Illinois Senate Bill SB1178 Latest Draft

                            104TH GENERAL ASSEMBLY
 State of Illinois
 2025 and 2026 SB1178 Introduced 1/24/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED: 35 ILCS 5/246 new35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 Amends the Illinois Income Tax Act. Creates an income tax credit for developers that invest in a qualified project redeveloping a brownfield or grayfield. 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 tangible personal property that is purchased by a developer who has been awarded a certificate of exemption by the Department of Commerce and Economic Opportunity and that is used to rehabilitate brownfield or grayfield property. Effective immediately. LRB104 08564 HLH 18616 b   A BILL FOR 104TH GENERAL ASSEMBLY
 State of Illinois
 2025 and 2026 SB1178 Introduced 1/24/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED:  35 ILCS 5/246 new35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 35 ILCS 5/246 new  35 ILCS 105/3-5  35 ILCS 110/3-5  35 ILCS 115/3-5  35 ILCS 120/2-5  Amends the Illinois Income Tax Act. Creates an income tax credit for developers that invest in a qualified project redeveloping a brownfield or grayfield. 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 tangible personal property that is purchased by a developer who has been awarded a certificate of exemption by the Department of Commerce and Economic Opportunity and that is used to rehabilitate brownfield or grayfield property. Effective immediately.  LRB104 08564 HLH 18616 b     LRB104 08564 HLH 18616 b   A BILL FOR
104TH GENERAL ASSEMBLY
 State of Illinois
 2025 and 2026 SB1178 Introduced 1/24/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED:
35 ILCS 5/246 new35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 35 ILCS 5/246 new  35 ILCS 105/3-5  35 ILCS 110/3-5  35 ILCS 115/3-5  35 ILCS 120/2-5
35 ILCS 5/246 new
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
Amends the Illinois Income Tax Act. Creates an income tax credit for developers that invest in a qualified project redeveloping a brownfield or grayfield. 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 tangible personal property that is purchased by a developer who has been awarded a certificate of exemption by the Department of Commerce and Economic Opportunity and that is used to rehabilitate brownfield or grayfield property. Effective immediately.
LRB104 08564 HLH 18616 b     LRB104 08564 HLH 18616 b
    LRB104 08564 HLH 18616 b
A BILL FOR
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1  AN ACT concerning revenue.
2  Be it enacted by the People of the State of Illinois,
3  represented in the General Assembly:
4  Section 5. The Illinois Income Tax Act is amended by
5  adding Section 246 as follows:
6  (35 ILCS 5/246 new)
7  Sec. 246. Brownfield and grayfield tax credit incentive
8  program.
9  (a) For taxable years ending on or after December 31, 2025
10  and ending on or before December 31, 2028, each taxpayer that
11  is a developer and that invests in a qualified project
12  redeveloping a brownfield or a grayfield may apply to the
13  Department to receive a credit against the taxes imposed by
14  subsections (a) and (b) of Section 201. If the redevelopment
15  is to a brownfield, the amount of the credit is equal to 10% of
16  up to $1,000,000 of the rehabilitation costs incurred by the
17  taxpayer after remediation has occurred. If the redevelopment
18  is to a grayfield, the amount of the credit is equal to 5% of
19  up to $1,000,000 of the rehabilitation costs incurred by the
20  taxpayer after remediation has occurred. The Department may
21  not issue more than $20,000,000 in credits under this Section
22  for taxable years ending on or after December 31, 2025 and
23  ending on or before December 31, 2028.

 

104TH GENERAL ASSEMBLY
 State of Illinois
 2025 and 2026 SB1178 Introduced 1/24/2025, by Sen. Michael W. Halpin SYNOPSIS AS INTRODUCED:
35 ILCS 5/246 new35 ILCS 105/3-535 ILCS 110/3-535 ILCS 115/3-535 ILCS 120/2-5 35 ILCS 5/246 new  35 ILCS 105/3-5  35 ILCS 110/3-5  35 ILCS 115/3-5  35 ILCS 120/2-5
35 ILCS 5/246 new
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
Amends the Illinois Income Tax Act. Creates an income tax credit for developers that invest in a qualified project redeveloping a brownfield or grayfield. 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 tangible personal property that is purchased by a developer who has been awarded a certificate of exemption by the Department of Commerce and Economic Opportunity and that is used to rehabilitate brownfield or grayfield property. Effective immediately.
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    LRB104 08564 HLH 18616 b
A BILL FOR

 

 

35 ILCS 5/246 new
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  (b) If a municipality or a county is the developer of the
2  project, then the Department shall award the municipality or
3  county the amount of the credit under this Section in the form
4  of a grant from the General Revenue Fund.
5  (c) In no event shall a credit under this Section reduce
6  the taxpayer's liability to less than zero. If the amount of
7  the credit exceeds the tax liability for the year, the excess
8  may be carried forward and applied to the tax liability of the
9  5 taxable years following the excess credit year. The tax
10  credit shall be applied to the earliest year for which there is
11  a tax liability. If there are credits for more than one year
12  that are available to offset a liability, the earlier credit
13  shall be applied first.
14  (d) If the taxpayer is a partnership or Subchapter S
15  corporation, the credit is allowed to pass through to the
16  partners and shareholders as provided in Section 251. Credits
17  may also be transferred during the 5 taxable years after the
18  taxable year in which the credit is claimed.
19  (e) The Department shall determine whether a project
20  qualifies for the credit under this Section. The criteria that
21  shall be used in making that determination are:
22  (1) the total amount of the developer's investment in
23  the project;
24  (2) the number of projected jobs or housing units
25  created by the project;
26  (3) the community impact of the planned

 

 

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1  revitalization; and
2  (4) the cost-efficiency of the project.
3  In addition, the Department shall give enhanced
4  consideration to projects that provide middle-income housing
5  as part of the project.
6  Receipt of other credits or incentives shall not count
7  against applicants when determining qualifying projects.
8  (f) The Department shall adopt rules to implement and
9  administer this Section, including rules concerning
10  applications for the tax credit. A taxpayer claiming the
11  credit provided by this Section must maintain and record any
12  information that the Department requires regarding the project
13  for which the credit is claimed.
14  (g) As used in this Section:
15  "Brownfield" means a former industrial or commercial site
16  where future use is affected by real or perceived
17  environmental contamination.
18  "Department" means the Department of Commerce and Economic
19  Opportunity.
20  "Developer" means a for-profit developer, a nonprofit
21  developer, a land bank, a municipality, or a county.
22  "Grayfield" means commercial buildings that have been
23  vacant for a minimum of 12 consecutive months. "Grayfield"
24  includes vacant shopping malls and surrounding parking lots.
25  "Household" means all persons using the premises as their
26  principal place of residence upon the sale or lease of the

 

 

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1  middle-income housing by the developer.
2  "Household income" means the combined federal adjusted
3  gross income of the members of the household for the taxable
4  year immediately preceding the year in which the middle-income
5  housing is sold or rented to the members of the household.
6  "Middle-income housing" means housing that is sold or
7  rented to pursuant to a contract with a term of one year or
8  longer to one or more individuals with a combined household
9  income that exceeds 80% of the median household income in
10  Illinois but does not exceed 120% of the median household
11  income in Illinois.
12  Section 10. The Use Tax Act is amended by changing Section
13  3-5 as follows:
14  (35 ILCS 105/3-5)
15  Sec. 3-5. Exemptions. Use, which, on and after January 1,
16  2025, includes use by a lessee, 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 not-for-profit
2  Illinois county fair association for use in conducting,
3  operating, or 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) Except as otherwise provided in this Act, personal
20  property purchased by a governmental body, by a corporation,
21  society, association, foundation, or institution organized and
22  operated exclusively for charitable, religious, or educational
23  purposes, or by a not-for-profit corporation, society,
24  association, foundation, institution, or organization that has
25  no compensated officers or employees and that is organized and
26  operated primarily for the recreation of persons 55 years of

 

 

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1  age or older. A limited liability company may qualify for the
2  exemption under this paragraph only if the limited liability
3  company is organized and operated exclusively for educational
4  purposes. On and after July 1, 1987, however, no entity
5  otherwise eligible for this exemption shall make tax-free
6  purchases unless it has an active exemption identification
7  number issued by the Department.
8  (5) Until July 1, 2003, a passenger car that is a
9  replacement vehicle to the extent that the purchase price of
10  the car is subject to the Replacement Vehicle Tax.
11  (6) Until July 1, 2003 and beginning again on September 1,
12  2004 through August 30, 2014, graphic arts machinery and
13  equipment, including repair and replacement parts, both new
14  and used, and including that manufactured on special order,
15  certified by the purchaser to be used primarily for graphic
16  arts production, and including machinery and equipment
17  purchased for lease. Equipment includes chemicals or chemicals
18  acting as catalysts but only if the chemicals or chemicals
19  acting as catalysts effect a direct and immediate change upon
20  a graphic arts product. Beginning on July 1, 2017, graphic
21  arts machinery and equipment is included in the manufacturing
22  and assembling machinery and equipment exemption under
23  paragraph (18).
24  (7) Farm chemicals.
25  (8) Legal tender, currency, medallions, or gold or silver
26  coinage issued by the State of Illinois, the government of the

 

 

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1  United States of America, or the government of any foreign
2  country, and bullion.
3  (9) Personal property purchased from a teacher-sponsored
4  student organization affiliated with an elementary or
5  secondary school located in Illinois.
6  (10) A motor vehicle that is used for automobile renting,
7  as defined in the Automobile Renting Occupation and Use Tax
8  Act.
9  (11) Farm machinery and equipment, both new and used,
10  including that manufactured on special order, certified by the
11  purchaser to be used primarily for production agriculture or
12  State or federal agricultural programs, including individual
13  replacement parts for the machinery and equipment, including
14  machinery and equipment purchased for lease, and including
15  implements of husbandry defined in Section 1-130 of the
16  Illinois Vehicle Code, farm machinery and agricultural
17  chemical and fertilizer spreaders, and nurse wagons required
18  to be registered under Section 3-809 of the Illinois Vehicle
19  Code, but excluding other motor vehicles required to be
20  registered under the Illinois Vehicle Code. Horticultural
21  polyhouses or hoop houses used for propagating, growing, or
22  overwintering plants shall be considered farm machinery and
23  equipment under this item (11). Agricultural chemical tender
24  tanks and dry boxes shall include units sold separately from a
25  motor vehicle required to be licensed and units sold mounted
26  on a motor vehicle required to be licensed if the selling price

 

 

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1  of the tender is separately stated.
2  Farm machinery and equipment shall include precision
3  farming equipment that is installed or purchased to be
4  installed on farm machinery and equipment, including, but not
5  limited to, tractors, harvesters, sprayers, planters, seeders,
6  or spreaders. Precision farming equipment includes, but is not
7  limited to, soil testing sensors, computers, monitors,
8  software, global positioning and mapping systems, and other
9  such equipment.
10  Farm machinery and equipment also includes computers,
11  sensors, software, and related equipment used primarily in the
12  computer-assisted operation of production agriculture
13  facilities, equipment, and activities such as, but not limited
14  to, the collection, monitoring, and correlation of animal and
15  crop data for the purpose of formulating animal diets and
16  agricultural chemicals.
17  Beginning on January 1, 2024, farm machinery and equipment
18  also includes electrical power generation equipment used
19  primarily for production agriculture.
20  This item (11) is exempt from the provisions of Section
21  3-90.
22  (12) Until June 30, 2013, fuel and petroleum products sold
23  to or used by an air common carrier, certified by the carrier
24  to be used for consumption, shipment, or storage in the
25  conduct of its business as an air common carrier, for a flight
26  destined for or returning from a location or locations outside

 

 

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1  the United States without regard to previous or subsequent
2  domestic stopovers.
3  Beginning July 1, 2013, fuel and petroleum products sold
4  to or used by an air carrier, certified by the carrier to be
5  used for consumption, shipment, or storage in the conduct of
6  its business as an air common carrier, for a flight that (i) is
7  engaged in foreign trade or is engaged in trade between the
8  United States and any of its possessions and (ii) transports
9  at least one individual or package for hire from the city of
10  origination to the city of final destination on the same
11  aircraft, without regard to a change in the flight number of
12  that aircraft.
13  (13) Proceeds of mandatory service charges separately
14  stated on customers' bills for the purchase and consumption of
15  food and beverages purchased at retail from a retailer, to the
16  extent that the proceeds of the service charge are in fact
17  turned over as tips or as a substitute for tips to the
18  employees who participate directly in preparing, serving,
19  hosting or cleaning up the food or beverage function with
20  respect to which the service charge is imposed.
21  (14) Until July 1, 2003, oil field exploration, drilling,
22  and production equipment, including (i) rigs and parts of
23  rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
24  pipe and tubular goods, including casing and drill strings,
25  (iii) pumps and pump-jack units, (iv) storage tanks and flow
26  lines, (v) any individual replacement part for oil field

 

 

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1  exploration, drilling, and production equipment, and (vi)
2  machinery and equipment purchased for lease; but excluding
3  motor vehicles required to be registered under the Illinois
4  Vehicle Code.
5  (15) Photoprocessing machinery and equipment, including
6  repair and replacement parts, both new and used, including
7  that manufactured on special order, certified by the purchaser
8  to be used primarily for photoprocessing, and including
9  photoprocessing machinery and equipment purchased for lease.
10  (16) Until July 1, 2028, coal and aggregate exploration,
11  mining, off-highway hauling, processing, maintenance, and
12  reclamation equipment, including replacement parts and
13  equipment, and including equipment purchased for lease, but
14  excluding motor vehicles required to be registered under the
15  Illinois Vehicle Code. The changes made to this Section by
16  Public Act 97-767 apply on and after July 1, 2003, but no claim
17  for credit or refund is allowed on or after August 16, 2013
18  (the effective date of Public Act 98-456) for such taxes paid
19  during the period beginning July 1, 2003 and ending on August
20  16, 2013 (the effective date of Public Act 98-456).
21  (17) Until July 1, 2003, distillation machinery and
22  equipment, sold as a unit or kit, assembled or installed by the
23  retailer, certified by the user to be used only for the
24  production of ethyl alcohol that will be used for consumption
25  as motor fuel or as a component of motor fuel for the personal
26  use of the user, and not subject to sale or resale.

 

 

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1  (18) Manufacturing and assembling machinery and equipment
2  used primarily in the process of manufacturing or assembling
3  tangible personal property for wholesale or retail sale or
4  lease, whether that sale or lease is made directly by the
5  manufacturer or by some other person, whether the materials
6  used in the process are owned by the manufacturer or some other
7  person, or whether that sale or lease is made apart from or as
8  an incident to the seller's engaging in the service occupation
9  of producing machines, tools, dies, jigs, patterns, gauges, or
10  other similar items of no commercial value on special order
11  for a particular purchaser. The exemption provided by this
12  paragraph (18) includes production related tangible personal
13  property, as defined in Section 3-50, purchased on or after
14  July 1, 2019. The exemption provided by this paragraph (18)
15  does not include machinery and equipment used in (i) the
16  generation of electricity for wholesale or retail sale; (ii)
17  the generation or treatment of natural or artificial gas for
18  wholesale or retail sale that is delivered to customers
19  through pipes, pipelines, or mains; or (iii) the treatment of
20  water for wholesale or retail sale that is delivered to
21  customers through pipes, pipelines, or mains. The provisions
22  of Public Act 98-583 are declaratory of existing law as to the
23  meaning and scope of this exemption. Beginning on July 1,
24  2017, the exemption provided by this paragraph (18) includes,
25  but is not limited to, graphic arts machinery and equipment,
26  as defined in paragraph (6) of this Section.

 

 

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

 

 

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1  time the non-qualifying use occurs. No lessor shall collect or
2  attempt to collect an amount (however designated) that
3  purports to reimburse that lessor for the tax imposed by this
4  Act or the Service Use Tax Act, as the case may be, if the tax
5  has not been paid by the lessor. If a lessor improperly
6  collects any such amount from the lessee, the lessee shall
7  have a legal right to claim a refund of that amount from the
8  lessor. If, however, that amount is not refunded to the lessee
9  for any reason, the lessor is liable to pay that amount to the
10  Department.
11  (24) 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 donated
14  for disaster relief to be used in a State or federally declared
15  disaster area in Illinois or bordering Illinois by a
16  manufacturer or retailer that is registered in this State to a
17  corporation, society, association, foundation, or institution
18  that has been issued a sales tax exemption identification
19  number by the Department that assists victims of the disaster
20  who reside within the declared disaster area.
21  (25) Beginning with taxable years ending on or after
22  December 31, 1995 and ending with taxable years ending on or
23  before December 31, 2004, personal property that is used in
24  the performance of infrastructure repairs in this State,
25  including, but not limited to, municipal roads and streets,
26  access roads, bridges, sidewalks, waste disposal systems,

 

 

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1  water and sewer line extensions, water distribution and
2  purification facilities, storm water drainage and retention
3  facilities, and sewage treatment facilities, resulting from a
4  State or federally declared disaster in Illinois or bordering
5  Illinois when such repairs are initiated on facilities located
6  in the declared disaster area within 6 months after the
7  disaster.
8  (26) Beginning July 1, 1999, game or game birds purchased
9  at a "game breeding and hunting preserve area" as that term is
10  used in the Wildlife Code. This paragraph is exempt from the
11  provisions of Section 3-90.
12  (27) A motor vehicle, as that term is defined in Section
13  1-146 of the Illinois Vehicle Code, that is donated to a
14  corporation, limited liability company, society, association,
15  foundation, or institution that is determined by the
16  Department to be organized and operated exclusively for
17  educational purposes. For purposes of this exemption, "a
18  corporation, limited liability company, society, association,
19  foundation, or institution organized and operated exclusively
20  for educational purposes" means all tax-supported public
21  schools, private schools that offer systematic instruction in
22  useful branches of learning by methods common to public
23  schools and that compare favorably in their scope and
24  intensity with the course of study presented in tax-supported
25  schools, and vocational or technical schools or institutes
26  organized and operated exclusively to provide a course of

 

 

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1  study of not less than 6 weeks duration and designed to prepare
2  individuals to follow a trade or to pursue a manual,
3  technical, mechanical, industrial, business, or commercial
4  occupation.
5  (28) Beginning January 1, 2000, personal property,
6  including food, purchased through fundraising events for the
7  benefit of a public or private elementary or secondary school,
8  a group of those schools, or one or more school districts if
9  the events are sponsored by an entity recognized by the school
10  district that consists primarily of volunteers and includes
11  parents and teachers of the school children. This paragraph
12  does not apply to fundraising events (i) for the benefit of
13  private home instruction or (ii) for which the fundraising
14  entity purchases the personal property sold at the events from
15  another individual or entity that sold the property for the
16  purpose of resale by the fundraising entity and that profits
17  from the sale to the fundraising entity. This paragraph is
18  exempt from the provisions of Section 3-90.
19  (29) Beginning January 1, 2000 and through December 31,
20  2001, new or used automatic vending machines that prepare and
21  serve hot food and beverages, including coffee, soup, and
22  other items, and replacement parts for these machines.
23  Beginning January 1, 2002 and through June 30, 2003, machines
24  and parts for machines used in commercial, coin-operated
25  amusement and vending business if a use or occupation tax is
26  paid on the gross receipts derived from the use of the

 

 

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1  commercial, coin-operated amusement and vending machines. This
2  paragraph is exempt from the provisions of Section 3-90.
3  (30) Beginning January 1, 2001 and through June 30, 2016,
4  food for human consumption that is to be consumed off the
5  premises where it is sold (other than alcoholic beverages,
6  soft drinks, and food that has been prepared for immediate
7  consumption) and prescription and nonprescription medicines,
8  drugs, medical appliances, and insulin, urine testing
9  materials, syringes, and needles used by diabetics, for human
10  use, when purchased for use by a person receiving medical
11  assistance under Article V of the Illinois Public Aid Code who
12  resides in a licensed long-term care facility, as defined in
13  the Nursing Home Care Act, or in a licensed facility as defined
14  in the ID/DD Community Care Act, the MC/DD Act, or the
15  Specialized Mental Health Rehabilitation Act of 2013.
16  (31) Beginning on August 2, 2001 (the effective date of
17  Public Act 92-227), computers and communications equipment
18  utilized for any hospital purpose and equipment used in the
19  diagnosis, analysis, or treatment of hospital patients
20  purchased by a lessor who leases the equipment, under a lease
21  of one year or longer executed or in effect at the time the
22  lessor would otherwise be subject to the tax imposed by this
23  Act, to a hospital that has been issued an active tax exemption
24  identification number by the Department under Section 1g of
25  the Retailers' Occupation Tax Act. If the equipment is leased
26  in a manner that does not qualify for this exemption or is used

 

 

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

 

 

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1  the time the nonqualifying use occurs. No lessor shall collect
2  or attempt to collect an amount (however designated) that
3  purports to reimburse that lessor for the tax imposed by this
4  Act or the Service Use Tax Act, as the case may be, if the tax
5  has not been paid by the lessor. If a lessor improperly
6  collects any such amount from the lessee, the lessee shall
7  have a legal right to claim a refund of that amount from the
8  lessor. If, however, that amount is not refunded to the lessee
9  for any reason, the lessor is liable to pay that amount to the
10  Department. This paragraph is exempt from the provisions of
11  Section 3-90.
12  (33) On and after July 1, 2003 and through June 30, 2004,
13  the use in this State of motor vehicles of the second division
14  with a gross vehicle weight in excess of 8,000 pounds and that
15  are subject to the commercial distribution fee imposed under
16  Section 3-815.1 of the Illinois Vehicle Code. Beginning on
17  July 1, 2004 and through June 30, 2005, the use in this State
18  of motor vehicles of the second division: (i) with a gross
19  vehicle weight rating in excess of 8,000 pounds; (ii) that are
20  subject to the commercial distribution fee imposed under
21  Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
22  are primarily used for commercial purposes. Through June 30,
23  2005, this exemption applies to repair and replacement parts
24  added after the initial purchase of such a motor vehicle if
25  that motor vehicle is used in a manner that would qualify for
26  the rolling stock exemption otherwise provided for in this

 

 

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1  Act. For purposes of this paragraph, the term "used for
2  commercial purposes" means the transportation of persons or
3  property in furtherance of any commercial or industrial
4  enterprise, whether for-hire or not.
5  (34) Beginning January 1, 2008, tangible personal property
6  used in the construction or maintenance of a community water
7  supply, as defined under Section 3.145 of the Environmental
8  Protection Act, that is operated by a not-for-profit
9  corporation that holds a valid water supply permit issued
10  under Title IV of the Environmental Protection Act. This
11  paragraph is exempt from the provisions of Section 3-90.
12  (35) Beginning January 1, 2010 and continuing through
13  December 31, 2029, materials, parts, equipment, components,
14  and furnishings incorporated into or upon an aircraft as part
15  of the modification, refurbishment, completion, replacement,
16  repair, or maintenance of the aircraft. This exemption
17  includes consumable supplies used in the modification,
18  refurbishment, completion, replacement, repair, and
19  maintenance of aircraft. However, until January 1, 2024, this
20  exemption excludes any materials, parts, equipment,
21  components, and consumable supplies used in the modification,
22  replacement, repair, and maintenance of aircraft engines or
23  power plants, whether such engines or power plants are
24  installed or uninstalled upon any such aircraft. "Consumable
25  supplies" 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 December
3  31, 2023, this exemption applies only to the use of qualifying
4  tangible personal property by persons who modify, refurbish,
5  complete, repair, replace, or maintain aircraft and who (i)
6  hold an Air Agency Certificate and are empowered to operate an
7  approved repair station by the Federal Aviation
8  Administration, (ii) have a Class IV Rating, and (iii) conduct
9  operations in accordance with Part 145 of the Federal Aviation
10  Regulations. From January 1, 2024 through December 31, 2029,
11  this exemption applies only to the use of qualifying tangible
12  personal property by: (A) persons who modify, refurbish,
13  complete, repair, replace, or maintain aircraft and who (i)
14  hold an Air Agency Certificate and are empowered to operate an
15  approved repair station by the Federal Aviation
16  Administration, (ii) have a Class IV Rating, and (iii) conduct
17  operations in accordance with Part 145 of the Federal Aviation
18  Regulations; and (B) persons who engage in the modification,
19  replacement, repair, and maintenance of aircraft engines or
20  power plants without regard to whether or not those persons
21  meet the qualifications of item (A).
22  The exemption does not include aircraft operated by a
23  commercial air carrier providing scheduled passenger air
24  service pursuant to authority issued under Part 121 or Part
25  129 of the Federal Aviation Regulations. The changes made to
26  this paragraph (35) by Public Act 98-534 are declarative of

 

 

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1  existing law. It is the intent of the General Assembly that the
2  exemption under this paragraph (35) applies continuously from
3  January 1, 2010 through December 31, 2024; however, no claim
4  for credit or refund is allowed for taxes paid as a result of
5  the disallowance of this exemption on or after January 1, 2015
6  and prior to February 5, 2020 (the effective date of Public Act
7  101-629).
8  (36) Tangible personal property purchased by a
9  public-facilities corporation, as described in Section
10  11-65-10 of the Illinois Municipal Code, for purposes of
11  constructing or furnishing a municipal convention hall, but
12  only if the legal title to the municipal convention hall is
13  transferred to the municipality without any further
14  consideration by or on behalf of the municipality at the time
15  of the completion of the municipal convention hall or upon the
16  retirement or redemption of any bonds or other debt
17  instruments issued by the public-facilities corporation in
18  connection with the development of the municipal convention
19  hall. This exemption includes existing public-facilities
20  corporations as provided in Section 11-65-25 of the Illinois
21  Municipal Code. This paragraph is exempt from the provisions
22  of Section 3-90.
23  (37) Beginning January 1, 2017 and through December 31,
24  2026, menstrual pads, tampons, and menstrual cups.
25  (38) Merchandise that is subject to the Rental Purchase
26  Agreement Occupation and Use Tax. The purchaser must certify

 

 

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1  that the item is purchased to be rented subject to a
2  rental-purchase agreement, as defined in the Rental-Purchase
3  Agreement Act, and provide proof of registration under the
4  Rental Purchase Agreement Occupation and Use Tax Act. This
5  paragraph is exempt from the provisions of Section 3-90.
6  (39) Tangible personal property purchased by a purchaser
7  who is exempt from the tax imposed by this Act by operation of
8  federal law. This paragraph is exempt from the provisions of
9  Section 3-90.
10  (40) 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 subcontractor
16  of the owner, operator, or tenant. Data centers that would
17  have qualified for a certificate of exemption prior to January
18  1, 2020 had Public Act 101-31 been in effect may apply for and
19  obtain an exemption for subsequent purchases of computer
20  equipment or enabling software purchased or leased to upgrade,
21  supplement, or replace computer equipment or enabling software
22  purchased or leased in the original investment that would have
23  qualified.
24  The Department of Commerce and Economic Opportunity shall
25  grant a certificate of exemption under this item (40) to
26  qualified data centers as defined by Section 605-1025 of the

 

 

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1  Department of Commerce and Economic Opportunity Law of the
2  Civil Administrative Code of Illinois.
3  For the purposes of this item (40):
4  "Data center" means a building or a series of
5  buildings rehabilitated or constructed to house working
6  servers in one physical location or multiple sites within
7  the State of Illinois.
8  "Qualified tangible personal property" means:
9  electrical systems and equipment; climate control and
10  chilling equipment and systems; mechanical systems and
11  equipment; monitoring and secure systems; emergency
12  generators; hardware; computers; servers; data storage
13  devices; network connectivity equipment; racks; cabinets;
14  telecommunications cabling infrastructure; raised floor
15  systems; peripheral components or systems; software;
16  mechanical, electrical, or plumbing systems; battery
17  systems; cooling systems and towers; temperature control
18  systems; other cabling; and other data center
19  infrastructure equipment and systems necessary to operate
20  qualified tangible personal property, including fixtures;
21  and component parts of any of the foregoing, including
22  installation, maintenance, repair, refurbishment, and
23  replacement of qualified tangible personal property to
24  generate, transform, transmit, distribute, or manage
25  electricity necessary to operate qualified tangible
26  personal property; and all other tangible personal

 

 

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1  property that is essential to the operations of a computer
2  data center. The term "qualified tangible personal
3  property" also includes building materials physically
4  incorporated into the qualifying data center. To document
5  the exemption allowed under this Section, the retailer
6  must obtain from the purchaser a copy of the certificate
7  of eligibility issued by the Department of Commerce and
8  Economic Opportunity.
9  This item (40) is exempt from the provisions of Section
10  3-90.
11  (41) Beginning July 1, 2022, breast pumps, breast pump
12  collection and storage supplies, and breast pump kits. This
13  item (41) is exempt from the provisions of Section 3-90. As
14  used in this item (41):
15  "Breast pump" means an electrically controlled or
16  manually controlled pump device designed or marketed to be
17  used to express milk from a human breast during lactation,
18  including the pump device and any battery, AC adapter, or
19  other power supply unit that is used to power the pump
20  device and is packaged and sold with the pump device at the
21  time of sale.
22  "Breast pump collection and storage supplies" means
23  items of tangible personal property designed or marketed
24  to be used in conjunction with a breast pump to collect
25  milk expressed from a human breast and to store collected
26  milk until it is ready for consumption.

 

 

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1  "Breast pump collection and storage supplies"
2  includes, but is not limited to: breast shields and breast
3  shield connectors; breast pump tubes and tubing adapters;
4  breast pump valves and membranes; backflow protectors and
5  backflow protector adaptors; bottles and bottle caps
6  specific to the operation of the breast pump; and breast
7  milk storage bags.
8  "Breast pump collection and storage supplies" does not
9  include: (1) bottles and bottle caps not specific to the
10  operation of the breast pump; (2) breast pump travel bags
11  and other similar carrying accessories, including ice
12  packs, labels, and other similar products; (3) breast pump
13  cleaning supplies; (4) nursing bras, bra pads, breast
14  shells, and other similar products; and (5) creams,
15  ointments, and other similar products that relieve
16  breastfeeding-related symptoms or conditions of the
17  breasts or nipples, unless sold as part of a breast pump
18  kit that is pre-packaged by the breast pump manufacturer
19  or distributor.
20  "Breast pump kit" means a kit that: (1) contains no
21  more than a breast pump, breast pump collection and
22  storage supplies, a rechargeable battery for operating the
23  breast pump, a breastmilk cooler, bottle stands, ice
24  packs, and a breast pump carrying case; and (2) is
25  pre-packaged as a breast pump kit by the breast pump
26  manufacturer or distributor.

 

 

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1  (42) Tangible personal property sold by or on behalf of
2  the State Treasurer pursuant to the Revised Uniform Unclaimed
3  Property Act. This item (42) is exempt from the provisions of
4  Section 3-90.
5  (43) Beginning on January 1, 2024, tangible personal
6  property purchased by an active duty member of the armed
7  forces of the United States who presents valid military
8  identification and purchases the property using a form of
9  payment where the federal government is the payor. The member
10  of the armed forces must complete, at the point of sale, a form
11  prescribed by the Department of Revenue documenting that the
12  transaction is eligible for the exemption under this
13  paragraph. Retailers must keep the form as documentation of
14  the exemption in their records for a period of not less than 6
15  years. "Armed forces of the United States" means the United
16  States Army, Navy, Air Force, Space Force, Marine Corps, or
17  Coast Guard. This paragraph is exempt from the provisions of
18  Section 3-90.
19  (44) Beginning July 1, 2024, home-delivered meals provided
20  to Medicare or Medicaid recipients when payment is made by an
21  intermediary, such as a Medicare Administrative Contractor, a
22  Managed Care Organization, or a Medicare Advantage
23  Organization, pursuant to a government contract. This item
24  (44) is exempt from the provisions of Section 3-90.
25  (45) (44) Beginning on January 1, 2026, as further defined
26  in Section 3-10, food for human consumption that is to be

 

 

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1  consumed off the premises where it is sold (other than
2  alcoholic beverages, food consisting of or infused with adult
3  use cannabis, soft drinks, candy, and food that has been
4  prepared for immediate consumption). This item (45) (44) is
5  exempt from the provisions of Section 3-90.
6  (46) (44) Use by the lessee of the following leased
7  tangible personal property:
8  (1) software transferred subject to a license that
9  meets the following requirements:
10  (A) it is evidenced by a written agreement signed
11  by the licensor and the customer;
12  (i) an electronic agreement in which the
13  customer accepts the license by means of an
14  electronic signature that is verifiable and can be
15  authenticated and is attached to or made part of
16  the license will comply with this requirement;
17  (ii) a license agreement in which the customer
18  electronically accepts the terms by clicking "I
19  agree" does not comply with this requirement;
20  (B) it restricts the customer's duplication and
21  use of the software;
22  (C) it prohibits the customer from licensing,
23  sublicensing, or transferring the software to a third
24  party (except to a related party) without the
25  permission and continued control of the licensor;
26  (D) the licensor has a policy of providing another

 

 

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1  copy at minimal or no charge if the customer loses or
2  damages the software, or of permitting the licensee to
3  make and keep an archival copy, and such policy is
4  either stated in the license agreement, supported by
5  the licensor's books and records, or supported by a
6  notarized statement made under penalties of perjury by
7  the licensor; and
8  (E) the customer must destroy or return all copies
9  of the software to the licensor at the end of the
10  license period; this provision is deemed to be met, in
11  the case of a perpetual license, without being set
12  forth in the license agreement; and
13  (2) property that is subject to a tax on lease
14  receipts imposed by a home rule unit of local government
15  if the ordinance imposing that tax was adopted prior to
16  January 1, 2023.
17  (47) Tangible personal property that is (i) purchased by a
18  developer who has been awarded a certificate of exemption
19  under this paragraph (47) by the Department of Commerce and
20  Economic Opportunity and (ii) used to rehabilitate brownfield
21  or grayfield property, as defined in Section 246 of the
22  Illinois Income Tax Act, after remediation has occurred. The
23  Department of Commerce and Economic Opportunity shall award
24  certificates of exemption under this paragraph (47) for
25  property that meets the criteria under this paragraph (47).
26  This paragraph is exempt from the provisions of Section 3-90.

 

 

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1  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
2  Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
3  eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
4  Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
5  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
6  103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
7  7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; revised
8  11-26-24.)
9  Section 15. The Service Use Tax Act is amended by changing
10  Section 3-5 as follows:
11  (35 ILCS 110/3-5)
12  Sec. 3-5. Exemptions. Use of the following tangible
13  personal property is exempt from the tax imposed by this Act:
14  (1) Personal property purchased from a corporation,
15  society, association, foundation, institution, or
16  organization, other than a limited liability company, that is
17  organized and operated as a not-for-profit service enterprise
18  for the benefit of persons 65 years of age or older if the
19  personal property was not purchased by the enterprise for the
20  purpose of resale by the enterprise.
21  (2) Personal property purchased by a non-profit Illinois
22  county fair association for use in conducting, operating, or
23  promoting the county fair.
24  (3) Personal property purchased by a not-for-profit arts

 

 

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1  or cultural organization that establishes, by proof required
2  by the Department by rule, that it has received an exemption
3  under Section 501(c)(3) of the Internal Revenue Code and that
4  is organized and operated primarily for the presentation or
5  support of arts or cultural programming, activities, or
6  services. These organizations include, but are not limited to,
7  music and dramatic arts organizations such as symphony
8  orchestras and theatrical groups, arts and cultural service
9  organizations, local arts councils, visual arts organizations,
10  and media arts organizations. On and after July 1, 2001 (the
11  effective date of Public Act 92-35), however, an entity
12  otherwise eligible for this exemption shall not make tax-free
13  purchases unless it has an active identification number issued
14  by the Department.
15  (4) Legal tender, currency, medallions, or gold or silver
16  coinage issued by the State of Illinois, the government of the
17  United States of America, or the government of any foreign
18  country, and bullion.
19  (5) Until July 1, 2003 and beginning again on September 1,
20  2004 through August 30, 2014, graphic arts machinery and
21  equipment, including repair and replacement parts, both new
22  and used, and including that manufactured on special order or
23  purchased for lease, certified by the purchaser to be used
24  primarily for graphic arts production. Equipment includes
25  chemicals or chemicals acting as catalysts but only if the
26  chemicals or chemicals acting as catalysts effect a direct and

 

 

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

 

 

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1  Farm machinery and equipment shall include precision
2  farming equipment that is installed or purchased to be
3  installed on farm machinery and equipment, including, but not
4  limited to, tractors, harvesters, sprayers, planters, seeders,
5  or spreaders. Precision farming equipment includes, but is not
6  limited to, soil testing sensors, computers, monitors,
7  software, global positioning and mapping systems, and other
8  such equipment.
9  Farm machinery and equipment also includes computers,
10  sensors, software, and related equipment used primarily in the
11  computer-assisted operation of production agriculture
12  facilities, equipment, and activities such as, but not limited
13  to, the collection, monitoring, and correlation of animal and
14  crop data for the purpose of formulating animal diets and
15  agricultural chemicals.
16  Beginning on January 1, 2024, farm machinery and equipment
17  also includes electrical power generation equipment used
18  primarily for production agriculture.
19  This item (7) is exempt from the provisions of Section
20  3-75.
21  (8) Until June 30, 2013, fuel and petroleum products sold
22  to or used by an air common carrier, certified by the carrier
23  to be used for consumption, shipment, or storage in the
24  conduct of its business as an air common carrier, for a flight
25  destined for or returning from a location or locations outside
26  the United States without regard to previous or subsequent

 

 

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1  domestic stopovers.
2  Beginning July 1, 2013, fuel and petroleum products sold
3  to or used by an air carrier, certified by the carrier to be
4  used for consumption, shipment, or storage in the conduct of
5  its business as an air common carrier, for a flight that (i) is
6  engaged in foreign trade or is engaged in trade between the
7  United States and any of its possessions and (ii) transports
8  at least one individual or package for hire from the city of
9  origination to the city of final destination on the same
10  aircraft, without regard to a change in the flight number of
11  that aircraft.
12  (9) Proceeds of mandatory service charges separately
13  stated on customers' bills for the purchase and consumption of
14  food and beverages acquired as an incident to the purchase of a
15  service from a serviceman, to the extent that the proceeds of
16  the service charge are in fact turned over as tips or as a
17  substitute for tips to the employees who participate directly
18  in preparing, serving, hosting or cleaning up the food or
19  beverage function with respect to which the service charge is
20  imposed.
21  (10) Until July 1, 2003, oil field exploration, drilling,
22  and production equipment, including (i) rigs and parts of
23  rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
24  pipe and tubular goods, including casing and drill strings,
25  (iii) pumps and pump-jack units, (iv) storage tanks and flow
26  lines, (v) any individual replacement part for oil field

 

 

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1  exploration, drilling, and production equipment, and (vi)
2  machinery and equipment purchased for lease; but excluding
3  motor vehicles required to be registered under the Illinois
4  Vehicle Code.
5  (11) Proceeds from the sale of photoprocessing machinery
6  and equipment, including repair and replacement parts, both
7  new and used, including that manufactured on special order,
8  certified by the purchaser to be used primarily for
9  photoprocessing, and including photoprocessing machinery and
10  equipment purchased for lease.
11  (12) Until July 1, 2028, coal and aggregate exploration,
12  mining, off-highway hauling, processing, maintenance, and
13  reclamation equipment, including replacement parts and
14  equipment, and including equipment purchased for lease, but
15  excluding motor vehicles required to be registered under the
16  Illinois Vehicle Code. The changes made to this Section by
17  Public Act 97-767 apply on and after July 1, 2003, but no claim
18  for credit or refund is allowed on or after August 16, 2013
19  (the effective date of Public Act 98-456) for such taxes paid
20  during the period beginning July 1, 2003 and ending on August
21  16, 2013 (the effective date of Public Act 98-456).
22  (13) Semen used for artificial insemination of livestock
23  for direct agricultural production.
24  (14) Horses, or interests in horses, registered with and
25  meeting the requirements of any of the Arabian Horse Club
26  Registry of America, Appaloosa Horse Club, American Quarter

 

 

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1  Horse Association, United States Trotting Association, or
2  Jockey Club, as appropriate, used for purposes of breeding or
3  racing for prizes. This item (14) is exempt from the
4  provisions of Section 3-75, and the exemption provided for
5  under this item (14) applies for all periods beginning May 30,
6  1995, but no claim for credit or refund is allowed on or after
7  January 1, 2008 (the effective date of Public Act 95-88) for
8  such taxes paid during the period beginning May 30, 2000 and
9  ending on January 1, 2008 (the effective date of Public Act
10  95-88).
11  (15) Computers and communications equipment utilized for
12  any hospital purpose and equipment used in the diagnosis,
13  analysis, or treatment of hospital patients purchased by a
14  lessor who leases the equipment, under a lease of one year or
15  longer executed or in effect at the time the lessor would
16  otherwise be subject to the tax imposed by this Act, to a
17  hospital that has been issued an active tax exemption
18  identification number by the Department under Section 1g of
19  the Retailers' Occupation Tax Act. If the equipment is leased
20  in a manner that does not qualify for this exemption or is used
21  in any other non-exempt manner, the lessor shall be liable for
22  the tax imposed under this Act or the Use Tax Act, as the case
23  may be, based on the fair market value of the property at the
24  time the non-qualifying use occurs. No lessor shall collect or
25  attempt to collect an amount (however designated) that
26  purports to reimburse that lessor for the tax imposed by this

 

 

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

 

 

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

 

 

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1  used in the Wildlife Code. This paragraph is exempt from the
2  provisions of Section 3-75.
3  (20) A motor vehicle, as that term is defined in Section
4  1-146 of the Illinois Vehicle Code, that is donated to a
5  corporation, limited liability company, society, association,
6  foundation, or institution that is determined by the
7  Department to be organized and operated exclusively for
8  educational purposes. For purposes of this exemption, "a
9  corporation, limited liability company, society, association,
10  foundation, or institution organized and operated exclusively
11  for educational purposes" means all tax-supported public
12  schools, private schools that offer systematic instruction in
13  useful branches of learning by methods common to public
14  schools and that compare favorably in their scope and
15  intensity with the course of study presented in tax-supported
16  schools, and vocational or technical schools or institutes
17  organized and operated exclusively to provide a course of
18  study of not less than 6 weeks duration and designed to prepare
19  individuals to follow a trade or to pursue a manual,
20  technical, mechanical, industrial, business, or commercial
21  occupation.
22  (21) Beginning January 1, 2000, personal property,
23  including food, purchased through fundraising events for the
24  benefit of a public or private elementary or secondary school,
25  a group of those schools, or one or more school districts if
26  the events are sponsored by an entity recognized by the school

 

 

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1  district that consists primarily of volunteers and includes
2  parents and teachers of the school children. This paragraph
3  does not apply to fundraising events (i) for the benefit of
4  private home instruction or (ii) for which the fundraising
5  entity purchases the personal property sold at the events from
6  another individual or entity that sold the property for the
7  purpose of resale by the fundraising entity and that profits
8  from the sale to the fundraising entity. This paragraph is
9  exempt from the provisions of Section 3-75.
10  (22) Beginning January 1, 2000 and through December 31,
11  2001, new or used automatic vending machines that prepare and
12  serve hot food and beverages, including coffee, soup, and
13  other items, and replacement parts for these machines.
14  Beginning January 1, 2002 and through June 30, 2003, machines
15  and parts for machines used in commercial, coin-operated
16  amusement and vending business if a use or occupation tax is
17  paid on the gross receipts derived from the use of the
18  commercial, coin-operated amusement and vending machines. This
19  paragraph is exempt from the provisions of Section 3-75.
20  (23) Beginning August 23, 2001 and through June 30, 2016,
21  food for human consumption that is to be consumed off the
22  premises where it is sold (other than alcoholic beverages,
23  soft drinks, and food that has been prepared for immediate
24  consumption) and prescription and nonprescription medicines,
25  drugs, medical appliances, and insulin, urine testing
26  materials, syringes, and needles used by diabetics, for human

 

 

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

 

 

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

 

 

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1  is exempt from the provisions of Section 3-75.
2  (26) Beginning January 1, 2008, tangible personal property
3  used in the construction or maintenance of a community water
4  supply, as defined under Section 3.145 of the Environmental
5  Protection Act, that is operated by a not-for-profit
6  corporation that holds a valid water supply permit issued
7  under Title IV of the Environmental Protection Act. This
8  paragraph is exempt from the provisions of Section 3-75.
9  (27) Beginning January 1, 2010 and continuing through
10  December 31, 2029, materials, parts, equipment, components,
11  and furnishings incorporated into or upon an aircraft as part
12  of the modification, refurbishment, completion, replacement,
13  repair, or maintenance of the aircraft. This exemption
14  includes consumable supplies used in the modification,
15  refurbishment, completion, replacement, repair, and
16  maintenance of aircraft. However, until January 1, 2024, this
17  exemption excludes any materials, parts, equipment,
18  components, and consumable supplies used in the modification,
19  replacement, repair, and maintenance of aircraft engines or
20  power plants, whether such engines or power plants are
21  installed or uninstalled upon any such aircraft. "Consumable
22  supplies" include, but are not limited to, adhesive, tape,
23  sandpaper, general purpose lubricants, cleaning solution,
24  latex gloves, and protective films.
25  Beginning January 1, 2010 and continuing through December
26  31, 2023, this exemption applies only to the use of qualifying

 

 

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1  tangible personal property transferred incident to the
2  modification, refurbishment, completion, replacement, repair,
3  or maintenance of aircraft by persons who (i) hold an Air
4  Agency Certificate and are empowered to operate an approved
5  repair station by the Federal Aviation Administration, (ii)
6  have a Class IV Rating, and (iii) conduct operations in
7  accordance with Part 145 of the Federal Aviation Regulations.
8  From January 1, 2024 through December 31, 2029, this exemption
9  applies only to the use of qualifying tangible personal
10  property transferred incident to: (A) the modification,
11  refurbishment, completion, repair, replacement, or maintenance
12  of an aircraft by persons who (i) hold an Air Agency
13  Certificate and are empowered to operate an approved repair
14  station by the Federal Aviation Administration, (ii) have a
15  Class IV Rating, and (iii) conduct operations in accordance
16  with Part 145 of the Federal Aviation Regulations; and (B) the
17  modification, replacement, repair, and maintenance of aircraft
18  engines or power plants without regard to whether or not those
19  persons meet the qualifications of item (A).
20  The exemption does not include aircraft operated by a
21  commercial air carrier providing scheduled passenger air
22  service pursuant to authority issued under Part 121 or Part
23  129 of the Federal Aviation Regulations. The changes made to
24  this paragraph (27) by Public Act 98-534 are declarative of
25  existing law. It is the intent of the General Assembly that the
26  exemption under this paragraph (27) applies continuously from

 

 

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1  January 1, 2010 through December 31, 2024; however, no claim
2  for credit or refund is allowed for taxes paid as a result of
3  the disallowance of this exemption on or after January 1, 2015
4  and prior to February 5, 2020 (the effective date of Public Act
5  101-629).
6  (28) Tangible personal property purchased by a
7  public-facilities corporation, as described in Section
8  11-65-10 of the Illinois Municipal Code, for purposes of
9  constructing or furnishing a municipal convention hall, but
10  only if the legal title to the municipal convention hall is
11  transferred to the municipality without any further
12  consideration by or on behalf of the municipality at the time
13  of the completion of the municipal convention hall or upon the
14  retirement or redemption of any bonds or other debt
15  instruments issued by the public-facilities corporation in
16  connection with the development of the municipal convention
17  hall. This exemption includes existing public-facilities
18  corporations as provided in Section 11-65-25 of the Illinois
19  Municipal Code. This paragraph is exempt from the provisions
20  of Section 3-75.
21  (29) Beginning January 1, 2017 and through December 31,
22  2026, menstrual pads, tampons, and menstrual cups.
23  (30) Tangible personal property transferred to a purchaser
24  who is exempt from the tax imposed by this Act by operation of
25  federal law. This paragraph is exempt from the provisions of
26  Section 3-75.

 

 

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

 

 

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1  chilling equipment and systems; mechanical systems and
2  equipment; monitoring and secure systems; emergency
3  generators; hardware; computers; servers; data storage
4  devices; network connectivity equipment; racks; cabinets;
5  telecommunications cabling infrastructure; raised floor
6  systems; peripheral components or systems; software;
7  mechanical, electrical, or plumbing systems; battery
8  systems; cooling systems and towers; temperature control
9  systems; other cabling; and other data center
10  infrastructure equipment and systems necessary to operate
11  qualified tangible personal property, including fixtures;
12  and component parts of any of the foregoing, including
13  installation, maintenance, repair, refurbishment, and
14  replacement of qualified tangible personal property to
15  generate, transform, transmit, distribute, or manage
16  electricity necessary to operate qualified tangible
17  personal property; and all other tangible personal
18  property that is essential to the operations of a computer
19  data center. The term "qualified tangible personal
20  property" also includes building materials physically
21  incorporated into the qualifying data center. To document
22  the exemption allowed under this Section, the retailer
23  must obtain from the purchaser a copy of the certificate
24  of eligibility issued by the Department of Commerce and
25  Economic Opportunity.
26  This item (31) is exempt from the provisions of Section

 

 

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1  3-75.
2  (32) Beginning July 1, 2022, breast pumps, breast pump
3  collection and storage supplies, and breast pump kits. This
4  item (32) is exempt from the provisions of Section 3-75. As
5  used in this item (32):
6  "Breast pump" means an electrically controlled or
7  manually controlled pump device designed or marketed to be
8  used to express milk from a human breast during lactation,
9  including the pump device and any battery, AC adapter, or
10  other power supply unit that is used to power the pump
11  device and is packaged and sold with the pump device at the
12  time of sale.
13  "Breast pump collection and storage supplies" means
14  items of tangible personal property designed or marketed
15  to be used in conjunction with a breast pump to collect
16  milk expressed from a human breast and to store collected
17  milk until it is ready for consumption.
18  "Breast pump collection and storage supplies"
19  includes, but is not limited to: breast shields and breast
20  shield connectors; breast pump tubes and tubing adapters;
21  breast pump valves and membranes; backflow protectors and
22  backflow protector adaptors; bottles and bottle caps
23  specific to the operation of the breast pump; and breast
24  milk storage bags.
25  "Breast pump collection and storage supplies" does not
26  include: (1) bottles and bottle caps not specific to the

 

 

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1  operation of the breast pump; (2) breast pump travel bags
2  and other similar carrying accessories, including ice
3  packs, labels, and other similar products; (3) breast pump
4  cleaning supplies; (4) nursing bras, bra pads, breast
5  shells, and other similar products; and (5) creams,
6  ointments, and other similar products that relieve
7  breastfeeding-related symptoms or conditions of the
8  breasts or nipples, unless sold as part of a breast pump
9  kit that is pre-packaged by the breast pump manufacturer
10  or distributor.
11  "Breast pump kit" means a kit that: (1) contains no
12  more than a breast pump, breast pump collection and
13  storage supplies, a rechargeable battery for operating the
14  breast pump, a breastmilk cooler, bottle stands, ice
15  packs, and a breast pump carrying case; and (2) is
16  pre-packaged as a breast pump kit by the breast pump
17  manufacturer or distributor.
18  (33) Tangible personal property sold by or on behalf of
19  the State Treasurer pursuant to the Revised Uniform Unclaimed
20  Property Act. This item (33) is exempt from the provisions of
21  Section 3-75.
22  (34) Beginning on January 1, 2024, tangible personal
23  property purchased by an active duty member of the armed
24  forces of the United States who presents valid military
25  identification and purchases the property using a form of
26  payment where the federal government is the payor. The member

 

 

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1  of the armed forces must complete, at the point of sale, a form
2  prescribed by the Department of Revenue documenting that the
3  transaction is eligible for the exemption under this
4  paragraph. Retailers must keep the form as documentation of
5  the exemption in their records for a period of not less than 6
6  years. "Armed forces of the United States" means the United
7  States Army, Navy, Air Force, Space Force, Marine Corps, or
8  Coast Guard. This paragraph is exempt from the provisions of
9  Section 3-75.
10  (35) Beginning July 1, 2024, home-delivered meals provided
11  to Medicare or Medicaid recipients when payment is made by an
12  intermediary, such as a Medicare Administrative Contractor, a
13  Managed Care Organization, or a Medicare Advantage
14  Organization, pursuant to a government contract. This
15  paragraph (35) is exempt from the provisions of Section 3-75.
16  (36) (35) Beginning on January 1, 2026, as further defined
17  in Section 3-10, food prepared for immediate consumption and
18  transferred incident to a sale of service subject to this Act
19  or the Service Occupation Tax Act by an entity licensed under
20  the Hospital Licensing Act, the Nursing Home Care Act, the
21  Assisted Living and Shared Housing Act, the ID/DD Community
22  Care Act, the MC/DD Act, the Specialized Mental Health
23  Rehabilitation Act of 2013, or the Child Care Act of 1969, or
24  by an entity that holds a permit issued pursuant to the Life
25  Care Facilities Act. This item (36) (35) is exempt from the
26  provisions of Section 3-75.

 

 

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1  (37) (36) Beginning on January 1, 2026, as further defined
2  in Section 3-10, food for human consumption that is to be
3  consumed off the premises where it is sold (other than
4  alcoholic beverages, food consisting of or infused with adult
5  use cannabis, soft drinks, candy, and food that has been
6  prepared for immediate consumption). This item (37) (36) is
7  exempt from the provisions of Section 3-75.
8  (38) (35) Use by a lessee of the following leased tangible
9  personal property:
10  (1) software transferred subject to a license that
11  meets the following requirements:
12  (A) it is evidenced by a written agreement signed
13  by the licensor and the customer;
14  (i) an electronic agreement in which the
15  customer accepts the license by means of an
16  electronic signature that is verifiable and can be
17  authenticated and is attached to or made part of
18  the license will comply with this requirement;
19  (ii) a license agreement in which the customer
20  electronically accepts the terms by clicking "I
21  agree" does not comply with this requirement;
22  (B) it restricts the customer's duplication and
23  use of the software;
24  (C) it prohibits the customer from licensing,
25  sublicensing, or transferring the software to a third
26  party (except to a related party) without the

 

 

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1  permission and continued control of the licensor;
2  (D) the licensor has a policy of providing another
3  copy at minimal or no charge if the customer loses or
4  damages the software, or of permitting the licensee to
5  make and keep an archival copy, and such policy is
6  either stated in the license agreement, supported by
7  the licensor's books and records, or supported by a
8  notarized statement made under penalties of perjury by
9  the licensor; and
10  (E) the customer must destroy or return all copies
11  of the software to the licensor at the end of the
12  license period; this provision is deemed to be met, in
13  the case of a perpetual license, without being set
14  forth in the license agreement; and
15  (2) property that is subject to a tax on lease
16  receipts imposed by a home rule unit of local government
17  if the ordinance imposing that tax was adopted prior to
18  January 1, 2023.
19  (39) Tangible personal property that is (i) purchased by a
20  developer who has been awarded a certificate of exemption
21  under this paragraph (39) by the Department of Commerce and
22  Economic Opportunity and (ii) used to rehabilitate brownfield
23  or grayfield property, as defined in Section 246 of the
24  Illinois Income Tax Act, after remediation has occurred. The
25  Department of Commerce and Economic Opportunity shall award
26  certificates of exemption under this paragraph (39) for

 

 

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1  property that meets the criteria under this paragraph (39).
2  This paragraph is exempt from the provisions of Section 3-75.
3  (Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
4  Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
5  75-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
6  Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
7  eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
8  103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
9  7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995,
10  eff. 8-9-24; revised 11-26-24.)
11  Section 20. The Service Occupation Tax Act is amended by
12  changing Section 3-5 as follows:
13  (35 ILCS 115/3-5)
14  Sec. 3-5. Exemptions. The following tangible personal
15  property is exempt from the tax imposed by this Act:
16  (1) Personal property sold by a corporation, society,
17  association, foundation, institution, or organization, other
18  than a limited liability company, that is organized and
19  operated as a not-for-profit service enterprise for the
20  benefit of persons 65 years of age or older if the personal
21  property was not purchased by the enterprise for the purpose
22  of resale by the enterprise.
23  (2) Personal property purchased by a not-for-profit
24  Illinois county fair association for use in conducting,

 

 

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

 

 

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

 

 

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1  on a motor vehicle required to be licensed if the selling price
2  of the tender is separately stated.
3  Farm machinery and equipment shall include precision
4  farming equipment that is installed or purchased to be
5  installed on farm machinery and equipment, including, but not
6  limited to, tractors, harvesters, sprayers, planters, seeders,
7  or spreaders. Precision farming equipment includes, but is not
8  limited to, soil testing sensors, computers, monitors,
9  software, global positioning and mapping systems, and other
10  such equipment.
11  Farm machinery and equipment also includes computers,
12  sensors, software, and related equipment used primarily in the
13  computer-assisted operation of production agriculture
14  facilities, equipment, and activities such as, but not limited
15  to, the collection, monitoring, and correlation of animal and
16  crop data for the purpose of formulating animal diets and
17  agricultural chemicals.
18  Beginning on January 1, 2024, farm machinery and equipment
19  also includes electrical power generation equipment used
20  primarily for production agriculture.
21  This item (7) is exempt from the provisions of Section
22  3-55.
23  (8) Until June 30, 2013, fuel and petroleum products sold
24  to or used by an air common 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 flight

 

 

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

 

 

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1  lines, (v) any individual replacement part for oil field
2  exploration, drilling, and production equipment, and (vi)
3  machinery and equipment purchased for lease; but excluding
4  motor vehicles required to be registered under the Illinois
5  Vehicle Code.
6  (11) Photoprocessing machinery and equipment, including
7  repair and replacement parts, both new and used, including
8  that manufactured on special order, certified by the purchaser
9  to be used primarily for photoprocessing, and including
10  photoprocessing machinery and equipment purchased for lease.
11  (12) Until July 1, 2028, coal and aggregate exploration,
12  mining, off-highway hauling, processing, maintenance, and
13  reclamation equipment, including replacement parts and
14  equipment, and including equipment purchased for lease, but
15  excluding motor vehicles required to be registered under the
16  Illinois Vehicle Code. The changes made to this Section by
17  Public Act 97-767 apply on and after July 1, 2003, but no claim
18  for credit or refund is allowed on or after August 16, 2013
19  (the effective date of Public Act 98-456) for such taxes paid
20  during the period beginning July 1, 2003 and ending on August
21  16, 2013 (the effective date of Public Act 98-456).
22  (13) Beginning January 1, 1992 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 non-prescription 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  (14) Semen used for artificial insemination of livestock
10  for direct agricultural production.
11  (15) Horses, or interests in horses, registered with and
12  meeting the requirements of any of the Arabian Horse Club
13  Registry of America, Appaloosa Horse Club, American Quarter
14  Horse Association, United States Trotting Association, or
15  Jockey Club, as appropriate, used for purposes of breeding or
16  racing for prizes. This item (15) is exempt from the
17  provisions of Section 3-55, and the exemption provided for
18  under this item (15) applies for all periods beginning May 30,
19  1995, but no claim for credit or refund is allowed on or after
20  January 1, 2008 (the effective date of Public Act 95-88) for
21  such taxes paid during the period beginning May 30, 2000 and
22  ending on January 1, 2008 (the effective date of Public Act
23  95-88).
24  (16) Computers and communications equipment utilized for
25  any hospital purpose and equipment used in the diagnosis,
26  analysis, or treatment of hospital patients sold to a lessor

 

 

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1  who leases the equipment, under a lease of one year or longer
2  executed or in effect at the time of the purchase, to a
3  hospital that has been issued an active tax exemption
4  identification number by the Department under Section 1g of
5  the Retailers' Occupation Tax Act.
6  (17) Personal property sold to a lessor who leases the
7  property, under a lease of one year or longer executed or in
8  effect at the time of the purchase, to a governmental body that
9  has been issued an active tax exemption identification number
10  by the Department under Section 1g of the Retailers'
11  Occupation Tax Act.
12  (18) Beginning with taxable years ending on or after
13  December 31, 1995 and ending with taxable years ending on or
14  before December 31, 2004, personal property that is donated
15  for disaster relief to be used in a State or federally declared
16  disaster area in Illinois or bordering Illinois by a
17  manufacturer or retailer that is registered in this State to a
18  corporation, society, association, foundation, or institution
19  that has been issued a sales tax exemption identification
20  number by the Department that assists victims of the disaster
21  who reside within the declared disaster area.
22  (19) Beginning with taxable years ending on or after
23  December 31, 1995 and ending with taxable years ending on or
24  before December 31, 2004, personal property that is used in
25  the performance of infrastructure repairs in this State,
26  including, but not limited to, municipal roads and streets,

 

 

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1  access roads, bridges, sidewalks, waste disposal systems,
2  water and sewer line extensions, water distribution and
3  purification facilities, storm water drainage and retention
4  facilities, and sewage treatment facilities, resulting from a
5  State or federally declared disaster in Illinois or bordering
6  Illinois when such repairs are initiated on facilities located
7  in the declared disaster area within 6 months after the
8  disaster.
9  (20) Beginning July 1, 1999, game or game birds sold at a
10  "game breeding and hunting preserve area" as that term is used
11  in the Wildlife Code. This paragraph is exempt from the
12  provisions of Section 3-55.
13  (21) A motor vehicle, as that term is defined in Section
14  1-146 of the Illinois Vehicle Code, that is donated to a
15  corporation, limited liability company, society, association,
16  foundation, or institution that is determined by the
17  Department to be organized and operated exclusively for
18  educational purposes. For purposes of this exemption, "a
19  corporation, limited liability company, society, association,
20  foundation, or institution organized and operated exclusively
21  for educational purposes" means all tax-supported public
22  schools, private schools that offer systematic instruction in
23  useful branches of learning by methods common to public
24  schools and that compare favorably in their scope and
25  intensity with the course of study presented in tax-supported
26  schools, and vocational or technical schools or institutes

 

 

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1  organized and operated exclusively to provide a course of
2  study of not less than 6 weeks duration and designed to prepare
3  individuals to follow a trade or to pursue a manual,
4  technical, mechanical, industrial, business, or commercial
5  occupation.
6  (22) Beginning January 1, 2000, personal property,
7  including food, purchased through fundraising events for the
8  benefit of a public or private elementary or secondary school,
9  a group of those schools, or one or more school districts if
10  the events are sponsored by an entity recognized by the school
11  district that consists primarily of volunteers and includes
12  parents and teachers of the school children. This paragraph
13  does not apply to fundraising events (i) for the benefit of
14  private home instruction or (ii) for which the fundraising
15  entity purchases the personal property sold at the events from
16  another individual or entity that sold the property for the
17  purpose of resale by the fundraising entity and that profits
18  from the sale to the fundraising entity. This paragraph is
19  exempt from the provisions of Section 3-55.
20  (23) Beginning January 1, 2000 and through December 31,
21  2001, new or used automatic vending machines that prepare and
22  serve hot food and beverages, including coffee, soup, and
23  other items, and replacement parts for these machines.
24  Beginning January 1, 2002 and through June 30, 2003, machines
25  and parts for machines used in commercial, coin-operated
26  amusement and vending business if a use or occupation tax is

 

 

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1  paid on the gross receipts derived from the use of the
2  commercial, coin-operated amusement and vending machines. This
3  paragraph is exempt from the provisions of Section 3-55.
4  (24) Beginning on August 2, 2001 (the effective date of
5  Public Act 92-227), computers and communications equipment
6  utilized for any hospital purpose and equipment used in the
7  diagnosis, analysis, or treatment of hospital patients sold to
8  a lessor who leases the equipment, under a lease of one year or
9  longer executed or in effect at the time of the purchase, to a
10  hospital that has been issued an active tax exemption
11  identification number by the Department under Section 1g of
12  the Retailers' Occupation Tax Act. This paragraph is exempt
13  from the provisions of Section 3-55.
14  (25) Beginning on August 2, 2001 (the effective date of
15  Public Act 92-227), personal property sold to a lessor who
16  leases the property, under a lease of one year or longer
17  executed or in effect at the time of the purchase, to a
18  governmental body that has been issued an active tax exemption
19  identification number by the Department under Section 1g of
20  the Retailers' Occupation Tax Act. This paragraph is exempt
21  from the provisions of Section 3-55.
22  (26) Beginning on January 1, 2002 and through June 30,
23  2016, tangible personal property purchased from an Illinois
24  retailer by a taxpayer engaged in centralized purchasing
25  activities in Illinois who will, upon receipt of the property
26  in Illinois, temporarily store the property in Illinois (i)

 

 

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1  for the purpose of subsequently transporting it outside this
2  State for use or consumption thereafter solely outside this
3  State or (ii) for the purpose of being processed, fabricated,
4  or manufactured into, attached to, or incorporated into other
5  tangible personal property to be transported outside this
6  State and thereafter used or consumed solely outside this
7  State. The Director of Revenue shall, pursuant to rules
8  adopted in accordance with the Illinois Administrative
9  Procedure Act, issue a permit to any taxpayer in good standing
10  with the Department who is eligible for the exemption under
11  this paragraph (26). The permit issued under this paragraph
12  (26) shall authorize the holder, to the extent and in the
13  manner specified in the rules adopted under this Act, to
14  purchase tangible personal property from a retailer exempt
15  from the taxes imposed by this Act. Taxpayers shall maintain
16  all necessary books and records to substantiate the use and
17  consumption of all such tangible personal property outside of
18  the State of Illinois.
19  (27) Beginning January 1, 2008, tangible personal property
20  used in the construction or maintenance of a community water
21  supply, as defined under Section 3.145 of the Environmental
22  Protection Act, that is operated by a not-for-profit
23  corporation that holds a valid water supply permit issued
24  under Title IV of the Environmental Protection Act. This
25  paragraph is exempt from the provisions of Section 3-55.
26  (28) Tangible personal property sold to a

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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1  to Medicare or Medicaid recipients when payment is made by an
2  intermediary, such as a Medicare Administrative Contractor, a
3  Managed Care Organization, or a Medicare Advantage
4  Organization, pursuant to a government contract. This
5  paragraph (36) (35) is exempt from the provisions of Section
6  3-55.
7  (37) (36) Beginning on January 1, 2026, as further defined
8  in Section 3-10, food prepared for immediate consumption and
9  transferred incident to a sale of service subject to this Act
10  or the Service Use Tax Act by an entity licensed under the
11  Hospital Licensing Act, the Nursing Home Care Act, the
12  Assisted Living and Shared Housing Act, the ID/DD Community
13  Care Act, the MC/DD Act, the Specialized Mental Health
14  Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
15  an entity that holds a permit issued pursuant to the Life Care
16  Facilities Act. This item (37) (36) is exempt from the
17  provisions of Section 3-55.
18  (38) (37) 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 (38) (37) is
24  exempt from the provisions of Section 3-55.
25  (39) (36) The lease of the following tangible personal
26  property:

 

 

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1  (1) computer software transferred subject to a license
2  that 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  (40) Tangible personal property that is (i) purchased by a
11  developer who has been awarded a certificate of exemption
12  under this paragraph (40) by the Department of Commerce and
13  Economic Opportunity and (ii) used to rehabilitate brownfield
14  or grayfield property, as defined in Section 246 of the
15  Illinois Income Tax Act, after remediation has occurred. The
16  Department of Commerce and Economic Opportunity shall award
17  certificates of exemption under this paragraph (40) for
18  property that meets the criteria under this paragraph (40).
19  This paragraph is exempt from the 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 25. 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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  SB1178 - 103 - LRB104 08564 HLH 18616 b
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

 

 

  SB1178 - 103 - LRB104 08564 HLH 18616 b


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  SB1178 - 104 - LRB104 08564 HLH 18616 b
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) Tangible personal property that is (i) purchased
18  by a developer who has been awarded a certificate of
19  exemption under this paragraph (52) by the Department of
20  Commerce and Economic Opportunity and (ii) used to
21  rehabilitate brownfield or grayfield property, as defined
22  in Section 246 of the Illinois Income Tax Act, after
23  remediation has occurred. The Department of Commerce and
24  Economic Opportunity shall award certificates of exemption
25  under this paragraph (52) for property that meets the
26  criteria under this paragraph (52). This paragraph is

 

 

  SB1178 - 104 - LRB104 08564 HLH 18616 b


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  SB1178 - 105 - LRB104 08564 HLH 18616 b
1  exempt from the provisions of Section 2-70.
2  (Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
3  102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
4  Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
5  5-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
6  5-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
7  6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; 103-592,
8  eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff. 7-1-24;
9  103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995, eff.
10  8-9-24; revised 11-26-24.)

 

 

  SB1178 - 105 - LRB104 08564 HLH 18616 b