at retail by that retailer, would be exempt from
2020	2020	3 retailers' occupation tax and use tax as an isolated or
2021	2021	4 occasional sale.
2022	2022	5 "Gross receipts" from the sales of tangible personal
2023	2023	6 property at retail means the total selling price or the amount
2024	2024	7 of such sales, as hereinbefore defined. In the case of charge
2025	2025	8 and time sales, the amount thereof shall be included only as
2026	2026	9 and when payments are received by the seller. In the case of
2027	2027	10 leases, except as otherwise provided in this Act, the amount
2028	2028	11 thereof shall be included only as and when gross receipts are
2029	2029	12 received by the lessor. Receipts or other consideration
2030	2030	13 derived by a seller from the sale, transfer or assignment of
2031	2031	14 accounts receivable to a wholly owned subsidiary will not be
2032	2032	15 deemed payments prior to the time the purchaser makes payment
2033	2033	16 on such accounts.
2034	2034	17 "Department" means the Department of Revenue.
2035	2035	18 "Person" means any natural individual, firm, partnership,
2036	2036	19 association, joint stock company, joint adventure, public or
2037	2037	20 private corporation, limited liability company, or a receiver,
2038	2038	21 executor, trustee, guardian or other representative appointed
2039	2039	22 by order of any court.
2040	2040	23 The isolated or occasional sale of tangible personal
2041	2041	24 property at retail by a person who does not hold himself out as
2042	2042	25 being engaged (or who does not habitually engage) in selling
2043	2043	26 such tangible personal property at retail, or a sale through a
2044	2044
2045	2045
2046	2046
2047	2047
2048	2048
2049	2049	HB1458 - 56 - LRB104 03259 HLH 13281 b
2050	2050
2051	2051
2052	2052	HB1458- 57 -LRB104 03259 HLH 13281 b HB1458 - 57 - LRB104 03259 HLH 13281 b
2053	2053	HB1458 - 57 - LRB104 03259 HLH 13281 b
2054	2054	1 bulk vending machine, does not constitute engaging in a
2055	2055	2 business of selling such tangible personal property at retail
2056	2056	3 within the meaning of this Act; provided that any person who is
2057	2057	4 engaged in a business which is not subject to the tax imposed
2058	2058	5 by this Act because of involving the sale of or a contract to
2059	2059	6 sell real estate or a construction contract to improve real
2060	2060	7 estate or a construction contract to engineer, install, and
2061	2061	8 maintain an integrated system of products, but who, in the
2062	2062	9 course of conducting such business, transfers tangible
2063	2063	10 personal property to users or consumers in the finished form
2064	2064	11 in which it was purchased, and which does not become real
2065	2065	12 estate or was not engineered and installed, under any
2066	2066	13 provision of a construction contract or real estate sale or
2067	2067	14 real estate sales agreement entered into with some other
2068	2068	15 person arising out of or because of such nontaxable business,
2069	2069	16 is engaged in the business of selling tangible personal
2070	2070	17 property at retail to the extent of the value of the tangible
2071	2071	18 personal property so transferred. If, in such a transaction, a
2072	2072	19 separate charge is made for the tangible personal property so
2073	2073	20 transferred, the value of such property, for the purpose of
2074	2074	21 this Act, shall be the amount so separately charged, but not
2075	2075	22 less than the cost of such property to the transferor; if no
2076	2076	23 separate charge is made, the value of such property, for the
2077	2077	24 purposes of this Act, is the cost to the transferor of such
2078	2078	25 tangible personal property. Construction contracts for the
2079	2079	26 improvement of real estate consisting of engineering,
2080	2080
2081	2081
2082	2082
2083	2083
2084	2084
2085	2085	HB1458 - 57 - LRB104 03259 HLH 13281 b
2086	2086
2087	2087
2088	2088	HB1458- 58 -LRB104 03259 HLH 13281 b HB1458 - 58 - LRB104 03259 HLH 13281 b
2089	2089	HB1458 - 58 - LRB104 03259 HLH 13281 b
2090	2090	1 installation, and maintenance of voice, data, video, security,
2091	2091	2 and all telecommunication systems do not constitute engaging
2092	2092	3 in a business of selling tangible personal property at retail
2093	2093	4 within the meaning of this Act if they are sold at one
2094	2094	5 specified contract price.
2095	2095	6 A person who holds himself or herself out as being engaged
2096	2096	7 (or who habitually engages) in selling tangible personal
2097	2097	8 property at retail is a person engaged in the business of
2098	2098	9 selling tangible personal property at retail hereunder with
2099	2099	10 respect to such sales (and not primarily in a service
2100	2100	11 occupation) notwithstanding the fact that such person designs
2101	2101	12 and produces such tangible personal property on special order
2102	2102	13 for the purchaser and in such a way as to render the property
2103	2103	14 of value only to such purchaser, if such tangible personal
2104	2104	15 property so produced on special order serves substantially the
2105	2105	16 same function as stock or standard items of tangible personal
2106	2106	17 property that are sold at retail.
2107	2107	18 Persons who engage in the business of transferring
2108	2108	19 tangible personal property upon the redemption of trading
2109	2109	20 stamps are engaged in the business of selling such property at
2110	2110	21 retail and shall be liable for and shall pay the tax imposed by
2111	2111	22 this Act on the basis of the retail value of the property
2112	2112	23 transferred upon redemption of such stamps.
2113	2113	24 Motor carriers, as defined in Section 18c-1104 of the
2114	2114	25 Vehicle Code, that sell items of tangible personal property to
2115	2115	26 purchasers for use or consumption in addition to rendering
2116	2116
2117	2117
2118	2118
2119	2119
2120	2120
2121	2121	HB1458 - 58 - LRB104 03259 HLH 13281 b
2122	2122
2123	2123
2124	2124	HB1458- 59 -LRB104 03259 HLH 13281 b HB1458 - 59 - LRB104 03259 HLH 13281 b
2125	2125	HB1458 - 59 - LRB104 03259 HLH 13281 b
2126	2126	1 service as a motor carrier are engaged in a profession or
2127	2127	2 service occupation as a motor carrier and are not considered
2128	2128	3 persons engaged in the business of selling tangible personal
2129	2129	4 property at retail within the meaning of this Act when they
2130	2130	5 sell items of tangible personal property to purchasers
2131	2131	6 incident to the rendering of service as a motor carrier. Those
2132	2132	7 motor carriers are not required to collect or remit the tax
2133	2133	8 imposed by this Act on the sale of that tangible personal
2134	2134	9 property.
2135	2135	10 "Bulk vending machine" means a vending machine, containing
2136	2136	11 unsorted confections, nuts, toys, or other items designed
2137	2137	12 primarily to be used or played with by children which, when a
2138	2138	13 coin or coins of a denomination not larger than $0.50 are
2139	2139	14 inserted, are dispensed in equal portions, at random and
2140	2140	15 without selection by the customer.
2141	2141	16 "Remote retailer" means a retailer that does not maintain
2142	2142	17 within this State, directly or by a subsidiary, an office,
2143	2143	18 distribution house, sales house, warehouse or other place of
2144	2144	19 business, or any agent or other representative operating
2145	2145	20 within this State under the authority of the retailer or its
2146	2146	21 subsidiary, irrespective of whether such place of business or
2147	2147	22 agent is located here permanently or temporarily or whether
2148	2148	23 such retailer or subsidiary is licensed to do business in this
2149	2149	24 State.
2150	2150	25 "Retailer maintaining a place of business in this State"
2151	2151	26 has the meaning given to that term in Section 2 of the Use Tax
2152	2152
2153	2153
2154	2154
2155	2155
2156	2156
2157	2157	HB1458 - 59 - LRB104 03259 HLH 13281 b
2158	2158
2159	2159
2160	2160	HB1458- 60 -LRB104 03259 HLH 13281 b HB1458 - 60 - LRB104 03259 HLH 13281 b
2161	2161	HB1458 - 60 - LRB104 03259 HLH 13281 b
2162	2162	1 Act.
2163	2163	2 "Marketplace" means a physical or electronic place, forum,
2164	2164	3 platform, application, or other method by which a marketplace
2165	2165	4 seller sells or offers to sell items.
2166	2166	5 "Marketplace facilitator" means a person who, pursuant to
2167	2167	6 an agreement with an unrelated third-party marketplace seller,
2168	2168	7 directly or indirectly through one or more affiliates
2169	2169	8 facilitates a retail sale by an unrelated third-party third
2170	2170	9 party marketplace seller by:
2171	2171	10 (1) listing or advertising for sale by the marketplace
2172	2172	11 seller in a marketplace, tangible personal property that
2173	2173	12 is subject to tax under this Act; and
2174	2174	13 (2) either directly or indirectly, through agreements
2175	2175	14 or arrangements with third parties, collecting payment
2176	2176	15 from the customer and transmitting that payment to the
2177	2177	16 marketplace seller regardless of whether the marketplace
2178	2178	17 facilitator receives compensation or other consideration
2179	2179	18 in exchange for its services.
2180	2180	19 A person who provides advertising services, including
2181	2181	20 listing products for sale, is not considered a marketplace
2182	2182	21 facilitator, so long as the advertising service platform or
2183	2183	22 forum does not engage, directly or indirectly through one or
2184	2184	23 more affiliated persons, in the activities described in
2185	2185	24 paragraph (2) of this definition of "marketplace facilitator".
2186	2186	25 "Marketplace facilitator" does not include any person
2187	2187	26 licensed under the Auction License Act. This exemption does
2188	2188
2189	2189
2190	2190
2191	2191
2192	2192
2193	2193	HB1458 - 60 - LRB104 03259 HLH 13281 b
2194	2194
2195	2195
2196	2196	HB1458- 61 -LRB104 03259 HLH 13281 b HB1458 - 61 - LRB104 03259 HLH 13281 b
2197	2197	HB1458 - 61 - LRB104 03259 HLH 13281 b
2198	2198	1 not apply to any person who is an Internet auction listing
2199	2199	2 service, as defined by the Auction License Act.
2200	2200	3 "Marketplace seller" means a person who that makes sales
2201	2201	4 through a marketplace operated by an unrelated third-party
2202	2202	5 third party marketplace facilitator.
2203	2203	6 (Source: P.A. 102-353, eff. 1-1-22; 102-634, eff. 8-27-21;
2204	2204	7 102-813, eff. 5-13-22; 103-592, eff. 1-1-25; 103-983, eff.
2205	2205	8 1-1-25; revised 11-26-24.)
2206	2206	9 (35 ILCS 120/2-55) (from Ch. 120, par. 441-55)
2207	2207	10 Sec. 2-55. Serviceman transfer. Tangible personal property
2208	2208	11 purchased by a serviceman, as defined in Section 2 of the
2209	2209	12 Service Occupation Tax Act, is subject to the tax imposed by
2210	2210	13 this Act when purchased for transfer by the serviceman
2211	2211	14 incidental to completion of a maintenance agreement.
2212	2212	15 Motor carriers, as defined in Section 18c-1104 of the
2213	2213	16 Vehicle Code, that sell items of tangible personal property to
2214	2214	17 purchasers for use or consumption in addition to rendering
2215	2215	18 service as a motor carrier are engaged in a profession or
2216	2216	19 service occupation as a motor carrier and are not engaged in
2217	2217	20 the business of selling tangible personal property to
2218	2218	21 purchasers for use or consumption within the meaning of this
2219	2219	22 Act. Those motor carriers are not required to collect or remit
2220	2220	23 the tax under this Act with respect to that tangible personal
2221	2221	24 property.
2222	2222	25 (Source: P.A. 91-51, eff. 6-30-99.)
2223	2223
2224	2224
2225	2225
2226	2226
2227	2227
2228	2228	HB1458 - 61 - LRB104 03259 HLH 13281 b
2229	2229
2230	2230
2231	2231	HB1458- 62 -LRB104 03259 HLH 13281 b HB1458 - 62 - LRB104 03259 HLH 13281 b
2232	2232	HB1458 - 62 - LRB104 03259 HLH 13281 b
2233	2233
2234	2234
2235	2235
2236	2236
2237	2237
2238	2238	HB1458 - 62 - LRB104 03259 HLH 13281 b