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92_HB3289enr
HB3289 Enrolled LRB9205821SMdv
1 AN ACT concerning taxes.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Use Tax Act is amended by changing
5 Sections 3-5, 3-45 and 3-50 and adding Section 3-10.5 as
6 follows:
7 (35 ILCS 105/3-5) (from Ch. 120, par. 439.3-5)
8 Sec. 3-5. Exemptions. Use of the following tangible
9 personal property is exempt from the tax imposed by this Act:
10 (1) Personal property purchased from a corporation,
11 society, association, foundation, institution, or
12 organization, other than a limited liability company, that is
13 organized and operated as a not-for-profit service enterprise
14 for the benefit of persons 65 years of age or older if the
15 personal property was not purchased by the enterprise for the
16 purpose of resale by the enterprise.
17 (2) Personal property purchased by a not-for-profit
18 Illinois county fair association for use in conducting,
19 operating, or promoting the county fair.
20 (3) Personal property purchased by a not-for-profit arts
21 or cultural organization that establishes, by proof required
22 by the Department by rule, that it has received an exemption
23 under Section 501(c)(3) of the Internal Revenue Code and that
24 is organized and operated for the presentation or support of
25 arts or cultural programming, activities, or services. These
26 organizations include, but are not limited to, music and
27 dramatic arts organizations such as symphony orchestras and
28 theatrical groups, arts and cultural service organizations,
29 local arts councils, visual arts organizations, and media
30 arts organizations.
31 (4) Personal property purchased by a governmental body,
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1 by a corporation, society, association, foundation, or
2 institution organized and operated exclusively for
3 charitable, religious, or educational purposes, or by a
4 not-for-profit corporation, society, association, foundation,
5 institution, or organization that has no compensated officers
6 or employees and that is organized and operated primarily for
7 the recreation of persons 55 years of age or older. A limited
8 liability company may qualify for the exemption under this
9 paragraph only if the limited liability company is organized
10 and operated exclusively for educational purposes. On and
11 after July 1, 1987, however, no entity otherwise eligible for
12 this exemption shall make tax-free purchases unless it has an
13 active exemption identification number issued by the
14 Department.
15 (5) A passenger car that is a replacement vehicle to the
16 extent that the purchase price of the car is subject to the
17 Replacement Vehicle Tax.
18 (6) Graphic arts machinery and equipment, including
19 repair and replacement parts, both new and used, and
20 including that manufactured on special order, certified by
21 the purchaser to be used primarily for graphic arts
22 production, and including machinery and equipment purchased
23 for lease. Equipment includes chemicals or chemicals acting
24 as catalysts but only if the chemicals or chemicals acting as
25 catalysts effect a direct and immediate change upon a graphic
26 arts product.
27 (7) Farm chemicals.
28 (8) Legal tender, currency, medallions, or gold or
29 silver coinage issued by the State of Illinois, the
30 government of the United States of America, or the government
31 of any foreign country, and bullion.
32 (9) Personal property purchased from a teacher-sponsored
33 student organization affiliated with an elementary or
34 secondary school located in Illinois.
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1 (10) A motor vehicle of the first division, a motor
2 vehicle of the second division that is a self-contained motor
3 vehicle designed or permanently converted to provide living
4 quarters for recreational, camping, or travel use, with
5 direct walk through to the living quarters from the driver's
6 seat, or a motor vehicle of the second division that is of
7 the van configuration designed for the transportation of not
8 less than 7 nor more than 16 passengers, as defined in
9 Section 1-146 of the Illinois Vehicle Code, that is used for
10 automobile renting, as defined in the Automobile Renting
11 Occupation and Use Tax Act.
12 (11) Farm machinery and equipment, both new and used,
13 including that manufactured on special order, certified by
14 the purchaser to be used primarily for production agriculture
15 or State or federal agricultural programs, including
16 individual replacement parts for the machinery and equipment,
17 including machinery and equipment purchased for lease, and
18 including implements of husbandry defined in Section 1-130 of
19 the Illinois Vehicle Code, farm machinery and agricultural
20 chemical and fertilizer spreaders, and nurse wagons required
21 to be registered under Section 3-809 of the Illinois Vehicle
22 Code, but excluding other motor vehicles required to be
23 registered under the Illinois Vehicle Code. Horticultural
24 polyhouses or hoop houses used for propagating, growing, or
25 overwintering plants shall be considered farm machinery and
26 equipment under this item (11). Agricultural chemical tender
27 tanks and dry boxes shall include units sold separately from
28 a motor vehicle required to be licensed and units sold
29 mounted on a motor vehicle required to be licensed if the
30 selling price of the tender is separately stated.
31 Farm machinery and equipment shall include precision
32 farming equipment that is installed or purchased to be
33 installed on farm machinery and equipment including, but not
34 limited to, tractors, harvesters, sprayers, planters,
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1 seeders, or spreaders. Precision farming equipment includes,
2 but is not limited to, soil testing sensors, computers,
3 monitors, software, global positioning and mapping systems,
4 and other such equipment.
5 Farm machinery and equipment also includes computers,
6 sensors, software, and related equipment used primarily in
7 the computer-assisted operation of production agriculture
8 facilities, equipment, and activities such as, but not
9 limited to, the collection, monitoring, and correlation of
10 animal and crop data for the purpose of formulating animal
11 diets and agricultural chemicals. This item (11) is exempt
12 from the provisions of Section 3-90.
13 (12) Fuel and petroleum products sold to or used by an
14 air common carrier, certified by the carrier to be used for
15 consumption, shipment, or storage in the conduct of its
16 business as an air common carrier, for a flight destined for
17 or returning from a location or locations outside the United
18 States without regard to previous or subsequent domestic
19 stopovers.
20 (13) Proceeds of mandatory service charges separately
21 stated on customers' bills for the purchase and consumption
22 of food and beverages purchased at retail from a retailer, to
23 the extent that the proceeds of the service charge are in
24 fact turned over as tips or as a substitute for tips to the
25 employees who participate directly in preparing, serving,
26 hosting or cleaning up the food or beverage function with
27 respect to which the service charge is imposed.
28 (14) Oil field exploration, drilling, and production
29 equipment, including (i) rigs and parts of rigs, rotary rigs,
30 cable tool rigs, and workover rigs, (ii) pipe and tubular
31 goods, including casing and drill strings, (iii) pumps and
32 pump-jack units, (iv) storage tanks and flow lines, (v) any
33 individual replacement part for oil field exploration,
34 drilling, and production equipment, and (vi) machinery and
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1 equipment purchased for lease; but excluding motor vehicles
2 required to be registered under the Illinois Vehicle Code.
3 (15) Photoprocessing machinery and equipment, including
4 repair and replacement parts, both new and used, including
5 that manufactured on special order, certified by the
6 purchaser to be used primarily for photoprocessing, and
7 including photoprocessing machinery and equipment purchased
8 for lease.
9 (16) Coal exploration, mining, offhighway hauling,
10 processing, maintenance, and reclamation equipment, including
11 replacement parts and equipment, and including equipment
12 purchased for lease, but excluding motor vehicles required to
13 be registered under the Illinois Vehicle Code.
14 (17) Distillation machinery and equipment, sold as a
15 unit or kit, assembled or installed by the retailer,
16 certified by the user to be used only for the production of
17 ethyl alcohol that will be used for consumption as motor fuel
18 or as a component of motor fuel for the personal use of the
19 user, and not subject to sale or resale.
20 (18) Manufacturing and assembling machinery and
21 equipment used primarily in the process of manufacturing or
22 assembling tangible personal property for wholesale or retail
23 sale or lease, whether that sale or lease is made directly by
24 the manufacturer or by some other person, whether the
25 materials used in the process are owned by the manufacturer
26 or some other person, or whether that sale or lease is made
27 apart from or as an incident to the seller's engaging in the
28 service occupation of producing machines, tools, dies, jigs,
29 patterns, gauges, or other similar items of no commercial
30 value on special order for a particular purchaser.
31 (19) Personal property delivered to a purchaser or
32 purchaser's donee inside Illinois when the purchase order for
33 that personal property was received by a florist located
34 outside Illinois who has a florist located inside Illinois
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1 deliver the personal property.
2 (20) Semen used for artificial insemination of livestock
3 for direct agricultural production.
4 (21) Horses, or interests in horses, registered with and
5 meeting the requirements of any of the Arabian Horse Club
6 Registry of America, Appaloosa Horse Club, American Quarter
7 Horse Association, United States Trotting Association, or
8 Jockey Club, as appropriate, used for purposes of breeding or
9 racing for prizes.
10 (22) Computers and communications equipment utilized for
11 any hospital purpose and equipment used in the diagnosis,
12 analysis, or treatment of hospital patients purchased by a
13 lessor who leases the equipment, under a lease of one year or
14 longer executed or in effect at the time the lessor would
15 otherwise be subject to the tax imposed by this Act, to a
16 hospital that has been issued an active tax exemption
17 identification number by the Department under Section 1g of
18 the Retailers' Occupation Tax Act. If the equipment is
19 leased in a manner that does not qualify for this exemption
20 or is used in any other non-exempt manner, the lessor shall
21 be liable for the tax imposed under this Act or the Service
22 Use Tax Act, as the case may be, based on the fair market
23 value of the property at the time the non-qualifying use
24 occurs. No lessor shall collect or attempt to collect an
25 amount (however designated) that purports to reimburse that
26 lessor for the tax imposed by this Act or the Service Use Tax
27 Act, as the case may be, if the tax has not been paid by the
28 lessor. If a lessor improperly collects any such amount from
29 the lessee, the lessee shall have a legal right to claim a
30 refund of that amount from the lessor. If, however, that
31 amount is not refunded to the lessee for any reason, the
32 lessor is liable to pay that amount to the Department.
33 (23) Personal property purchased by a lessor who leases
34 the property, under a lease of one year or longer executed
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1 or in effect at the time the lessor would otherwise be
2 subject to the tax imposed by this Act, to a governmental
3 body that has been issued an active sales tax exemption
4 identification number by the Department under Section 1g of
5 the Retailers' Occupation Tax Act. If the property is leased
6 in a manner that does not qualify for this exemption or used
7 in any other non-exempt manner, the lessor shall be liable
8 for the tax imposed under this Act or the Service Use Tax
9 Act, as the case may be, based on the fair market value of
10 the property at the time the non-qualifying use occurs. No
11 lessor shall collect or attempt to collect an amount (however
12 designated) that purports to reimburse that lessor for the
13 tax imposed by this Act or the Service Use Tax Act, as the
14 case may be, if the tax has not been paid by the lessor. If
15 a lessor improperly collects any such amount from the lessee,
16 the lessee shall have a legal right to claim a refund of that
17 amount from the lessor. If, however, that amount is not
18 refunded to the lessee for any reason, the lessor is liable
19 to pay that amount to the Department.
20 (24) Beginning with taxable years ending on or after
21 December 31, 1995 and ending with taxable years ending on or
22 before December 31, 2004, personal property that is donated
23 for disaster relief to be used in a State or federally
24 declared disaster area in Illinois or bordering Illinois by a
25 manufacturer or retailer that is registered in this State to
26 a corporation, society, association, foundation, or
27 institution that has been issued a sales tax exemption
28 identification number by the Department that assists victims
29 of the disaster who reside within the declared disaster area.
30 (25) Beginning with taxable years ending on or after
31 December 31, 1995 and ending with taxable years ending on or
32 before December 31, 2004, personal property that is used in
33 the performance of infrastructure repairs in this State,
34 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
7 located in the declared disaster area within 6 months after
8 the disaster.
9 (26) Beginning July 1, 1999, game or game birds
10 purchased at a "game breeding and hunting preserve area" or
11 an "exotic game hunting area" as those terms are used in the
12 Wildlife Code or at a hunting enclosure approved through
13 rules adopted by the Department of Natural Resources. This
14 paragraph is exempt from the provisions of Section 3-90.
15 (27) A motor vehicle, as that term is defined in Section
16 1-146 of the Illinois Vehicle Code, that is donated to a
17 corporation, limited liability company, society, association,
18 foundation, or institution that is determined by the
19 Department to be organized and operated exclusively for
20 educational purposes. For purposes of this exemption, "a
21 corporation, limited liability company, society, association,
22 foundation, or institution organized and operated exclusively
23 for educational purposes" means all tax-supported public
24 schools, private schools that offer systematic instruction in
25 useful branches of learning by methods common to public
26 schools and that compare favorably in their scope and
27 intensity with the course of study presented in tax-supported
28 schools, and vocational or technical schools or institutes
29 organized and operated exclusively to provide a course of
30 study of not less than 6 weeks duration and designed to
31 prepare individuals to follow a trade or to pursue a manual,
32 technical, mechanical, industrial, business, or commercial
33 occupation.
34 (28) Beginning January 1, 2000, personal property,
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1 including food, purchased through fundraising events for the
2 benefit of a public or private elementary or secondary
3 school, a group of those schools, or one or more school
4 districts if the events are sponsored by an entity recognized
5 by the school district that consists primarily of volunteers
6 and includes parents and teachers of the school children.
7 This paragraph does not apply to fundraising events (i) for
8 the benefit of private home instruction or (ii) for which the
9 fundraising entity purchases the personal property sold at
10 the events from another individual or entity that sold the
11 property for the purpose of resale by the fundraising entity
12 and that profits from the sale to the fundraising entity.
13 This paragraph is exempt from the provisions of Section 3-90.
14 (29) Beginning January 1, 2000, new or used automatic
15 vending machines that prepare and serve hot food and
16 beverages, including coffee, soup, and other items, and
17 replacement parts for these machines. This paragraph is
18 exempt from the provisions of Section 3-90.
19 (30) Food for human consumption that is to be consumed
20 off the premises where it is sold (other than alcoholic
21 beverages, soft drinks, and food that has been prepared for
22 immediate consumption) and prescription and nonprescription
23 medicines, drugs, medical appliances, and insulin, urine
24 testing materials, syringes, and needles used by diabetics,
25 for human use, when purchased for use by a person receiving
26 medical assistance under Article 5 of the Illinois Public Aid
27 Code who resides in a licensed long-term care facility, as
28 defined in the Nursing Home Care Act.
29 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97;
30 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff.
31 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
32 eff. 8-20-99; 91-901, eff. 1-1-01.)
33 (35 ILCS 105/3-10.5 new)
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1 Sec. 3-10.5. Direct payment of retailers' occupation tax
2 and applicable local retailers' occupation tax by purchaser;
3 purchaser relieved of paying use tax and local retailers'
4 occupation tax reimbursement liabilities to retailer.
5 (a) A retailer who makes a retail sale of tangible
6 personal property to a purchaser who provides the retailer
7 with a copy of the purchaser's valid Direct Pay Permit issued
8 under Section 2-10.5 of the Retailers' Occupation Tax Act is
9 not required under Section 3-45 of this Act to collect the
10 tax imposed by this Act on that sale.
11 (b) A purchaser who makes a purchase from a retailer who
12 would otherwise incur retailers' occupation tax liability on
13 the transaction and who provides the retailer with a copy of
14 a valid Direct Pay Permit issued under Section 2-10.5 of the
15 Retailers' Occupation Tax Act does not incur the tax imposed
16 by this Act on the purchase. The purchaser assumes the
17 retailer's obligation to pay the retailers' occupation tax
18 directly to the Department, including all local retailers'
19 occupation tax liabilities applicable to that retail sale.
20 (c) A purchaser who makes a purchase from a retailer who
21 would not incur retailers' occupation tax liability on the
22 transaction and who provides the retailer with a copy of a
23 valid Direct Pay Permit issued under Section 2-10.5 of the
24 Retailers' Occupation Tax Act incurs the tax imposed by this
25 Act on the purchase. If, on any transaction, the retailer is
26 entitled under this Act to a discount for collecting and
27 remitting the tax imposed under this Act to the Department,
28 the right to the discount provided in Section 9 of this Act
29 shall be transferred to the Permit holder. If the retailer
30 would not be entitled to a discount as provided in Section 9
31 of this Act, then the Permit holder is not entitled to a
32 discount.
33 (35 ILCS 105/3-45) (from Ch. 120, par. 439.3-45)
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1 Sec. 3-45. Collection. The tax imposed by this Act
2 shall be collected from the purchaser by a retailer
3 maintaining a place of business in this State or a retailer
4 authorized by the Department under Section 6 of this Act, and
5 shall be remitted to the Department as provided in Section 9
6 of this Act, except as provided in Section 3-10.5 of this
7 Act.
8 The tax imposed by this Act that is not paid to a
9 retailer under this Section shall be paid to the Department
10 directly by any person using the property within this State
11 as provided in Section 10 of this Act.
12 Retailers shall collect the tax from users by adding the
13 tax to the selling price of tangible personal property, when
14 sold for use, in the manner prescribed by the Department.
15 The Department may adopt and promulgate reasonable rules and
16 regulations for the adding of the tax by retailers to selling
17 prices by prescribing bracket systems for the purpose of
18 enabling the retailers to add and collect, as far as
19 practicable, the amount of the tax.
20 If a seller collects use tax measured by receipts that
21 are not subject to use tax, or if a seller, in collecting use
22 tax measured by receipts that are subject to tax under this
23 Act, collects more from the purchaser than the required
24 amount of the use tax on the transaction, the purchaser shall
25 have a legal right to claim a refund of that amount from the
26 seller. If, however, that amount is not refunded to the
27 purchaser for any reason, the seller is liable to pay that
28 amount to the Department. This paragraph does not apply to
29 an amount collected by the seller as use tax on receipts that
30 are subject to tax under this Act as long as the collection
31 is made in compliance with the tax collection brackets
32 prescribed by the Department in its rules and regulations.
33 (Source: P.A. 91-51, eff. 6-30-99.)
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1 (35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
2 Sec. 3-50. Manufacturing and assembly exemption. The
3 manufacturing and assembling machinery and equipment
4 exemption includes machinery and equipment that replaces
5 machinery and equipment in an existing manufacturing facility
6 as well as machinery and equipment that are for use in an
7 expanded or new manufacturing facility. The machinery and
8 equipment exemption also includes machinery and equipment
9 used in the general maintenance or repair of exempt machinery
10 and equipment or for in-house manufacture of exempt machinery
11 and equipment. For the purposes of this exemption, terms have
12 the following meanings:
13 (1) "Manufacturing process" means the production of
14 an article of tangible personal property, whether the
15 article is a finished product or an article for use in
16 the process of manufacturing or assembling a different
17 article of tangible personal property, by a procedure
18 commonly regarded as manufacturing, processing,
19 fabricating, or refining that changes some existing
20 material into a material with a different form, use, or
21 name. In relation to a recognized integrated business
22 composed of a series of operations that collectively
23 constitute manufacturing, or individually constitute
24 manufacturing operations, the manufacturing process
25 commences with the first operation or stage of production
26 in the series and does not end until the completion of
27 the final product in the last operation or stage of
28 production in the series. For purposes of this
29 exemption, photoprocessing is a manufacturing process of
30 tangible personal property for wholesale or retail sale.
31 (2) "Assembling process" means the production of an
32 article of tangible personal property, whether the
33 article is a finished product or an article for use in
34 the process of manufacturing or assembling a different
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1 article of tangible personal property, by the combination
2 of existing materials in a manner commonly regarded as
3 assembling that results in an article or material of a
4 different form, use, or name.
5 (3) "Machinery" means major mechanical machines or
6 major components of those machines contributing to a
7 manufacturing or assembling process.
8 (4) "Equipment" includes an independent device or
9 tool separate from machinery but essential to an
10 integrated manufacturing or assembly process; including
11 computers used primarily in a manufacturer's operating
12 exempt machinery and equipment in a computer assisted
13 design, computer assisted manufacturing (CAD/CAM) system;
14 any subunit or assembly comprising a component of any
15 machinery or auxiliary, adjunct, or attachment parts of
16 machinery, such as tools, dies, jigs, fixtures, patterns,
17 and molds; and any parts that require periodic
18 replacement in the course of normal operation; but does
19 not include hand tools. Equipment includes chemicals or
20 chemicals acting as catalysts but only if the chemicals
21 or chemicals acting as catalysts effect a direct and
22 immediate change upon a product being manufactured or
23 assembled for wholesale or retail sale or lease.
24 The manufacturing and assembling machinery and equipment
25 exemption includes the sale of materials to a purchaser who
26 produces exempted types of machinery, equipment, or tools and
27 who rents or leases that machinery, equipment, or tools to a
28 manufacturer of tangible personal property. This exemption
29 also includes the sale of materials to a purchaser who
30 manufactures those materials into an exempted type of
31 machinery, equipment, or tools that the purchaser uses
32 himself or herself in the manufacturing of tangible personal
33 property. This exemption includes the sale of exempted types
34 of machinery or equipment to a purchaser who is not the
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1 manufacturer, but who rents or leases the use of the property
2 to a manufacturer. The purchaser of the machinery and
3 equipment who has an active resale registration number shall
4 furnish that number to the seller at the time of purchase. A
5 user of the machinery, equipment, or tools without an active
6 resale registration number shall prepare a certificate of
7 exemption for each transaction stating facts establishing the
8 exemption for that transaction, and that certificate shall be
9 available to the Department for inspection or audit. The
10 Department shall prescribe the form of the certificate.
11 Informal rulings, opinions, or letters issued by the
12 Department in response to an inquiry or request for an
13 opinion from any person regarding the coverage and
14 applicability of this exemption to specific devices shall be
15 published, maintained as a public record, and made available
16 for public inspection and copying. If the informal ruling,
17 opinion, or letter contains trade secrets or other
18 confidential information, where possible, the Department
19 shall delete that information before publication. Whenever
20 informal rulings, opinions, or letters contain a policy of
21 general applicability, the Department shall formulate and
22 adopt that policy as a rule in accordance with the Illinois
23 Administrative Procedure Act.
24 (Source: P.A. 91-51, eff. 6-30-99.)
25 Section 10. The Service Use Tax Act is amended by
26 changing Sections 2 and 3-5 as follows:
27 (35 ILCS 110/2) (from Ch. 120, par. 439.32)
28 Sec. 2. "Use" means the exercise by any person of any
29 right or power over tangible personal property incident to
30 the ownership of that property, but does not include the sale
31 or use for demonstration by him of that property in any form
32 as tangible personal property in the regular course of
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1 business. "Use" does not mean the interim use of tangible
2 personal property nor the physical incorporation of tangible
3 personal property, as an ingredient or constituent, into
4 other tangible personal property, (a) which is sold in the
5 regular course of business or (b) which the person
6 incorporating such ingredient or constituent therein has
7 undertaken at the time of such purchase to cause to be
8 transported in interstate commerce to destinations outside
9 the State of Illinois.
10 "Purchased from a serviceman" means the acquisition of
11 the ownership of, or title to, tangible personal property
12 through a sale of service.
13 "Purchaser" means any person who, through a sale of
14 service, acquires the ownership of, or title to, any tangible
15 personal property.
16 "Cost price" means the consideration paid by the
17 serviceman for a purchase valued in money, whether paid in
18 money or otherwise, including cash, credits and services, and
19 shall be determined without any deduction on account of the
20 supplier's cost of the property sold or on account of any
21 other expense incurred by the supplier. When a serviceman
22 contracts out part or all of the services required in his
23 sale of service, it shall be presumed that the cost price to
24 the serviceman of the property transferred to him or her by
25 his or her subcontractor is equal to 50% of the
26 subcontractor's charges to the serviceman in the absence of
27 proof of the consideration paid by the subcontractor for the
28 purchase of such property.
29 "Selling price" means the consideration for a sale valued
30 in money whether received in money or otherwise, including
31 cash, credits and service, and shall be determined without
32 any deduction on account of the serviceman's cost of the
33 property sold, the cost of materials used, labor or service
34 cost or any other expense whatsoever, but does not include
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1 interest or finance charges which appear as separate items on
2 the bill of sale or sales contract nor charges that are added
3 to prices by sellers on account of the seller's duty to
4 collect, from the purchaser, the tax that is imposed by this
5 Act.
6 "Department" means the Department of Revenue.
7 "Person" means any natural individual, firm, partnership,
8 association, joint stock company, joint venture, public or
9 private corporation, limited liability company, and any
10 receiver, executor, trustee, guardian or other representative
11 appointed by order of any court.
12 "Sale of service" means any transaction except:
13 (1) a retail sale of tangible personal property
14 taxable under the Retailers' Occupation Tax Act or under
15 the Use Tax Act.
16 (2) a sale of tangible personal property for the
17 purpose of resale made in compliance with Section 2c of
18 the Retailers' Occupation Tax Act.
19 (3) except as hereinafter provided, a sale or
20 transfer of tangible personal property as an incident to
21 the rendering of service for or by any governmental body,
22 or for or by any corporation, society, association,
23 foundation or institution organized and operated
24 exclusively for charitable, religious or educational
25 purposes or any not-for-profit corporation, society,
26 association, foundation, institution or organization
27 which has no compensated officers or employees and which
28 is organized and operated primarily for the recreation of
29 persons 55 years of age or older. A limited liability
30 company may qualify for the exemption under this
31 paragraph only if the limited liability company is
32 organized and operated exclusively for educational
33 purposes.
34 (4) a sale or transfer of tangible personal
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1 property as an incident to the rendering of service for
2 interstate carriers for hire for use as rolling stock
3 moving in interstate commerce or by lessors under a lease
4 of one year or longer, executed or in effect at the time
5 of purchase of personal property, to interstate carriers
6 for hire for use as rolling stock moving in interstate
7 commerce so long as so used by such interstate carriers
8 for hire, and equipment operated by a telecommunications
9 provider, licensed as a common carrier by the Federal
10 Communications Commission, which is permanently installed
11 in or affixed to aircraft moving in interstate commerce.
12 (4a) a sale or transfer of tangible personal
13 property as an incident to the rendering of service for
14 owners, lessors, or shippers of tangible personal
15 property which is utilized by interstate carriers for
16 hire for use as rolling stock moving in interstate
17 commerce so long as so used by interstate carriers for
18 hire, and equipment operated by a telecommunications
19 provider, licensed as a common carrier by the Federal
20 Communications Commission, which is permanently installed
21 in or affixed to aircraft moving in interstate commerce.
22 (5) a sale or transfer of machinery and equipment
23 used primarily in the process of the manufacturing or
24 assembling, either in an existing, an expanded or a new
25 manufacturing facility, of tangible personal property for
26 wholesale or retail sale or lease, whether such sale or
27 lease is made directly by the manufacturer or by some
28 other person, whether the materials used in the process
29 are owned by the manufacturer or some other person, or
30 whether such sale or lease is made apart from or as an
31 incident to the seller's engaging in a service occupation
32 and the applicable tax is a Service Use Tax or Service
33 Occupation Tax, rather than Use Tax or Retailers'
34 Occupation Tax.
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1 (5a) the repairing, reconditioning or remodeling,
2 for a common carrier by rail, of tangible personal
3 property which belongs to such carrier for hire, and as
4 to which such carrier receives the physical possession of
5 the repaired, reconditioned or remodeled item of tangible
6 personal property in Illinois, and which such carrier
7 transports, or shares with another common carrier in the
8 transportation of such property, out of Illinois on a
9 standard uniform bill of lading showing the person who
10 repaired, reconditioned or remodeled the property to a
11 destination outside Illinois, for use outside Illinois.
12 (5b) a sale or transfer of tangible personal
13 property which is produced by the seller thereof on
14 special order in such a way as to have made the
15 applicable tax the Service Occupation Tax or the Service
16 Use Tax, rather than the Retailers' Occupation Tax or the
17 Use Tax, for an interstate carrier by rail which receives
18 the physical possession of such property in Illinois, and
19 which transports such property, or shares with another
20 common carrier in the transportation of such property,
21 out of Illinois on a standard uniform bill of lading
22 showing the seller of the property as the shipper or
23 consignor of such property to a destination outside
24 Illinois, for use outside Illinois.
25 (6) a sale or transfer of distillation machinery
26 and equipment, sold as a unit or kit and assembled or
27 installed by the retailer, which machinery and equipment
28 is certified by the user to be used only for the
29 production of ethyl alcohol that will be used for
30 consumption as motor fuel or as a component of motor fuel
31 for the personal use of such user and not subject to sale
32 or resale.
33 (7) at the election of any serviceman not required
34 to be otherwise registered as a retailer under Section 2a
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1 of the Retailers' Occupation Tax Act, made for each
2 fiscal year sales of service in which the aggregate
3 annual cost price of tangible personal property
4 transferred as an incident to the sales of service is
5 less than 35%, or 75% in the case of servicemen
6 transferring prescription drugs or servicemen engaged in
7 graphic arts production, of the aggregate annual total
8 gross receipts from all sales of service. The purchase of
9 such tangible personal property by the serviceman shall
10 be subject to tax under the Retailers' Occupation Tax Act
11 and the Use Tax Act. However, if a primary serviceman
12 who has made the election described in this paragraph
13 subcontracts service work to a secondary serviceman who
14 has also made the election described in this paragraph,
15 the primary serviceman does not incur a Use Tax liability
16 if the secondary serviceman (i) has paid or will pay Use
17 Tax on his or her cost price of any tangible personal
18 property transferred to the primary serviceman and (ii)
19 certifies that fact in writing to the primary serviceman.
20 Tangible personal property transferred incident to the
21 completion of a maintenance agreement is exempt from the tax
22 imposed pursuant to this Act.
23 Exemption (5) also includes machinery and equipment used
24 in the general maintenance or repair of such exempt machinery
25 and equipment or for in-house manufacture of exempt machinery
26 and equipment. For the purposes of exemption (5), each of
27 these terms shall have the following meanings: (1)
28 "manufacturing process" shall mean the production of any
29 article of tangible personal property, whether such article
30 is a finished product or an article for use in the process of
31 manufacturing or assembling a different article of tangible
32 personal property, by procedures commonly regarded as
33 manufacturing, processing, fabricating, or refining which
34 changes some existing material or materials into a material
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1 with a different form, use or name. In relation to a
2 recognized integrated business composed of a series of
3 operations which collectively constitute manufacturing, or
4 individually constitute manufacturing operations, the
5 manufacturing process shall be deemed to commence with the
6 first operation or stage of production in the series, and
7 shall not be deemed to end until the completion of the final
8 product in the last operation or stage of production in the
9 series; and further, for purposes of exemption (5),
10 photoprocessing is deemed to be a manufacturing process of
11 tangible personal property for wholesale or retail sale; (2)
12 "assembling process" shall mean the production of any article
13 of tangible personal property, whether such article is a
14 finished product or an article for use in the process of
15 manufacturing or assembling a different article of tangible
16 personal property, by the combination of existing materials
17 in a manner commonly regarded as assembling which results in
18 a material of a different form, use or name; (3) "machinery"
19 shall mean major mechanical machines or major components of
20 such machines contributing to a manufacturing or assembling
21 process; and (4) "equipment" shall include any independent
22 device or tool separate from any machinery but essential to
23 an integrated manufacturing or assembly process; including
24 computers used primarily in a manufacturer's operating exempt
25 machinery and equipment in a computer assisted design,
26 computer assisted manufacturing (CAD/CAM) system; or any
27 subunit or assembly comprising a component of any machinery
28 or auxiliary, adjunct or attachment parts of machinery, such
29 as tools, dies, jigs, fixtures, patterns and molds; or any
30 parts which require periodic replacement in the course of
31 normal operation; but shall not include hand tools. Equipment
32 includes chemicals or chemicals acting as catalysts but only
33 if the chemicals or chemicals acting as catalysts effect a
34 direct and immediate change upon a product being manufactured
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1 or assembled for wholesale or retail sale or lease. The
2 purchaser of such machinery and equipment who has an active
3 resale registration number shall furnish such number to the
4 seller at the time of purchase. The user of such machinery
5 and equipment and tools without an active resale registration
6 number shall prepare a certificate of exemption for each
7 transaction stating facts establishing the exemption for that
8 transaction, which certificate shall be available to the
9 Department for inspection or audit. The Department shall
10 prescribe the form of the certificate.
11 Any informal rulings, opinions or letters issued by the
12 Department in response to an inquiry or request for any
13 opinion from any person regarding the coverage and
14 applicability of exemption (5) to specific devices shall be
15 published, maintained as a public record, and made available
16 for public inspection and copying. If the informal ruling,
17 opinion or letter contains trade secrets or other
18 confidential information, where possible the Department shall
19 delete such information prior to publication. Whenever such
20 informal rulings, opinions, or letters contain any policy of
21 general applicability, the Department shall formulate and
22 adopt such policy as a rule in accordance with the provisions
23 of the Illinois Administrative Procedure Act.
24 On and after July 1, 1987, no entity otherwise eligible
25 under exemption (3) of this Section shall make tax free
26 purchases unless it has an active exemption identification
27 number issued by the Department.
28 The purchase, employment and transfer of such tangible
29 personal property as newsprint and ink for the primary
30 purpose of conveying news (with or without other information)
31 is not a purchase, use or sale of service or of tangible
32 personal property within the meaning of this Act.
33 "Serviceman" means any person who is engaged in the
34 occupation of making sales of service.
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1 "Sale at retail" means "sale at retail" as defined in the
2 Retailers' Occupation Tax Act.
3 "Supplier" means any person who makes sales of tangible
4 personal property to servicemen for the purpose of resale as
5 an incident to a sale of service.
6 "Serviceman maintaining a place of business in this
7 State", or any like term, means and includes any serviceman:
8 1. having or maintaining within this State,
9 directly or by a subsidiary, an office, distribution
10 house, sales house, warehouse or other place of business,
11 or any agent or other representative operating within
12 this State under the authority of the serviceman or its
13 subsidiary, irrespective of whether such place of
14 business or agent or other representative is located here
15 permanently or temporarily, or whether such serviceman or
16 subsidiary is licensed to do business in this State;
17 2. soliciting orders for tangible personal property
18 by means of a telecommunication or television shopping
19 system (which utilizes toll free numbers) which is
20 intended by the retailer to be broadcast by cable
21 television or other means of broadcasting, to consumers
22 located in this State;
23 3. pursuant to a contract with a broadcaster or
24 publisher located in this State, soliciting orders for
25 tangible personal property by means of advertising which
26 is disseminated primarily to consumers located in this
27 State and only secondarily to bordering jurisdictions;
28 4. soliciting orders for tangible personal property
29 by mail if the solicitations are substantial and
30 recurring and if the retailer benefits from any banking,
31 financing, debt collection, telecommunication, or
32 marketing activities occurring in this State or benefits
33 from the location in this State of authorized
34 installation, servicing, or repair facilities;
HB3289 Enrolled -23- LRB9205821SMdv
1 5. being owned or controlled by the same interests
2 which own or control any retailer engaging in business in
3 the same or similar line of business in this State;
4 6. having a franchisee or licensee operating under
5 its trade name if the franchisee or licensee is required
6 to collect the tax under this Section;
7 7. pursuant to a contract with a cable television
8 operator located in this State, soliciting orders for
9 tangible personal property by means of advertising which
10 is transmitted or distributed over a cable television
11 system in this State; or
12 8. engaging in activities in Illinois, which
13 activities in the state in which the supply business
14 engaging in such activities is located would constitute
15 maintaining a place of business in that state.
16 (Source: P.A. 91-51, eff. 6-30-99.)
17 (35 ILCS 110/3-5) (from Ch. 120, par. 439.33-5)
18 Sec. 3-5. Exemptions. Use of the following tangible
19 personal property is exempt from the tax imposed by this Act:
20 (1) Personal property purchased from a corporation,
21 society, association, foundation, institution, or
22 organization, other than a limited liability company, that is
23 organized and operated as a not-for-profit service enterprise
24 for the benefit of persons 65 years of age or older if the
25 personal property was not purchased by the enterprise for the
26 purpose of resale by the enterprise.
27 (2) Personal property purchased by a non-profit Illinois
28 county fair association for use in conducting, operating, or
29 promoting the county fair.
30 (3) Personal property purchased by a not-for-profit arts
31 or cultural organization that establishes, by proof required
32 by the Department by rule, that it has received an exemption
33 under Section 501(c)(3) of the Internal Revenue Code and that
HB3289 Enrolled -24- LRB9205821SMdv
1 is organized and operated for the presentation or support of
2 arts or cultural programming, activities, or services. These
3 organizations include, but are not limited to, music and
4 dramatic arts organizations such as symphony orchestras and
5 theatrical groups, arts and cultural service organizations,
6 local arts councils, visual arts organizations, and media
7 arts organizations.
8 (4) Legal tender, currency, medallions, or gold or
9 silver coinage issued by the State of Illinois, the
10 government of the United States of America, or the government
11 of any foreign country, and bullion.
12 (5) Graphic arts machinery and equipment, including
13 repair and replacement parts, both new and used, and
14 including that manufactured on special order or purchased for
15 lease, certified by the purchaser to be used primarily for
16 graphic arts production. Equipment includes chemicals or
17 chemicals acting as catalysts but only if the chemicals or
18 chemicals acting as catalysts effect a direct and immediate
19 change upon a graphic arts product.
20 (6) Personal property purchased from a teacher-sponsored
21 student organization affiliated with an elementary or
22 secondary school located in Illinois.
23 (7) Farm machinery and equipment, both new and used,
24 including that manufactured on special order, certified by
25 the purchaser to be used primarily for production agriculture
26 or State or federal agricultural programs, including
27 individual replacement parts for the machinery and equipment,
28 including machinery and equipment purchased for lease, and
29 including implements of husbandry defined in Section 1-130 of
30 the Illinois Vehicle Code, farm machinery and agricultural
31 chemical and fertilizer spreaders, and nurse wagons required
32 to be registered under Section 3-809 of the Illinois Vehicle
33 Code, but excluding other motor vehicles required to be
34 registered under the Illinois Vehicle Code. Horticultural
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1 polyhouses or hoop houses used for propagating, growing, or
2 overwintering plants shall be considered farm machinery and
3 equipment under this item (7). Agricultural chemical tender
4 tanks and dry boxes shall include units sold separately from
5 a motor vehicle required to be licensed and units sold
6 mounted on a motor vehicle required to be licensed if the
7 selling price of the tender is separately stated.
8 Farm machinery and equipment shall include precision
9 farming equipment that is installed or purchased to be
10 installed on farm machinery and equipment including, but not
11 limited to, tractors, harvesters, sprayers, planters,
12 seeders, or spreaders. Precision farming equipment includes,
13 but is not limited to, soil testing sensors, computers,
14 monitors, software, global positioning and mapping systems,
15 and other such equipment.
16 Farm machinery and equipment also includes computers,
17 sensors, software, and related equipment used primarily in
18 the computer-assisted operation of production agriculture
19 facilities, equipment, and activities such as, but not
20 limited to, the collection, monitoring, and correlation of
21 animal and crop data for the purpose of formulating animal
22 diets and agricultural chemicals. This item (7) is exempt
23 from the provisions of Section 3-75.
24 (8) Fuel and petroleum products sold to or used by an
25 air common carrier, certified by the carrier to be used for
26 consumption, shipment, or storage in the conduct of its
27 business as an air common carrier, for a flight destined for
28 or returning from a location or locations outside the United
29 States without regard to previous or subsequent domestic
30 stopovers.
31 (9) Proceeds of mandatory service charges separately
32 stated on customers' bills for the purchase and consumption
33 of food and beverages acquired as an incident to the purchase
34 of a service from a serviceman, to the extent that the
HB3289 Enrolled -26- LRB9205821SMdv
1 proceeds of the service charge are in fact turned over as
2 tips or as a substitute for tips to the employees who
3 participate directly in preparing, serving, hosting or
4 cleaning up the food or beverage function with respect to
5 which the service charge is imposed.
6 (10) Oil field exploration, drilling, and production
7 equipment, including (i) rigs and parts of rigs, rotary rigs,
8 cable tool rigs, and workover rigs, (ii) pipe and tubular
9 goods, including casing and drill strings, (iii) pumps and
10 pump-jack units, (iv) storage tanks and flow lines, (v) any
11 individual replacement part for oil field exploration,
12 drilling, and production equipment, and (vi) machinery and
13 equipment purchased for lease; but excluding motor vehicles
14 required to be registered under the Illinois Vehicle Code.
15 (11) Proceeds from the sale of photoprocessing machinery
16 and equipment, including repair and replacement parts, both
17 new and used, including that manufactured on special order,
18 certified by the purchaser to be used primarily for
19 photoprocessing, and including photoprocessing machinery and
20 equipment purchased for lease.
21 (12) Coal exploration, mining, offhighway hauling,
22 processing, maintenance, and reclamation equipment, including
23 replacement parts and equipment, and including equipment
24 purchased for lease, but excluding motor vehicles required to
25 be registered under the Illinois Vehicle Code.
26 (13) Semen used for artificial insemination of livestock
27 for direct agricultural production.
28 (14) Horses, or interests in horses, registered with and
29 meeting the requirements of any of the Arabian Horse Club
30 Registry of America, Appaloosa Horse Club, American Quarter
31 Horse Association, United States Trotting Association, or
32 Jockey Club, as appropriate, used for purposes of breeding or
33 racing for prizes.
34 (15) Computers and communications equipment utilized for
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1 any hospital purpose and equipment used in the diagnosis,
2 analysis, or treatment of hospital patients purchased by a
3 lessor who leases the equipment, under a lease of one year or
4 longer executed or in effect at the time the lessor would
5 otherwise be subject to the tax imposed by this Act, to a
6 hospital that has been issued an active tax exemption
7 identification number by the Department under Section 1g of
8 the Retailers' Occupation Tax Act. If the equipment is leased
9 in a manner that does not qualify for this exemption or is
10 used in any other non-exempt manner, the lessor shall be
11 liable for the tax imposed under this Act or the Use Tax Act,
12 as the case may be, based on the fair market value of the
13 property at the time the non-qualifying use occurs. No
14 lessor shall collect or attempt to collect an amount (however
15 designated) that purports to reimburse that lessor for the
16 tax imposed by this Act or the Use Tax Act, as the case may
17 be, if the tax has not been paid by the lessor. If a lessor
18 improperly collects any such amount from the lessee, the
19 lessee shall have a legal right to claim a refund of that
20 amount from the lessor. If, however, that amount is not
21 refunded to the lessee for any reason, the lessor is liable
22 to pay that amount to the Department.
23 (16) Personal property purchased by a lessor who leases
24 the property, under a lease of one year or longer executed or
25 in effect at the time the lessor would otherwise be subject
26 to the tax imposed by this Act, to a governmental body that
27 has been issued an active tax exemption identification number
28 by the Department under Section 1g of the Retailers'
29 Occupation Tax Act. If the property is leased in a manner
30 that does not qualify for this exemption or is used in any
31 other non-exempt manner, the lessor shall be liable for the
32 tax imposed under this Act or the Use Tax Act, as the case
33 may be, based on the fair market value of the property at the
34 time the non-qualifying use occurs. No lessor shall collect
HB3289 Enrolled -28- LRB9205821SMdv
1 or attempt to collect an amount (however designated) that
2 purports to reimburse that lessor for the tax imposed by this
3 Act or the Use Tax Act, as the case may be, if the tax has
4 not been paid by the lessor. If a lessor improperly collects
5 any such amount from the lessee, the lessee shall have a
6 legal right to claim a refund of that amount from the lessor.
7 If, however, that amount is not refunded to the lessee for
8 any reason, the lessor is liable to pay that amount to the
9 Department.
10 (17) Beginning with taxable years ending on or after
11 December 31, 1995 and ending with taxable years ending on or
12 before December 31, 2004, personal property that is donated
13 for disaster relief to be used in a State or federally
14 declared disaster area in Illinois or bordering Illinois by a
15 manufacturer or retailer that is registered in this State to
16 a corporation, society, association, foundation, or
17 institution that has been issued a sales tax exemption
18 identification number by the Department that assists victims
19 of the disaster who reside within the declared disaster area.
20 (18) Beginning with taxable years ending on or after
21 December 31, 1995 and ending with taxable years ending on or
22 before December 31, 2004, personal property that is used in
23 the performance of infrastructure repairs in this State,
24 including but not limited to municipal roads and streets,
25 access roads, bridges, sidewalks, waste disposal systems,
26 water and sewer line extensions, water distribution and
27 purification facilities, storm water drainage and retention
28 facilities, and sewage treatment facilities, resulting from a
29 State or federally declared disaster in Illinois or bordering
30 Illinois when such repairs are initiated on facilities
31 located in the declared disaster area within 6 months after
32 the disaster.
33 (19) Beginning July 1, 1999, game or game birds
34 purchased at a "game breeding and hunting preserve area" or
HB3289 Enrolled -29- LRB9205821SMdv
1 an "exotic game hunting area" as those terms are used in the
2 Wildlife Code or at a hunting enclosure approved through
3 rules adopted by the Department of Natural Resources. This
4 paragraph is exempt from the provisions of Section 3-75.
5 (20) (19) A motor vehicle, as that term is defined in
6 Section 1-146 of the Illinois Vehicle Code, that is donated
7 to a corporation, limited liability company, society,
8 association, foundation, or institution that is determined by
9 the Department to be organized and operated exclusively for
10 educational purposes. For purposes of this exemption, "a
11 corporation, limited liability company, society, association,
12 foundation, or institution organized and operated exclusively
13 for educational purposes" means all tax-supported public
14 schools, private schools that offer systematic instruction in
15 useful branches of learning by methods common to public
16 schools and that compare favorably in their scope and
17 intensity with the course of study presented in tax-supported
18 schools, and vocational or technical schools or institutes
19 organized and operated exclusively to provide a course of
20 study of not less than 6 weeks duration and designed to
21 prepare individuals to follow a trade or to pursue a manual,
22 technical, mechanical, industrial, business, or commercial
23 occupation.
24 (21) (20) Beginning January 1, 2000, personal property,
25 including food, purchased through fundraising events for the
26 benefit of a public or private elementary or secondary
27 school, a group of those schools, or one or more school
28 districts if the events are sponsored by an entity recognized
29 by the school district that consists primarily of volunteers
30 and includes parents and teachers of the school children.
31 This paragraph does not apply to fundraising events (i) for
32 the benefit of private home instruction or (ii) for which the
33 fundraising entity purchases the personal property sold at
34 the events from another individual or entity that sold the
HB3289 Enrolled -30- LRB9205821SMdv
1 property for the purpose of resale by the fundraising entity
2 and that profits from the sale to the fundraising entity.
3 This paragraph is exempt from the provisions of Section 3-75.
4 (22) (19) Beginning January 1, 2000, new or used
5 automatic vending machines that prepare and serve hot food
6 and beverages, including coffee, soup, and other items, and
7 replacement parts for these machines. This paragraph is
8 exempt from the provisions of Section 3-75.
9 (23) Food for human consumption that is to be consumed
10 off the premises where it is sold (other than alcoholic
11 beverages, soft drinks, and food that has been prepared for
12 immediate consumption) and prescription and nonprescription
13 medicines, drugs, medical appliances, and insulin, urine
14 testing materials, syringes, and needles used by diabetics,
15 for human use, when purchased for use by a person receiving
16 medical assistance under Article 5 of the Illinois Public Aid
17 Code who resides in a licensed long-term care facility, as
18 defined in the Nursing Home Care Act.
19 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97;
20 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff.
21 7-20-99; 91-439, eff. 8-6-99; 91-637, eff. 8-20-99; 91-644,
22 eff. 8-20-99; revised 9-29-99.)
23 Section 12. The Service Occupation Tax Act is amended by
24 changing Sections 2 and 3-5 as follows:
25 (35 ILCS 115/2) (from Ch. 120, par. 439.102)
26 Sec. 2. "Transfer" means any transfer of the title to
27 property or of the ownership of property whether or not the
28 transferor retains title as security for the payment of
29 amounts due him from the transferee.
30 "Cost Price" means the consideration paid by the
31 serviceman for a purchase valued in money, whether paid in
32 money or otherwise, including cash, credits and services, and
HB3289 Enrolled -31- LRB9205821SMdv
1 shall be determined without any deduction on account of the
2 supplier's cost of the property sold or on account of any
3 other expense incurred by the supplier. When a serviceman
4 contracts out part or all of the services required in his
5 sale of service, it shall be presumed that the cost price to
6 the serviceman of the property transferred to him by his or
7 her subcontractor is equal to 50% of the subcontractor's
8 charges to the serviceman in the absence of proof of the
9 consideration paid by the subcontractor for the purchase of
10 such property.
11 "Department" means the Department of Revenue.
12 "Person" means any natural individual, firm, partnership,
13 association, joint stock company, joint venture, public or
14 private corporation, limited liability company, and any
15 receiver, executor, trustee, guardian or other representative
16 appointed by order of any court.
17 "Sale of Service" means any transaction except:
18 (a) A retail sale of tangible personal property taxable
19 under the Retailers' Occupation Tax Act or under the Use Tax
20 Act.
21 (b) A sale of tangible personal property for the purpose
22 of resale made in compliance with Section 2c of the
23 Retailers' Occupation Tax Act.
24 (c) Except as hereinafter provided, a sale or transfer
25 of tangible personal property as an incident to the rendering
26 of service for or by any governmental body or for or by any
27 corporation, society, association, foundation or institution
28 organized and operated exclusively for charitable, religious
29 or educational purposes or any not-for-profit corporation,
30 society, association, foundation, institution or organization
31 which has no compensated officers or employees and which is
32 organized and operated primarily for the recreation of
33 persons 55 years of age or older. A limited liability company
34 may qualify for the exemption under this paragraph only if
HB3289 Enrolled -32- LRB9205821SMdv
1 the limited liability company is organized and operated
2 exclusively for educational purposes.
3 (d) A sale or transfer of tangible personal property as
4 an incident to the rendering of service for interstate
5 carriers for hire for use as rolling stock moving in
6 interstate commerce or lessors under leases of one year or
7 longer, executed or in effect at the time of purchase, to
8 interstate carriers for hire for use as rolling stock moving
9 in interstate commerce, and equipment operated by a
10 telecommunications provider, licensed as a common carrier by
11 the Federal Communications Commission, which is permanently
12 installed in or affixed to aircraft moving in interstate
13 commerce.
14 (d-1) A sale or transfer of tangible personal property
15 as an incident to the rendering of service for owners,
16 lessors or shippers of tangible personal property which is
17 utilized by interstate carriers for hire for use as rolling
18 stock moving in interstate commerce, and equipment operated
19 by a telecommunications provider, licensed as a common
20 carrier by the Federal Communications Commission, which is
21 permanently installed in or affixed to aircraft moving in
22 interstate commerce.
23 (d-2) The repairing, reconditioning or remodeling, for a
24 common carrier by rail, of tangible personal property which
25 belongs to such carrier for hire, and as to which such
26 carrier receives the physical possession of the repaired,
27 reconditioned or remodeled item of tangible personal property
28 in Illinois, and which such carrier transports, or shares
29 with another common carrier in the transportation of such
30 property, out of Illinois on a standard uniform bill of
31 lading showing the person who repaired, reconditioned or
32 remodeled the property as the shipper or consignor of such
33 property to a destination outside Illinois, for use outside
34 Illinois.
HB3289 Enrolled -33- LRB9205821SMdv
1 (d-3) A sale or transfer of tangible personal property
2 which is produced by the seller thereof on special order in
3 such a way as to have made the applicable tax the Service
4 Occupation Tax or the Service Use Tax, rather than the
5 Retailers' Occupation Tax or the Use Tax, for an interstate
6 carrier by rail which receives the physical possession of
7 such property in Illinois, and which transports such
8 property, or shares with another common carrier in the
9 transportation of such property, out of Illinois on a
10 standard uniform bill of lading showing the seller of the
11 property as the shipper or consignor of such property to a
12 destination outside Illinois, for use outside Illinois.
13 (d-4) Until January 1, 1997, a sale, by a registered
14 serviceman paying tax under this Act to the Department, of
15 special order printed materials delivered outside Illinois
16 and which are not returned to this State, if delivery is made
17 by the seller or agent of the seller, including an agent who
18 causes the product to be delivered outside Illinois by a
19 common carrier or the U.S. postal service.
20 (e) A sale or transfer of machinery and equipment used
21 primarily in the process of the manufacturing or assembling,
22 either in an existing, an expanded or a new manufacturing
23 facility, of tangible personal property for wholesale or
24 retail sale or lease, whether such sale or lease is made
25 directly by the manufacturer or by some other person, whether
26 the materials used in the process are owned by the
27 manufacturer or some other person, or whether such sale or
28 lease is made apart from or as an incident to the seller's
29 engaging in a service occupation and the applicable tax is a
30 Service Occupation Tax or Service Use Tax, rather than
31 Retailers' Occupation Tax or Use Tax.
32 (f) The sale or transfer of distillation machinery and
33 equipment, sold as a unit or kit and assembled or installed
34 by the retailer, which machinery and equipment is certified
HB3289 Enrolled -34- LRB9205821SMdv
1 by the user to be used only for the production of ethyl
2 alcohol that will be used for consumption as motor fuel or as
3 a component of motor fuel for the personal use of such user
4 and not subject to sale or resale.
5 (g) At the election of any serviceman not required to be
6 otherwise registered as a retailer under Section 2a of the
7 Retailers' Occupation Tax Act, made for each fiscal year
8 sales of service in which the aggregate annual cost price of
9 tangible personal property transferred as an incident to the
10 sales of service is less than 35% (75% in the case of
11 servicemen transferring prescription drugs or servicemen
12 engaged in graphic arts production) of the aggregate annual
13 total gross receipts from all sales of service. The purchase
14 of such tangible personal property by the serviceman shall be
15 subject to tax under the Retailers' Occupation Tax Act and
16 the Use Tax Act. However, if a primary serviceman who has
17 made the election described in this paragraph subcontracts
18 service work to a secondary serviceman who has also made the
19 election described in this paragraph, the primary serviceman
20 does not incur a Use Tax liability if the secondary
21 serviceman (i) has paid or will pay Use Tax on his or her
22 cost price of any tangible personal property transferred to
23 the primary serviceman and (ii) certifies that fact in
24 writing to the primary serviceman.
25 Tangible personal property transferred incident to the
26 completion of a maintenance agreement is exempt from the tax
27 imposed pursuant to this Act.
28 Exemption (e) also includes machinery and equipment used
29 in the general maintenance or repair of such exempt machinery
30 and equipment or for in-house manufacture of exempt machinery
31 and equipment. For the purposes of exemption (e), each of
32 these terms shall have the following meanings: (1)
33 "manufacturing process" shall mean the production of any
34 article of tangible personal property, whether such article
HB3289 Enrolled -35- LRB9205821SMdv
1 is a finished product or an article for use in the process of
2 manufacturing or assembling a different article of tangible
3 personal property, by procedures commonly regarded as
4 manufacturing, processing, fabricating, or refining which
5 changes some existing material or materials into a material
6 with a different form, use or name. In relation to a
7 recognized integrated business composed of a series of
8 operations which collectively constitute manufacturing, or
9 individually constitute manufacturing operations, the
10 manufacturing process shall be deemed to commence with the
11 first operation or stage of production in the series, and
12 shall not be deemed to end until the completion of the final
13 product in the last operation or stage of production in the
14 series; and further for purposes of exemption (e),
15 photoprocessing is deemed to be a manufacturing process of
16 tangible personal property for wholesale or retail sale; (2)
17 "assembling process" shall mean the production of any article
18 of tangible personal property, whether such article is a
19 finished product or an article for use in the process of
20 manufacturing or assembling a different article of tangible
21 personal property, by the combination of existing materials
22 in a manner commonly regarded as assembling which results in
23 a material of a different form, use or name; (3) "machinery"
24 shall mean major mechanical machines or major components of
25 such machines contributing to a manufacturing or assembling
26 process; and (4) "equipment" shall include any independent
27 device or tool separate from any machinery but essential to
28 an integrated manufacturing or assembly process; including
29 computers used primarily in a manufacuturer's operating
30 exempt machinery and equipment in a computer assisted design,
31 computer assisted manufacturing (CAD/CAM) system; or any
32 subunit or assembly comprising a component of any machinery
33 or auxiliary, adjunct or attachment parts of machinery, such
34 as tools, dies, jigs, fixtures, patterns and molds; or any
HB3289 Enrolled -36- LRB9205821SMdv
1 parts which require periodic replacement in the course of
2 normal operation; but shall not include hand tools. Equipment
3 includes chemicals or chemicals acting as catalysts but only
4 if the chemicals or chemicals acting as catalysts effect a
5 direct and immediate change upon a product being manufactured
6 or assembled for wholesale or retail sale or lease. The
7 purchaser of such machinery and equipment who has an active
8 resale registration number shall furnish such number to the
9 seller at the time of purchase. The purchaser of such
10 machinery and equipment and tools without an active resale
11 registration number shall furnish to the seller a certificate
12 of exemption for each transaction stating facts establishing
13 the exemption for that transaction, which certificate shall
14 be available to the Department for inspection or audit.
15 The rolling stock exemption applies to rolling stock used
16 by an interstate carrier for hire, even just between points
17 in Illinois, if such rolling stock transports, for hire,
18 persons whose journeys or property whose shipments originate
19 or terminate outside Illinois.
20 Any informal rulings, opinions or letters issued by the
21 Department in response to an inquiry or request for any
22 opinion from any person regarding the coverage and
23 applicability of exemption (e) to specific devices shall be
24 published, maintained as a public record, and made available
25 for public inspection and copying. If the informal ruling,
26 opinion or letter contains trade secrets or other
27 confidential information, where possible the Department shall
28 delete such information prior to publication. Whenever such
29 informal rulings, opinions, or letters contain any policy of
30 general applicability, the Department shall formulate and
31 adopt such policy as a rule in accordance with the provisions
32 of the Illinois Administrative Procedure Act.
33 On and after July 1, 1987, no entity otherwise eligible
34 under exemption (c) of this Section shall make tax free
HB3289 Enrolled -37- LRB9205821SMdv
1 purchases unless it has an active exemption identification
2 number issued by the Department.
3 "Serviceman" means any person who is engaged in the
4 occupation of making sales of service.
5 "Sale at Retail" means "sale at retail" as defined in the
6 Retailers' Occupation Tax Act.
7 "Supplier" means any person who makes sales of tangible
8 personal property to servicemen for the purpose of resale as
9 an incident to a sale of service.
10 (Source: P.A. 91-51, eff. 6-30-99.)
11 (35 ILCS 115/3-5) (from Ch. 120, par. 439.103-5)
12 Sec. 3-5. Exemptions. The following tangible personal
13 property is exempt from the tax imposed by this Act:
14 (1) Personal property sold by a corporation, society,
15 association, foundation, institution, or organization, other
16 than a limited liability company, that is organized and
17 operated as a not-for-profit service enterprise for the
18 benefit of persons 65 years of age or older if the personal
19 property was not purchased by the enterprise for the purpose
20 of resale by the enterprise.
21 (2) Personal property purchased by a not-for-profit
22 Illinois county fair association for use in conducting,
23 operating, or promoting the county fair.
24 (3) Personal property purchased by any not-for-profit
25 arts or cultural organization that establishes, by proof
26 required by the Department by rule, that it has received an
27 exemption under Section 501(c)(3) of the Internal Revenue
28 Code and that is organized and operated for the presentation
29 or support of arts or cultural programming, activities, or
30 services. These organizations include, but are not limited
31 to, music and dramatic arts organizations such as symphony
32 orchestras and theatrical groups, arts and cultural service
33 organizations, local arts councils, visual arts
HB3289 Enrolled -38- LRB9205821SMdv
1 organizations, and media arts organizations.
2 (4) Legal tender, currency, medallions, or gold or
3 silver coinage issued by the State of Illinois, the
4 government of the United States of America, or the government
5 of any foreign country, and bullion.
6 (5) Graphic arts machinery and equipment, including
7 repair and replacement parts, both new and used, and
8 including that manufactured on special order or purchased for
9 lease, certified by the purchaser to be used primarily for
10 graphic arts production. Equipment includes chemicals or
11 chemicals acting as catalysts but only if the chemicals or
12 chemicals acting as catalysts effect a direct and immediate
13 change upon a graphic arts product.
14 (6) Personal property sold by a teacher-sponsored
15 student organization affiliated with an elementary or
16 secondary school located in Illinois.
17 (7) Farm machinery and equipment, both new and used,
18 including that manufactured on special order, certified by
19 the purchaser to be used primarily for production agriculture
20 or State or federal agricultural programs, including
21 individual replacement parts for the machinery and equipment,
22 including machinery and equipment purchased for lease, and
23 including implements of husbandry defined in Section 1-130 of
24 the Illinois Vehicle Code, farm machinery and agricultural
25 chemical and fertilizer spreaders, and nurse wagons required
26 to be registered under Section 3-809 of the Illinois Vehicle
27 Code, but excluding other motor vehicles required to be
28 registered under the Illinois Vehicle Code. Horticultural
29 polyhouses or hoop houses used for propagating, growing, or
30 overwintering plants shall be considered farm machinery and
31 equipment under this item (7). Agricultural chemical tender
32 tanks and dry boxes shall include units sold separately from
33 a motor vehicle required to be licensed and units sold
34 mounted on a motor vehicle required to be licensed if the
HB3289 Enrolled -39- LRB9205821SMdv
1 selling price 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,
6 seeders, or spreaders. Precision farming equipment includes,
7 but is not limited to, soil testing sensors, computers,
8 monitors, software, global positioning and mapping systems,
9 and other such equipment.
10 Farm machinery and equipment also includes computers,
11 sensors, software, and related equipment used primarily in
12 the computer-assisted operation of production agriculture
13 facilities, equipment, and activities such as, but not
14 limited to, the collection, monitoring, and correlation of
15 animal and crop data for the purpose of formulating animal
16 diets and agricultural chemicals. This item (7) is exempt
17 from the provisions of Section 3-55.
18 (8) Fuel and petroleum products sold to or used by an
19 air common carrier, certified by the carrier to be used for
20 consumption, shipment, or storage in the conduct of its
21 business as an air common carrier, for a flight destined for
22 or returning from a location or locations outside the United
23 States without regard to previous or subsequent domestic
24 stopovers.
25 (9) Proceeds of mandatory service charges separately
26 stated on customers' bills for the purchase and consumption
27 of food and beverages, to the extent that the proceeds of the
28 service charge are in fact turned over as tips or as a
29 substitute for tips to the employees who participate directly
30 in preparing, serving, hosting or cleaning up the food or
31 beverage function with respect to which the service charge is
32 imposed.
33 (10) Oil field exploration, drilling, and production
34 equipment, including (i) rigs and parts of rigs, rotary rigs,
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1 cable tool rigs, and workover rigs, (ii) pipe and tubular
2 goods, including casing and drill strings, (iii) pumps and
3 pump-jack units, (iv) storage tanks and flow lines, (v) any
4 individual replacement part for oil field exploration,
5 drilling, and production equipment, and (vi) machinery and
6 equipment purchased for lease; but excluding motor vehicles
7 required to be registered under the Illinois Vehicle Code.
8 (11) Photoprocessing machinery and equipment, including
9 repair and replacement parts, both new and used, including
10 that manufactured on special order, certified by the
11 purchaser to be used primarily for photoprocessing, and
12 including photoprocessing machinery and equipment purchased
13 for lease.
14 (12) Coal exploration, mining, offhighway hauling,
15 processing, maintenance, and reclamation equipment, including
16 replacement parts and equipment, and including equipment
17 purchased for lease, but excluding motor vehicles required to
18 be registered under the Illinois Vehicle Code.
19 (13) Food for human consumption that is to be consumed
20 off the premises where it is sold (other than alcoholic
21 beverages, soft drinks and food that has been prepared for
22 immediate consumption) and prescription and non-prescription
23 medicines, drugs, medical appliances, and insulin, urine
24 testing materials, syringes, and needles used by diabetics,
25 for human use, when purchased for use by a person receiving
26 medical assistance under Article 5 of the Illinois Public Aid
27 Code who resides in a licensed long-term care facility, as
28 defined in the Nursing Home Care Act.
29 (14) Semen used for artificial insemination of livestock
30 for direct agricultural production.
31 (15) Horses, or interests in horses, registered with and
32 meeting the requirements of any of the Arabian Horse Club
33 Registry of America, Appaloosa Horse Club, American Quarter
34 Horse Association, United States Trotting Association, or
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1 Jockey Club, as appropriate, used for purposes of breeding or
2 racing for prizes.
3 (16) Computers and communications equipment utilized for
4 any hospital purpose and equipment used in the diagnosis,
5 analysis, or treatment of hospital patients sold to a lessor
6 who leases the equipment, under a lease of one year or longer
7 executed or in effect at the time of the purchase, to a
8 hospital that has been issued an active tax exemption
9 identification number by the Department under Section 1g of
10 the Retailers' Occupation Tax Act.
11 (17) Personal property sold to a lessor who leases the
12 property, under a lease of one year or longer executed or in
13 effect at the time of the purchase, to a governmental body
14 that has been issued an active tax exemption identification
15 number by the Department under Section 1g of the Retailers'
16 Occupation Tax Act.
17 (18) Beginning with taxable years ending on or after
18 December 31, 1995 and ending with taxable years ending on or
19 before December 31, 2004, personal property that is donated
20 for disaster relief to be used in a State or federally
21 declared disaster area in Illinois or bordering Illinois by a
22 manufacturer or retailer that is registered in this State to
23 a corporation, society, association, foundation, or
24 institution that has been issued a sales tax exemption
25 identification number by the Department that assists victims
26 of the disaster who reside within the declared disaster area.
27 (19) Beginning with taxable years ending on or after
28 December 31, 1995 and ending with taxable years ending on or
29 before December 31, 2004, personal property that is used in
30 the performance of infrastructure repairs in this State,
31 including but not limited to municipal roads and streets,
32 access roads, bridges, sidewalks, waste disposal systems,
33 water and sewer line extensions, water distribution and
34 purification facilities, storm water drainage and retention
HB3289 Enrolled -42- LRB9205821SMdv
1 facilities, and sewage treatment facilities, resulting from a
2 State or federally declared disaster in Illinois or bordering
3 Illinois when such repairs are initiated on facilities
4 located in the declared disaster area within 6 months after
5 the disaster.
6 (20) Beginning July 1, 1999, game or game birds sold at
7 a "game breeding and hunting preserve area" or an "exotic
8 game hunting area" as those terms are used in the Wildlife
9 Code or at a hunting enclosure approved through rules adopted
10 by the Department of Natural Resources. This paragraph is
11 exempt from the provisions of Section 3-55.
12 (21) (20) A motor vehicle, as that term is defined in
13 Section 1-146 of the Illinois Vehicle Code, that is donated
14 to a corporation, limited liability company, society,
15 association, foundation, or institution that is determined by
16 the 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
27 study of not less than 6 weeks duration and designed to
28 prepare individuals to follow a trade or to pursue a manual,
29 technical, mechanical, industrial, business, or commercial
30 occupation.
31 (22) (21) Beginning January 1, 2000, personal property,
32 including food, purchased through fundraising events for the
33 benefit of a public or private elementary or secondary
34 school, a group of those schools, or one or more school
HB3289 Enrolled -43- LRB9205821SMdv
1 districts if the events are sponsored by an entity recognized
2 by the school district that consists primarily of volunteers
3 and includes parents and teachers of the school children.
4 This paragraph does not apply to fundraising events (i) for
5 the benefit of private home instruction or (ii) for which the
6 fundraising entity purchases the personal property sold at
7 the events from another individual or entity that sold the
8 property for the purpose of resale by the fundraising entity
9 and that profits from the sale to the fundraising entity.
10 This paragraph is exempt from the provisions of Section 3-55.
11 (23) (20) Beginning January 1, 2000, new or used
12 automatic vending machines that prepare and serve hot food
13 and beverages, including coffee, soup, and other items, and
14 replacement parts for these machines. This paragraph is
15 exempt from the provisions of Section 3-55.
16 (Source: P.A. 90-14, eff. 7-1-97; 90-552, eff. 12-12-97;
17 90-605, eff. 6-30-98; 91-51, eff. 6-30-99; 91-200, eff.
18 7-20-99; 91-439, eff. 8-6-99; 91-533, eff. 8-13-99; 91-637,
19 eff. 8-20-99; 91-644, eff. 8-20-99; revised 9-29-99.)
20 Section 15. The Retailers' Occupation Tax Act is amended
21 by changing Sections 2-5, 2-45, 3, and 5k and by adding
22 Section 2-10.5 as follows:
23 (35 ILCS 120/2-5) (from Ch. 120, par. 441-5)
24 Sec. 2-5. Exemptions. Gross receipts from proceeds from
25 the sale of the following tangible personal property are
26 exempt from the tax imposed by this Act:
27 (1) Farm chemicals.
28 (2) Farm machinery and equipment, both new and used,
29 including that manufactured on special order, certified by
30 the purchaser to be used primarily for production agriculture
31 or State or federal agricultural programs, including
32 individual replacement parts for the machinery and equipment,
HB3289 Enrolled -44- LRB9205821SMdv
1 including machinery and equipment purchased for lease, and
2 including implements of husbandry defined in Section 1-130 of
3 the Illinois Vehicle Code, farm machinery and agricultural
4 chemical and fertilizer spreaders, and nurse wagons required
5 to be registered under Section 3-809 of the Illinois Vehicle
6 Code, but excluding other motor vehicles required to be
7 registered under the Illinois Vehicle Code. Horticultural
8 polyhouses or hoop houses used for propagating, growing, or
9 overwintering plants shall be considered farm machinery and
10 equipment under this item (2). Agricultural chemical tender
11 tanks and dry boxes shall include units sold separately from
12 a motor vehicle required to be licensed and units sold
13 mounted on a motor vehicle required to be licensed, if the
14 selling price of the tender is separately stated.
15 Farm machinery and equipment shall include precision
16 farming equipment that is installed or purchased to be
17 installed on farm machinery and equipment including, but not
18 limited to, tractors, harvesters, sprayers, planters,
19 seeders, or spreaders. Precision farming equipment includes,
20 but is not limited to, soil testing sensors, computers,
21 monitors, software, global positioning and mapping systems,
22 and other such equipment.
23 Farm machinery and equipment also includes computers,
24 sensors, software, and related equipment used primarily in
25 the computer-assisted operation of production agriculture
26 facilities, equipment, and activities such as, but not
27 limited to, the collection, monitoring, and correlation of
28 animal and crop data for the purpose of formulating animal
29 diets and agricultural chemicals. This item (7) is exempt
30 from the provisions of Section 2-70.
31 (3) Distillation machinery and equipment, sold as a unit
32 or kit, assembled or installed by the retailer, certified by
33 the user to be used only for the production of ethyl alcohol
34 that will be used for consumption as motor fuel or as a
HB3289 Enrolled -45- LRB9205821SMdv
1 component of motor fuel for the personal use of the user, and
2 not subject to sale or resale.
3 (4) Graphic arts machinery and equipment, including
4 repair and replacement parts, both new and used, and
5 including that manufactured on special order or purchased for
6 lease, certified by the purchaser to be used primarily for
7 graphic arts production. Equipment includes chemicals or
8 chemicals acting as catalysts but only if the chemicals or
9 chemicals acting as catalysts effect a direct and immediate
10 change upon a graphic arts product.
11 (5) A motor vehicle of the first division, a motor
12 vehicle of the second division that is a self-contained motor
13 vehicle designed or permanently converted to provide living
14 quarters for recreational, camping, or travel use, with
15 direct walk through access to the living quarters from the
16 driver's seat, or a motor vehicle of the second division that
17 is of the van configuration designed for the transportation
18 of not less than 7 nor more than 16 passengers, as defined in
19 Section 1-146 of the Illinois Vehicle Code, that is used for
20 automobile renting, as defined in the Automobile Renting
21 Occupation and Use Tax Act.
22 (6) Personal property sold by a teacher-sponsored
23 student organization affiliated with an elementary or
24 secondary school located in Illinois.
25 (7) Proceeds of that portion of the selling price of a
26 passenger car the sale of which is subject to the Replacement
27 Vehicle Tax.
28 (8) Personal property sold to an Illinois county fair
29 association for use in conducting, operating, or promoting
30 the county fair.
31 (9) Personal property sold to a not-for-profit arts or
32 cultural organization that establishes, by proof required by
33 the Department by rule, that it has received an exemption
34 under Section 501(c)(3) of the Internal Revenue Code and that
HB3289 Enrolled -46- LRB9205821SMdv
1 is organized and operated for the presentation or support of
2 arts or cultural programming, activities, or services. These
3 organizations include, but are not limited to, music and
4 dramatic arts organizations such as symphony orchestras and
5 theatrical groups, arts and cultural service organizations,
6 local arts councils, visual arts organizations, and media
7 arts organizations.
8 (10) Personal property sold by a corporation, society,
9 association, foundation, institution, or organization, other
10 than a limited liability company, that is organized and
11 operated as a not-for-profit service enterprise for the
12 benefit of persons 65 years of age or older if the personal
13 property was not purchased by the enterprise for the purpose
14 of resale by the enterprise.
15 (11) Personal property sold to a governmental body, to a
16 corporation, society, association, foundation, or institution
17 organized and operated exclusively for charitable, religious,
18 or educational purposes, or to a not-for-profit corporation,
19 society, association, foundation, institution, or
20 organization that has no compensated officers or employees
21 and that is organized and operated primarily for the
22 recreation of persons 55 years of age or older. A limited
23 liability company may qualify for the exemption under this
24 paragraph only if the limited liability company is organized
25 and operated exclusively for educational purposes. On and
26 after July 1, 1987, however, no entity otherwise eligible for
27 this exemption shall make tax-free purchases unless it has an
28 active identification number issued by the Department.
29 (12) Personal property sold to interstate carriers for
30 hire for use as rolling stock moving in interstate commerce
31 or to lessors under leases of one year or longer executed or
32 in effect at the time of purchase by interstate carriers for
33 hire for use as rolling stock moving in interstate commerce
34 and equipment operated by a telecommunications provider,
HB3289 Enrolled -47- LRB9205821SMdv
1 licensed as a common carrier by the Federal Communications
2 Commission, which is permanently installed in or affixed to
3 aircraft moving in interstate commerce.
4 (13) Proceeds from sales to owners, lessors, or shippers
5 of tangible personal property that is utilized by interstate
6 carriers for hire for use as rolling stock moving in
7 interstate commerce and equipment operated by a
8 telecommunications provider, licensed as a common carrier by
9 the Federal Communications Commission, which is permanently
10 installed in or affixed to aircraft moving in interstate
11 commerce.
12 (14) Machinery and equipment that will be used by the
13 purchaser, or a lessee of the purchaser, primarily in the
14 process of manufacturing or assembling tangible personal
15 property for wholesale or retail sale or lease, whether the
16 sale or lease is made directly by the manufacturer or by some
17 other person, whether the materials used in the process are
18 owned by the manufacturer or some other person, or whether
19 the sale or lease is made apart from or as an incident to the
20 seller's engaging in the service occupation of producing
21 machines, tools, dies, jigs, patterns, gauges, or other
22 similar items of no commercial value on special order for a
23 particular purchaser.
24 (15) Proceeds of mandatory service charges separately
25 stated on customers' bills for purchase and consumption of
26 food and beverages, to the extent that the proceeds of the
27 service charge are in fact turned over as tips or as a
28 substitute for tips to the employees who participate directly
29 in preparing, serving, hosting or cleaning up the food or
30 beverage function with respect to which the service charge is
31 imposed.
32 (16) Petroleum products sold to a purchaser if the
33 seller is prohibited by federal law from charging tax to the
34 purchaser.
HB3289 Enrolled -48- LRB9205821SMdv
1 (17) Tangible personal property sold to a common carrier
2 by rail or motor that receives the physical possession of the
3 property in Illinois and that transports the property, or
4 shares with another common carrier in the transportation of
5 the property, out of Illinois on a standard uniform bill of
6 lading showing the seller of the property as the shipper or
7 consignor of the property to a destination outside Illinois,
8 for use outside Illinois.
9 (18) Legal tender, currency, medallions, or gold or
10 silver coinage issued by the State of Illinois, the
11 government of the United States of America, or the government
12 of any foreign country, and bullion.
13 (19) Oil field exploration, drilling, and production
14 equipment, including (i) rigs and parts of rigs, rotary rigs,
15 cable tool rigs, and workover rigs, (ii) pipe and tubular
16 goods, including casing and drill strings, (iii) pumps and
17 pump-jack units, (iv) storage tanks and flow lines, (v) any
18 individual replacement part for oil field exploration,
19 drilling, and production equipment, and (vi) machinery and
20 equipment purchased for lease; but excluding motor vehicles
21 required to be registered under the Illinois Vehicle Code.
22 (20) Photoprocessing machinery and equipment, including
23 repair and replacement parts, both new and used, including
24 that manufactured on special order, certified by the
25 purchaser to be used primarily for photoprocessing, and
26 including photoprocessing machinery and equipment purchased
27 for lease.
28 (21) Coal exploration, mining, offhighway hauling,
29 processing, maintenance, and reclamation equipment, including
30 replacement parts and equipment, and including equipment
31 purchased for lease, but excluding motor vehicles required to
32 be registered under the Illinois Vehicle Code.
33 (22) Fuel and petroleum products sold to or used by an
34 air carrier, certified by the carrier to be used for
HB3289 Enrolled -49- LRB9205821SMdv
1 consumption, shipment, or storage in the conduct of its
2 business as an air common carrier, for a flight destined for
3 or returning from a location or locations outside the United
4 States without regard to previous or subsequent domestic
5 stopovers.
6 (23) A transaction in which the purchase order is
7 received by a florist who is located outside Illinois, but
8 who has a florist located in Illinois deliver the property to
9 the purchaser or the purchaser's donee in Illinois.
10 (24) Fuel consumed or used in the operation of ships,
11 barges, or vessels that are used primarily in or for the
12 transportation of property or the conveyance of persons for
13 hire on rivers bordering on this State if the fuel is
14 delivered by the seller to the purchaser's barge, ship, or
15 vessel while it is afloat upon that bordering river.
16 (25) A motor vehicle sold in this State to a nonresident
17 even though the motor vehicle is delivered to the nonresident
18 in this State, if the motor vehicle is not to be titled in
19 this State, and if a driveaway decal permit is issued to the
20 motor vehicle as provided in Section 3-603 of the Illinois
21 Vehicle Code or if the nonresident purchaser has vehicle
22 registration plates to transfer to the motor vehicle upon
23 returning to his or her home state. The issuance of the
24 driveaway decal permit or having the out-of-state
25 registration plates to be transferred is prima facie evidence
26 that the motor vehicle will not be titled in this State.
27 (26) Semen used for artificial insemination of livestock
28 for direct agricultural production.
29 (27) Horses, or interests in horses, registered with and
30 meeting the requirements of any of the Arabian Horse Club
31 Registry of America, Appaloosa Horse Club, American Quarter
32 Horse Association, United States Trotting Association, or
33 Jockey Club, as appropriate, used for purposes of breeding or
34 racing for prizes.
HB3289 Enrolled -50- LRB9205821SMdv
1 (28) Computers and communications equipment utilized for
2 any hospital purpose and equipment used in the diagnosis,
3 analysis, or treatment of hospital patients sold to a lessor
4 who leases the equipment, under a lease of one year or longer
5 executed or in effect at the time of the purchase, to a
6 hospital that has been issued an active tax exemption
7 identification number by the Department under Section 1g of
8 this Act.
9 (29) Personal property sold to a lessor who leases the
10 property, under a lease of one year or longer executed or in
11 effect at the time of the purchase, to a governmental body
12 that has been issued an active tax exemption identification
13 number by the Department under Section 1g of this Act.
14 (30) Beginning with taxable years ending on or after
15 December 31, 1995 and ending with taxable years ending on or
16 before December 31, 2004, personal property that is donated
17 for disaster relief to be used in a State or federally
18 declared disaster area in Illinois or bordering Illinois by a
19 manufacturer or retailer that is registered in this State to
20 a corporation, society, association, foundation, or
21 institution that has been issued a sales tax exemption
22 identification number by the Department that assists victims
23 of the disaster who reside within the declared disaster area.
24 (31) Beginning with taxable years ending on or after
25 December 31, 1995 and ending with taxable years ending on or
26 before December 31, 2004, personal property that is used in
27 the performance of infrastructure repairs in this State,
28 including but not limited to municipal roads and streets,
29 access roads, bridges, sidewalks, waste disposal systems,
30 water and sewer line extensions, water distribution and
31 purification facilities, storm water drainage and retention
32 facilities, and sewage treatment facilities, resulting from a
33 State or federally declared disaster in Illinois or bordering
34 Illinois when such repairs are initiated on facilities
HB3289 Enrolled -51- LRB9205821SMdv
1 located in the declared disaster area within 6 months after
2 the disaster.
3 (32) Beginning July 1, 1999, game or game birds sold at
4 a "game breeding and hunting preserve area" or an "exotic
5 game hunting area" as those terms are used in the Wildlife
6 Code or at a hunting enclosure approved through rules adopted
7 by the Department of Natural Resources. This paragraph is
8 exempt from the provisions of Section 2-70.
9 (33) (32) A motor vehicle, as that term is defined in
10 Section 1-146 of the Illinois Vehicle Code, that is donated
11 to a corporation, limited liability company, society,
12 association, foundation, or institution that is determined by
13 the Department to be organized and operated exclusively for
14 educational purposes. For purposes of this exemption, "a
15 corporation, limited liability company, society, association,
16 foundation, or institution organized and operated exclusively
17 for educational purposes" means all tax-supported public
18 schools, private schools that offer systematic instruction in
19 useful branches of learning by methods common to public
20 schools and that compare favorably in their scope and
21 intensity with the course of study presented in tax-supported
22 schools, and vocational or technical schools or institutes
23 organized and operated exclusively to provide a course of
24 study of not less than 6 weeks duration and designed to
25 prepare individuals to follow a trade or to pursue a manual,
26 technical, mechanical, industrial, business, or commercial
27 occupation.
28 (34) (33) Beginning January 1, 2000, personal property,
29 including food, purchased through fundraising events for the
30 benefit of a public or private elementary or secondary
31 school, a group of those schools, or one or more school
32 districts if the events are sponsored by an entity recognized
33 by the school district that consists primarily of volunteers
34 and includes parents and teachers of the school children.
HB3289 Enrolled -52- LRB9205821SMdv
1 This paragraph does not apply to fundraising events (i) for
2 the benefit of private home instruction or (ii) for which the
3 fundraising entity purchases the personal property sold at
4 the events from another individual or entity that sold the
5 property for the purpose of resale by the fundraising entity
6 and that profits from the sale to the fundraising entity.
7 This paragraph is exempt from the provisions of Section 2-70.
8 (35) (32) Beginning January 1, 2000, new or used
9 automatic vending machines that prepare and serve hot food
10 and beverages, including coffee, soup, and other items, and
11 replacement parts for these machines. This paragraph is
12 exempt from the provisions of Section 2-70.
13 (36) Food for human consumption that is to be consumed
14 off the premises where it is sold (other than alcoholic
15 beverages, soft drinks, and food that has been prepared for
16 immediate consumption) and prescription and nonprescription
17 medicines, drugs, medical appliances, and insulin, urine
18 testing materials, syringes, and needles used by diabetics,
19 for human use, when purchased for use by a person receiving
20 medical assistance under Article 5 of the Illinois Public Aid
21 Code who resides in a licensed long-term care facility, as
22 defined in the Nursing Home Care Act.
23 (Source: P.A. 90-14, eff. 7-1-97; 90-519, eff. 6-1-98;
24 90-552, eff. 12-12-97; 90-605, eff. 6-30-98; 91-51, eff.
25 6-30-99; 91-200, eff. 7-20-99; 91-439, eff. 8-6-99; 91-533,
26 eff. 8-13-99; 91-637, eff. 8-20-99; 91-644, eff. 8-20-99;
27 revised 9-28-99.)
28 (35 ILCS 120/2-10.5 new)
29 Sec. 2-10.5. Direct payment program; purchaser's
30 providing of permit to retailer; retailer relieved of
31 collecting use tax and local retailers' occupation tax
32 reimbursements from purchaser; direct payment of retailers'
33 occupation tax and local retailers' occupation tax by
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1 purchaser.
2 (a) Beginning on July 1, 2001 there is established in
3 this State a Direct Payment Program to be administered by the
4 Department. The Department shall issue a Direct Pay Permit
5 to applicants who have been approved to participate in the
6 Direct Payment Program. Each person applying to participate
7 in the Direct Payment Program must demonstrate (1) the
8 applicant's ability to comply with the retailers' occupation
9 tax laws and the use tax laws in effect in this State and
10 that the applicant's accounting system will reflect the
11 proper amount of tax due, (2) that the applicant has a valid
12 business purpose for participating in the Direct Payment
13 Program, and (3) how the applicant's participation in the
14 Direct Payment Program will benefit tax compliance.
15 Application shall be made on forms provided by the Department
16 and shall contain information as the Department may
17 reasonably require. The Department shall approve or deny an
18 applicant within 90 days after the Department's receipt of
19 the application, unless the Department makes a written
20 request for additional information from the applicant.
21 (b) A person who has been approved for the Direct
22 Payment Program and who has been issued a Direct Pay Permit
23 by the Department is relieved of paying tax to a retailer
24 when purchasing tangible personal property for use or
25 consumption, except as provided in subsection (d), by
26 providing that retailer a copy of that Direct Pay Permit. A
27 retailer who accepts a copy of a customer's Direct Pay Permit
28 is relieved of the obligation to remit the tax imposed by
29 this Act on the transaction. References in this Section to
30 "the tax imposed by this Act" include any local occupation
31 taxes administered by the Department that would be incurred
32 on the retail sale.
33 (c) Once the holder of a Direct Pay Permit uses that
34 Permit to relieve the Permit holder from paying tax to a
HB3289 Enrolled -54- LRB9205821SMdv
1 particular retailer, the holder must use its Permit for all
2 purchases, except as provided in subsection (d), from that
3 retailer for so long as the Permit is valid.
4 (d) Direct Pay Permits are not valid and shall not be
5 used for sales or purchases of:
6 (1) food or beverage;
7 (2) tangible personal property required to be
8 titled or registered with an agency of government; or
9 (3) any transactions subject to the Service
10 Occupation Tax Act or Service Use Tax Act.
11 (e) Direct Pay Permits are not assignable and are not
12 transferable. As an illustration, a construction contractor
13 shall not make purchases using a customer's Direct Pay
14 Permit.
15 (f) A Direct Pay Permit is valid until it is revoked by
16 the Department or until the holder notifies the Department in
17 writing that the holder is withdrawing from the Direct
18 Payment Program. A Direct Pay Permit can be revoked by the
19 Department, after notice and hearing, if the holder violates
20 any provision of this Act, any provision of the Illinois Use
21 Tax Act, or any provision of any Act imposing a local
22 retailers' occupation tax administered by the Department.
23 (g) The holder of a Direct Pay Permit who has been
24 relieved of paying tax to a retailer on a purchase for use or
25 consumption by representing to that retailer that it would
26 pay all applicable taxes directly to the Department shall pay
27 those taxes to the Department not later than the 20th day of
28 the month following the month in which the purchase was made.
29 Permit holders making such purchases are subject to all
30 provisions of this Act, and the tax must be reported and paid
31 as retailers' occupation tax in the same manner that the
32 retailer from whom the purchases were made would have
33 reported and paid it, including any local retailers'
34 occupation taxes applicable to that retail sale.
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1 Notwithstanding any other provision of this Act, Permit
2 holders shall make all payments to the Department through the
3 use of electronic funds transfer.
4 (35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
5 Sec. 2-45. Manufacturing and assembly exemption. The
6 manufacturing and assembly machinery and equipment exemption
7 includes machinery and equipment that replaces machinery and
8 equipment in an existing manufacturing facility as well as
9 machinery and equipment that are for use in an expanded or
10 new manufacturing facility.
11 The machinery and equipment exemption also includes
12 machinery and equipment used in the general maintenance or
13 repair of exempt machinery and equipment or for in-house
14 manufacture of exempt machinery and equipment. For the
15 purposes of this exemption, terms have the following
16 meanings:
17 (1) "Manufacturing process" means the production of
18 an article of tangible personal property, whether the
19 article is a finished product or an article for use in
20 the process of manufacturing or assembling a different
21 article of tangible personal property, by a procedure
22 commonly regarded as manufacturing, processing,
23 fabricating, or refining that changes some existing
24 material or materials into a material with a different
25 form, use, or name. In relation to a recognized
26 integrated business composed of a series of operations
27 that collectively constitute manufacturing, or
28 individually constitute manufacturing operations, the
29 manufacturing process commences with the first operation
30 or stage of production in the series and does not end
31 until the completion of the final product in the last
32 operation or stage of production in the series. For
33 purposes of this exemption, photoprocessing is a
HB3289 Enrolled -56- LRB9205821SMdv
1 manufacturing process of tangible personal property for
2 wholesale or retail sale.
3 (2) "Assembling process" means the production of an
4 article of tangible personal property, whether the
5 article is a finished product or an article for use in
6 the process of manufacturing or assembling a different
7 article of tangible personal property, by the combination
8 of existing materials in a manner commonly regarded as
9 assembling that results in a material of a different
10 form, use, or name.
11 (3) "Machinery" means major mechanical machines or
12 major components of those machines contributing to a
13 manufacturing or assembling process.
14 (4) "Equipment" includes an independent device or
15 tool separate from machinery but essential to an
16 integrated manufacturing or assembly process; including
17 computers used primarily in a manufacturer's operating
18 exempt machinery and equipment in a computer assisted
19 design, computer assisted manufacturing (CAD/CAM) system;
20 any subunit or assembly comprising a component of any
21 machinery or auxiliary, adjunct, or attachment parts of
22 machinery, such as tools, dies, jigs, fixtures, patterns,
23 and molds; and any parts that require periodic
24 replacement in the course of normal operation; but does
25 not include hand tools. Equipment includes chemicals or
26 chemicals acting as catalysts but only if the chemicals
27 or chemicals acting as catalysts effect a direct and
28 immediate change upon a product being manufactured or
29 assembled for wholesale or retail sale or lease.
30 The manufacturing and assembling machinery and equipment
31 exemption includes the sale of materials to a purchaser who
32 produces exempted types of machinery, equipment, or tools and
33 who rents or leases that machinery, equipment, or tools to a
34 manufacturer of tangible personal property. This exemption
HB3289 Enrolled -57- LRB9205821SMdv
1 also includes the sale of materials to a purchaser who
2 manufactures those materials into an exempted type of
3 machinery, equipment, or tools that the purchaser uses
4 himself or herself in the manufacturing of tangible personal
5 property. The purchaser of the machinery and equipment who
6 has an active resale registration number shall furnish that
7 number to the seller at the time of purchase. A purchaser of
8 the machinery, equipment, and tools without an active resale
9 registration number shall furnish to the seller a certificate
10 of exemption for each transaction stating facts establishing
11 the exemption for that transaction, and that certificate
12 shall be available to the Department for inspection or audit.
13 Informal rulings, opinions, or letters issued by the
14 Department in response to an inquiry or request for an
15 opinion from any person regarding the coverage and
16 applicability of this exemption to specific devices shall be
17 published, maintained as a public record, and made available
18 for public inspection and copying. If the informal ruling,
19 opinion, or letter contains trade secrets or other
20 confidential information, where possible, the Department
21 shall delete that information before publication. Whenever
22 informal rulings, opinions, or letters contain a policy of
23 general applicability, the Department shall formulate and
24 adopt that policy as a rule in accordance with the Illinois
25 Administrative Procedure Act.
26 (Source: P.A. 91-51, eff. 6-30-99.)
27 (35 ILCS 120/3) (from Ch. 120, par. 442)
28 Sec. 3. Except as provided in this Section, on or before
29 the twentieth day of each calendar month, every person
30 engaged in the business of selling tangible personal property
31 at retail in this State during the preceding calendar month
32 shall file a return with the Department, stating:
33 1. The name of the seller;
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1 2. His residence address and the address of his
2 principal place of business and the address of the
3 principal place of business (if that is a different
4 address) from which he engages in the business of selling
5 tangible personal property at retail in this State;
6 3. Total amount of receipts received by him during
7 the preceding calendar month or quarter, as the case may
8 be, from sales of tangible personal property, and from
9 services furnished, by him during such preceding calendar
10 month or quarter;
11 4. Total amount received by him during the
12 preceding calendar month or quarter on charge and time
13 sales of tangible personal property, and from services
14 furnished, by him prior to the month or quarter for which
15 the return is filed;
16 5. Deductions allowed by law;
17 6. Gross receipts which were received by him during
18 the preceding calendar month or quarter and upon the
19 basis of which the tax is imposed;
20 7. The amount of credit provided in Section 2d of
21 this Act;
22 8. The amount of tax due;
23 9. The signature of the taxpayer; and
24 10. Such other reasonable information as the
25 Department may require.
26 If a taxpayer fails to sign a return within 30 days after
27 the proper notice and demand for signature by the Department,
28 the return shall be considered valid and any amount shown to
29 be due on the return shall be deemed assessed.
30 Each return shall be accompanied by the statement of
31 prepaid tax issued pursuant to Section 2e for which credit is
32 claimed.
33 A retailer may accept a Manufacturer's Purchase Credit
34 certification from a purchaser in satisfaction of Use Tax as
HB3289 Enrolled -59- LRB9205821SMdv
1 provided in Section 3-85 of the Use Tax Act if the purchaser
2 provides the appropriate documentation as required by Section
3 3-85 of the Use Tax Act. A Manufacturer's Purchase Credit
4 certification, accepted by a retailer as provided in Section
5 3-85 of the Use Tax Act, may be used by that retailer to
6 satisfy Retailers' Occupation Tax liability in the amount
7 claimed in the certification, not to exceed 6.25% of the
8 receipts subject to tax from a qualifying purchase.
9 The Department may require returns to be filed on a
10 quarterly basis. If so required, a return for each calendar
11 quarter shall be filed on or before the twentieth day of the
12 calendar month following the end of such calendar quarter.
13 The taxpayer shall also file a return with the Department for
14 each of the first two months of each calendar quarter, on or
15 before the twentieth day of the following calendar month,
16 stating:
17 1. The name of the seller;
18 2. The address of the principal place of business
19 from which he engages in the business of selling tangible
20 personal property at retail in this State;
21 3. The total amount of taxable receipts received by
22 him during the preceding calendar month from sales of
23 tangible personal property by him during such preceding
24 calendar month, including receipts from charge and time
25 sales, but less all deductions allowed by law;
26 4. The amount of credit provided in Section 2d of
27 this Act;
28 5. The amount of tax due; and
29 6. Such other reasonable information as the
30 Department may require.
31 If a total amount of less than $1 is payable, refundable
32 or creditable, such amount shall be disregarded if it is less
33 than 50 cents and shall be increased to $1 if it is 50 cents
34 or more.
HB3289 Enrolled -60- LRB9205821SMdv
1 Beginning October 1, 1993, a taxpayer who has an average
2 monthly tax liability of $150,000 or more shall make all
3 payments required by rules of the Department by electronic
4 funds transfer. Beginning October 1, 1994, a taxpayer who
5 has an average monthly tax liability of $100,000 or more
6 shall make all payments required by rules of the Department
7 by electronic funds transfer. Beginning October 1, 1995, a
8 taxpayer who has an average monthly tax liability of $50,000
9 or more shall make all payments required by rules of the
10 Department by electronic funds transfer. Beginning October
11 1, 2000, a taxpayer who has an annual tax liability of
12 $200,000 or more shall make all payments required by rules of
13 the Department by electronic funds transfer. The term
14 "annual tax liability" shall be the sum of the taxpayer's
15 liabilities under this Act, and under all other State and
16 local occupation and use tax laws administered by the
17 Department, for the immediately preceding calendar year. The
18 term "average monthly tax liability" shall be the sum of the
19 taxpayer's liabilities under this Act, and under all other
20 State and local occupation and use tax laws administered by
21 the Department, for the immediately preceding calendar year
22 divided by 12.
23 Before August 1 of each year beginning in 1993, the
24 Department shall notify all taxpayers required to make
25 payments by electronic funds transfer. All taxpayers
26 required to make payments by electronic funds transfer shall
27 make those payments for a minimum of one year beginning on
28 October 1.
29 Any taxpayer not required to make payments by electronic
30 funds transfer may make payments by electronic funds transfer
31 with the permission of the Department.
32 All taxpayers required to make payment by electronic
33 funds transfer and any taxpayers authorized to voluntarily
34 make payments by electronic funds transfer shall make those
HB3289 Enrolled -61- LRB9205821SMdv
1 payments in the manner authorized by the Department.
2 The Department shall adopt such rules as are necessary to
3 effectuate a program of electronic funds transfer and the
4 requirements of this Section.
5 Any amount which is required to be shown or reported on
6 any return or other document under this Act shall, if such
7 amount is not a whole-dollar amount, be increased to the
8 nearest whole-dollar amount in any case where the fractional
9 part of a dollar is 50 cents or more, and decreased to the
10 nearest whole-dollar amount where the fractional part of a
11 dollar is less than 50 cents.
12 If the retailer is otherwise required to file a monthly
13 return and if the retailer's average monthly tax liability to
14 the Department does not exceed $200, the Department may
15 authorize his returns to be filed on a quarter annual basis,
16 with the return for January, February and March of a given
17 year being due by April 20 of such year; with the return for
18 April, May and June of a given year being due by July 20 of
19 such year; with the return for July, August and September of
20 a given year being due by October 20 of such year, and with
21 the return for October, November and December of a given year
22 being due by January 20 of the following year.
23 If the retailer is otherwise required to file a monthly
24 or quarterly return and if the retailer's average monthly tax
25 liability with the Department does not exceed $50, the
26 Department may authorize his returns to be filed on an annual
27 basis, with the return for a given year being due by January
28 20 of the following year.
29 Such quarter annual and annual returns, as to form and
30 substance, shall be subject to the same requirements as
31 monthly returns.
32 Notwithstanding any other provision in this Act
33 concerning the time within which a retailer may file his
34 return, in the case of any retailer who ceases to engage in a
HB3289 Enrolled -62- LRB9205821SMdv
1 kind of business which makes him responsible for filing
2 returns under this Act, such retailer shall file a final
3 return under this Act with the Department not more than one
4 month after discontinuing such business.
5 Where the same person has more than one business
6 registered with the Department under separate registrations
7 under this Act, such person may not file each return that is
8 due as a single return covering all such registered
9 businesses, but shall file separate returns for each such
10 registered business.
11 In addition, with respect to motor vehicles, watercraft,
12 aircraft, and trailers that are required to be registered
13 with an agency of this State, every retailer selling this
14 kind of tangible personal property shall file, with the
15 Department, upon a form to be prescribed and supplied by the
16 Department, a separate return for each such item of tangible
17 personal property which the retailer sells, except that if,
18 in the same transaction, (i) a retailer of aircraft,
19 watercraft, motor vehicles or trailers transfers more than
20 one aircraft, watercraft, motor vehicle or trailer to another
21 aircraft, watercraft, motor vehicle retailer or trailer
22 retailer for the purpose of resale or (ii) a retailer of
23 aircraft, watercraft, motor vehicles, or trailers transfers
24 more than one aircraft, watercraft, motor vehicle, or trailer
25 to a purchaser for use as a qualifying rolling stock as
26 provided in Section 2-5 of this Act, then that seller may
27 report the transfer of all aircraft, watercraft, motor
28 vehicles or trailers involved in that transaction to the
29 Department on the same uniform invoice-transaction reporting
30 return form. For purposes of this Section, "watercraft"
31 means a Class 2, Class 3, or Class 4 watercraft as defined in
32 Section 3-2 of the Boat Registration and Safety Act, a
33 personal watercraft, or any boat equipped with an inboard
34 motor.
HB3289 Enrolled -63- LRB9205821SMdv
1 Any retailer who sells only motor vehicles, watercraft,
2 aircraft, or trailers that are required to be registered with
3 an agency of this State, so that all retailers' occupation
4 tax liability is required to be reported, and is reported, on
5 such transaction reporting returns and who is not otherwise
6 required to file monthly or quarterly returns, need not file
7 monthly or quarterly returns. However, those retailers shall
8 be required to file returns on an annual basis.
9 The transaction reporting return, in the case of motor
10 vehicles or trailers that are required to be registered with
11 an agency of this State, shall be the same document as the
12 Uniform Invoice referred to in Section 5-402 of The Illinois
13 Vehicle Code and must show the name and address of the
14 seller; the name and address of the purchaser; the amount of
15 the selling price including the amount allowed by the
16 retailer for traded-in property, if any; the amount allowed
17 by the retailer for the traded-in tangible personal property,
18 if any, to the extent to which Section 1 of this Act allows
19 an exemption for the value of traded-in property; the balance
20 payable after deducting such trade-in allowance from the
21 total selling price; the amount of tax due from the retailer
22 with respect to such transaction; the amount of tax collected
23 from the purchaser by the retailer on such transaction (or
24 satisfactory evidence that such tax is not due in that
25 particular instance, if that is claimed to be the fact); the
26 place and date of the sale; a sufficient identification of
27 the property sold; such other information as is required in
28 Section 5-402 of The Illinois Vehicle Code, and such other
29 information as the Department may reasonably require.
30 The transaction reporting return in the case of
31 watercraft or aircraft must show the name and address of the
32 seller; the name and address of the purchaser; the amount of
33 the selling price including the amount allowed by the
34 retailer for traded-in property, if any; the amount allowed
HB3289 Enrolled -64- LRB9205821SMdv
1 by the retailer for the traded-in tangible personal property,
2 if any, to the extent to which Section 1 of this Act allows
3 an exemption for the value of traded-in property; the balance
4 payable after deducting such trade-in allowance from the
5 total selling price; the amount of tax due from the retailer
6 with respect to such transaction; the amount of tax collected
7 from the purchaser by the retailer on such transaction (or
8 satisfactory evidence that such tax is not due in that
9 particular instance, if that is claimed to be the fact); the
10 place and date of the sale, a sufficient identification of
11 the property sold, and such other information as the
12 Department may reasonably require.
13 Such transaction reporting return shall be filed not
14 later than 20 days after the day of delivery of the item that
15 is being sold, but may be filed by the retailer at any time
16 sooner than that if he chooses to do so. The transaction
17 reporting return and tax remittance or proof of exemption
18 from the Illinois use tax may be transmitted to the
19 Department by way of the State agency with which, or State
20 officer with whom the tangible personal property must be
21 titled or registered (if titling or registration is required)
22 if the Department and such agency or State officer determine
23 that this procedure will expedite the processing of
24 applications for title or registration.
25 With each such transaction reporting return, the retailer
26 shall remit the proper amount of tax due (or shall submit
27 satisfactory evidence that the sale is not taxable if that is
28 the case), to the Department or its agents, whereupon the
29 Department shall issue, in the purchaser's name, a use tax
30 receipt (or a certificate of exemption if the Department is
31 satisfied that the particular sale is tax exempt) which such
32 purchaser may submit to the agency with which, or State
33 officer with whom, he must title or register the tangible
34 personal property that is involved (if titling or
HB3289 Enrolled -65- LRB9205821SMdv
1 registration is required) in support of such purchaser's
2 application for an Illinois certificate or other evidence of
3 title or registration to such tangible personal property.
4 No retailer's failure or refusal to remit tax under this
5 Act precludes a user, who has paid the proper tax to the
6 retailer, from obtaining his certificate of title or other
7 evidence of title or registration (if titling or registration
8 is required) upon satisfying the Department that such user
9 has paid the proper tax (if tax is due) to the retailer. The
10 Department shall adopt appropriate rules to carry out the
11 mandate of this paragraph.
12 If the user who would otherwise pay tax to the retailer
13 wants the transaction reporting return filed and the payment
14 of the tax or proof of exemption made to the Department
15 before the retailer is willing to take these actions and such
16 user has not paid the tax to the retailer, such user may
17 certify to the fact of such delay by the retailer and may
18 (upon the Department being satisfied of the truth of such
19 certification) transmit the information required by the
20 transaction reporting return and the remittance for tax or
21 proof of exemption directly to the Department and obtain his
22 tax receipt or exemption determination, in which event the
23 transaction reporting return and tax remittance (if a tax
24 payment was required) shall be credited by the Department to
25 the proper retailer's account with the Department, but
26 without the 2.1% or 1.75% discount provided for in this
27 Section being allowed. When the user pays the tax directly
28 to the Department, he shall pay the tax in the same amount
29 and in the same form in which it would be remitted if the tax
30 had been remitted to the Department by the retailer.
31 Refunds made by the seller during the preceding return
32 period to purchasers, on account of tangible personal
33 property returned to the seller, shall be allowed as a
34 deduction under subdivision 5 of his monthly or quarterly
HB3289 Enrolled -66- LRB9205821SMdv
1 return, as the case may be, in case the seller had
2 theretofore included the receipts from the sale of such
3 tangible personal property in a return filed by him and had
4 paid the tax imposed by this Act with respect to such
5 receipts.
6 Where the seller is a corporation, the return filed on
7 behalf of such corporation shall be signed by the president,
8 vice-president, secretary or treasurer or by the properly
9 accredited agent of such corporation.
10 Where the seller is a limited liability company, the
11 return filed on behalf of the limited liability company shall
12 be signed by a manager, member, or properly accredited agent
13 of the limited liability company.
14 Except as provided in this Section, the retailer filing
15 the return under this Section shall, at the time of filing
16 such return, pay to the Department the amount of tax imposed
17 by this Act less a discount of 2.1% prior to January 1, 1990
18 and 1.75% on and after January 1, 1990, or $5 per calendar
19 year, whichever is greater, which is allowed to reimburse the
20 retailer for the expenses incurred in keeping records,
21 preparing and filing returns, remitting the tax and supplying
22 data to the Department on request. Any prepayment made
23 pursuant to Section 2d of this Act shall be included in the
24 amount on which such 2.1% or 1.75% discount is computed. In
25 the case of retailers who report and pay the tax on a
26 transaction by transaction basis, as provided in this
27 Section, such discount shall be taken with each such tax
28 remittance instead of when such retailer files his periodic
29 return.
30 Before October 1, 2000, if the taxpayer's average monthly
31 tax liability to the Department under this Act, the Use Tax
32 Act, the Service Occupation Tax Act, and the Service Use Tax
33 Act, excluding any liability for prepaid sales tax to be
34 remitted in accordance with Section 2d of this Act, was
HB3289 Enrolled -67- LRB9205821SMdv
1 $10,000 or more during the preceding 4 complete calendar
2 quarters, he shall file a return with the Department each
3 month by the 20th day of the month next following the month
4 during which such tax liability is incurred and shall make
5 payments to the Department on or before the 7th, 15th, 22nd
6 and last day of the month during which such liability is
7 incurred. On and after October 1, 2000, if the taxpayer's
8 average monthly tax liability to the Department under this
9 Act, the Use Tax Act, the Service Occupation Tax Act, and the
10 Service Use Tax Act, excluding any liability for prepaid
11 sales tax to be remitted in accordance with Section 2d of
12 this Act, was $20,000 or more during the preceding 4 complete
13 calendar quarters, he shall file a return with the Department
14 each month by the 20th day of the month next following the
15 month during which such tax liability is incurred and shall
16 make payment to the Department on or before the 7th, 15th,
17 22nd and last day of the month during which such liability is
18 incurred. If the month during which such tax liability is
19 incurred began prior to January 1, 1985, each payment shall
20 be in an amount equal to 1/4 of the taxpayer's actual
21 liability for the month or an amount set by the Department
22 not to exceed 1/4 of the average monthly liability of the
23 taxpayer to the Department for the preceding 4 complete
24 calendar quarters (excluding the month of highest liability
25 and the month of lowest liability in such 4 quarter period).
26 If the month during which such tax liability is incurred
27 begins on or after January 1, 1985 and prior to January 1,
28 1987, each payment shall be in an amount equal to 22.5% of
29 the taxpayer's actual liability for the month or 27.5% of the
30 taxpayer's liability for the same calendar month of the
31 preceding year. If the month during which such tax liability
32 is incurred begins on or after January 1, 1987 and prior to
33 January 1, 1988, each payment shall be in an amount equal to
34 22.5% of the taxpayer's actual liability for the month or
HB3289 Enrolled -68- LRB9205821SMdv
1 26.25% of the taxpayer's liability for the same calendar
2 month of the preceding year. If the month during which such
3 tax liability is incurred begins on or after January 1, 1988,
4 and prior to January 1, 1989, or begins on or after January
5 1, 1996, each payment shall be in an amount equal to 22.5% of
6 the taxpayer's actual liability for the month or 25% of the
7 taxpayer's liability for the same calendar month of the
8 preceding year. If the month during which such tax liability
9 is incurred begins on or after January 1, 1989, and prior to
10 January 1, 1996, each payment shall be in an amount equal to
11 22.5% of the taxpayer's actual liability for the month or 25%
12 of the taxpayer's liability for the same calendar month of
13 the preceding year or 100% of the taxpayer's actual liability
14 for the quarter monthly reporting period. The amount of such
15 quarter monthly payments shall be credited against the final
16 tax liability of the taxpayer's return for that month.
17 Before October 1, 2000, once applicable, the requirement of
18 the making of quarter monthly payments to the Department by
19 taxpayers having an average monthly tax liability of $10,000
20 or more as determined in the manner provided above shall
21 continue until such taxpayer's average monthly liability to
22 the Department during the preceding 4 complete calendar
23 quarters (excluding the month of highest liability and the
24 month of lowest liability) is less than $9,000, or until such
25 taxpayer's average monthly liability to the Department as
26 computed for each calendar quarter of the 4 preceding
27 complete calendar quarter period is less than $10,000.
28 However, if a taxpayer can show the Department that a
29 substantial change in the taxpayer's business has occurred
30 which causes the taxpayer to anticipate that his average
31 monthly tax liability for the reasonably foreseeable future
32 will fall below the $10,000 threshold stated above, then such
33 taxpayer may petition the Department for a change in such
34 taxpayer's reporting status. On and after October 1, 2000,
HB3289 Enrolled -69- LRB9205821SMdv
1 once applicable, the requirement of the making of quarter
2 monthly payments to the Department by taxpayers having an
3 average monthly tax liability of $20,000 or more as
4 determined in the manner provided above shall continue until
5 such taxpayer's average monthly liability to the Department
6 during the preceding 4 complete calendar quarters (excluding
7 the month of highest liability and the month of lowest
8 liability) is less than $19,000 or until such taxpayer's
9 average monthly liability to the Department as computed for
10 each calendar quarter of the 4 preceding complete calendar
11 quarter period is less than $20,000. However, if a taxpayer
12 can show the Department that a substantial change in the
13 taxpayer's business has occurred which causes the taxpayer to
14 anticipate that his average monthly tax liability for the
15 reasonably foreseeable future will fall below the $20,000
16 threshold stated above, then such taxpayer may petition the
17 Department for a change in such taxpayer's reporting status.
18 The Department shall change such taxpayer's reporting status
19 unless it finds that such change is seasonal in nature and
20 not likely to be long term. If any such quarter monthly
21 payment is not paid at the time or in the amount required by
22 this Section, then the taxpayer shall be liable for penalties
23 and interest on the difference between the minimum amount due
24 as a payment and the amount of such quarter monthly payment
25 actually and timely paid, except insofar as the taxpayer has
26 previously made payments for that month to the Department in
27 excess of the minimum payments previously due as provided in
28 this Section. The Department shall make reasonable rules and
29 regulations to govern the quarter monthly payment amount and
30 quarter monthly payment dates for taxpayers who file on other
31 than a calendar monthly basis.
32 The provisions of this paragraph apply before October 1,
33 2001. Without regard to whether a taxpayer is required to
34 make quarter monthly payments as specified above, any
HB3289 Enrolled -70- LRB9205821SMdv
1 taxpayer who is required by Section 2d of this Act to collect
2 and remit prepaid taxes and has collected prepaid taxes which
3 average in excess of $25,000 per month during the preceding 2
4 complete calendar quarters, shall file a return with the
5 Department as required by Section 2f and shall make payments
6 to the Department on or before the 7th, 15th, 22nd and last
7 day of the month during which such liability is incurred. If
8 the month during which such tax liability is incurred began
9 prior to the effective date of this amendatory Act of 1985,
10 each payment shall be in an amount not less than 22.5% of the
11 taxpayer's actual liability under Section 2d. If the month
12 during which such tax liability is incurred begins on or
13 after January 1, 1986, each payment shall be in an amount
14 equal to 22.5% of the taxpayer's actual liability for the
15 month or 27.5% of the taxpayer's liability for the same
16 calendar month of the preceding calendar year. If the month
17 during which such tax liability is incurred begins on or
18 after January 1, 1987, each payment shall be in an amount
19 equal to 22.5% of the taxpayer's actual liability for the
20 month or 26.25% of the taxpayer's liability for the same
21 calendar month of the preceding year. The amount of such
22 quarter monthly payments shall be credited against the final
23 tax liability of the taxpayer's return for that month filed
24 under this Section or Section 2f, as the case may be. Once
25 applicable, the requirement of the making of quarter monthly
26 payments to the Department pursuant to this paragraph shall
27 continue until such taxpayer's average monthly prepaid tax
28 collections during the preceding 2 complete calendar quarters
29 is $25,000 or less. If any such quarter monthly payment is
30 not paid at the time or in the amount required, the taxpayer
31 shall be liable for penalties and interest on such
32 difference, except insofar as the taxpayer has previously
33 made payments for that month in excess of the minimum
34 payments previously due.
HB3289 Enrolled -71- LRB9205821SMdv
1 The provisions of this paragraph apply on and after
2 October 1, 2001. Without regard to whether a taxpayer is
3 required to make quarter monthly payments as specified above,
4 any taxpayer who is required by Section 2d of this Act to
5 collect and remit prepaid taxes and has collected prepaid
6 taxes that average in excess of $20,000 per month during the
7 preceding 4 complete calendar quarters shall file a return
8 with the Department as required by Section 2f and shall make
9 payments to the Department on or before the 7th, 15th, 22nd
10 and last day of the month during which the liability is
11 incurred. Each payment shall be in an amount equal to 22.5%
12 of the taxpayer's actual liability for the month or 25% of
13 the taxpayer's liability for the same calendar month of the
14 preceding year. The amount of the quarter monthly payments
15 shall be credited against the final tax liability of the
16 taxpayer's return for that month filed under this Section or
17 Section 2f, as the case may be. Once applicable, the
18 requirement of the making of quarter monthly payments to the
19 Department pursuant to this paragraph shall continue until
20 the taxpayer's average monthly prepaid tax collections during
21 the preceding 4 complete calendar quarters (excluding the
22 month of highest liability and the month of lowest liability)
23 is less than $19,000 or until such taxpayer's average monthly
24 liability to the Department as computed for each calendar
25 quarter of the 4 preceding complete calendar quarters is less
26 than $20,000. If any such quarter monthly payment is not
27 paid at the time or in the amount required, the taxpayer
28 shall be liable for penalties and interest on such
29 difference, except insofar as the taxpayer has previously
30 made payments for that month in excess of the minimum
31 payments previously due.
32 If any payment provided for in this Section exceeds the
33 taxpayer's liabilities under this Act, the Use Tax Act, the
34 Service Occupation Tax Act and the Service Use Tax Act, as
HB3289 Enrolled -72- LRB9205821SMdv
1 shown on an original monthly return, the Department shall, if
2 requested by the taxpayer, issue to the taxpayer a credit
3 memorandum no later than 30 days after the date of payment.
4 The credit evidenced by such credit memorandum may be
5 assigned by the taxpayer to a similar taxpayer under this
6 Act, the Use Tax Act, the Service Occupation Tax Act or the
7 Service Use Tax Act, in accordance with reasonable rules and
8 regulations to be prescribed by the Department. If no such
9 request is made, the taxpayer may credit such excess payment
10 against tax liability subsequently to be remitted to the
11 Department under this Act, the Use Tax Act, the Service
12 Occupation Tax Act or the Service Use Tax Act, in accordance
13 with reasonable rules and regulations prescribed by the
14 Department. If the Department subsequently determined that
15 all or any part of the credit taken was not actually due to
16 the taxpayer, the taxpayer's 2.1% and 1.75% vendor's discount
17 shall be reduced by 2.1% or 1.75% of the difference between
18 the credit taken and that actually due, and that taxpayer
19 shall be liable for penalties and interest on such
20 difference.
21 If a retailer of motor fuel is entitled to a credit under
22 Section 2d of this Act which exceeds the taxpayer's liability
23 to the Department under this Act for the month which the
24 taxpayer is filing a return, the Department shall issue the
25 taxpayer a credit memorandum for the excess.
26 Beginning January 1, 1990, each month the Department
27 shall pay into the Local Government Tax Fund, a special fund
28 in the State treasury which is hereby created, the net
29 revenue realized for the preceding month from the 1% tax on
30 sales of food for human consumption which is to be consumed
31 off the premises where it is sold (other than alcoholic
32 beverages, soft drinks and food which has been prepared for
33 immediate consumption) and prescription and nonprescription
34 medicines, drugs, medical appliances and insulin, urine
HB3289 Enrolled -73- LRB9205821SMdv
1 testing materials, syringes and needles used by diabetics.
2 Beginning January 1, 1990, each month the Department
3 shall pay into the County and Mass Transit District Fund, a
4 special fund in the State treasury which is hereby created,
5 4% of the net revenue realized for the preceding month from
6 the 6.25% general rate.
7 Beginning August 1, 2000, each month the Department shall
8 pay into the County and Mass Transit District Fund 20% of the
9 net revenue realized for the preceding month from the 1.25%
10 rate on the selling price of motor fuel and gasohol.
11 Beginning January 1, 1990, each month the Department
12 shall pay into the Local Government Tax Fund 16% of the net
13 revenue realized for the preceding month from the 6.25%
14 general rate on the selling price of tangible personal
15 property.
16 Beginning August 1, 2000, each month the Department shall
17 pay into the Local Government Tax Fund 80% of the net revenue
18 realized for the preceding month from the 1.25% rate on the
19 selling price of motor fuel and gasohol.
20 Of the remainder of the moneys received by the Department
21 pursuant to this Act, (a) 1.75% thereof shall be paid into
22 the Build Illinois Fund and (b) prior to July 1, 1989, 2.2%
23 and on and after July 1, 1989, 3.8% thereof shall be paid
24 into the Build Illinois Fund; provided, however, that if in
25 any fiscal year the sum of (1) the aggregate of 2.2% or 3.8%,
26 as the case may be, of the moneys received by the Department
27 and required to be paid into the Build Illinois Fund pursuant
28 to this Act, Section 9 of the Use Tax Act, Section 9 of the
29 Service Use Tax Act, and Section 9 of the Service Occupation
30 Tax Act, such Acts being hereinafter called the "Tax Acts"
31 and such aggregate of 2.2% or 3.8%, as the case may be, of
32 moneys being hereinafter called the "Tax Act Amount", and (2)
33 the amount transferred to the Build Illinois Fund from the
34 State and Local Sales Tax Reform Fund shall be less than the
HB3289 Enrolled -74- LRB9205821SMdv
1 Annual Specified Amount (as hereinafter defined), an amount
2 equal to the difference shall be immediately paid into the
3 Build Illinois Fund from other moneys received by the
4 Department pursuant to the Tax Acts; the "Annual Specified
5 Amount" means the amounts specified below for fiscal years
6 1986 through 1993:
7 Fiscal Year Annual Specified Amount
8 1986 $54,800,000
9 1987 $76,650,000
10 1988 $80,480,000
11 1989 $88,510,000
12 1990 $115,330,000
13 1991 $145,470,000
14 1992 $182,730,000
15 1993 $206,520,000;
16 and means the Certified Annual Debt Service Requirement (as
17 defined in Section 13 of the Build Illinois Bond Act) or the
18 Tax Act Amount, whichever is greater, for fiscal year 1994
19 and each fiscal year thereafter; and further provided, that
20 if on the last business day of any month the sum of (1) the
21 Tax Act Amount required to be deposited into the Build
22 Illinois Bond Account in the Build Illinois Fund during such
23 month and (2) the amount transferred to the Build Illinois
24 Fund from the State and Local Sales Tax Reform Fund shall
25 have been less than 1/12 of the Annual Specified Amount, an
26 amount equal to the difference shall be immediately paid into
27 the Build Illinois Fund from other moneys received by the
28 Department pursuant to the Tax Acts; and, further provided,
29 that in no event shall the payments required under the
30 preceding proviso result in aggregate payments into the Build
31 Illinois Fund pursuant to this clause (b) for any fiscal year
32 in excess of the greater of (i) the Tax Act Amount or (ii)
33 the Annual Specified Amount for such fiscal year. The
34 amounts payable into the Build Illinois Fund under clause (b)
HB3289 Enrolled -75- LRB9205821SMdv
1 of the first sentence in this paragraph shall be payable only
2 until such time as the aggregate amount on deposit under each
3 trust indenture securing Bonds issued and outstanding
4 pursuant to the Build Illinois Bond Act is sufficient, taking
5 into account any future investment income, to fully provide,
6 in accordance with such indenture, for the defeasance of or
7 the payment of the principal of, premium, if any, and
8 interest on the Bonds secured by such indenture and on any
9 Bonds expected to be issued thereafter and all fees and costs
10 payable with respect thereto, all as certified by the
11 Director of the Bureau of the Budget. If on the last
12 business day of any month in which Bonds are outstanding
13 pursuant to the Build Illinois Bond Act, the aggregate of
14 moneys deposited in the Build Illinois Bond Account in the
15 Build Illinois Fund in such month shall be less than the
16 amount required to be transferred in such month from the
17 Build Illinois Bond Account to the Build Illinois Bond
18 Retirement and Interest Fund pursuant to Section 13 of the
19 Build Illinois Bond Act, an amount equal to such deficiency
20 shall be immediately paid from other moneys received by the
21 Department pursuant to the Tax Acts to the Build Illinois
22 Fund; provided, however, that any amounts paid to the Build
23 Illinois Fund in any fiscal year pursuant to this sentence
24 shall be deemed to constitute payments pursuant to clause (b)
25 of the first sentence of this paragraph and shall reduce the
26 amount otherwise payable for such fiscal year pursuant to
27 that clause (b). The moneys received by the Department
28 pursuant to this Act and required to be deposited into the
29 Build Illinois Fund are subject to the pledge, claim and
30 charge set forth in Section 12 of the Build Illinois Bond
31 Act.
32 Subject to payment of amounts into the Build Illinois
33 Fund as provided in the preceding paragraph or in any
34 amendment thereto hereafter enacted, the following specified
HB3289 Enrolled -76- LRB9205821SMdv
1 monthly installment of the amount requested in the
2 certificate of the Chairman of the Metropolitan Pier and
3 Exposition Authority provided under Section 8.25f of the
4 State Finance Act, but not in excess of sums designated as
5 "Total Deposit", shall be deposited in the aggregate from
6 collections under Section 9 of the Use Tax Act, Section 9 of
7 the Service Use Tax Act, Section 9 of the Service Occupation
8 Tax Act, and Section 3 of the Retailers' Occupation Tax Act
9 into the McCormick Place Expansion Project Fund in the
10 specified fiscal years.
11 Fiscal Year Total Deposit
12 1993 $0
13 1994 53,000,000
14 1995 58,000,000
15 1996 61,000,000
16 1997 64,000,000
17 1998 68,000,000
18 1999 71,000,000
19 2000 75,000,000
20 2001 80,000,000
21 2002 84,000,000
22 2003 89,000,000
23 2004 93,000,000
24 2005 97,000,000
25 2006 102,000,000
26 2007 108,000,000
27 2008 115,000,000
28 2009 120,000,000
29 2010 126,000,000
30 2011 132,000,000
31 2012 138,000,000
32 2013 and 145,000,000
33 each fiscal year
34 thereafter that bonds
HB3289 Enrolled -77- LRB9205821SMdv
1 are outstanding under
2 Section 13.2 of the
3 Metropolitan Pier and
4 Exposition Authority
5 Act, but not after fiscal year 2029.
6 Beginning July 20, 1993 and in each month of each fiscal
7 year thereafter, one-eighth of the amount requested in the
8 certificate of the Chairman of the Metropolitan Pier and
9 Exposition Authority for that fiscal year, less the amount
10 deposited into the McCormick Place Expansion Project Fund by
11 the State Treasurer in the respective month under subsection
12 (g) of Section 13 of the Metropolitan Pier and Exposition
13 Authority Act, plus cumulative deficiencies in the deposits
14 required under this Section for previous months and years,
15 shall be deposited into the McCormick Place Expansion Project
16 Fund, until the full amount requested for the fiscal year,
17 but not in excess of the amount specified above as "Total
18 Deposit", has been deposited.
19 Subject to payment of amounts into the Build Illinois
20 Fund and the McCormick Place Expansion Project Fund pursuant
21 to the preceding paragraphs or in any amendment thereto
22 hereafter enacted, each month the Department shall pay into
23 the Local Government Distributive Fund 0.4% of the net
24 revenue realized for the preceding month from the 5% general
25 rate or 0.4% of 80% of the net revenue realized for the
26 preceding month from the 6.25% general rate, as the case may
27 be, on the selling price of tangible personal property which
28 amount shall, subject to appropriation, be distributed as
29 provided in Section 2 of the State Revenue Sharing Act. No
30 payments or distributions pursuant to this paragraph shall be
31 made if the tax imposed by this Act on photoprocessing
32 products is declared unconstitutional, or if the proceeds
33 from such tax are unavailable for distribution because of
34 litigation.
HB3289 Enrolled -78- LRB9205821SMdv
1 Subject to payment of amounts into the Build Illinois
2 Fund, the McCormick Place Expansion Project Fund, and the
3 Local Government Distributive Fund pursuant to the preceding
4 paragraphs or in any amendments thereto hereafter enacted,
5 beginning July 1, 1993, the Department shall each month pay
6 into the Illinois Tax Increment Fund 0.27% of 80% of the net
7 revenue realized for the preceding month from the 6.25%
8 general rate on the selling price of tangible personal
9 property.
10 Of the remainder of the moneys received by the Department
11 pursuant to this Act, 75% thereof shall be paid into the
12 State Treasury and 25% shall be reserved in a special account
13 and used only for the transfer to the Common School Fund as
14 part of the monthly transfer from the General Revenue Fund in
15 accordance with Section 8a of the State Finance Act.
16 The Department may, upon separate written notice to a
17 taxpayer, require the taxpayer to prepare and file with the
18 Department on a form prescribed by the Department within not
19 less than 60 days after receipt of the notice an annual
20 information return for the tax year specified in the notice.
21 Such annual return to the Department shall include a
22 statement of gross receipts as shown by the retailer's last
23 Federal income tax return. If the total receipts of the
24 business as reported in the Federal income tax return do not
25 agree with the gross receipts reported to the Department of
26 Revenue for the same period, the retailer shall attach to his
27 annual return a schedule showing a reconciliation of the 2
28 amounts and the reasons for the difference. The retailer's
29 annual return to the Department shall also disclose the cost
30 of goods sold by the retailer during the year covered by such
31 return, opening and closing inventories of such goods for
32 such year, costs of goods used from stock or taken from stock
33 and given away by the retailer during such year, payroll
34 information of the retailer's business during such year and
HB3289 Enrolled -79- LRB9205821SMdv
1 any additional reasonable information which the Department
2 deems would be helpful in determining the accuracy of the
3 monthly, quarterly or annual returns filed by such retailer
4 as provided for in this Section.
5 If the annual information return required by this Section
6 is not filed when and as required, the taxpayer shall be
7 liable as follows:
8 (i) Until January 1, 1994, the taxpayer shall be
9 liable for a penalty equal to 1/6 of 1% of the tax due
10 from such taxpayer under this Act during the period to be
11 covered by the annual return for each month or fraction
12 of a month until such return is filed as required, the
13 penalty to be assessed and collected in the same manner
14 as any other penalty provided for in this Act.
15 (ii) On and after January 1, 1994, the taxpayer
16 shall be liable for a penalty as described in Section 3-4
17 of the Uniform Penalty and Interest Act.
18 The chief executive officer, proprietor, owner or highest
19 ranking manager shall sign the annual return to certify the
20 accuracy of the information contained therein. Any person
21 who willfully signs the annual return containing false or
22 inaccurate information shall be guilty of perjury and
23 punished accordingly. The annual return form prescribed by
24 the Department shall include a warning that the person
25 signing the return may be liable for perjury.
26 The provisions of this Section concerning the filing of
27 an annual information return do not apply to a retailer who
28 is not required to file an income tax return with the United
29 States Government.
30 As soon as possible after the first day of each month,
31 upon certification of the Department of Revenue, the
32 Comptroller shall order transferred and the Treasurer shall
33 transfer from the General Revenue Fund to the Motor Fuel Tax
34 Fund an amount equal to 1.7% of 80% of the net revenue
HB3289 Enrolled -80- LRB9205821SMdv
1 realized under this Act for the second preceding month.
2 Beginning April 1, 2000, this transfer is no longer required
3 and shall not be made.
4 Net revenue realized for a month shall be the revenue
5 collected by the State pursuant to this Act, less the amount
6 paid out during that month as refunds to taxpayers for
7 overpayment of liability.
8 For greater simplicity of administration, manufacturers,
9 importers and wholesalers whose products are sold at retail
10 in Illinois by numerous retailers, and who wish to do so, may
11 assume the responsibility for accounting and paying to the
12 Department all tax accruing under this Act with respect to
13 such sales, if the retailers who are affected do not make
14 written objection to the Department to this arrangement.
15 Any person who promotes, organizes, provides retail
16 selling space for concessionaires or other types of sellers
17 at the Illinois State Fair, DuQuoin State Fair, county fairs,
18 local fairs, art shows, flea markets and similar exhibitions
19 or events, including any transient merchant as defined by
20 Section 2 of the Transient Merchant Act of 1987, is required
21 to file a report with the Department providing the name of
22 the merchant's business, the name of the person or persons
23 engaged in merchant's business, the permanent address and
24 Illinois Retailers Occupation Tax Registration Number of the
25 merchant, the dates and location of the event and other
26 reasonable information that the Department may require. The
27 report must be filed not later than the 20th day of the month
28 next following the month during which the event with retail
29 sales was held. Any person who fails to file a report
30 required by this Section commits a business offense and is
31 subject to a fine not to exceed $250.
32 Any person engaged in the business of selling tangible
33 personal property at retail as a concessionaire or other type
34 of seller at the Illinois State Fair, county fairs, art
HB3289 Enrolled -81- LRB9205821SMdv
1 shows, flea markets and similar exhibitions or events, or any
2 transient merchants, as defined by Section 2 of the Transient
3 Merchant Act of 1987, may be required to make a daily report
4 of the amount of such sales to the Department and to make a
5 daily payment of the full amount of tax due. The Department
6 shall impose this requirement when it finds that there is a
7 significant risk of loss of revenue to the State at such an
8 exhibition or event. Such a finding shall be based on
9 evidence that a substantial number of concessionaires or
10 other sellers who are not residents of Illinois will be
11 engaging in the business of selling tangible personal
12 property at retail at the exhibition or event, or other
13 evidence of a significant risk of loss of revenue to the
14 State. The Department shall notify concessionaires and other
15 sellers affected by the imposition of this requirement. In
16 the absence of notification by the Department, the
17 concessionaires and other sellers shall file their returns as
18 otherwise required in this Section.
19 (Source: P.A. 90-491, eff. 1-1-99; 90-612, eff. 7-8-98;
20 91-37, eff. 7-1-99; 91-51, eff. 6-30-99; 91-101, eff.
21 7-12-99; 91-541, eff. 8-13-99; 91-872, eff. 7-1-00; 91-901,
22 eff. 1-1-01; revised 1-15-01.)
23 (35 ILCS 120/5k) (from Ch. 120, par. 444k)
24 (Text of Section before amendment by P.A. 91-954)
25 Sec. 5k. Each retailer whose place a business is within
26 a county or municipality which has established an Enterprise
27 Zone pursuant to the "Illinois Enterprise Zone Act" and who
28 makes a sale of building materials to be incorporated into
29 real estate in such enterprise zone by remodeling,
30 rehabilitation or new construction, may deduct receipts from
31 such sales when calculating the tax imposed by this Act. The
32 deduction allowed by this Section for the sale of building
33 materials may be limited, to the extent authorized by
HB3289 Enrolled -82- LRB9205821SMdv
1 ordinance, adopted after the effective date of this
2 amendatory Act of 1992, by the municipality or county that
3 created the enterprise zone. The corporate authorities of
4 any municipality or county that adopts an ordinance or
5 resolution imposing or changing any limitation on the
6 enterprise zone exemption for building materials shall
7 transmit to the Department of Revenue on or not later than 5
8 days after publication, as provided by law, a certified copy
9 of the ordinance or resolution imposing or changing those
10 limitations, whereupon the Department of Revenue shall
11 proceed to administer and enforce those limitations effective
12 the first day of the second calendar month next following
13 date of receipt by the Department of the certified ordinance
14 or resolution.
15 (Source: P.A. 91-51, eff. 6-30-99.)
16 (Text of Section after amendment by P.A. 91-954)
17 Sec. 5k. Each retailer in Illinois who makes a sale of
18 building materials to be incorporated into real estate in an
19 enterprise zone established by a county or municipality under
20 the Illinois Enterprise Zone Act by remodeling,
21 rehabilitation or new construction, may deduct receipts from
22 such sales when calculating the tax imposed by this Act. The
23 deduction allowed by this Section for the sale of building
24 materials may be limited, to the extent authorized by
25 ordinance, adopted after the effective date of this
26 amendatory Act of 1992, by the municipality or county that
27 created the enterprise zone in which the retailer's place of
28 business is located. The corporate authorities of any
29 municipality or county that adopts an ordinance or resolution
30 imposing or changing any limitation on the enterprise zone
31 exemption for building materials shall transmit to the
32 Department of Revenue on or not later than 5 days after
33 publication, as provided by law, a certified copy of the
34 ordinance or resolution imposing or changing those
HB3289 Enrolled -83- LRB9205821SMdv
1 limitations, whereupon the Department of Revenue shall
2 proceed to administer and enforce those limitations effective
3 the first day of the second calendar month next following
4 date of receipt by the Department of the certified ordinance
5 or resolution. The provisions of this Section are exempt
6 from Section 2-70.
7 (Source: P.A. 91-51, eff. 6-30-99; 91-954, eff. 1-1-02.)
8 Section 95. No acceleration or delay. Where this Act
9 makes changes in a statute that is represented in this Act by
10 text that is not yet or no longer in effect (for example, a
11 Section represented by multiple versions), the use of that
12 text does not accelerate or delay the taking effect of (i)
13 the changes made by this Act or (ii) provisions derived from
14 any other Public Act.
15 Section 99. Effective date. This Act takes effect upon
16 becoming law.
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