104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB3643 Introduced , by Rep. Elizabeth "Lisa" Hernandez SYNOPSIS AS INTRODUCED: 35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for equipment and materials placed in service on or after January 1, 2026 that are incorporated into or used in the business of providing broadband services. Effective immediately. LRB104 11394 HLH 21482 b A BILL FOR 104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB3643 Introduced , by Rep. Elizabeth "Lisa" Hernandez SYNOPSIS AS INTRODUCED: 35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 35 ILCS 105/3-5 35 ILCS 110/3-5 35 ILCS 115/3-5 35 ILCS 120/2-5 Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for equipment and materials placed in service on or after January 1, 2026 that are incorporated into or used in the business of providing broadband services. Effective immediately. LRB104 11394 HLH 21482 b LRB104 11394 HLH 21482 b A BILL FOR
104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB3643 Introduced , by Rep. Elizabeth "Lisa" Hernandez SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 35 ILCS 105/3-5 35 ILCS 110/3-5 35 ILCS 115/3-5 35 ILCS 120/2-5
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for equipment and materials placed in service on or after January 1, 2026 that are incorporated into or used in the business of providing broadband services. Effective immediately.
LRB104 11394 HLH 21482 b LRB104 11394 HLH 21482 b
LRB104 11394 HLH 21482 b
A BILL FOR
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HB3643 LRB104 11394 HLH 21482 b
1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Use Tax Act is amended by changing Section
5 3-5 as follows:
6 (35 ILCS 105/3-5)
7 Sec. 3-5. Exemptions. Use, which, on and after January 1,
8 2025, includes use by a lessee, of the following tangible
9 personal property is exempt from the tax imposed by this Act:
10 (1) Personal property purchased from a corporation,
11 society, association, foundation, institution, or
12 organization, other than a limited liability company, that is
13 organized and operated as a not-for-profit service enterprise
14 for the benefit of persons 65 years of age or older if the
15 personal property was not purchased by the enterprise for the
16 purpose of resale by the enterprise.
17 (2) Personal property purchased by a not-for-profit
18 Illinois county fair association for use in conducting,
19 operating, or promoting the county fair.
20 (3) Personal property purchased by a not-for-profit arts
21 or cultural organization that establishes, by proof required
22 by the Department by rule, that it has received an exemption
23 under Section 501(c)(3) of the Internal Revenue Code and that
104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026 HB3643 Introduced , by Rep. Elizabeth "Lisa" Hernandez SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 35 ILCS 105/3-5 35 ILCS 110/3-5 35 ILCS 115/3-5 35 ILCS 120/2-5
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Creates an exemption for equipment and materials placed in service on or after January 1, 2026 that are incorporated into or used in the business of providing broadband services. Effective immediately.
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LRB104 11394 HLH 21482 b
A BILL FOR
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
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1 is organized and operated primarily for the presentation or
2 support of arts or cultural programming, activities, or
3 services. These organizations include, but are not limited to,
4 music and dramatic arts organizations such as symphony
5 orchestras and theatrical groups, arts and cultural service
6 organizations, local arts councils, visual arts organizations,
7 and media arts organizations. On and after July 1, 2001 (the
8 effective date of Public Act 92-35), however, an entity
9 otherwise eligible for this exemption shall not make tax-free
10 purchases unless it has an active identification number issued
11 by the Department.
12 (4) Except as otherwise provided in this Act, personal
13 property purchased by a governmental body, by a corporation,
14 society, association, foundation, or institution organized and
15 operated exclusively for charitable, religious, or educational
16 purposes, or by a not-for-profit corporation, society,
17 association, foundation, institution, or organization that has
18 no compensated officers or employees and that is organized and
19 operated primarily for the recreation of persons 55 years of
20 age or older. A limited liability company may qualify for the
21 exemption under this paragraph only if the limited liability
22 company is organized and operated exclusively for educational
23 purposes. On and after July 1, 1987, however, no entity
24 otherwise eligible for this exemption shall make tax-free
25 purchases unless it has an active exemption identification
26 number issued by the Department.
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1 (5) Until July 1, 2003, a passenger car that is a
2 replacement vehicle to the extent that the purchase price of
3 the car is subject to the Replacement Vehicle Tax.
4 (6) Until July 1, 2003 and beginning again on September 1,
5 2004 through August 30, 2014, graphic arts machinery and
6 equipment, including repair and replacement parts, both new
7 and used, and including that manufactured on special order,
8 certified by the purchaser to be used primarily for graphic
9 arts production, and including machinery and equipment
10 purchased for lease. Equipment includes chemicals or chemicals
11 acting as catalysts but only if the chemicals or chemicals
12 acting as catalysts effect a direct and immediate change upon
13 a graphic arts product. Beginning on July 1, 2017, graphic
14 arts machinery and equipment is included in the manufacturing
15 and assembling machinery and equipment exemption under
16 paragraph (18).
17 (7) Farm chemicals.
18 (8) Legal tender, currency, medallions, or gold or silver
19 coinage issued by the State of Illinois, the government of the
20 United States of America, or the government of any foreign
21 country, and bullion.
22 (9) Personal property purchased from a teacher-sponsored
23 student organization affiliated with an elementary or
24 secondary school located in Illinois.
25 (10) A motor vehicle that is used for automobile renting,
26 as defined in the Automobile Renting Occupation and Use Tax
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1 Act.
2 (11) Farm machinery and equipment, both new and used,
3 including that manufactured on special order, certified by the
4 purchaser to be used primarily for production agriculture or
5 State or federal agricultural programs, including individual
6 replacement parts for the machinery and equipment, including
7 machinery and equipment purchased for lease, and including
8 implements of husbandry defined in Section 1-130 of the
9 Illinois Vehicle Code, farm machinery and agricultural
10 chemical and fertilizer spreaders, and nurse wagons required
11 to be registered under Section 3-809 of the Illinois Vehicle
12 Code, but excluding other motor vehicles required to be
13 registered under the Illinois Vehicle Code. Horticultural
14 polyhouses or hoop houses used for propagating, growing, or
15 overwintering plants shall be considered farm machinery and
16 equipment under this item (11). Agricultural chemical tender
17 tanks and dry boxes shall include units sold separately from a
18 motor vehicle required to be licensed and units sold mounted
19 on a motor vehicle required to be licensed if the selling price
20 of the tender is separately stated.
21 Farm machinery and equipment shall include precision
22 farming equipment that is installed or purchased to be
23 installed on farm machinery and equipment, including, but not
24 limited to, tractors, harvesters, sprayers, planters, seeders,
25 or spreaders. Precision farming equipment includes, but is not
26 limited to, soil testing sensors, computers, monitors,
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1 software, global positioning and mapping systems, and other
2 such equipment.
3 Farm machinery and equipment also includes computers,
4 sensors, software, and related equipment used primarily in the
5 computer-assisted operation of production agriculture
6 facilities, equipment, and activities such as, but not limited
7 to, the collection, monitoring, and correlation of animal and
8 crop data for the purpose of formulating animal diets and
9 agricultural chemicals.
10 Beginning on January 1, 2024, farm machinery and equipment
11 also includes electrical power generation equipment used
12 primarily for production agriculture.
13 This item (11) is exempt from the provisions of Section
14 3-90.
15 (12) Until June 30, 2013, fuel and petroleum products sold
16 to or used by an air common carrier, certified by the carrier
17 to be used for consumption, shipment, or storage in the
18 conduct of its business as an air common carrier, for a flight
19 destined for or returning from a location or locations outside
20 the United States without regard to previous or subsequent
21 domestic stopovers.
22 Beginning July 1, 2013, fuel and petroleum products sold
23 to or used by an air carrier, certified by the carrier to be
24 used for consumption, shipment, or storage in the conduct of
25 its business as an air common carrier, for a flight that (i) is
26 engaged in foreign trade or is engaged in trade between the
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1 United States and any of its possessions and (ii) transports
2 at least one individual or package for hire from the city of
3 origination to the city of final destination on the same
4 aircraft, without regard to a change in the flight number of
5 that aircraft.
6 (13) Proceeds of mandatory service charges separately
7 stated on customers' bills for the purchase and consumption of
8 food and beverages purchased at retail from a retailer, to the
9 extent that the proceeds of the service charge are in fact
10 turned over as tips or as a substitute for tips to the
11 employees who participate directly in preparing, serving,
12 hosting or cleaning up the food or beverage function with
13 respect to which the service charge is imposed.
14 (14) Until July 1, 2003, oil field exploration, drilling,
15 and production equipment, including (i) rigs and parts of
16 rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
17 pipe and tubular goods, including casing and drill strings,
18 (iii) pumps and pump-jack units, (iv) storage tanks and flow
19 lines, (v) any individual replacement part for oil field
20 exploration, drilling, and production equipment, and (vi)
21 machinery and equipment purchased for lease; but excluding
22 motor vehicles required to be registered under the Illinois
23 Vehicle Code.
24 (15) Photoprocessing machinery and equipment, including
25 repair and replacement parts, both new and used, including
26 that manufactured on special order, certified by the purchaser
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1 to be used primarily for photoprocessing, and including
2 photoprocessing machinery and equipment purchased for lease.
3 (16) Until July 1, 2028, coal and aggregate exploration,
4 mining, off-highway hauling, processing, maintenance, and
5 reclamation equipment, including replacement parts and
6 equipment, and including equipment purchased for lease, but
7 excluding motor vehicles required to be registered under the
8 Illinois Vehicle Code. The changes made to this Section by
9 Public Act 97-767 apply on and after July 1, 2003, but no claim
10 for credit or refund is allowed on or after August 16, 2013
11 (the effective date of Public Act 98-456) for such taxes paid
12 during the period beginning July 1, 2003 and ending on August
13 16, 2013 (the effective date of Public Act 98-456).
14 (17) Until July 1, 2003, distillation machinery and
15 equipment, sold as a unit or kit, assembled or installed by the
16 retailer, certified by the user to be used only for the
17 production of ethyl alcohol that will be used for consumption
18 as motor fuel or as a component of motor fuel for the personal
19 use of the user, and not subject to sale or resale.
20 (18) Manufacturing and assembling machinery and equipment
21 used primarily in the process of manufacturing or assembling
22 tangible personal property for wholesale or retail sale or
23 lease, whether that sale or lease is made directly by the
24 manufacturer or by some other person, whether the materials
25 used in the process are owned by the manufacturer or some other
26 person, or whether that sale or lease is made apart from or as
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1 an incident to the seller's engaging in the service occupation
2 of producing machines, tools, dies, jigs, patterns, gauges, or
3 other similar items of no commercial value on special order
4 for a particular purchaser. The exemption provided by this
5 paragraph (18) includes production related tangible personal
6 property, as defined in Section 3-50, purchased on or after
7 July 1, 2019. The exemption provided by this paragraph (18)
8 does not include machinery and equipment used in (i) the
9 generation of electricity for wholesale or retail sale; (ii)
10 the generation or treatment of natural or artificial gas for
11 wholesale or retail sale that is delivered to customers
12 through pipes, pipelines, or mains; or (iii) the treatment of
13 water for wholesale or retail sale that is delivered to
14 customers through pipes, pipelines, or mains. The provisions
15 of Public Act 98-583 are declaratory of existing law as to the
16 meaning and scope of this exemption. Beginning on July 1,
17 2017, the exemption provided by this paragraph (18) includes,
18 but is not limited to, graphic arts machinery and equipment,
19 as defined in paragraph (6) of this Section.
20 (19) Personal property delivered to a purchaser or
21 purchaser's donee inside Illinois when the purchase order for
22 that personal property was received by a florist located
23 outside Illinois who has a florist located inside Illinois
24 deliver the personal property.
25 (20) Semen used for artificial insemination of livestock
26 for direct agricultural production.
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1 (21) Horses, or interests in horses, registered with and
2 meeting the requirements of any of the Arabian Horse Club
3 Registry of America, Appaloosa Horse Club, American Quarter
4 Horse Association, United States Trotting Association, or
5 Jockey Club, as appropriate, used for purposes of breeding or
6 racing for prizes. This item (21) is exempt from the
7 provisions of Section 3-90, and the exemption provided for
8 under this item (21) applies for all periods beginning May 30,
9 1995, but no claim for credit or refund is allowed on or after
10 January 1, 2008 for such taxes paid during the period
11 beginning May 30, 2000 and ending on January 1, 2008.
12 (22) Computers and communications equipment utilized for
13 any hospital purpose and equipment used in the diagnosis,
14 analysis, or treatment of hospital patients purchased by a
15 lessor who leases the equipment, under a lease of one year or
16 longer executed or in effect at the time the lessor would
17 otherwise be subject to the tax imposed by this Act, to a
18 hospital that has been issued an active tax exemption
19 identification number by the Department under Section 1g of
20 the Retailers' Occupation Tax Act. If the equipment is leased
21 in a manner that does not qualify for this exemption or is used
22 in any other non-exempt manner, the lessor shall be liable for
23 the tax imposed under this Act or the Service Use Tax Act, as
24 the case may be, based on the fair market value of the property
25 at the time the non-qualifying use occurs. No lessor shall
26 collect or attempt to collect an amount (however designated)
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1 that purports to reimburse that lessor for the tax imposed by
2 this Act or the Service Use Tax Act, as the case may be, if the
3 tax has not been paid by the lessor. If a lessor improperly
4 collects any such amount from the lessee, the lessee shall
5 have a legal right to claim a refund of that amount from the
6 lessor. If, however, that amount is not refunded to the lessee
7 for any reason, the lessor is liable to pay that amount to the
8 Department.
9 (23) Personal property purchased by a lessor who leases
10 the property, under a lease of one year or longer executed or
11 in effect at the time the lessor would otherwise be subject to
12 the tax imposed by this Act, to a governmental body that has
13 been issued an active sales tax exemption identification
14 number by the Department under Section 1g of the Retailers'
15 Occupation Tax Act. If the property is leased in a manner that
16 does not qualify for this exemption or used in any other
17 non-exempt manner, the lessor shall be liable for the tax
18 imposed under this Act or the Service Use Tax Act, as the case
19 may be, based on the fair market value of the property at the
20 time the non-qualifying use occurs. No lessor shall collect or
21 attempt to collect an amount (however designated) that
22 purports to reimburse that lessor for the tax imposed by this
23 Act or the Service Use Tax Act, as the case may be, if the tax
24 has not been paid by the lessor. If a lessor improperly
25 collects any such amount from the lessee, the lessee shall
26 have a legal right to claim a refund of that amount from the
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1 lessor. If, however, that amount is not refunded to the lessee
2 for any reason, the lessor is liable to pay that amount to the
3 Department.
4 (24) Beginning with taxable years ending on or after
5 December 31, 1995 and ending with taxable years ending on or
6 before December 31, 2004, personal property that is donated
7 for disaster relief to be used in a State or federally declared
8 disaster area in Illinois or bordering Illinois by a
9 manufacturer or retailer that is registered in this State to a
10 corporation, society, association, foundation, or institution
11 that has been issued a sales tax exemption identification
12 number by the Department that assists victims of the disaster
13 who reside within the declared disaster area.
14 (25) Beginning with taxable years ending on or after
15 December 31, 1995 and ending with taxable years ending on or
16 before December 31, 2004, personal property that is used in
17 the performance of infrastructure repairs in this State,
18 including, but not limited to, municipal roads and streets,
19 access roads, bridges, sidewalks, waste disposal systems,
20 water and sewer line extensions, water distribution and
21 purification facilities, storm water drainage and retention
22 facilities, and sewage treatment facilities, resulting from a
23 State or federally declared disaster in Illinois or bordering
24 Illinois when such repairs are initiated on facilities located
25 in the declared disaster area within 6 months after the
26 disaster.
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1 (26) Beginning July 1, 1999, game or game birds purchased
2 at a "game breeding and hunting preserve area" as that term is
3 used in the Wildlife Code. This paragraph is exempt from the
4 provisions of Section 3-90.
5 (27) A motor vehicle, as that term is defined in Section
6 1-146 of the Illinois Vehicle Code, that is donated to a
7 corporation, limited liability company, society, association,
8 foundation, or institution that is determined by the
9 Department to be organized and operated exclusively for
10 educational purposes. For purposes of this exemption, "a
11 corporation, limited liability company, society, association,
12 foundation, or institution organized and operated exclusively
13 for educational purposes" means all tax-supported public
14 schools, private schools that offer systematic instruction in
15 useful branches of learning by methods common to public
16 schools and that compare favorably in their scope and
17 intensity with the course of study presented in tax-supported
18 schools, and vocational or technical schools or institutes
19 organized and operated exclusively to provide a course of
20 study of not less than 6 weeks duration and designed to prepare
21 individuals to follow a trade or to pursue a manual,
22 technical, mechanical, industrial, business, or commercial
23 occupation.
24 (28) Beginning January 1, 2000, personal property,
25 including food, purchased through fundraising events for the
26 benefit of a public or private elementary or secondary school,
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1 a group of those schools, or one or more school districts if
2 the events are sponsored by an entity recognized by the school
3 district that consists primarily of volunteers and includes
4 parents and teachers of the school children. This paragraph
5 does not apply to fundraising events (i) for the benefit of
6 private home instruction or (ii) for which the fundraising
7 entity purchases the personal property sold at the events from
8 another individual or entity that sold the property for the
9 purpose of resale by the fundraising entity and that profits
10 from the sale to the fundraising entity. This paragraph is
11 exempt from the provisions of Section 3-90.
12 (29) Beginning January 1, 2000 and through December 31,
13 2001, new or used automatic vending machines that prepare and
14 serve hot food and beverages, including coffee, soup, and
15 other items, and replacement parts for these machines.
16 Beginning January 1, 2002 and through June 30, 2003, machines
17 and parts for machines used in commercial, coin-operated
18 amusement and vending business if a use or occupation tax is
19 paid on the gross receipts derived from the use of the
20 commercial, coin-operated amusement and vending machines. This
21 paragraph is exempt from the provisions of Section 3-90.
22 (30) Beginning January 1, 2001 and through June 30, 2016,
23 food for human consumption that is to be consumed off the
24 premises where it is sold (other than alcoholic beverages,
25 soft drinks, and food that has been prepared for immediate
26 consumption) and prescription and nonprescription medicines,
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1 drugs, medical appliances, and insulin, urine testing
2 materials, syringes, and needles used by diabetics, for human
3 use, when purchased for use by a person receiving medical
4 assistance under Article V of the Illinois Public Aid Code who
5 resides in a licensed long-term care facility, as defined in
6 the Nursing Home Care Act, or in a licensed facility as defined
7 in the ID/DD Community Care Act, the MC/DD Act, or the
8 Specialized Mental Health Rehabilitation Act of 2013.
9 (31) Beginning on August 2, 2001 (the effective date of
10 Public Act 92-227), computers and communications equipment
11 utilized for any hospital purpose and equipment used in the
12 diagnosis, analysis, or treatment of hospital patients
13 purchased by a lessor who leases the equipment, under a lease
14 of one year or longer executed or in effect at the time the
15 lessor would otherwise be subject to the tax imposed by this
16 Act, to a hospital that has been issued an active tax exemption
17 identification number by the Department under Section 1g of
18 the Retailers' Occupation Tax Act. If the equipment is leased
19 in a manner that does not qualify for this exemption or is used
20 in any other nonexempt manner, the lessor shall be liable for
21 the tax imposed under this Act or the Service Use Tax Act, as
22 the case may be, based on the fair market value of the property
23 at the time the nonqualifying use occurs. No lessor shall
24 collect or attempt to collect an amount (however designated)
25 that purports to reimburse that lessor for the tax imposed by
26 this Act or the Service Use Tax Act, as the case may be, if the
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1 tax has not been paid by the lessor. If a lessor improperly
2 collects any such amount from the lessee, the lessee shall
3 have a legal right to claim a refund of that amount from the
4 lessor. If, however, that amount is not refunded to the lessee
5 for any reason, the lessor is liable to pay that amount to the
6 Department. This paragraph is exempt from the provisions of
7 Section 3-90.
8 (32) Beginning on August 2, 2001 (the effective date of
9 Public Act 92-227), personal property purchased by a lessor
10 who leases the property, under a lease of one year or longer
11 executed or in effect at the time the lessor would otherwise be
12 subject to the tax imposed by this Act, to a governmental body
13 that has been issued an active sales tax exemption
14 identification number by the Department under Section 1g of
15 the Retailers' Occupation Tax Act. If the property is leased
16 in a manner that does not qualify for this exemption or used in
17 any other nonexempt manner, the lessor shall be liable for the
18 tax imposed under this Act or the Service Use Tax Act, as the
19 case may be, based on the fair market value of the property at
20 the time the nonqualifying use occurs. No lessor shall collect
21 or attempt to collect an amount (however designated) that
22 purports to reimburse that lessor for the tax imposed by this
23 Act or the Service Use Tax Act, as the case may be, if the tax
24 has not been paid by the lessor. If a lessor improperly
25 collects any such amount from the lessee, the lessee shall
26 have a legal right to claim a refund of that amount from the
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1 lessor. If, however, that amount is not refunded to the lessee
2 for any reason, the lessor is liable to pay that amount to the
3 Department. This paragraph is exempt from the provisions of
4 Section 3-90.
5 (33) On and after July 1, 2003 and through June 30, 2004,
6 the use in this State of motor vehicles of the second division
7 with a gross vehicle weight in excess of 8,000 pounds and that
8 are subject to the commercial distribution fee imposed under
9 Section 3-815.1 of the Illinois Vehicle Code. Beginning on
10 July 1, 2004 and through June 30, 2005, the use in this State
11 of motor vehicles of the second division: (i) with a gross
12 vehicle weight rating in excess of 8,000 pounds; (ii) that are
13 subject to the commercial distribution fee imposed under
14 Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
15 are primarily used for commercial purposes. Through June 30,
16 2005, this exemption applies to repair and replacement parts
17 added after the initial purchase of such a motor vehicle if
18 that motor vehicle is used in a manner that would qualify for
19 the rolling stock exemption otherwise provided for in this
20 Act. For purposes of this paragraph, the term "used for
21 commercial purposes" means the transportation of persons or
22 property in furtherance of any commercial or industrial
23 enterprise, whether for-hire or not.
24 (34) Beginning January 1, 2008, tangible personal property
25 used in the construction or maintenance of a community water
26 supply, as defined under Section 3.145 of the Environmental
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1 Protection Act, that is operated by a not-for-profit
2 corporation that holds a valid water supply permit issued
3 under Title IV of the Environmental Protection Act. This
4 paragraph is exempt from the provisions of Section 3-90.
5 (35) Beginning January 1, 2010 and continuing through
6 December 31, 2029, materials, parts, equipment, components,
7 and furnishings incorporated into or upon an aircraft as part
8 of the modification, refurbishment, completion, replacement,
9 repair, or maintenance of the aircraft. This exemption
10 includes consumable supplies used in the modification,
11 refurbishment, completion, replacement, repair, and
12 maintenance of aircraft. However, until January 1, 2024, this
13 exemption excludes any materials, parts, equipment,
14 components, and consumable supplies used in the modification,
15 replacement, repair, and maintenance of aircraft engines or
16 power plants, whether such engines or power plants are
17 installed or uninstalled upon any such aircraft. "Consumable
18 supplies" include, but are not limited to, adhesive, tape,
19 sandpaper, general purpose lubricants, cleaning solution,
20 latex gloves, and protective films.
21 Beginning January 1, 2010 and continuing through December
22 31, 2023, this exemption applies only to the use of qualifying
23 tangible personal property by persons who modify, refurbish,
24 complete, repair, replace, or maintain aircraft and who (i)
25 hold an Air Agency Certificate and are empowered to operate an
26 approved repair station by the Federal Aviation
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1 Administration, (ii) have a Class IV Rating, and (iii) conduct
2 operations in accordance with Part 145 of the Federal Aviation
3 Regulations. From January 1, 2024 through December 31, 2029,
4 this exemption applies only to the use of qualifying tangible
5 personal property by: (A) persons who modify, refurbish,
6 complete, repair, replace, or maintain aircraft and who (i)
7 hold an Air Agency Certificate and are empowered to operate an
8 approved repair station by the Federal Aviation
9 Administration, (ii) have a Class IV Rating, and (iii) conduct
10 operations in accordance with Part 145 of the Federal Aviation
11 Regulations; and (B) persons who engage in the modification,
12 replacement, repair, and maintenance of aircraft engines or
13 power plants without regard to whether or not those persons
14 meet the qualifications of item (A).
15 The exemption does not include aircraft operated by a
16 commercial air carrier providing scheduled passenger air
17 service pursuant to authority issued under Part 121 or Part
18 129 of the Federal Aviation Regulations. The changes made to
19 this paragraph (35) by Public Act 98-534 are declarative of
20 existing law. It is the intent of the General Assembly that the
21 exemption under this paragraph (35) applies continuously from
22 January 1, 2010 through December 31, 2024; however, no claim
23 for credit or refund is allowed for taxes paid as a result of
24 the disallowance of this exemption on or after January 1, 2015
25 and prior to February 5, 2020 (the effective date of Public Act
26 101-629).
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1 (36) Tangible personal property purchased by a
2 public-facilities corporation, as described in Section
3 11-65-10 of the Illinois Municipal Code, for purposes of
4 constructing or furnishing a municipal convention hall, but
5 only if the legal title to the municipal convention hall is
6 transferred to the municipality without any further
7 consideration by or on behalf of the municipality at the time
8 of the completion of the municipal convention hall or upon the
9 retirement or redemption of any bonds or other debt
10 instruments issued by the public-facilities corporation in
11 connection with the development of the municipal convention
12 hall. This exemption includes existing public-facilities
13 corporations as provided in Section 11-65-25 of the Illinois
14 Municipal Code. This paragraph is exempt from the provisions
15 of Section 3-90.
16 (37) Beginning January 1, 2017 and through December 31,
17 2026, menstrual pads, tampons, and menstrual cups.
18 (38) Merchandise that is subject to the Rental Purchase
19 Agreement Occupation and Use Tax. The purchaser must certify
20 that the item is purchased to be rented subject to a
21 rental-purchase agreement, as defined in the Rental-Purchase
22 Agreement Act, and provide proof of registration under the
23 Rental Purchase Agreement Occupation and Use Tax Act. This
24 paragraph is exempt from the provisions of Section 3-90.
25 (39) Tangible personal property purchased by a purchaser
26 who is exempt from the tax imposed by this Act by operation of
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1 federal law. This paragraph is exempt from the provisions of
2 Section 3-90.
3 (40) Qualified tangible personal property used in the
4 construction or operation of a data center that has been
5 granted a certificate of exemption by the Department of
6 Commerce and Economic Opportunity, whether that tangible
7 personal property is purchased by the owner, operator, or
8 tenant of the data center or by a contractor or subcontractor
9 of the owner, operator, or tenant. Data centers that would
10 have qualified for a certificate of exemption prior to January
11 1, 2020 had Public Act 101-31 been in effect may apply for and
12 obtain an exemption for subsequent purchases of computer
13 equipment or enabling software purchased or leased to upgrade,
14 supplement, or replace computer equipment or enabling software
15 purchased or leased in the original investment that would have
16 qualified.
17 The Department of Commerce and Economic Opportunity shall
18 grant a certificate of exemption under this item (40) to
19 qualified data centers as defined by Section 605-1025 of the
20 Department of Commerce and Economic Opportunity Law of the
21 Civil Administrative Code of Illinois.
22 For the purposes of this item (40):
23 "Data center" means a building or a series of
24 buildings rehabilitated or constructed to house working
25 servers in one physical location or multiple sites within
26 the State of Illinois.
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1 "Qualified tangible personal property" means:
2 electrical systems and equipment; climate control and
3 chilling equipment and systems; mechanical systems and
4 equipment; monitoring and secure systems; emergency
5 generators; hardware; computers; servers; data storage
6 devices; network connectivity equipment; racks; cabinets;
7 telecommunications cabling infrastructure; raised floor
8 systems; peripheral components or systems; software;
9 mechanical, electrical, or plumbing systems; battery
10 systems; cooling systems and towers; temperature control
11 systems; other cabling; and other data center
12 infrastructure equipment and systems necessary to operate
13 qualified tangible personal property, including fixtures;
14 and component parts of any of the foregoing, including
15 installation, maintenance, repair, refurbishment, and
16 replacement of qualified tangible personal property to
17 generate, transform, transmit, distribute, or manage
18 electricity necessary to operate qualified tangible
19 personal property; and all other tangible personal
20 property that is essential to the operations of a computer
21 data center. The term "qualified tangible personal
22 property" also includes building materials physically
23 incorporated into the qualifying data center. To document
24 the exemption allowed under this Section, the retailer
25 must obtain from the purchaser a copy of the certificate
26 of eligibility issued by the Department of Commerce and
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1 Economic Opportunity.
2 This item (40) is exempt from the provisions of Section
3 3-90.
4 (41) Beginning July 1, 2022, breast pumps, breast pump
5 collection and storage supplies, and breast pump kits. This
6 item (41) is exempt from the provisions of Section 3-90. As
7 used in this item (41):
8 "Breast pump" means an electrically controlled or
9 manually controlled pump device designed or marketed to be
10 used to express milk from a human breast during lactation,
11 including the pump device and any battery, AC adapter, or
12 other power supply unit that is used to power the pump
13 device and is packaged and sold with the pump device at the
14 time of sale.
15 "Breast pump collection and storage supplies" means
16 items of tangible personal property designed or marketed
17 to be used in conjunction with a breast pump to collect
18 milk expressed from a human breast and to store collected
19 milk until it is ready for consumption.
20 "Breast pump collection and storage supplies"
21 includes, but is not limited to: breast shields and breast
22 shield connectors; breast pump tubes and tubing adapters;
23 breast pump valves and membranes; backflow protectors and
24 backflow protector adaptors; bottles and bottle caps
25 specific to the operation of the breast pump; and breast
26 milk storage bags.
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1 "Breast pump collection and storage supplies" does not
2 include: (1) bottles and bottle caps not specific to the
3 operation of the breast pump; (2) breast pump travel bags
4 and other similar carrying accessories, including ice
5 packs, labels, and other similar products; (3) breast pump
6 cleaning supplies; (4) nursing bras, bra pads, breast
7 shells, and other similar products; and (5) creams,
8 ointments, and other similar products that relieve
9 breastfeeding-related symptoms or conditions of the
10 breasts or nipples, unless sold as part of a breast pump
11 kit that is pre-packaged by the breast pump manufacturer
12 or distributor.
13 "Breast pump kit" means a kit that: (1) contains no
14 more than a breast pump, breast pump collection and
15 storage supplies, a rechargeable battery for operating the
16 breast pump, a breastmilk cooler, bottle stands, ice
17 packs, and a breast pump carrying case; and (2) is
18 pre-packaged as a breast pump kit by the breast pump
19 manufacturer or distributor.
20 (42) Tangible personal property sold by or on behalf of
21 the State Treasurer pursuant to the Revised Uniform Unclaimed
22 Property Act. This item (42) is exempt from the provisions of
23 Section 3-90.
24 (43) Beginning on January 1, 2024, tangible personal
25 property purchased by an active duty member of the armed
26 forces of the United States who presents valid military
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1 identification and purchases the property using a form of
2 payment where the federal government is the payor. The member
3 of the armed forces must complete, at the point of sale, a form
4 prescribed by the Department of Revenue documenting that the
5 transaction is eligible for the exemption under this
6 paragraph. Retailers must keep the form as documentation of
7 the exemption in their records for a period of not less than 6
8 years. "Armed forces of the United States" means the United
9 States Army, Navy, Air Force, Space Force, Marine Corps, or
10 Coast Guard. This paragraph is exempt from the provisions of
11 Section 3-90.
12 (44) Beginning July 1, 2024, home-delivered meals provided
13 to Medicare or Medicaid recipients when payment is made by an
14 intermediary, such as a Medicare Administrative Contractor, a
15 Managed Care Organization, or a Medicare Advantage
16 Organization, pursuant to a government contract. This item
17 (44) is exempt from the provisions of Section 3-90.
18 (45) (44) Beginning on January 1, 2026, as further defined
19 in Section 3-10, food for human consumption that is to be
20 consumed off the premises where it is sold (other than
21 alcoholic beverages, food consisting of or infused with adult
22 use cannabis, soft drinks, candy, and food that has been
23 prepared for immediate consumption). This item (45) (44) is
24 exempt from the provisions of Section 3-90.
25 (46) (44) Use by the lessee of the following leased
26 tangible personal property:
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1 (1) software transferred subject to a license that
2 meets the following requirements:
3 (A) it is evidenced by a written agreement signed
4 by the licensor and the customer;
5 (i) an electronic agreement in which the
6 customer accepts the license by means of an
7 electronic signature that is verifiable and can be
8 authenticated and is attached to or made part of
9 the license will comply with this requirement;
10 (ii) a license agreement in which the customer
11 electronically accepts the terms by clicking "I
12 agree" does not comply with this requirement;
13 (B) it restricts the customer's duplication and
14 use of the software;
15 (C) it prohibits the customer from licensing,
16 sublicensing, or transferring the software to a third
17 party (except to a related party) without the
18 permission and continued control of the licensor;
19 (D) the licensor has a policy of providing another
20 copy at minimal or no charge if the customer loses or
21 damages the software, or of permitting the licensee to
22 make and keep an archival copy, and such policy is
23 either stated in the license agreement, supported by
24 the licensor's books and records, or supported by a
25 notarized statement made under penalties of perjury by
26 the licensor; and
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1 (E) the customer must destroy or return all copies
2 of the software to the licensor at the end of the
3 license period; this provision is deemed to be met, in
4 the case of a perpetual license, without being set
5 forth in the license agreement; and
6 (2) property that is subject to a tax on lease
7 receipts imposed by a home rule unit of local government
8 if the ordinance imposing that tax was adopted prior to
9 January 1, 2023.
10 (47) Equipment and materials placed in service on or after
11 January 1, 2026 that are incorporated into or used in the
12 business of providing broadband services, including all
13 equipment and materials machinery, software, or other tangible
14 personal property that is used in whole or in part in
15 producing, broadcasting, distributing, sending, receiving,
16 storing, transmitting, retransmitting, amplifying, switching,
17 or routing broadband services, including the monitoring,
18 testing, maintaining, enabling, or facilitating of such
19 equipment, machinery, software, or other infrastructure. That
20 property includes, but is not limited to, wires, cables
21 including fiber optic cables, antennas, poles, switches,
22 routers, amplifiers, rectifiers, repeaters, receivers,
23 multiplexers, duplexers, transmitters, power equipment, backup
24 power equipment, diagnostic equipment, storage devices,
25 modems, and other general central office equipment, such as
26 channel cards, frames, and cabinets. As used in this item
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1 (47), "broadband" and "broadband service" have the meanings
2 given to those terms under Section 10 of the Broadband
3 Advisory Council Act. This item (47) is exempt from the
4 provisions of Section 3-90.
5 (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
6 Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
7 eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
8 Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
9 eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
10 103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
11 7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; revised
12 11-26-24.)
13 Section 10. The Service Use Tax Act is amended by changing
14 Section 3-5 as follows:
15 (35 ILCS 110/3-5)
16 Sec. 3-5. Exemptions. Use of the following tangible
17 personal property is exempt from the tax imposed by this Act:
18 (1) Personal property purchased from a corporation,
19 society, association, foundation, institution, or
20 organization, other than a limited liability company, that is
21 organized and operated as a not-for-profit service enterprise
22 for the benefit of persons 65 years of age or older if the
23 personal property was not purchased by the enterprise for the
24 purpose of resale by the enterprise.
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1 (2) Personal property purchased by a non-profit Illinois
2 county fair association for use in conducting, operating, or
3 promoting the county fair.
4 (3) Personal property purchased by a not-for-profit arts
5 or cultural organization that establishes, by proof required
6 by the Department by rule, that it has received an exemption
7 under Section 501(c)(3) of the Internal Revenue Code and that
8 is organized and operated primarily for the presentation or
9 support of arts or cultural programming, activities, or
10 services. These organizations include, but are not limited to,
11 music and dramatic arts organizations such as symphony
12 orchestras and theatrical groups, arts and cultural service
13 organizations, local arts councils, visual arts organizations,
14 and media arts organizations. On and after July 1, 2001 (the
15 effective date of Public Act 92-35), however, an entity
16 otherwise eligible for this exemption shall not make tax-free
17 purchases unless it has an active identification number issued
18 by the Department.
19 (4) Legal tender, currency, medallions, or gold or silver
20 coinage issued by the State of Illinois, the government of the
21 United States of America, or the government of any foreign
22 country, and bullion.
23 (5) Until July 1, 2003 and beginning again on September 1,
24 2004 through August 30, 2014, graphic arts machinery and
25 equipment, including repair and replacement parts, both new
26 and used, and including that manufactured on special order or
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1 purchased for lease, certified by the purchaser to be used
2 primarily for graphic arts production. Equipment includes
3 chemicals or chemicals acting as catalysts but only if the
4 chemicals or chemicals acting as catalysts effect a direct and
5 immediate change upon a graphic arts product. Beginning on
6 July 1, 2017, graphic arts machinery and equipment is included
7 in the manufacturing and assembling machinery and equipment
8 exemption under Section 2 of this Act.
9 (6) Personal property purchased from a teacher-sponsored
10 student organization affiliated with an elementary or
11 secondary school located in Illinois.
12 (7) Farm machinery and equipment, both new and used,
13 including that manufactured on special order, certified by the
14 purchaser to be used primarily for production agriculture or
15 State or federal agricultural programs, including individual
16 replacement parts for the machinery and equipment, including
17 machinery and equipment purchased for lease, and including
18 implements of husbandry defined in Section 1-130 of the
19 Illinois Vehicle Code, farm machinery and agricultural
20 chemical and fertilizer spreaders, and nurse wagons required
21 to be registered under Section 3-809 of the Illinois Vehicle
22 Code, but excluding other motor vehicles required to be
23 registered under the Illinois Vehicle Code. Horticultural
24 polyhouses or hoop houses used for propagating, growing, or
25 overwintering plants shall be considered farm machinery and
26 equipment under this item (7). Agricultural chemical tender
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1 tanks and dry boxes shall include units sold separately from a
2 motor vehicle required to be licensed and units sold mounted
3 on a motor vehicle required to be licensed if the selling price
4 of the tender is separately stated.
5 Farm machinery and equipment shall include precision
6 farming equipment that is installed or purchased to be
7 installed on farm machinery and equipment, including, but not
8 limited to, tractors, harvesters, sprayers, planters, seeders,
9 or spreaders. Precision farming equipment includes, but is not
10 limited to, soil testing sensors, computers, monitors,
11 software, global positioning and mapping systems, and other
12 such equipment.
13 Farm machinery and equipment also includes computers,
14 sensors, software, and related equipment used primarily in the
15 computer-assisted operation of production agriculture
16 facilities, equipment, and activities such as, but not limited
17 to, the collection, monitoring, and correlation of animal and
18 crop data for the purpose of formulating animal diets and
19 agricultural chemicals.
20 Beginning on January 1, 2024, farm machinery and equipment
21 also includes electrical power generation equipment used
22 primarily for production agriculture.
23 This item (7) is exempt from the provisions of Section
24 3-75.
25 (8) Until June 30, 2013, fuel and petroleum products sold
26 to or used by an air common carrier, certified by the carrier
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1 to be used for consumption, shipment, or storage in the
2 conduct of its business as an air common carrier, for a flight
3 destined for or returning from a location or locations outside
4 the United States without regard to previous or subsequent
5 domestic stopovers.
6 Beginning July 1, 2013, fuel and petroleum products sold
7 to or used by an air carrier, certified by the carrier to be
8 used for consumption, shipment, or storage in the conduct of
9 its business as an air common carrier, for a flight that (i) is
10 engaged in foreign trade or is engaged in trade between the
11 United States and any of its possessions and (ii) transports
12 at least one individual or package for hire from the city of
13 origination to the city of final destination on the same
14 aircraft, without regard to a change in the flight number of
15 that aircraft.
16 (9) Proceeds of mandatory service charges separately
17 stated on customers' bills for the purchase and consumption of
18 food and beverages acquired as an incident to the purchase of a
19 service from a serviceman, to the extent that the proceeds of
20 the service charge are in fact turned over as tips or as a
21 substitute for tips to the employees who participate directly
22 in preparing, serving, hosting or cleaning up the food or
23 beverage function with respect to which the service charge is
24 imposed.
25 (10) Until July 1, 2003, oil field exploration, drilling,
26 and production equipment, including (i) rigs and parts of
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1 rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
2 pipe and tubular goods, including casing and drill strings,
3 (iii) pumps and pump-jack units, (iv) storage tanks and flow
4 lines, (v) any individual replacement part for oil field
5 exploration, drilling, and production equipment, and (vi)
6 machinery and equipment purchased for lease; but excluding
7 motor vehicles required to be registered under the Illinois
8 Vehicle Code.
9 (11) Proceeds from the sale of photoprocessing machinery
10 and equipment, including repair and replacement parts, both
11 new and used, including that manufactured on special order,
12 certified by the purchaser to be used primarily for
13 photoprocessing, and including photoprocessing machinery and
14 equipment purchased for lease.
15 (12) Until July 1, 2028, coal and aggregate exploration,
16 mining, off-highway hauling, processing, maintenance, and
17 reclamation equipment, including replacement parts and
18 equipment, and including equipment purchased for lease, but
19 excluding motor vehicles required to be registered under the
20 Illinois Vehicle Code. The changes made to this Section by
21 Public Act 97-767 apply on and after July 1, 2003, but no claim
22 for credit or refund is allowed on or after August 16, 2013
23 (the effective date of Public Act 98-456) for such taxes paid
24 during the period beginning July 1, 2003 and ending on August
25 16, 2013 (the effective date of Public Act 98-456).
26 (13) Semen used for artificial insemination of livestock
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1 for direct agricultural production.
2 (14) Horses, or interests in horses, registered with and
3 meeting the requirements of any of the Arabian Horse Club
4 Registry of America, Appaloosa Horse Club, American Quarter
5 Horse Association, United States Trotting Association, or
6 Jockey Club, as appropriate, used for purposes of breeding or
7 racing for prizes. This item (14) is exempt from the
8 provisions of Section 3-75, and the exemption provided for
9 under this item (14) applies for all periods beginning May 30,
10 1995, but no claim for credit or refund is allowed on or after
11 January 1, 2008 (the effective date of Public Act 95-88) for
12 such taxes paid during the period beginning May 30, 2000 and
13 ending on January 1, 2008 (the effective date of Public Act
14 95-88).
15 (15) Computers and communications equipment utilized for
16 any hospital purpose and equipment used in the diagnosis,
17 analysis, or treatment of hospital patients purchased by a
18 lessor who leases the equipment, under a lease of one year or
19 longer executed or in effect at the time the lessor would
20 otherwise be subject to the tax imposed by this Act, to a
21 hospital that has been issued an active tax exemption
22 identification number by the Department under Section 1g of
23 the Retailers' Occupation Tax Act. If the equipment is leased
24 in a manner that does not qualify for this exemption or is used
25 in any other non-exempt manner, the lessor shall be liable for
26 the tax imposed under this Act or the Use Tax Act, as the case
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1 may be, based on the fair market value of the property at the
2 time the non-qualifying use occurs. No lessor shall collect or
3 attempt to collect an amount (however designated) that
4 purports to reimburse that lessor for the tax imposed by this
5 Act or the Use Tax Act, as the case may be, if the tax has not
6 been paid by the lessor. If a lessor improperly collects any
7 such amount from the lessee, the lessee shall have a legal
8 right to claim a refund of that amount from the lessor. If,
9 however, that amount is not refunded to the lessee for any
10 reason, the lessor is liable to pay that amount to the
11 Department.
12 (16) Personal property purchased by a lessor who leases
13 the property, under a lease of one year or longer executed or
14 in effect at the time the lessor would otherwise be subject to
15 the tax imposed by this Act, to a governmental body that has
16 been issued an active tax exemption identification number by
17 the Department under Section 1g of the Retailers' Occupation
18 Tax Act. If the property is leased in a manner that does not
19 qualify for this exemption or is used in any other non-exempt
20 manner, the lessor shall be liable for the tax imposed under
21 this Act or the Use Tax Act, as the case may be, based on the
22 fair market value of the property at the time the
23 non-qualifying use occurs. No lessor shall collect or attempt
24 to collect an amount (however designated) that purports to
25 reimburse that lessor for the tax imposed by this Act or the
26 Use Tax Act, as the case may be, if the tax has not been paid
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1 by the lessor. If a lessor improperly collects any such amount
2 from the lessee, the lessee shall have a legal right to claim a
3 refund of that amount from the lessor. If, however, that
4 amount is not refunded to the lessee for any reason, the lessor
5 is liable to pay that amount to the Department.
6 (17) Beginning with taxable years ending on or after
7 December 31, 1995 and ending with taxable years ending on or
8 before December 31, 2004, personal property that is donated
9 for disaster relief to be used in a State or federally declared
10 disaster area in Illinois or bordering Illinois by a
11 manufacturer or retailer that is registered in this State to a
12 corporation, society, association, foundation, or institution
13 that has been issued a sales tax exemption identification
14 number by the Department that assists victims of the disaster
15 who reside within the declared disaster area.
16 (18) Beginning with taxable years ending on or after
17 December 31, 1995 and ending with taxable years ending on or
18 before December 31, 2004, personal property that is used in
19 the performance of infrastructure repairs in this State,
20 including, but not limited to, municipal roads and streets,
21 access roads, bridges, sidewalks, waste disposal systems,
22 water and sewer line extensions, water distribution and
23 purification facilities, storm water drainage and retention
24 facilities, and sewage treatment facilities, resulting from a
25 State or federally declared disaster in Illinois or bordering
26 Illinois when such repairs are initiated on facilities located
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1 in the declared disaster area within 6 months after the
2 disaster.
3 (19) Beginning July 1, 1999, game or game birds purchased
4 at a "game breeding and hunting preserve area" as that term is
5 used in the Wildlife Code. This paragraph is exempt from the
6 provisions of Section 3-75.
7 (20) A motor vehicle, as that term is defined in Section
8 1-146 of the Illinois Vehicle Code, that is donated to a
9 corporation, limited liability company, society, association,
10 foundation, or institution that is determined by the
11 Department to be organized and operated exclusively for
12 educational purposes. For purposes of this exemption, "a
13 corporation, limited liability company, society, association,
14 foundation, or institution organized and operated exclusively
15 for educational purposes" means all tax-supported public
16 schools, private schools that offer systematic instruction in
17 useful branches of learning by methods common to public
18 schools and that compare favorably in their scope and
19 intensity with the course of study presented in tax-supported
20 schools, and vocational or technical schools or institutes
21 organized and operated exclusively to provide a course of
22 study of not less than 6 weeks duration and designed to prepare
23 individuals to follow a trade or to pursue a manual,
24 technical, mechanical, industrial, business, or commercial
25 occupation.
26 (21) Beginning January 1, 2000, personal property,
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1 including food, purchased through fundraising events for the
2 benefit of a public or private elementary or secondary school,
3 a group of those schools, or one or more school districts if
4 the events are sponsored by an entity recognized by the school
5 district that consists primarily of volunteers and includes
6 parents and teachers of the school children. This paragraph
7 does not apply to fundraising events (i) for the benefit of
8 private home instruction or (ii) for which the fundraising
9 entity purchases the personal property sold at the events from
10 another individual or entity that sold the property for the
11 purpose of resale by the fundraising entity and that profits
12 from the sale to the fundraising entity. This paragraph is
13 exempt from the provisions of Section 3-75.
14 (22) Beginning January 1, 2000 and through December 31,
15 2001, new or used automatic vending machines that prepare and
16 serve hot food and beverages, including coffee, soup, and
17 other items, and replacement parts for these machines.
18 Beginning January 1, 2002 and through June 30, 2003, machines
19 and parts for machines used in commercial, coin-operated
20 amusement and vending business if a use or occupation tax is
21 paid on the gross receipts derived from the use of the
22 commercial, coin-operated amusement and vending machines. This
23 paragraph is exempt from the provisions of Section 3-75.
24 (23) Beginning August 23, 2001 and through June 30, 2016,
25 food for human consumption that is to be consumed off the
26 premises where it is sold (other than alcoholic beverages,
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1 soft drinks, and food that has been prepared for immediate
2 consumption) and prescription and nonprescription medicines,
3 drugs, medical appliances, and insulin, urine testing
4 materials, syringes, and needles used by diabetics, for human
5 use, when purchased for use by a person receiving medical
6 assistance under Article V of the Illinois Public Aid Code who
7 resides in a licensed long-term care facility, as defined in
8 the Nursing Home Care Act, or in a licensed facility as defined
9 in the ID/DD Community Care Act, the MC/DD Act, or the
10 Specialized Mental Health Rehabilitation Act of 2013.
11 (24) Beginning on August 2, 2001 (the effective date of
12 Public Act 92-227), computers and communications equipment
13 utilized for any hospital purpose and equipment used in the
14 diagnosis, analysis, or treatment of hospital patients
15 purchased by a lessor who leases the equipment, under a lease
16 of one year or longer executed or in effect at the time the
17 lessor would otherwise be subject to the tax imposed by this
18 Act, to a hospital that has been issued an active tax exemption
19 identification number by the Department under Section 1g of
20 the Retailers' Occupation Tax Act. If the equipment is leased
21 in a manner that does not qualify for this exemption or is used
22 in any other nonexempt manner, the lessor shall be liable for
23 the tax imposed under this Act or the Use Tax Act, as the case
24 may be, based on the fair market value of the property at the
25 time the nonqualifying use occurs. No lessor shall collect or
26 attempt to collect an amount (however designated) that
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1 purports to reimburse that lessor for the tax imposed by this
2 Act or the Use Tax Act, as the case may be, if the tax has not
3 been paid by the lessor. If a lessor improperly collects any
4 such amount from the lessee, the lessee shall have a legal
5 right to claim a refund of that amount from the lessor. If,
6 however, that amount is not refunded to the lessee for any
7 reason, the lessor is liable to pay that amount to the
8 Department. This paragraph is exempt from the provisions of
9 Section 3-75.
10 (25) Beginning on August 2, 2001 (the effective date of
11 Public Act 92-227), personal property purchased by a lessor
12 who leases the property, under a lease of one year or longer
13 executed or in effect at the time the lessor would otherwise be
14 subject to the tax imposed by this Act, to a governmental body
15 that has been issued an active tax exemption identification
16 number by the Department under Section 1g of the Retailers'
17 Occupation Tax Act. If the property is leased in a manner that
18 does not qualify for this exemption or is used in any other
19 nonexempt manner, the lessor shall be liable for the tax
20 imposed under this Act or the Use Tax Act, as the case may be,
21 based on the fair market value of the property at the time the
22 nonqualifying use occurs. No lessor shall collect or attempt
23 to collect an amount (however designated) that purports to
24 reimburse that lessor for the tax imposed by this Act or the
25 Use Tax Act, as the case may be, if the tax has not been paid
26 by the lessor. If a lessor improperly collects any such amount
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1 from the lessee, the lessee shall have a legal right to claim a
2 refund of that amount from the lessor. If, however, that
3 amount is not refunded to the lessee for any reason, the lessor
4 is liable to pay that amount to the Department. This paragraph
5 is exempt from the provisions of Section 3-75.
6 (26) Beginning January 1, 2008, tangible personal property
7 used in the construction or maintenance of a community water
8 supply, as defined under Section 3.145 of the Environmental
9 Protection Act, that is operated by a not-for-profit
10 corporation that holds a valid water supply permit issued
11 under Title IV of the Environmental Protection Act. This
12 paragraph is exempt from the provisions of Section 3-75.
13 (27) Beginning January 1, 2010 and continuing through
14 December 31, 2029, materials, parts, equipment, components,
15 and furnishings incorporated into or upon an aircraft as part
16 of the modification, refurbishment, completion, replacement,
17 repair, or maintenance of the aircraft. This exemption
18 includes consumable supplies used in the modification,
19 refurbishment, completion, replacement, repair, and
20 maintenance of aircraft. However, until January 1, 2024, this
21 exemption excludes any materials, parts, equipment,
22 components, and consumable supplies used in the modification,
23 replacement, repair, and maintenance of aircraft engines or
24 power plants, whether such engines or power plants are
25 installed or uninstalled upon any such aircraft. "Consumable
26 supplies" include, but are not limited to, adhesive, tape,
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1 sandpaper, general purpose lubricants, cleaning solution,
2 latex gloves, and protective films.
3 Beginning January 1, 2010 and continuing through December
4 31, 2023, this exemption applies only to the use of qualifying
5 tangible personal property transferred incident to the
6 modification, refurbishment, completion, replacement, repair,
7 or maintenance of aircraft by persons who (i) hold an Air
8 Agency Certificate and are empowered to operate an approved
9 repair station by the Federal Aviation Administration, (ii)
10 have a Class IV Rating, and (iii) conduct operations in
11 accordance with Part 145 of the Federal Aviation Regulations.
12 From January 1, 2024 through December 31, 2029, this exemption
13 applies only to the use of qualifying tangible personal
14 property transferred incident to: (A) the modification,
15 refurbishment, completion, repair, replacement, or maintenance
16 of an aircraft by persons who (i) hold an Air Agency
17 Certificate and are empowered to operate an approved repair
18 station by the Federal Aviation Administration, (ii) have a
19 Class IV Rating, and (iii) conduct operations in accordance
20 with Part 145 of the Federal Aviation Regulations; and (B) the
21 modification, replacement, repair, and maintenance of aircraft
22 engines or power plants without regard to whether or not those
23 persons meet the qualifications of item (A).
24 The exemption does not include aircraft operated by a
25 commercial air carrier providing scheduled passenger air
26 service pursuant to authority issued under Part 121 or Part
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1 129 of the Federal Aviation Regulations. The changes made to
2 this paragraph (27) by Public Act 98-534 are declarative of
3 existing law. It is the intent of the General Assembly that the
4 exemption under this paragraph (27) applies continuously from
5 January 1, 2010 through December 31, 2024; however, no claim
6 for credit or refund is allowed for taxes paid as a result of
7 the disallowance of this exemption on or after January 1, 2015
8 and prior to February 5, 2020 (the effective date of Public Act
9 101-629).
10 (28) Tangible personal property purchased by a
11 public-facilities corporation, as described in Section
12 11-65-10 of the Illinois Municipal Code, for purposes of
13 constructing or furnishing a municipal convention hall, but
14 only if the legal title to the municipal convention hall is
15 transferred to the municipality without any further
16 consideration by or on behalf of the municipality at the time
17 of the completion of the municipal convention hall or upon the
18 retirement or redemption of any bonds or other debt
19 instruments issued by the public-facilities corporation in
20 connection with the development of the municipal convention
21 hall. This exemption includes existing public-facilities
22 corporations as provided in Section 11-65-25 of the Illinois
23 Municipal Code. This paragraph is exempt from the provisions
24 of Section 3-75.
25 (29) Beginning January 1, 2017 and through December 31,
26 2026, menstrual pads, tampons, and menstrual cups.
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1 (30) Tangible personal property transferred to a purchaser
2 who is exempt from the tax imposed by this Act by operation of
3 federal law. This paragraph is exempt from the provisions of
4 Section 3-75.
5 (31) Qualified tangible personal property used in the
6 construction or operation of a data center that has been
7 granted a certificate of exemption by the Department of
8 Commerce and Economic Opportunity, whether that tangible
9 personal property is purchased by the owner, operator, or
10 tenant of the data center or by a contractor or subcontractor
11 of the owner, operator, or tenant. Data centers that would
12 have qualified for a certificate of exemption prior to January
13 1, 2020 had Public Act 101-31 been in effect, may apply for and
14 obtain an exemption for subsequent purchases of computer
15 equipment or enabling software purchased or leased to upgrade,
16 supplement, or replace computer equipment or enabling software
17 purchased or leased in the original investment that would have
18 qualified.
19 The Department of Commerce and Economic Opportunity shall
20 grant a certificate of exemption under this item (31) to
21 qualified data centers as defined by Section 605-1025 of the
22 Department of Commerce and Economic Opportunity Law of the
23 Civil Administrative Code of Illinois.
24 For the purposes of this item (31):
25 "Data center" means a building or a series of
26 buildings rehabilitated or constructed to house working
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1 servers in one physical location or multiple sites within
2 the State of Illinois.
3 "Qualified tangible personal property" means:
4 electrical systems and equipment; climate control and
5 chilling equipment and systems; mechanical systems and
6 equipment; monitoring and secure systems; emergency
7 generators; hardware; computers; servers; data storage
8 devices; network connectivity equipment; racks; cabinets;
9 telecommunications cabling infrastructure; raised floor
10 systems; peripheral components or systems; software;
11 mechanical, electrical, or plumbing systems; battery
12 systems; cooling systems and towers; temperature control
13 systems; other cabling; and other data center
14 infrastructure equipment and systems necessary to operate
15 qualified tangible personal property, including fixtures;
16 and component parts of any of the foregoing, including
17 installation, maintenance, repair, refurbishment, and
18 replacement of qualified tangible personal property to
19 generate, transform, transmit, distribute, or manage
20 electricity necessary to operate qualified tangible
21 personal property; and all other tangible personal
22 property that is essential to the operations of a computer
23 data center. The term "qualified tangible personal
24 property" also includes building materials physically
25 incorporated into the qualifying data center. To document
26 the exemption allowed under this Section, the retailer
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1 must obtain from the purchaser a copy of the certificate
2 of eligibility issued by the Department of Commerce and
3 Economic Opportunity.
4 This item (31) is exempt from the provisions of Section
5 3-75.
6 (32) Beginning July 1, 2022, breast pumps, breast pump
7 collection and storage supplies, and breast pump kits. This
8 item (32) is exempt from the provisions of Section 3-75. As
9 used in this item (32):
10 "Breast pump" means an electrically controlled or
11 manually controlled pump device designed or marketed to be
12 used to express milk from a human breast during lactation,
13 including the pump device and any battery, AC adapter, or
14 other power supply unit that is used to power the pump
15 device and is packaged and sold with the pump device at the
16 time of sale.
17 "Breast pump collection and storage supplies" means
18 items of tangible personal property designed or marketed
19 to be used in conjunction with a breast pump to collect
20 milk expressed from a human breast and to store collected
21 milk until it is ready for consumption.
22 "Breast pump collection and storage supplies"
23 includes, but is not limited to: breast shields and breast
24 shield connectors; breast pump tubes and tubing adapters;
25 breast pump valves and membranes; backflow protectors and
26 backflow protector adaptors; bottles and bottle caps
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1 specific to the operation of the breast pump; and breast
2 milk storage bags.
3 "Breast pump collection and storage supplies" does not
4 include: (1) bottles and bottle caps not specific to the
5 operation of the breast pump; (2) breast pump travel bags
6 and other similar carrying accessories, including ice
7 packs, labels, and other similar products; (3) breast pump
8 cleaning supplies; (4) nursing bras, bra pads, breast
9 shells, and other similar products; and (5) creams,
10 ointments, and other similar products that relieve
11 breastfeeding-related symptoms or conditions of the
12 breasts or nipples, unless sold as part of a breast pump
13 kit that is pre-packaged by the breast pump manufacturer
14 or distributor.
15 "Breast pump kit" means a kit that: (1) contains no
16 more than a breast pump, breast pump collection and
17 storage supplies, a rechargeable battery for operating the
18 breast pump, a breastmilk cooler, bottle stands, ice
19 packs, and a breast pump carrying case; and (2) is
20 pre-packaged as a breast pump kit by the breast pump
21 manufacturer or distributor.
22 (33) Tangible personal property sold by or on behalf of
23 the State Treasurer pursuant to the Revised Uniform Unclaimed
24 Property Act. This item (33) is exempt from the provisions of
25 Section 3-75.
26 (34) Beginning on January 1, 2024, tangible personal
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1 property purchased by an active duty member of the armed
2 forces of the United States who presents valid military
3 identification and purchases the property using a form of
4 payment where the federal government is the payor. The member
5 of the armed forces must complete, at the point of sale, a form
6 prescribed by the Department of Revenue documenting that the
7 transaction is eligible for the exemption under this
8 paragraph. Retailers must keep the form as documentation of
9 the exemption in their records for a period of not less than 6
10 years. "Armed forces of the United States" means the United
11 States Army, Navy, Air Force, Space Force, Marine Corps, or
12 Coast Guard. This paragraph is exempt from the provisions of
13 Section 3-75.
14 (35) Beginning July 1, 2024, home-delivered meals provided
15 to Medicare or Medicaid recipients when payment is made by an
16 intermediary, such as a Medicare Administrative Contractor, a
17 Managed Care Organization, or a Medicare Advantage
18 Organization, pursuant to a government contract. This
19 paragraph (35) is exempt from the provisions of Section 3-75.
20 (36) (35) Beginning on January 1, 2026, as further defined
21 in Section 3-10, food prepared for immediate consumption and
22 transferred incident to a sale of service subject to this Act
23 or the Service Occupation Tax Act by an entity licensed under
24 the Hospital Licensing Act, the Nursing Home Care Act, the
25 Assisted Living and Shared Housing Act, the ID/DD Community
26 Care Act, the MC/DD Act, the Specialized Mental Health
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1 Rehabilitation Act of 2013, or the Child Care Act of 1969, or
2 by an entity that holds a permit issued pursuant to the Life
3 Care Facilities Act. This item (36) (35) is exempt from the
4 provisions of Section 3-75.
5 (37) (36) Beginning on January 1, 2026, as further defined
6 in Section 3-10, food for human consumption that is to be
7 consumed off the premises where it is sold (other than
8 alcoholic beverages, food consisting of or infused with adult
9 use cannabis, soft drinks, candy, and food that has been
10 prepared for immediate consumption). This item (37) (36) is
11 exempt from the provisions of Section 3-75.
12 (38) (35) Use by a lessee of the following leased tangible
13 personal property:
14 (1) software transferred subject to a license that
15 meets the following requirements:
16 (A) it is evidenced by a written agreement signed
17 by the licensor and the customer;
18 (i) an electronic agreement in which the
19 customer accepts the license by means of an
20 electronic signature that is verifiable and can be
21 authenticated and is attached to or made part of
22 the license will comply with this requirement;
23 (ii) a license agreement in which the customer
24 electronically accepts the terms by clicking "I
25 agree" does not comply with this requirement;
26 (B) it restricts the customer's duplication and
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1 use of the software;
2 (C) it prohibits the customer from licensing,
3 sublicensing, or transferring the software to a third
4 party (except to a related party) without the
5 permission and continued control of the licensor;
6 (D) the licensor has a policy of providing another
7 copy at minimal or no charge if the customer loses or
8 damages the software, or of permitting the licensee to
9 make and keep an archival copy, and such policy is
10 either stated in the license agreement, supported by
11 the licensor's books and records, or supported by a
12 notarized statement made under penalties of perjury by
13 the licensor; and
14 (E) the customer must destroy or return all copies
15 of the software to the licensor at the end of the
16 license period; this provision is deemed to be met, in
17 the case of a perpetual license, without being set
18 forth in the license agreement; and
19 (2) property that is subject to a tax on lease
20 receipts imposed by a home rule unit of local government
21 if the ordinance imposing that tax was adopted prior to
22 January 1, 2023.
23 (39) Equipment and materials placed in service on or after
24 January 1, 2026 that are incorporated into or used in the
25 business of providing broadband services, including all
26 equipment and materials machinery, software, or other tangible
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1 personal property that is used in whole or in part in
2 producing, broadcasting, distributing, sending, receiving,
3 storing, transmitting, retransmitting, amplifying, switching,
4 or routing broadband services, including the monitoring,
5 testing, maintaining, enabling, or facilitating of such
6 equipment, machinery, software, or other infrastructure. That
7 property includes, but is not limited to, wires, cables
8 including fiber optic cables, antennas, poles, switches,
9 routers, amplifiers, rectifiers, repeaters, receivers,
10 multiplexers, duplexers, transmitters, power equipment, backup
11 power equipment, diagnostic equipment, storage devices,
12 modems, and other general central office equipment, such as
13 channel cards, frames, and cabinets. As used in this item
14 (39), "broadband" and "broadband service" have the meanings
15 given to those terms under Section 10 of the Broadband
16 Advisory Council Act. This item (39) is exempt from the
17 provisions of Section 3-75.
18 (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
19 Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
20 75-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
21 Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
22 eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
23 103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
24 7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995,
25 eff. 8-9-24; revised 11-26-24.)
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1 Section 15. The Service Occupation Tax Act is amended by
2 changing Section 3-5 as follows:
3 (35 ILCS 115/3-5)
4 Sec. 3-5. Exemptions. The following tangible personal
5 property is exempt from the tax imposed by this Act:
6 (1) Personal property sold by a corporation, society,
7 association, foundation, institution, or organization, other
8 than a limited liability company, that is organized and
9 operated as a not-for-profit service enterprise for the
10 benefit of persons 65 years of age or older if the personal
11 property was not purchased by the enterprise for the purpose
12 of resale by the enterprise.
13 (2) Personal property purchased by a not-for-profit
14 Illinois county fair association for use in conducting,
15 operating, or promoting the county fair.
16 (3) Personal property purchased by any not-for-profit arts
17 or cultural organization that establishes, by proof required
18 by the Department by rule, that it has received an exemption
19 under Section 501(c)(3) of the Internal Revenue Code and that
20 is organized and operated primarily for the presentation or
21 support of arts or cultural programming, activities, or
22 services. These organizations include, but are not limited to,
23 music and dramatic arts organizations such as symphony
24 orchestras and theatrical groups, arts and cultural service
25 organizations, local arts councils, visual arts organizations,
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1 and media arts organizations. On and after July 1, 2001 (the
2 effective date of Public Act 92-35), however, an entity
3 otherwise eligible for this exemption shall not make tax-free
4 purchases unless it has an active identification number issued
5 by the Department.
6 (4) Legal tender, currency, medallions, or gold or silver
7 coinage issued by the State of Illinois, the government of the
8 United States of America, or the government of any foreign
9 country, and bullion.
10 (5) Until July 1, 2003 and beginning again on September 1,
11 2004 through August 30, 2014, graphic arts machinery and
12 equipment, including repair and replacement parts, both new
13 and used, and including that manufactured on special order or
14 purchased for lease, certified by the purchaser to be used
15 primarily for graphic arts production. Equipment includes
16 chemicals or chemicals acting as catalysts but only if the
17 chemicals or chemicals acting as catalysts effect a direct and
18 immediate change upon a graphic arts product. Beginning on
19 July 1, 2017, graphic arts machinery and equipment is included
20 in the manufacturing and assembling machinery and equipment
21 exemption under Section 2 of this Act.
22 (6) Personal property sold by a teacher-sponsored student
23 organization affiliated with an elementary or secondary school
24 located in Illinois.
25 (7) Farm machinery and equipment, both new and used,
26 including that manufactured on special order, certified by the
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1 purchaser to be used primarily for production agriculture or
2 State or federal agricultural programs, including individual
3 replacement parts for the machinery and equipment, including
4 machinery and equipment purchased for lease, and including
5 implements of husbandry defined in Section 1-130 of the
6 Illinois Vehicle Code, farm machinery and agricultural
7 chemical and fertilizer spreaders, and nurse wagons required
8 to be registered under Section 3-809 of the Illinois Vehicle
9 Code, but excluding other motor vehicles required to be
10 registered under the Illinois Vehicle Code. Horticultural
11 polyhouses or hoop houses used for propagating, growing, or
12 overwintering plants shall be considered farm machinery and
13 equipment under this item (7). Agricultural chemical tender
14 tanks and dry boxes shall include units sold separately from a
15 motor vehicle required to be licensed and units sold mounted
16 on a motor vehicle required to be licensed if the selling price
17 of the tender is separately stated.
18 Farm machinery and equipment shall include precision
19 farming equipment that is installed or purchased to be
20 installed on farm machinery and equipment, including, but not
21 limited to, tractors, harvesters, sprayers, planters, seeders,
22 or spreaders. Precision farming equipment includes, but is not
23 limited to, soil testing sensors, computers, monitors,
24 software, global positioning and mapping systems, and other
25 such equipment.
26 Farm machinery and equipment also includes computers,
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1 sensors, software, and related equipment used primarily in the
2 computer-assisted operation of production agriculture
3 facilities, equipment, and activities such as, but not limited
4 to, the collection, monitoring, and correlation of animal and
5 crop data for the purpose of formulating animal diets and
6 agricultural chemicals.
7 Beginning on January 1, 2024, farm machinery and equipment
8 also includes electrical power generation equipment used
9 primarily for production agriculture.
10 This item (7) is exempt from the provisions of Section
11 3-55.
12 (8) Until June 30, 2013, fuel and petroleum products sold
13 to or used by an air common carrier, certified by the carrier
14 to be used for consumption, shipment, or storage in the
15 conduct of its business as an air common carrier, for a flight
16 destined for or returning from a location or locations outside
17 the United States without regard to previous or subsequent
18 domestic stopovers.
19 Beginning July 1, 2013, fuel and petroleum products sold
20 to or used by an air carrier, certified by the carrier to be
21 used for consumption, shipment, or storage in the conduct of
22 its business as an air common carrier, for a flight that (i) is
23 engaged in foreign trade or is engaged in trade between the
24 United States and any of its possessions and (ii) transports
25 at least one individual or package for hire from the city of
26 origination to the city of final destination on the same
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1 aircraft, without regard to a change in the flight number of
2 that aircraft.
3 (9) Proceeds of mandatory service charges separately
4 stated on customers' bills for the purchase and consumption of
5 food and beverages, to the extent that the proceeds of the
6 service charge are in fact turned over as tips or as a
7 substitute for tips to the employees who participate directly
8 in preparing, serving, hosting or cleaning up the food or
9 beverage function with respect to which the service charge is
10 imposed.
11 (10) Until July 1, 2003, oil field exploration, drilling,
12 and production equipment, including (i) rigs and parts of
13 rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
14 pipe and tubular goods, including casing and drill strings,
15 (iii) pumps and pump-jack units, (iv) storage tanks and flow
16 lines, (v) any individual replacement part for oil field
17 exploration, drilling, and production equipment, and (vi)
18 machinery and equipment purchased for lease; but excluding
19 motor vehicles required to be registered under the Illinois
20 Vehicle Code.
21 (11) Photoprocessing machinery and equipment, including
22 repair and replacement parts, both new and used, including
23 that manufactured on special order, certified by the purchaser
24 to be used primarily for photoprocessing, and including
25 photoprocessing machinery and equipment purchased for lease.
26 (12) Until July 1, 2028, coal and aggregate exploration,
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1 mining, off-highway hauling, processing, maintenance, and
2 reclamation equipment, including replacement parts and
3 equipment, and including equipment purchased for lease, but
4 excluding motor vehicles required to be registered under the
5 Illinois Vehicle Code. The changes made to this Section by
6 Public Act 97-767 apply on and after July 1, 2003, but no claim
7 for credit or refund is allowed on or after August 16, 2013
8 (the effective date of Public Act 98-456) for such taxes paid
9 during the period beginning July 1, 2003 and ending on August
10 16, 2013 (the effective date of Public Act 98-456).
11 (13) Beginning January 1, 1992 and through June 30, 2016,
12 food for human consumption that is to be consumed off the
13 premises where it is sold (other than alcoholic beverages,
14 soft drinks and food that has been prepared for immediate
15 consumption) and prescription and non-prescription medicines,
16 drugs, medical appliances, and insulin, urine testing
17 materials, syringes, and needles used by diabetics, for human
18 use, when purchased for use by a person receiving medical
19 assistance under Article V of the Illinois Public Aid Code who
20 resides in a licensed long-term care facility, as defined in
21 the Nursing Home Care Act, or in a licensed facility as defined
22 in the ID/DD Community Care Act, the MC/DD Act, or the
23 Specialized Mental Health Rehabilitation Act of 2013.
24 (14) Semen used for artificial insemination of livestock
25 for direct agricultural production.
26 (15) Horses, or interests in horses, registered with and
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1 meeting the requirements of any of the Arabian Horse Club
2 Registry of America, Appaloosa Horse Club, American Quarter
3 Horse Association, United States Trotting Association, or
4 Jockey Club, as appropriate, used for purposes of breeding or
5 racing for prizes. This item (15) is exempt from the
6 provisions of Section 3-55, and the exemption provided for
7 under this item (15) applies for all periods beginning May 30,
8 1995, but no claim for credit or refund is allowed on or after
9 January 1, 2008 (the effective date of Public Act 95-88) for
10 such taxes paid during the period beginning May 30, 2000 and
11 ending on January 1, 2008 (the effective date of Public Act
12 95-88).
13 (16) Computers and communications equipment utilized for
14 any hospital purpose and equipment used in the diagnosis,
15 analysis, or treatment of hospital patients sold to a lessor
16 who leases the equipment, under a lease of one year or longer
17 executed or in effect at the time of the purchase, to a
18 hospital that has been issued an active tax exemption
19 identification number by the Department under Section 1g of
20 the Retailers' Occupation Tax Act.
21 (17) Personal property sold to a lessor who leases the
22 property, under a lease of one year or longer executed or in
23 effect at the time of the purchase, to a governmental body that
24 has been issued an active tax exemption identification number
25 by the Department under Section 1g of the Retailers'
26 Occupation Tax Act.
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1 (18) Beginning with taxable years ending on or after
2 December 31, 1995 and ending with taxable years ending on or
3 before December 31, 2004, personal property that is donated
4 for disaster relief to be used in a State or federally declared
5 disaster area in Illinois or bordering Illinois by a
6 manufacturer or retailer that is registered in this State to a
7 corporation, society, association, foundation, or institution
8 that has been issued a sales tax exemption identification
9 number by the Department that assists victims of the disaster
10 who reside within the declared disaster area.
11 (19) Beginning with taxable years ending on or after
12 December 31, 1995 and ending with taxable years ending on or
13 before December 31, 2004, personal property that is used in
14 the performance of infrastructure repairs in this State,
15 including, but not limited to, municipal roads and streets,
16 access roads, bridges, sidewalks, waste disposal systems,
17 water and sewer line extensions, water distribution and
18 purification facilities, storm water drainage and retention
19 facilities, and sewage treatment facilities, resulting from a
20 State or federally declared disaster in Illinois or bordering
21 Illinois when such repairs are initiated on facilities located
22 in the declared disaster area within 6 months after the
23 disaster.
24 (20) Beginning July 1, 1999, game or game birds sold at a
25 "game breeding and hunting preserve area" as that term is used
26 in the Wildlife Code. This paragraph is exempt from the
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1 provisions of Section 3-55.
2 (21) A motor vehicle, as that term is defined in Section
3 1-146 of the Illinois Vehicle Code, that is donated to a
4 corporation, limited liability company, society, association,
5 foundation, or institution that is determined by the
6 Department to be organized and operated exclusively for
7 educational purposes. For purposes of this exemption, "a
8 corporation, limited liability company, society, association,
9 foundation, or institution organized and operated exclusively
10 for educational purposes" means all tax-supported public
11 schools, private schools that offer systematic instruction in
12 useful branches of learning by methods common to public
13 schools and that compare favorably in their scope and
14 intensity with the course of study presented in tax-supported
15 schools, and vocational or technical schools or institutes
16 organized and operated exclusively to provide a course of
17 study of not less than 6 weeks duration and designed to prepare
18 individuals to follow a trade or to pursue a manual,
19 technical, mechanical, industrial, business, or commercial
20 occupation.
21 (22) Beginning January 1, 2000, personal property,
22 including food, purchased through fundraising events for the
23 benefit of a public or private elementary or secondary school,
24 a group of those schools, or one or more school districts if
25 the events are sponsored by an entity recognized by the school
26 district that consists primarily of volunteers and includes
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1 parents and teachers of the school children. This paragraph
2 does not apply to fundraising events (i) for the benefit of
3 private home instruction or (ii) for which the fundraising
4 entity purchases the personal property sold at the events from
5 another individual or entity that sold the property for the
6 purpose of resale by the fundraising entity and that profits
7 from the sale to the fundraising entity. This paragraph is
8 exempt from the provisions of Section 3-55.
9 (23) Beginning January 1, 2000 and through December 31,
10 2001, new or used automatic vending machines that prepare and
11 serve hot food and beverages, including coffee, soup, and
12 other items, and replacement parts for these machines.
13 Beginning January 1, 2002 and through June 30, 2003, machines
14 and parts for machines used in commercial, coin-operated
15 amusement and vending business if a use or occupation tax is
16 paid on the gross receipts derived from the use of the
17 commercial, coin-operated amusement and vending machines. This
18 paragraph is exempt from the provisions of Section 3-55.
19 (24) Beginning on August 2, 2001 (the effective date of
20 Public Act 92-227), computers and communications equipment
21 utilized for any hospital purpose and equipment used in the
22 diagnosis, analysis, or treatment of hospital patients sold to
23 a lessor who leases the equipment, under a lease of one year or
24 longer executed or in effect at the time of the purchase, to a
25 hospital that has been issued an active tax exemption
26 identification number by the Department under Section 1g of
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1 the Retailers' Occupation Tax Act. This paragraph is exempt
2 from the provisions of Section 3-55.
3 (25) Beginning on August 2, 2001 (the effective date of
4 Public Act 92-227), personal property sold to a lessor who
5 leases the property, under a lease of one year or longer
6 executed or in effect at the time of the purchase, to a
7 governmental body that has been issued an active tax exemption
8 identification number by the Department under Section 1g of
9 the Retailers' Occupation Tax Act. This paragraph is exempt
10 from the provisions of Section 3-55.
11 (26) Beginning on January 1, 2002 and through June 30,
12 2016, tangible personal property purchased from an Illinois
13 retailer by a taxpayer engaged in centralized purchasing
14 activities in Illinois who will, upon receipt of the property
15 in Illinois, temporarily store the property in Illinois (i)
16 for the purpose of subsequently transporting it outside this
17 State for use or consumption thereafter solely outside this
18 State or (ii) for the purpose of being processed, fabricated,
19 or manufactured into, attached to, or incorporated into other
20 tangible personal property to be transported outside this
21 State and thereafter used or consumed solely outside this
22 State. The Director of Revenue shall, pursuant to rules
23 adopted in accordance with the Illinois Administrative
24 Procedure Act, issue a permit to any taxpayer in good standing
25 with the Department who is eligible for the exemption under
26 this paragraph (26). The permit issued under this paragraph
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1 (26) shall authorize the holder, to the extent and in the
2 manner specified in the rules adopted under this Act, to
3 purchase tangible personal property from a retailer exempt
4 from the taxes imposed by this Act. Taxpayers shall maintain
5 all necessary books and records to substantiate the use and
6 consumption of all such tangible personal property outside of
7 the State of Illinois.
8 (27) Beginning January 1, 2008, tangible personal property
9 used in the construction or maintenance of a community water
10 supply, as defined under Section 3.145 of the Environmental
11 Protection Act, that is operated by a not-for-profit
12 corporation that holds a valid water supply permit issued
13 under Title IV of the Environmental Protection Act. This
14 paragraph is exempt from the provisions of Section 3-55.
15 (28) Tangible personal property sold to a
16 public-facilities corporation, as described in Section
17 11-65-10 of the Illinois Municipal Code, for purposes of
18 constructing or furnishing a municipal convention hall, but
19 only if the legal title to the municipal convention hall is
20 transferred to the municipality without any further
21 consideration by or on behalf of the municipality at the time
22 of the completion of the municipal convention hall or upon the
23 retirement or redemption of any bonds or other debt
24 instruments issued by the public-facilities corporation in
25 connection with the development of the municipal convention
26 hall. This exemption includes existing public-facilities
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1 corporations as provided in Section 11-65-25 of the Illinois
2 Municipal Code. This paragraph is exempt from the provisions
3 of Section 3-55.
4 (29) Beginning January 1, 2010 and continuing through
5 December 31, 2029, materials, parts, equipment, components,
6 and furnishings incorporated into or upon an aircraft as part
7 of the modification, refurbishment, completion, replacement,
8 repair, or maintenance of the aircraft. This exemption
9 includes consumable supplies used in the modification,
10 refurbishment, completion, replacement, repair, and
11 maintenance of aircraft. However, until January 1, 2024, this
12 exemption excludes any materials, parts, equipment,
13 components, and consumable supplies used in the modification,
14 replacement, repair, and maintenance of aircraft engines or
15 power plants, whether such engines or power plants are
16 installed or uninstalled upon any such aircraft. "Consumable
17 supplies" include, but are not limited to, adhesive, tape,
18 sandpaper, general purpose lubricants, cleaning solution,
19 latex gloves, and protective films.
20 Beginning January 1, 2010 and continuing through December
21 31, 2023, this exemption applies only to the transfer of
22 qualifying tangible personal property incident to the
23 modification, refurbishment, completion, replacement, repair,
24 or maintenance of an aircraft by persons who (i) hold an Air
25 Agency Certificate and are empowered to operate an approved
26 repair station by the Federal Aviation Administration, (ii)
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1 have a Class IV Rating, and (iii) conduct operations in
2 accordance with Part 145 of the Federal Aviation Regulations.
3 The exemption does not include aircraft operated by a
4 commercial air carrier providing scheduled passenger air
5 service pursuant to authority issued under Part 121 or Part
6 129 of the Federal Aviation Regulations. From January 1, 2024
7 through December 31, 2029, this exemption applies only to the
8 transfer of qualifying tangible personal property incident to:
9 (A) the modification, refurbishment, completion, repair,
10 replacement, or maintenance of an aircraft by persons who (i)
11 hold an Air Agency Certificate and are empowered to operate an
12 approved repair station by the Federal Aviation
13 Administration, (ii) have a Class IV Rating, and (iii) conduct
14 operations in accordance with Part 145 of the Federal Aviation
15 Regulations; and (B) the modification, replacement, repair,
16 and maintenance of aircraft engines or power plants without
17 regard to whether or not those persons meet the qualifications
18 of item (A).
19 The changes made to this paragraph (29) by Public Act
20 98-534 are declarative of existing law. It is the intent of the
21 General Assembly that the exemption under this paragraph (29)
22 applies continuously from January 1, 2010 through December 31,
23 2024; however, no claim for credit or refund is allowed for
24 taxes paid as a result of the disallowance of this exemption on
25 or after January 1, 2015 and prior to February 5, 2020 (the
26 effective date of Public Act 101-629).
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1 (30) Beginning January 1, 2017 and through December 31,
2 2026, menstrual pads, tampons, and menstrual cups.
3 (31) Tangible personal property transferred to a purchaser
4 who is exempt from tax by operation of federal law. This
5 paragraph is exempt from the provisions of Section 3-55.
6 (32) Qualified tangible personal property used in the
7 construction or operation of a data center that has been
8 granted a certificate of exemption by the Department of
9 Commerce and Economic Opportunity, whether that tangible
10 personal property is purchased by the owner, operator, or
11 tenant of the data center or by a contractor or subcontractor
12 of the owner, operator, or tenant. Data centers that would
13 have qualified for a certificate of exemption prior to January
14 1, 2020 had Public Act 101-31 been in effect, may apply for and
15 obtain an exemption for subsequent purchases of computer
16 equipment or enabling software purchased or leased to upgrade,
17 supplement, or replace computer equipment or enabling software
18 purchased or leased in the original investment that would have
19 qualified.
20 The Department of Commerce and Economic Opportunity shall
21 grant a certificate of exemption under this item (32) to
22 qualified data centers as defined by Section 605-1025 of the
23 Department of Commerce and Economic Opportunity Law of the
24 Civil Administrative Code of Illinois.
25 For the purposes of this item (32):
26 "Data center" means a building or a series of
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1 buildings rehabilitated or constructed to house working
2 servers in one physical location or multiple sites within
3 the State of Illinois.
4 "Qualified tangible personal property" means:
5 electrical systems and equipment; climate control and
6 chilling equipment and systems; mechanical systems and
7 equipment; monitoring and secure systems; emergency
8 generators; hardware; computers; servers; data storage
9 devices; network connectivity equipment; racks; cabinets;
10 telecommunications cabling infrastructure; raised floor
11 systems; peripheral components or systems; software;
12 mechanical, electrical, or plumbing systems; battery
13 systems; cooling systems and towers; temperature control
14 systems; other cabling; and other data center
15 infrastructure equipment and systems necessary to operate
16 qualified tangible personal property, including fixtures;
17 and component parts of any of the foregoing, including
18 installation, maintenance, repair, refurbishment, and
19 replacement of qualified tangible personal property to
20 generate, transform, transmit, distribute, or manage
21 electricity necessary to operate qualified tangible
22 personal property; and all other tangible personal
23 property that is essential to the operations of a computer
24 data center. The term "qualified tangible personal
25 property" also includes building materials physically
26 incorporated into the qualifying data center. To document
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1 the exemption allowed under this Section, the retailer
2 must obtain from the purchaser a copy of the certificate
3 of eligibility issued by the Department of Commerce and
4 Economic Opportunity.
5 This item (32) is exempt from the provisions of Section
6 3-55.
7 (33) Beginning July 1, 2022, breast pumps, breast pump
8 collection and storage supplies, and breast pump kits. This
9 item (33) is exempt from the provisions of Section 3-55. As
10 used in this item (33):
11 "Breast pump" means an electrically controlled or
12 manually controlled pump device designed or marketed to be
13 used to express milk from a human breast during lactation,
14 including the pump device and any battery, AC adapter, or
15 other power supply unit that is used to power the pump
16 device and is packaged and sold with the pump device at the
17 time of sale.
18 "Breast pump collection and storage supplies" means
19 items of tangible personal property designed or marketed
20 to be used in conjunction with a breast pump to collect
21 milk expressed from a human breast and to store collected
22 milk until it is ready for consumption.
23 "Breast pump collection and storage supplies"
24 includes, but is not limited to: breast shields and breast
25 shield connectors; breast pump tubes and tubing adapters;
26 breast pump valves and membranes; backflow protectors and
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1 backflow protector adaptors; bottles and bottle caps
2 specific to the operation of the breast pump; and breast
3 milk storage bags.
4 "Breast pump collection and storage supplies" does not
5 include: (1) bottles and bottle caps not specific to the
6 operation of the breast pump; (2) breast pump travel bags
7 and other similar carrying accessories, including ice
8 packs, labels, and other similar products; (3) breast pump
9 cleaning supplies; (4) nursing bras, bra pads, breast
10 shells, and other similar products; and (5) creams,
11 ointments, and other similar products that relieve
12 breastfeeding-related symptoms or conditions of the
13 breasts or nipples, unless sold as part of a breast pump
14 kit that is pre-packaged by the breast pump manufacturer
15 or distributor.
16 "Breast pump kit" means a kit that: (1) contains no
17 more than a breast pump, breast pump collection and
18 storage supplies, a rechargeable battery for operating the
19 breast pump, a breastmilk cooler, bottle stands, ice
20 packs, and a breast pump carrying case; and (2) is
21 pre-packaged as a breast pump kit by the breast pump
22 manufacturer or distributor.
23 (34) Tangible personal property sold by or on behalf of
24 the State Treasurer pursuant to the Revised Uniform Unclaimed
25 Property Act. This item (34) is exempt from the provisions of
26 Section 3-55.
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1 (35) Beginning on January 1, 2024, tangible personal
2 property purchased by an active duty member of the armed
3 forces of the United States who presents valid military
4 identification and purchases the property using a form of
5 payment where the federal government is the payor. The member
6 of the armed forces must complete, at the point of sale, a form
7 prescribed by the Department of Revenue documenting that the
8 transaction is eligible for the exemption under this
9 paragraph. Retailers must keep the form as documentation of
10 the exemption in their records for a period of not less than 6
11 years. "Armed forces of the United States" means the United
12 States Army, Navy, Air Force, Space Force, Marine Corps, or
13 Coast Guard. This paragraph is exempt from the provisions of
14 Section 3-55.
15 (36) Beginning July 1, 2024, home-delivered meals provided
16 to Medicare or Medicaid recipients when payment is made by an
17 intermediary, such as a Medicare Administrative Contractor, a
18 Managed Care Organization, or a Medicare Advantage
19 Organization, pursuant to a government contract. This
20 paragraph (36) (35) is exempt from the provisions of Section
21 3-55.
22 (37) (36) Beginning on January 1, 2026, as further defined
23 in Section 3-10, food prepared for immediate consumption and
24 transferred incident to a sale of service subject to this Act
25 or the Service Use Tax Act by an entity licensed under the
26 Hospital Licensing Act, the Nursing Home Care Act, the
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1 Assisted Living and Shared Housing Act, the ID/DD Community
2 Care Act, the MC/DD Act, the Specialized Mental Health
3 Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
4 an entity that holds a permit issued pursuant to the Life Care
5 Facilities Act. This item (37) (36) is exempt from the
6 provisions of Section 3-55.
7 (38) (37) Beginning on January 1, 2026, as further defined
8 in Section 3-10, food for human consumption that is to be
9 consumed off the premises where it is sold (other than
10 alcoholic beverages, food consisting of or infused with adult
11 use cannabis, soft drinks, candy, and food that has been
12 prepared for immediate consumption). This item (38) (37) is
13 exempt from the provisions of Section 3-55.
14 (39) (36) The lease of the following tangible personal
15 property:
16 (1) computer software transferred subject to a license
17 that meets the following requirements:
18 (A) it is evidenced by a written agreement signed
19 by the licensor and the customer;
20 (i) an electronic agreement in which the
21 customer accepts the license by means of an
22 electronic signature that is verifiable and can be
23 authenticated and is attached to or made part of
24 the license will comply with this requirement;
25 (ii) a license agreement in which the customer
26 electronically accepts the terms by clicking "I
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1 agree" does not comply with this requirement;
2 (B) it restricts the customer's duplication and
3 use of the software;
4 (C) it prohibits the customer from licensing,
5 sublicensing, or transferring the software to a third
6 party (except to a related party) without the
7 permission and continued control of the licensor;
8 (D) the licensor has a policy of providing another
9 copy at minimal or no charge if the customer loses or
10 damages the software, or of permitting the licensee to
11 make and keep an archival copy, and such policy is
12 either stated in the license agreement, supported by
13 the licensor's books and records, or supported by a
14 notarized statement made under penalties of perjury by
15 the licensor; and
16 (E) the customer must destroy or return all copies
17 of the software to the licensor at the end of the
18 license period; this provision is deemed to be met, in
19 the case of a perpetual license, without being set
20 forth in the license agreement; and
21 (2) property that is subject to a tax on lease
22 receipts imposed by a home rule unit of local government
23 if the ordinance imposing that tax was adopted prior to
24 January 1, 2023.
25 (40) Equipment and materials placed in service on or after
26 January 1, 2026 that are incorporated into or used in the
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1 business of providing broadband services, including all
2 equipment and materials machinery, software, or other tangible
3 personal property that is used in whole or in part in
4 producing, broadcasting, distributing, sending, receiving,
5 storing, transmitting, retransmitting, amplifying, switching,
6 or routing broadband services, including the monitoring,
7 testing, maintaining, enabling, or facilitating of such
8 equipment, machinery, software, or other infrastructure. That
9 property includes, but is not limited to, wires, cables
10 including fiber optic cables, antennas, poles, switches,
11 routers, amplifiers, rectifiers, repeaters, receivers,
12 multiplexers, duplexers, transmitters, power equipment, backup
13 power equipment, diagnostic equipment, storage devices,
14 modems, and other general central office equipment, such as
15 channel cards, frames, and cabinets. As used in this item
16 (40), "broadband" and "broadband service" have the meanings
17 given to those terms under Section 10 of the Broadband
18 Advisory Council Act. This item (40) is exempt from the
19 provisions of Section 3-55.
20 (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
21 Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
22 75-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
23 Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
24 eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
25 103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
26 7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995,
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1 eff. 8-9-24; revised 11-26-24.)
2 Section 20. The Retailers' Occupation Tax Act is amended
3 by changing Section 2-5 as follows:
4 (35 ILCS 120/2-5)
5 Sec. 2-5. Exemptions. Gross receipts from proceeds from
6 the sale, which, on and after January 1, 2025, includes the
7 lease, of the following tangible personal property are exempt
8 from the tax imposed by this Act:
9 (1) Farm chemicals.
10 (2) Farm machinery and equipment, both new and used,
11 including that manufactured on special order, certified by
12 the purchaser to be used primarily for production
13 agriculture or State or federal agricultural programs,
14 including individual replacement parts for the machinery
15 and equipment, including machinery and equipment purchased
16 for lease, and including implements of husbandry defined
17 in Section 1-130 of the Illinois Vehicle Code, farm
18 machinery and agricultural chemical and fertilizer
19 spreaders, and nurse wagons required to be registered
20 under Section 3-809 of the Illinois Vehicle Code, but
21 excluding other motor vehicles required to be registered
22 under the Illinois Vehicle Code. Horticultural polyhouses
23 or hoop houses used for propagating, growing, or
24 overwintering plants shall be considered farm machinery
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1 and equipment under this item (2). Agricultural chemical
2 tender tanks and dry boxes shall include units sold
3 separately from a motor vehicle required to be licensed
4 and units sold mounted on a motor vehicle required to be
5 licensed, if the selling price of the tender is separately
6 stated.
7 Farm machinery and equipment shall include precision
8 farming equipment that is installed or purchased to be
9 installed on farm machinery and equipment including, but
10 not limited to, tractors, harvesters, sprayers, planters,
11 seeders, or spreaders. Precision farming equipment
12 includes, but is not limited to, soil testing sensors,
13 computers, monitors, software, global positioning and
14 mapping systems, and other such equipment.
15 Farm machinery and equipment also includes computers,
16 sensors, software, and related equipment used primarily in
17 the computer-assisted operation of production agriculture
18 facilities, equipment, and activities such as, but not
19 limited to, the collection, monitoring, and correlation of
20 animal and crop data for the purpose of formulating animal
21 diets and agricultural chemicals.
22 Beginning on January 1, 2024, farm machinery and
23 equipment also includes electrical power generation
24 equipment used primarily for production agriculture.
25 This item (2) is exempt from the provisions of Section
26 2-70.
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1 (3) Until July 1, 2003, distillation machinery and
2 equipment, sold as a unit or kit, assembled or installed
3 by the retailer, certified by the user to be used only for
4 the production of ethyl alcohol that will be used for
5 consumption as motor fuel or as a component of motor fuel
6 for the personal use of the user, and not subject to sale
7 or resale.
8 (4) Until July 1, 2003 and beginning again September
9 1, 2004 through August 30, 2014, graphic arts machinery
10 and equipment, including repair and replacement parts,
11 both new and used, and including that manufactured on
12 special order or purchased for lease, certified by the
13 purchaser to be used primarily for graphic arts
14 production. Equipment includes chemicals or chemicals
15 acting as catalysts but only if the chemicals or chemicals
16 acting as catalysts effect a direct and immediate change
17 upon a graphic arts product. Beginning on July 1, 2017,
18 graphic arts machinery and equipment is included in the
19 manufacturing and assembling machinery and equipment
20 exemption under paragraph (14).
21 (5) A motor vehicle that is used for automobile
22 renting, as defined in the Automobile Renting Occupation
23 and Use Tax Act. This paragraph is exempt from the
24 provisions of Section 2-70.
25 (6) Personal property sold by a teacher-sponsored
26 student organization affiliated with an elementary or
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1 secondary school located in Illinois.
2 (7) Until July 1, 2003, proceeds of that portion of
3 the selling price of a passenger car the sale of which is
4 subject to the Replacement Vehicle Tax.
5 (8) Personal property sold to an Illinois county fair
6 association for use in conducting, operating, or promoting
7 the county fair.
8 (9) Personal property sold to a not-for-profit arts or
9 cultural organization that establishes, by proof required
10 by the Department by rule, that it has received an
11 exemption under Section 501(c)(3) of the Internal Revenue
12 Code and that is organized and operated primarily for the
13 presentation or support of arts or cultural programming,
14 activities, or services. These organizations include, but
15 are not limited to, music and dramatic arts organizations
16 such as symphony orchestras and theatrical groups, arts
17 and cultural service organizations, local arts councils,
18 visual arts organizations, and media arts organizations.
19 On and after July 1, 2001 (the effective date of Public Act
20 92-35), however, an entity otherwise eligible for this
21 exemption shall not make tax-free purchases unless it has
22 an active identification number issued by the Department.
23 (10) Personal property sold by a corporation, society,
24 association, foundation, institution, or organization,
25 other than a limited liability company, that is organized
26 and operated as a not-for-profit service enterprise for
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1 the benefit of persons 65 years of age or older if the
2 personal property was not purchased by the enterprise for
3 the purpose of resale by the enterprise.
4 (11) Except as otherwise provided in this Section,
5 personal property sold to a governmental body, to a
6 corporation, society, association, foundation, or
7 institution organized and operated exclusively for
8 charitable, religious, or educational purposes, or to a
9 not-for-profit corporation, society, association,
10 foundation, institution, or organization that has no
11 compensated officers or employees and that is organized
12 and operated primarily for the recreation of persons 55
13 years of age or older. A limited liability company may
14 qualify for the exemption under this paragraph only if the
15 limited liability company is organized and operated
16 exclusively for educational purposes. On and after July 1,
17 1987, however, no entity otherwise eligible for this
18 exemption shall make tax-free purchases unless it has an
19 active identification number issued by the Department.
20 (12) (Blank).
21 (12-5) On and after July 1, 2003 and through June 30,
22 2004, motor vehicles of the second division with a gross
23 vehicle weight in excess of 8,000 pounds that are subject
24 to the commercial distribution fee imposed under Section
25 3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
26 2004 and through June 30, 2005, the use in this State of
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1 motor vehicles of the second division: (i) with a gross
2 vehicle weight rating in excess of 8,000 pounds; (ii) that
3 are subject to the commercial distribution fee imposed
4 under Section 3-815.1 of the Illinois Vehicle Code; and
5 (iii) that are primarily used for commercial purposes.
6 Through June 30, 2005, this exemption applies to repair
7 and replacement parts added after the initial purchase of
8 such a motor vehicle if that motor vehicle is used in a
9 manner that would qualify for the rolling stock exemption
10 otherwise provided for in this Act. For purposes of this
11 paragraph, "used for commercial purposes" means the
12 transportation of persons or property in furtherance of
13 any commercial or industrial enterprise whether for-hire
14 or not.
15 (13) Proceeds from sales to owners or lessors,
16 lessees, or shippers of tangible personal property that is
17 utilized by interstate carriers for hire for use as
18 rolling stock moving in interstate commerce and equipment
19 operated by a telecommunications provider, licensed as a
20 common carrier by the Federal Communications Commission,
21 which is permanently installed in or affixed to aircraft
22 moving in interstate commerce.
23 (14) Machinery and equipment that will be used by the
24 purchaser, or a lessee of the purchaser, primarily in the
25 process of manufacturing or assembling tangible personal
26 property for wholesale or retail sale or lease, whether
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1 the sale or lease is made directly by the manufacturer or
2 by some other person, whether the materials used in the
3 process are owned by the manufacturer or some other
4 person, or whether the sale or lease is made apart from or
5 as an incident to the seller's engaging in the service
6 occupation of producing machines, tools, dies, jigs,
7 patterns, gauges, or other similar items of no commercial
8 value on special order for a particular purchaser. The
9 exemption provided by this paragraph (14) does not include
10 machinery and equipment used in (i) the generation of
11 electricity for wholesale or retail sale; (ii) the
12 generation or treatment of natural or artificial gas for
13 wholesale or retail sale that is delivered to customers
14 through pipes, pipelines, or mains; or (iii) the treatment
15 of water for wholesale or retail sale that is delivered to
16 customers through pipes, pipelines, or mains. The
17 provisions of Public Act 98-583 are declaratory of
18 existing law as to the meaning and scope of this
19 exemption. Beginning on July 1, 2017, the exemption
20 provided by this paragraph (14) includes, but is not
21 limited to, graphic arts machinery and equipment, as
22 defined in paragraph (4) of this Section.
23 (15) Proceeds of mandatory service charges separately
24 stated on customers' bills for purchase and consumption of
25 food and beverages, to the extent that the proceeds of the
26 service charge are in fact turned over as tips or as a
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1 substitute for tips to the employees who participate
2 directly in preparing, serving, hosting or cleaning up the
3 food or beverage function with respect to which the
4 service charge is imposed.
5 (16) Tangible personal property sold to a purchaser if
6 the purchaser is exempt from use tax by operation of
7 federal law. This paragraph is exempt from the provisions
8 of Section 2-70.
9 (17) Tangible personal property sold to a common
10 carrier by rail or motor that receives the physical
11 possession of the property in Illinois and that transports
12 the property, or shares with another common carrier in the
13 transportation of the property, out of Illinois on a
14 standard uniform bill of lading showing the seller of the
15 property as the shipper or consignor of the property to a
16 destination outside Illinois, for use outside Illinois.
17 (18) Legal tender, currency, medallions, or gold or
18 silver coinage issued by the State of Illinois, the
19 government of the United States of America, or the
20 government of any foreign country, and bullion.
21 (19) Until July 1, 2003, oil field exploration,
22 drilling, and production equipment, including (i) rigs and
23 parts of rigs, rotary rigs, cable tool rigs, and workover
24 rigs, (ii) pipe and tubular goods, including casing and
25 drill strings, (iii) pumps and pump-jack units, (iv)
26 storage tanks and flow lines, (v) any individual
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1 replacement part for oil field exploration, drilling, and
2 production equipment, and (vi) machinery and equipment
3 purchased for lease; but excluding motor vehicles required
4 to be registered under the Illinois Vehicle Code.
5 (20) Photoprocessing machinery and equipment,
6 including repair and replacement parts, both new and used,
7 including that manufactured on special order, certified by
8 the purchaser to be used primarily for photoprocessing,
9 and including photoprocessing machinery and equipment
10 purchased for lease.
11 (21) Until July 1, 2028, coal and aggregate
12 exploration, mining, off-highway hauling, processing,
13 maintenance, and reclamation equipment, including
14 replacement parts and equipment, and including equipment
15 purchased for lease, but excluding motor vehicles required
16 to be registered under the Illinois Vehicle Code. The
17 changes made to this Section by Public Act 97-767 apply on
18 and after July 1, 2003, but no claim for credit or refund
19 is allowed on or after August 16, 2013 (the effective date
20 of Public Act 98-456) for such taxes paid during the
21 period beginning July 1, 2003 and ending on August 16,
22 2013 (the effective date of Public Act 98-456).
23 (22) Until June 30, 2013, fuel and petroleum products
24 sold to or used by an air carrier, certified by the carrier
25 to be used for consumption, shipment, or storage in the
26 conduct of its business as an air common carrier, for a
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1 flight destined for or returning from a location or
2 locations outside the United States without regard to
3 previous or subsequent domestic stopovers.
4 Beginning July 1, 2013, fuel and petroleum products
5 sold to or used by an air carrier, certified by the carrier
6 to be used for consumption, shipment, or storage in the
7 conduct of its business as an air common carrier, for a
8 flight that (i) is engaged in foreign trade or is engaged
9 in trade between the United States and any of its
10 possessions and (ii) transports at least one individual or
11 package for hire from the city of origination to the city
12 of final destination on the same aircraft, without regard
13 to a change in the flight number of that aircraft.
14 (23) A transaction in which the purchase order is
15 received by a florist who is located outside Illinois, but
16 who has a florist located in Illinois deliver the property
17 to the purchaser or the purchaser's donee in Illinois.
18 (24) Fuel consumed or used in the operation of ships,
19 barges, or vessels that are used primarily in or for the
20 transportation of property or the conveyance of persons
21 for hire on rivers bordering on this State if the fuel is
22 delivered by the seller to the purchaser's barge, ship, or
23 vessel while it is afloat upon that bordering river.
24 (25) Except as provided in item (25-5) of this
25 Section, a motor vehicle sold in this State to a
26 nonresident even though the motor vehicle is delivered to
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1 the nonresident in this State, if the motor vehicle is not
2 to be titled in this State, and if a drive-away permit is
3 issued to the motor vehicle as provided in Section 3-603
4 of the Illinois Vehicle Code or if the nonresident
5 purchaser has vehicle registration plates to transfer to
6 the motor vehicle upon returning to his or her home state.
7 The issuance of the drive-away permit or having the
8 out-of-state registration plates to be transferred is
9 prima facie evidence that the motor vehicle will not be
10 titled in this State.
11 (25-5) The exemption under item (25) does not apply if
12 the state in which the motor vehicle will be titled does
13 not allow a reciprocal exemption for a motor vehicle sold
14 and delivered in that state to an Illinois resident but
15 titled in Illinois. The tax collected under this Act on
16 the sale of a motor vehicle in this State to a resident of
17 another state that does not allow a reciprocal exemption
18 shall be imposed at a rate equal to the state's rate of tax
19 on taxable property in the state in which the purchaser is
20 a resident, except that the tax shall not exceed the tax
21 that would otherwise be imposed under this Act. At the
22 time of the sale, the purchaser shall execute a statement,
23 signed under penalty of perjury, of his or her intent to
24 title the vehicle in the state in which the purchaser is a
25 resident within 30 days after the sale and of the fact of
26 the payment to the State of Illinois of tax in an amount
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1 equivalent to the state's rate of tax on taxable property
2 in his or her state of residence and shall submit the
3 statement to the appropriate tax collection agency in his
4 or her state of residence. In addition, the retailer must
5 retain a signed copy of the statement in his or her
6 records. Nothing in this item shall be construed to
7 require the removal of the vehicle from this state
8 following the filing of an intent to title the vehicle in
9 the purchaser's state of residence if the purchaser titles
10 the vehicle in his or her state of residence within 30 days
11 after the date of sale. The tax collected under this Act in
12 accordance with this item (25-5) shall be proportionately
13 distributed as if the tax were collected at the 6.25%
14 general rate imposed under this Act.
15 (25-7) Beginning on July 1, 2007, no tax is imposed
16 under this Act on the sale of an aircraft, as defined in
17 Section 3 of the Illinois Aeronautics Act, if all of the
18 following conditions are met:
19 (1) the aircraft leaves this State within 15 days
20 after the later of either the issuance of the final
21 billing for the sale of the aircraft, or the
22 authorized approval for return to service, completion
23 of the maintenance record entry, and completion of the
24 test flight and ground test for inspection, as
25 required by 14 CFR 91.407;
26 (2) the aircraft is not based or registered in
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1 this State after the sale of the aircraft; and
2 (3) the seller retains in his or her books and
3 records and provides to the Department a signed and
4 dated certification from the purchaser, on a form
5 prescribed by the Department, certifying that the
6 requirements of this item (25-7) are met. The
7 certificate must also include the name and address of
8 the purchaser, the address of the location where the
9 aircraft is to be titled or registered, the address of
10 the primary physical location of the aircraft, and
11 other information that the Department may reasonably
12 require.
13 For purposes of this item (25-7):
14 "Based in this State" means hangared, stored, or
15 otherwise used, excluding post-sale customizations as
16 defined in this Section, for 10 or more days in each
17 12-month period immediately following the date of the sale
18 of the aircraft.
19 "Registered in this State" means an aircraft
20 registered with the Department of Transportation,
21 Aeronautics Division, or titled or registered with the
22 Federal Aviation Administration to an address located in
23 this State.
24 This paragraph (25-7) is exempt from the provisions of
25 Section 2-70.
26 (26) Semen used for artificial insemination of
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1 livestock for direct agricultural production.
2 (27) Horses, or interests in horses, registered with
3 and meeting the requirements of any of the Arabian Horse
4 Club Registry of America, Appaloosa Horse Club, American
5 Quarter Horse Association, United States Trotting
6 Association, or Jockey Club, as appropriate, used for
7 purposes of breeding or racing for prizes. This item (27)
8 is exempt from the provisions of Section 2-70, and the
9 exemption provided for under this item (27) applies for
10 all periods beginning May 30, 1995, but no claim for
11 credit or refund is allowed on or after January 1, 2008
12 (the effective date of Public Act 95-88) for such taxes
13 paid during the period beginning May 30, 2000 and ending
14 on January 1, 2008 (the effective date of Public Act
15 95-88).
16 (28) Computers and communications equipment utilized
17 for any hospital purpose and equipment used in the
18 diagnosis, analysis, or treatment of hospital patients
19 sold to a lessor who leases the equipment, under a lease of
20 one year or longer executed or in effect at the time of the
21 purchase, to a hospital that has been issued an active tax
22 exemption identification number by the Department under
23 Section 1g of this Act.
24 (29) Personal property sold to a lessor who leases the
25 property, under a lease of one year or longer executed or
26 in effect at the time of the purchase, to a governmental
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1 body that has been issued an active tax exemption
2 identification number by the Department under Section 1g
3 of this Act.
4 (30) Beginning with taxable years ending on or after
5 December 31, 1995 and ending with taxable years ending on
6 or before December 31, 2004, personal property that is
7 donated for disaster relief to be used in a State or
8 federally declared disaster area in Illinois or bordering
9 Illinois by a manufacturer or retailer that is registered
10 in this State to a corporation, society, association,
11 foundation, or institution that has been issued a sales
12 tax exemption identification number by the Department that
13 assists victims of the disaster who reside within the
14 declared disaster area.
15 (31) Beginning with taxable years ending on or after
16 December 31, 1995 and ending with taxable years ending on
17 or before December 31, 2004, personal property that is
18 used in the performance of infrastructure repairs in this
19 State, including, but not limited to, municipal roads and
20 streets, access roads, bridges, sidewalks, waste disposal
21 systems, water and sewer line extensions, water
22 distribution and purification facilities, storm water
23 drainage and retention facilities, and sewage treatment
24 facilities, resulting from a State or federally declared
25 disaster in Illinois or bordering Illinois when such
26 repairs are initiated on facilities located in the
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1 declared disaster area within 6 months after the disaster.
2 (32) Beginning July 1, 1999, game or game birds sold
3 at a "game breeding and hunting preserve area" as that
4 term is used in the Wildlife Code. This paragraph is
5 exempt from the provisions of Section 2-70.
6 (33) A motor vehicle, as that term is defined in
7 Section 1-146 of the Illinois Vehicle Code, that is
8 donated to a corporation, limited liability company,
9 society, association, foundation, or institution that is
10 determined by the Department to be organized and operated
11 exclusively for educational purposes. For purposes of this
12 exemption, "a corporation, limited liability company,
13 society, association, foundation, or institution organized
14 and operated exclusively for educational purposes" means
15 all tax-supported public schools, private schools that
16 offer systematic instruction in useful branches of
17 learning by methods common to public schools and that
18 compare favorably in their scope and intensity with the
19 course of study presented in tax-supported schools, and
20 vocational or technical schools or institutes organized
21 and operated exclusively to provide a course of study of
22 not less than 6 weeks duration and designed to prepare
23 individuals to follow a trade or to pursue a manual,
24 technical, mechanical, industrial, business, or commercial
25 occupation.
26 (34) Beginning January 1, 2000, personal property,
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1 including food, purchased through fundraising events for
2 the benefit of a public or private elementary or secondary
3 school, a group of those schools, or one or more school
4 districts if the events are sponsored by an entity
5 recognized by the school district that consists primarily
6 of volunteers and includes parents and teachers of the
7 school children. This paragraph does not apply to
8 fundraising events (i) for the benefit of private home
9 instruction or (ii) for which the fundraising entity
10 purchases the personal property sold at the events from
11 another individual or entity that sold the property for
12 the purpose of resale by the fundraising entity and that
13 profits from the sale to the fundraising entity. This
14 paragraph is exempt from the provisions of Section 2-70.
15 (35) Beginning January 1, 2000 and through December
16 31, 2001, new or used automatic vending machines that
17 prepare and serve hot food and beverages, including
18 coffee, soup, and other items, and replacement parts for
19 these machines. Beginning January 1, 2002 and through June
20 30, 2003, machines and parts for machines used in
21 commercial, coin-operated amusement and vending business
22 if a use or occupation tax is paid on the gross receipts
23 derived from the use of the commercial, coin-operated
24 amusement and vending machines. This paragraph is exempt
25 from the provisions of Section 2-70.
26 (35-5) Beginning August 23, 2001 and through June 30,
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1 2016, food for human consumption that is to be consumed
2 off the premises where it is sold (other than alcoholic
3 beverages, soft drinks, and food that has been prepared
4 for immediate consumption) and prescription and
5 nonprescription medicines, drugs, medical appliances, and
6 insulin, urine testing materials, syringes, and needles
7 used by diabetics, for human use, when purchased for use
8 by a person receiving medical assistance under Article V
9 of the Illinois Public Aid Code who resides in a licensed
10 long-term care facility, as defined in the Nursing Home
11 Care Act, or a licensed facility as defined in the ID/DD
12 Community Care Act, the MC/DD Act, or the Specialized
13 Mental Health Rehabilitation Act of 2013.
14 (36) Beginning August 2, 2001, computers and
15 communications equipment utilized for any hospital purpose
16 and equipment used in the diagnosis, analysis, or
17 treatment of hospital patients sold to a lessor who leases
18 the equipment, under a lease of one year or longer
19 executed or in effect at the time of the purchase, to a
20 hospital that has been issued an active tax exemption
21 identification number by the Department under Section 1g
22 of this Act. This paragraph is exempt from the provisions
23 of Section 2-70.
24 (37) Beginning August 2, 2001, personal property sold
25 to a lessor who leases the property, under a lease of one
26 year or longer executed or in effect at the time of the
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1 purchase, to a governmental body that has been issued an
2 active tax exemption identification number by the
3 Department under Section 1g of this Act. This paragraph is
4 exempt from the provisions of Section 2-70.
5 (38) Beginning on January 1, 2002 and through June 30,
6 2016, tangible personal property purchased from an
7 Illinois retailer by a taxpayer engaged in centralized
8 purchasing activities in Illinois who will, upon receipt
9 of the property in Illinois, temporarily store the
10 property in Illinois (i) for the purpose of subsequently
11 transporting it outside this State for use or consumption
12 thereafter solely outside this State or (ii) for the
13 purpose of being processed, fabricated, or manufactured
14 into, attached to, or incorporated into other tangible
15 personal property to be transported outside this State and
16 thereafter used or consumed solely outside this State. The
17 Director of Revenue shall, pursuant to rules adopted in
18 accordance with the Illinois Administrative Procedure Act,
19 issue a permit to any taxpayer in good standing with the
20 Department who is eligible for the exemption under this
21 paragraph (38). The permit issued under this paragraph
22 (38) shall authorize the holder, to the extent and in the
23 manner specified in the rules adopted under this Act, to
24 purchase tangible personal property from a retailer exempt
25 from the taxes imposed by this Act. Taxpayers shall
26 maintain all necessary books and records to substantiate
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1 the use and consumption of all such tangible personal
2 property outside of the State of Illinois.
3 (39) Beginning January 1, 2008, tangible personal
4 property used in the construction or maintenance of a
5 community water supply, as defined under Section 3.145 of
6 the Environmental Protection Act, that is operated by a
7 not-for-profit corporation that holds a valid water supply
8 permit issued under Title IV of the Environmental
9 Protection Act. This paragraph is exempt from the
10 provisions of Section 2-70.
11 (40) Beginning January 1, 2010 and continuing through
12 December 31, 2029, materials, parts, equipment,
13 components, and furnishings incorporated into or upon an
14 aircraft as part of the modification, refurbishment,
15 completion, replacement, repair, or maintenance of the
16 aircraft. This exemption includes consumable supplies used
17 in the modification, refurbishment, completion,
18 replacement, repair, and maintenance of aircraft. However,
19 until January 1, 2024, this exemption excludes any
20 materials, parts, equipment, components, and consumable
21 supplies used in the modification, replacement, repair,
22 and maintenance of aircraft engines or power plants,
23 whether such engines or power plants are installed or
24 uninstalled upon any such aircraft. "Consumable supplies"
25 include, but are not limited to, adhesive, tape,
26 sandpaper, general purpose lubricants, cleaning solution,
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1 latex gloves, and protective films.
2 Beginning January 1, 2010 and continuing through
3 December 31, 2023, this exemption applies only to the sale
4 of qualifying tangible personal property to persons who
5 modify, refurbish, complete, replace, or maintain an
6 aircraft and who (i) hold an Air Agency Certificate and
7 are empowered to operate an approved repair station by the
8 Federal Aviation Administration, (ii) have a Class IV
9 Rating, and (iii) conduct operations in accordance with
10 Part 145 of the Federal Aviation Regulations. The
11 exemption does not include aircraft operated by a
12 commercial air carrier providing scheduled passenger air
13 service pursuant to authority issued under Part 121 or
14 Part 129 of the Federal Aviation Regulations. From January
15 1, 2024 through December 31, 2029, this exemption applies
16 only to the sale of qualifying tangible personal property
17 to: (A) persons who modify, refurbish, complete, repair,
18 replace, or maintain aircraft and who (i) hold an Air
19 Agency Certificate and are empowered to operate an
20 approved repair station by the Federal Aviation
21 Administration, (ii) have a Class IV Rating, and (iii)
22 conduct operations in accordance with Part 145 of the
23 Federal Aviation Regulations; and (B) persons who engage
24 in the modification, replacement, repair, and maintenance
25 of aircraft engines or power plants without regard to
26 whether or not those persons meet the qualifications of
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1 item (A).
2 The changes made to this paragraph (40) by Public Act
3 98-534 are declarative of existing law. It is the intent
4 of the General Assembly that the exemption under this
5 paragraph (40) applies continuously from January 1, 2010
6 through December 31, 2024; however, no claim for credit or
7 refund is allowed for taxes paid as a result of the
8 disallowance of this exemption on or after January 1, 2015
9 and prior to February 5, 2020 (the effective date of
10 Public Act 101-629).
11 (41) Tangible personal property sold to a
12 public-facilities corporation, as described in Section
13 11-65-10 of the Illinois Municipal Code, for purposes of
14 constructing or furnishing a municipal convention hall,
15 but only if the legal title to the municipal convention
16 hall is transferred to the municipality without any
17 further consideration by or on behalf of the municipality
18 at the time of the completion of the municipal convention
19 hall or upon the retirement or redemption of any bonds or
20 other debt instruments issued by the public-facilities
21 corporation in connection with the development of the
22 municipal convention hall. This exemption includes
23 existing public-facilities corporations as provided in
24 Section 11-65-25 of the Illinois Municipal Code. This
25 paragraph is exempt from the provisions of Section 2-70.
26 (42) Beginning January 1, 2017 and through December
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1 31, 2026, menstrual pads, tampons, and menstrual cups.
2 (43) Merchandise that is subject to the Rental
3 Purchase Agreement Occupation and Use Tax. The purchaser
4 must certify that the item is purchased to be rented
5 subject to a rental-purchase agreement, as defined in the
6 Rental-Purchase Agreement Act, and provide proof of
7 registration under the Rental Purchase Agreement
8 Occupation and Use Tax Act. This paragraph is exempt from
9 the provisions of Section 2-70.
10 (44) Qualified tangible personal property used in the
11 construction or operation of a data center that has been
12 granted a certificate of exemption by the Department of
13 Commerce and Economic Opportunity, whether that tangible
14 personal property is purchased by the owner, operator, or
15 tenant of the data center or by a contractor or
16 subcontractor of the owner, operator, or tenant. Data
17 centers that would have qualified for a certificate of
18 exemption prior to January 1, 2020 had Public Act 101-31
19 been in effect, may apply for and obtain an exemption for
20 subsequent purchases of computer equipment or enabling
21 software purchased or leased to upgrade, supplement, or
22 replace computer equipment or enabling software purchased
23 or leased in the original investment that would have
24 qualified.
25 The Department of Commerce and Economic Opportunity
26 shall grant a certificate of exemption under this item
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1 (44) to qualified data centers as defined by Section
2 605-1025 of the Department of Commerce and Economic
3 Opportunity Law of the Civil Administrative Code of
4 Illinois.
5 For the purposes of this item (44):
6 "Data center" means a building or a series of
7 buildings rehabilitated or constructed to house
8 working servers in one physical location or multiple
9 sites within the State of Illinois.
10 "Qualified tangible personal property" means:
11 electrical systems and equipment; climate control and
12 chilling equipment and systems; mechanical systems and
13 equipment; monitoring and secure systems; emergency
14 generators; hardware; computers; servers; data storage
15 devices; network connectivity equipment; racks;
16 cabinets; telecommunications cabling infrastructure;
17 raised floor systems; peripheral components or
18 systems; software; mechanical, electrical, or plumbing
19 systems; battery systems; cooling systems and towers;
20 temperature control systems; other cabling; and other
21 data center infrastructure equipment and systems
22 necessary to operate qualified tangible personal
23 property, including fixtures; and component parts of
24 any of the foregoing, including installation,
25 maintenance, repair, refurbishment, and replacement of
26 qualified tangible personal property to generate,
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1 transform, transmit, distribute, or manage electricity
2 necessary to operate qualified tangible personal
3 property; and all other tangible personal property
4 that is essential to the operations of a computer data
5 center. The term "qualified tangible personal
6 property" also includes building materials physically
7 incorporated into the qualifying data center. To
8 document the exemption allowed under this Section, the
9 retailer must obtain from the purchaser a copy of the
10 certificate of eligibility issued by the Department of
11 Commerce and Economic Opportunity.
12 This item (44) is exempt from the provisions of
13 Section 2-70.
14 (45) Beginning January 1, 2020 and through December
15 31, 2020, sales of tangible personal property made by a
16 marketplace seller over a marketplace for which tax is due
17 under this Act but for which use tax has been collected and
18 remitted to the Department by a marketplace facilitator
19 under Section 2d of the Use Tax Act are exempt from tax
20 under this Act. A marketplace seller claiming this
21 exemption shall maintain books and records demonstrating
22 that the use tax on such sales has been collected and
23 remitted by a marketplace facilitator. Marketplace sellers
24 that have properly remitted tax under this Act on such
25 sales may file a claim for credit as provided in Section 6
26 of this Act. No claim is allowed, however, for such taxes
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1 for which a credit or refund has been issued to the
2 marketplace facilitator under the Use Tax Act, or for
3 which the marketplace facilitator has filed a claim for
4 credit or refund under the Use Tax Act.
5 (46) Beginning July 1, 2022, breast pumps, breast pump
6 collection and storage supplies, and breast pump kits.
7 This item (46) is exempt from the provisions of Section
8 2-70. As used in this item (46):
9 "Breast pump" means an electrically controlled or
10 manually controlled pump device designed or marketed to be
11 used to express milk from a human breast during lactation,
12 including the pump device and any battery, AC adapter, or
13 other power supply unit that is used to power the pump
14 device and is packaged and sold with the pump device at the
15 time of sale.
16 "Breast pump collection and storage supplies" means
17 items of tangible personal property designed or marketed
18 to be used in conjunction with a breast pump to collect
19 milk expressed from a human breast and to store collected
20 milk until it is ready for consumption.
21 "Breast pump collection and storage supplies"
22 includes, but is not limited to: breast shields and breast
23 shield connectors; breast pump tubes and tubing adapters;
24 breast pump valves and membranes; backflow protectors and
25 backflow protector adaptors; bottles and bottle caps
26 specific to the operation of the breast pump; and breast
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1 milk storage bags.
2 "Breast pump collection and storage supplies" does not
3 include: (1) bottles and bottle caps not specific to the
4 operation of the breast pump; (2) breast pump travel bags
5 and other similar carrying accessories, including ice
6 packs, labels, and other similar products; (3) breast pump
7 cleaning supplies; (4) nursing bras, bra pads, breast
8 shells, and other similar products; and (5) creams,
9 ointments, and other similar products that relieve
10 breastfeeding-related symptoms or conditions of the
11 breasts or nipples, unless sold as part of a breast pump
12 kit that is pre-packaged by the breast pump manufacturer
13 or distributor.
14 "Breast pump kit" means a kit that: (1) contains no
15 more than a breast pump, breast pump collection and
16 storage supplies, a rechargeable battery for operating the
17 breast pump, a breastmilk cooler, bottle stands, ice
18 packs, and a breast pump carrying case; and (2) is
19 pre-packaged as a breast pump kit by the breast pump
20 manufacturer or distributor.
21 (47) Tangible personal property sold by or on behalf
22 of the State Treasurer pursuant to the Revised Uniform
23 Unclaimed Property Act. This item (47) is exempt from the
24 provisions of Section 2-70.
25 (48) Beginning on January 1, 2024, tangible personal
26 property purchased by an active duty member of the armed
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1 forces of the United States who presents valid military
2 identification and purchases the property using a form of
3 payment where the federal government is the payor. The
4 member of the armed forces must complete, at the point of
5 sale, a form prescribed by the Department of Revenue
6 documenting that the transaction is eligible for the
7 exemption under this paragraph. Retailers must keep the
8 form as documentation of the exemption in their records
9 for a period of not less than 6 years. "Armed forces of the
10 United States" means the United States Army, Navy, Air
11 Force, Space Force, Marine Corps, or Coast Guard. This
12 paragraph is exempt from the provisions of Section 2-70.
13 (49) Beginning July 1, 2024, home-delivered meals
14 provided to Medicare or Medicaid recipients when payment
15 is made by an intermediary, such as a Medicare
16 Administrative Contractor, a Managed Care Organization, or
17 a Medicare Advantage Organization, pursuant to a
18 government contract. This paragraph (49) is exempt from
19 the provisions of Section 2-70.
20 (50) (49) Beginning on January 1, 2026, as further
21 defined in Section 2-10, food for human consumption that
22 is to be consumed off the premises where it is sold (other
23 than alcoholic beverages, food consisting of or infused
24 with adult use cannabis, soft drinks, candy, and food that
25 has been prepared for immediate consumption). This item
26 (50) (49) is exempt from the provisions of Section 2-70.
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1 (51) (49) Gross receipts from the lease of the
2 following tangible personal property:
3 (1) computer software transferred subject to a
4 license that meets the following requirements:
5 (A) it is evidenced by a written agreement
6 signed by the licensor and the customer;
7 (i) an electronic agreement in which the
8 customer accepts the license by means of an
9 electronic signature that is verifiable and
10 can be authenticated and is attached to or
11 made part of the license will comply with this
12 requirement;
13 (ii) a license agreement in which the
14 customer electronically accepts the terms by
15 clicking "I agree" does not comply with this
16 requirement;
17 (B) it restricts the customer's duplication
18 and use of the software;
19 (C) it prohibits the customer from licensing,
20 sublicensing, or transferring the software to a
21 third party (except to a related party) without
22 the permission and continued control of the
23 licensor;
24 (D) the licensor has a policy of providing
25 another copy at minimal or no charge if the
26 customer loses or damages the software, or of
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1 permitting the licensee to make and keep an
2 archival copy, and such policy is either stated in
3 the license agreement, supported by the licensor's
4 books and records, or supported by a notarized
5 statement made under penalties of perjury by the
6 licensor; and
7 (E) the customer must destroy or return all
8 copies of the software to the licensor at the end
9 of the license period; this provision is deemed to
10 be met, in the case of a perpetual license,
11 without being set forth in the license agreement;
12 and
13 (2) property that is subject to a tax on lease
14 receipts imposed by a home rule unit of local
15 government if the ordinance imposing that tax was
16 adopted prior to January 1, 2023.
17 (52) Equipment and materials placed in service on or
18 after January 1, 2026 that are incorporated into or used
19 in the business of providing broadband services, including
20 all equipment and materials machinery, software, or other
21 tangible personal property that is used in whole or in
22 part in producing, broadcasting, distributing, sending,
23 receiving, storing, transmitting, retransmitting,
24 amplifying, switching, or routing broadband services,
25 including the monitoring, testing, maintaining, enabling,
26 or facilitating of such equipment, machinery, software, or
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1 other infrastructure. That property includes, but is not
2 limited to, wires, cables including fiber optic cables,
3 antennas, poles, switches, routers, amplifiers,
4 rectifiers, repeaters, receivers, multiplexers,
5 duplexers, transmitters, power equipment, backup power
6 equipment, diagnostic equipment, storage devices, modems,
7 and other general central office equipment, such as
8 channel cards, frames, and cabinets. As used in this item
9 (52), "broadband" and "broadband service" have the
10 meanings given to those terms under Section 10 of the
11 Broadband Advisory Council Act. This item (52) is exempt
12 from the provisions of Section 2-70.
13 (Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
14 102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
15 Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
16 5-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
17 5-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
18 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; 103-592,
19 eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff. 7-1-24;
20 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995, eff.
21 8-9-24; revised 11-26-24.)
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