Illinois-2013-HB2499-Introduced

98TH GENERAL ASSEMBLY State of Illinois 2013 and 2014 HB2499

Introduced , by Rep. Barbara Flynn Currie

SYNOPSIS AS INTRODUCED:

`35 ILCS 105/3-5`
`35 ILCS 110/3-5`
`35 ILCS 115/3-5`
`35 ILCS 120/2-5`

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Makes changes concerning an exemption for petroleum products to provide that the exemption applies to fuel and petroleum products sold to or used by an air carrier, certified by the carrier to be used for consumption, shipment, or storage in the conduct of its business as an air common carrier, for a flight that (i) is engaged in foreign trade or (ii) is engaged in trade between the United States and any of its possessions, and (iii) transports at least one individual or package for hire from the city of origination to the city of final destination on the same aircraft, without regard to a change in the flight number of that aircraft. Effective immediately.

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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning revenue.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Use Tax Act is amended by changing Section

5 3-5 as follows:

6 (35 ILCS 105/3-5)

7 Sec. 3-5. Exemptions. Use of the following tangible

8 personal property is exempt from the tax imposed by this Act:

9 (1) Personal property purchased from a corporation,

10 society, association, foundation, institution, or

11 organization, other than a limited liability company, that is

12 organized and operated as a not-for-profit service enterprise

13 for the benefit of persons 65 years of age or older if the

14 personal property was not purchased by the enterprise for the

15 purpose of resale by the enterprise.

16 (2) Personal property purchased by a not-for-profit

17 Illinois county fair association for use in conducting,

18 operating, or promoting the county fair.

19 (3) Personal property purchased by a not-for-profit arts or

20 cultural organization that establishes, by proof required by

21 the Department by rule, that it has received an exemption under

22 Section 501(c)(3) of the Internal Revenue Code and that is

23 organized and operated primarily for the presentation or

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1 support of arts or cultural programming, activities, or

2 services. These organizations include, but are not limited to,

3 music and dramatic arts organizations such as symphony

4 orchestras and theatrical groups, arts and cultural service

5 organizations, local arts councils, visual arts organizations,

6 and media arts organizations. On and after the effective date

7 of this amendatory Act of the 92nd General Assembly, however,

8 an entity otherwise eligible for this exemption shall not make

9 tax-free purchases unless it has an active identification

10 number issued by the Department.

11 (4) Personal property purchased by a governmental body, by

12 a corporation, society, association, foundation, or

13 institution organized and operated exclusively for charitable,

14 religious, or educational purposes, or by a not-for-profit

15 corporation, society, association, foundation, institution, or

16 organization that has no compensated officers or employees and

17 that is organized and operated primarily for the recreation of

18 persons 55 years of age or older. A limited liability company

19 may qualify for the exemption under this paragraph only if the

20 limited liability company is organized and operated

21 exclusively for educational purposes. On and after July 1,

22 1987, however, no entity otherwise eligible for this exemption

23 shall make tax-free purchases unless it has an active exemption

24 identification number issued by the Department.

25 (5) Until July 1, 2003, a passenger car that is a

26 replacement vehicle to the extent that the purchase price of

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1 the car is subject to the Replacement Vehicle Tax.

2 (6) Until July 1, 2003 and beginning again on September 1,

3 2004 through August 30, 2014, graphic arts machinery and

4 equipment, including repair and replacement parts, both new and

5 used, and including that manufactured on special order,

6 certified by the purchaser to be used primarily for graphic

7 arts production, and including machinery and equipment

8 purchased for lease. Equipment includes chemicals or chemicals

9 acting as catalysts but only if the chemicals or chemicals

10 acting as catalysts effect a direct and immediate change upon a

11 graphic arts product.

12 (7) Farm chemicals.

13 (8) Legal tender, currency, medallions, or gold or silver

14 coinage issued by the State of Illinois, the government of the

15 United States of America, or the government of any foreign

16 country, and bullion.

17 (9) Personal property purchased from a teacher-sponsored

18 student organization affiliated with an elementary or

19 secondary school located in Illinois.

20 (10) A motor vehicle of the first division, a motor vehicle

21 of the second division that is a self-contained motor vehicle

22 designed or permanently converted to provide living quarters

23 for recreational, camping, or travel use, with direct walk

24 through to the living quarters from the driver's seat, or a

25 motor vehicle of the second division that is of the van

26 configuration designed for the transportation of not less than

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1 7 nor more than 16 passengers, as defined in Section 1-146 of

2 the Illinois Vehicle Code, that is used for automobile renting,

3 as defined in the Automobile Renting Occupation and Use Tax

4 Act.

5 (11) Farm machinery and equipment, both new and used,

6 including that manufactured on special order, certified by the

7 purchaser to be used primarily for production agriculture or

8 State or federal agricultural programs, including individual

9 replacement parts for the machinery and equipment, including

10 machinery and equipment purchased for lease, and including

11 implements of husbandry defined in Section 1-130 of the

12 Illinois Vehicle Code, farm machinery and agricultural

13 chemical and fertilizer spreaders, and nurse wagons required to

14 be registered under Section 3-809 of the Illinois Vehicle Code,

15 but excluding other motor vehicles required to be registered

16 under the Illinois Vehicle Code. Horticultural polyhouses or

17 hoop houses used for propagating, growing, or overwintering

18 plants shall be considered farm machinery and equipment under

19 this item (11). Agricultural chemical tender tanks and dry

20 boxes shall include units sold separately from a motor vehicle

21 required to be licensed and units sold mounted on a motor

22 vehicle required to be licensed if the selling price of the

23 tender is separately stated.

24 Farm machinery and equipment shall include precision

25 farming equipment that is installed or purchased to be

26 installed on farm machinery and equipment including, but not

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1 limited to, tractors, harvesters, sprayers, planters, seeders,

2 or spreaders. Precision farming equipment includes, but is not

3 limited to, soil testing sensors, computers, monitors,

4 software, global positioning and mapping systems, and other

5 such equipment.

6 Farm machinery and equipment also includes computers,

7 sensors, software, and related equipment used primarily in the

8 computer-assisted operation of production agriculture

9 facilities, equipment, and activities such as, but not limited

10 to, the collection, monitoring, and correlation of animal and

11 crop data for the purpose of formulating animal diets and

12 agricultural chemicals. This item (11) is exempt from the

13 provisions of Section 3-90.

14 (12) Until June 30, 2013, fuel ~~Fuel~~ and petroleum products

15 sold to or used by an air common carrier, certified by the

16 carrier to be used for consumption, shipment, or storage in the

17 conduct of its business as an air common carrier, for a flight

18 destined for or returning from a location or locations outside

19 the United States without regard to previous or subsequent

20 domestic stopovers.

21 Beginning July 1, 2013, fuel and petroleum products sold to

22 or used by an air carrier, certified by the carrier to be used

23 for consumption, shipment, or storage in the conduct of its

24 business as an air common carrier, for a flight that (i) is

25 engaged in foreign trade or (ii) is engaged in trade between

26 the United States and any of its possessions, and (iii)

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1 transports at least one individual or package for hire from the

2 city of origination to the city of final destination on the

3 same aircraft, without regard to a change in the flight number

4 of that aircraft.

5 (13) Proceeds of mandatory service charges separately

6 stated on customers' bills for the purchase and consumption of

7 food and beverages purchased at retail from a retailer, to the

8 extent that the proceeds of the service charge are in fact

9 turned over as tips or as a substitute for tips to the

10 employees who participate directly in preparing, serving,

11 hosting or cleaning up the food or beverage function with

12 respect to which the service charge is imposed.

13 (14) Until July 1, 2003, oil field exploration, drilling,

14 and production equipment, including (i) rigs and parts of rigs,

15 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

16 tubular goods, including casing and drill strings, (iii) pumps

17 and 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 (15) Photoprocessing machinery and equipment, including

23 repair and replacement parts, both new and used, including that

24 manufactured on special order, certified by the purchaser to be

25 used primarily for photoprocessing, and including

26 photoprocessing machinery and equipment purchased for lease.

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1 (16) Until July 1, 2003, and beginning again on the

2 effective date of this amendatory Act of the 97th General

3 Assembly and thereafter, coal and aggregate exploration,

4 mining, offhighway hauling, processing, maintenance, and

5 reclamation equipment, including replacement parts and

6 equipment, and including equipment purchased for lease, but

7 excluding motor vehicles required to be registered under the

8 Illinois Vehicle Code.

9 (17) Until July 1, 2003, distillation machinery and

10 equipment, sold as a unit or kit, assembled or installed by the

11 retailer, certified by the user to be used only for the

12 production of ethyl alcohol that will be used for consumption

13 as motor fuel or as a component of motor fuel for the personal

14 use of the user, and not subject to sale or resale.

15 (18) Manufacturing and assembling machinery and equipment

16 used primarily in the process of manufacturing or assembling

17 tangible personal property for wholesale or retail sale or

18 lease, whether that sale or lease is made directly by the

19 manufacturer or by some other person, whether the materials

20 used in the process are owned by the manufacturer or some other

21 person, or whether that sale or lease is made apart from or as

22 an incident to the seller's engaging in the service occupation

23 of producing machines, tools, dies, jigs, patterns, gauges, or

24 other similar items of no commercial value on special order for

25 a particular purchaser.

26 (19) Personal property delivered to a purchaser or

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1 purchaser's donee inside Illinois when the purchase order for

2 that personal property was received by a florist located

3 outside Illinois who has a florist located inside Illinois

4 deliver the personal property.

5 (20) Semen used for artificial insemination of livestock

6 for direct agricultural production.

7 (21) Horses, or interests in horses, registered with and

8 meeting the requirements of any of the Arabian Horse Club

9 Registry of America, Appaloosa Horse Club, American Quarter

10 Horse Association, United States Trotting Association, or

11 Jockey Club, as appropriate, used for purposes of breeding or

12 racing for prizes. This item (21) is exempt from the provisions

13 of Section 3-90, and the exemption provided for under this item

14 (21) applies for all periods beginning May 30, 1995, but no

15 claim for credit or refund is allowed on or after January 1,

16 2008 for such taxes paid during the period beginning May 30,

17 2000 and ending on January 1, 2008.

18 (22) Computers and communications equipment utilized for

19 any hospital purpose and equipment used in the diagnosis,

20 analysis, or treatment of hospital patients purchased by a

21 lessor who leases the equipment, under a lease of one year or

22 longer executed or in effect at the time the lessor would

23 otherwise be subject to the tax imposed by this Act, to a

24 hospital that has been issued an active tax exemption

25 identification number by the Department under Section 1g of the

26 Retailers' Occupation Tax Act. If the equipment is leased in a

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1 manner that does not qualify for this exemption or is used in

2 any other non-exempt manner, the lessor shall be liable for the

3 tax imposed under this Act or the Service Use Tax Act, as the

4 case may be, based on the fair market value of the property at

5 the time the non-qualifying use occurs. No lessor shall collect

6 or attempt to collect an amount (however designated) that

7 purports to reimburse that lessor for the tax imposed by this

8 Act or the Service Use Tax Act, as the case may be, if the tax

9 has not been paid by the lessor. If a lessor improperly

10 collects any such amount from the lessee, the lessee shall have

11 a legal right to claim a refund of that amount from the lessor.

12 If, however, that amount is not refunded to the lessee for any

13 reason, the lessor is liable to pay that amount to the

14 Department.

15 (23) Personal property purchased by a lessor who leases the

16 property, under a lease of one year or longer executed or in

17 effect at the time the lessor would otherwise be subject to the

18 tax imposed by this Act, to a governmental body that has been

19 issued an active sales tax exemption identification number by

20 the Department under Section 1g of the Retailers' Occupation

21 Tax Act. If the property is leased in a manner that does not

22 qualify for this exemption or used in any other non-exempt

23 manner, the lessor shall be liable for the tax imposed under

24 this Act or the Service Use Tax Act, as the case may be, based

25 on the fair market value of the property at the time the

26 non-qualifying use occurs. No lessor shall collect or attempt

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1 to collect an amount (however designated) that purports to

2 reimburse that lessor for the tax imposed by this Act or the

3 Service Use Tax Act, as the case may be, if the tax has not been

4 paid by the lessor. If a lessor improperly collects any such

5 amount from the lessee, the lessee shall have a legal right to

6 claim a refund of that amount from the lessor. If, however,

7 that amount is not refunded to the lessee for any reason, the

8 lessor is liable to pay that amount to the Department.

9 (24) Beginning with taxable years ending on or after

10 December 31, 1995 and ending with taxable years ending on or

11 before December 31, 2004, personal property that is donated for

12 disaster relief to be used in a State or federally declared

13 disaster area in Illinois or bordering Illinois by a

14 manufacturer or retailer that is registered in this State to a

15 corporation, society, association, foundation, or institution

16 that has been issued a sales tax exemption identification

17 number by the Department that assists victims of the disaster

18 who reside within the declared disaster area.

19 (25) Beginning with taxable years ending on or after

20 December 31, 1995 and ending with taxable years ending on or

21 before December 31, 2004, personal property that is used in the

22 performance of infrastructure repairs in this State, including

23 but not limited to municipal roads and streets, access roads,

24 bridges, sidewalks, waste disposal systems, water and sewer

25 line extensions, water distribution and purification

26 facilities, storm water drainage and retention facilities, and

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1 sewage treatment facilities, resulting from a State or

2 federally declared disaster in Illinois or bordering Illinois

3 when such repairs are initiated on facilities located in the

4 declared disaster area within 6 months after the disaster.

5 (26) Beginning July 1, 1999, game or game birds purchased

6 at a "game breeding and hunting preserve area" as that term is

7 used in the Wildlife Code. This paragraph is exempt from the

8 provisions of Section 3-90.

9 (27) A motor vehicle, as that term is defined in Section

10 1-146 of the Illinois Vehicle Code, that is donated to a

11 corporation, limited liability company, society, association,

12 foundation, or institution that is determined by the Department

13 to be organized and operated exclusively for educational

14 purposes. For purposes of this exemption, "a corporation,

15 limited liability company, society, association, foundation,

16 or institution organized and operated exclusively for

17 educational purposes" means all tax-supported public schools,

18 private schools that offer systematic instruction in useful

19 branches of learning by methods common to public schools and

20 that compare favorably in their scope and intensity with the

21 course of study presented in tax-supported schools, and

22 vocational or technical schools or institutes organized and

23 operated exclusively to provide a course of study of not less

24 than 6 weeks duration and designed to prepare individuals to

25 follow a trade or to pursue a manual, technical, mechanical,

26 industrial, business, or commercial occupation.

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1 (28) Beginning January 1, 2000, personal property,

2 including food, purchased through fundraising events for the

3 benefit of a public or private elementary or secondary school,

4 a group of those schools, or one or more school districts if

5 the events are sponsored by an entity recognized by the school

6 district that consists primarily of volunteers and includes

7 parents and teachers of the school children. This paragraph

8 does not apply to fundraising events (i) for the benefit of

9 private home instruction or (ii) for which the fundraising

10 entity purchases the personal property sold at the events from

11 another individual or entity that sold the property for the

12 purpose of resale by the fundraising entity and that profits

13 from the sale to the fundraising entity. This paragraph is

14 exempt from the provisions of Section 3-90.

15 (29) Beginning January 1, 2000 and through December 31,

16 2001, new or used automatic vending machines that prepare and

17 serve hot food and beverages, including coffee, soup, and other

18 items, and replacement parts for these machines. Beginning

19 January 1, 2002 and through June 30, 2003, machines and parts

20 for machines used in commercial, coin-operated amusement and

21 vending business if a use or occupation tax is paid on the

22 gross receipts derived from the use of the commercial,

23 coin-operated amusement and vending machines. This paragraph

24 is exempt from the provisions of Section 3-90.

25 (30) Beginning January 1, 2001 and through June 30, 2016,

26 food for human consumption that is to be consumed off the

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1 premises where it is sold (other than alcoholic beverages, soft

2 drinks, and food that has been prepared for immediate

3 consumption) and prescription and nonprescription medicines,

4 drugs, medical appliances, and insulin, urine testing

5 materials, syringes, and needles used by diabetics, for human

6 use, when purchased for use by a person receiving medical

7 assistance under Article V of the Illinois Public Aid Code who

8 resides in a licensed long-term care facility, as defined in

9 the Nursing Home Care Act, or in a licensed facility as defined

10 in the ID/DD Community Care Act or the Specialized Mental

11 Health Rehabilitation Act.

12 (31) Beginning on the effective date of this amendatory Act

13 of the 92nd General Assembly, computers and communications

14 equipment utilized for any hospital purpose and equipment used

15 in the diagnosis, analysis, or treatment of hospital patients

16 purchased by a lessor who leases the equipment, under a lease

17 of one year or longer executed or in effect at the time the

18 lessor would otherwise be subject to the tax imposed by this

19 Act, to a hospital that has been issued an active tax exemption

20 identification number by the Department under Section 1g of the

21 Retailers' Occupation Tax Act. If the equipment is leased in a

22 manner that does not qualify for this exemption or is used in

23 any other nonexempt manner, the lessor shall be liable for the

24 tax imposed under this Act or the Service Use Tax Act, as the

25 case may be, based on the fair market value of the property at

26 the time the nonqualifying use occurs. No lessor shall collect

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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 Service Use Tax Act, as the case may be, if the tax

4 has not been paid by the lessor. If a lessor improperly

5 collects any such amount from the lessee, the lessee shall have

6 a legal right to claim a refund of that amount from the lessor.

7 If, however, that amount is not refunded to the lessee for any

8 reason, the lessor is liable to pay that amount to the

9 Department. This paragraph is exempt from the provisions of

10 Section 3-90.

11 (32) Beginning on the effective date of this amendatory Act

12 of the 92nd General Assembly, personal property purchased by a

13 lessor who leases the property, 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 governmental body that has been issued an active sales tax

17 exemption identification number by the Department under

18 Section 1g of the Retailers' Occupation Tax Act. If the

19 property is leased in a manner that does not qualify for this

20 exemption or used in any other nonexempt manner, the lessor

21 shall be liable for the tax imposed under this Act or the

22 Service Use Tax Act, as the case may be, based on the fair

23 market value of the property at the time the nonqualifying use

24 occurs. No lessor shall collect or attempt to collect an amount

25 (however designated) that purports to reimburse that lessor for

26 the tax imposed by this Act or the Service Use Tax Act, as the

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1 case may be, if the tax has not been paid by the lessor. If a

2 lessor improperly collects any such amount from the lessee, the

3 lessee shall have a legal right to claim a refund of that

4 amount from the lessor. If, however, that amount is not

5 refunded to the lessee for any reason, the lessor is liable to

6 pay that amount to the Department. This paragraph is exempt

7 from the provisions of Section 3-90.

8 (33) On and after July 1, 2003 and through June 30, 2004,

9 the use in this State of motor vehicles of the second division

10 with a gross vehicle weight in excess of 8,000 pounds and that

11 are subject to the commercial distribution fee imposed under

12 Section 3-815.1 of the Illinois Vehicle Code. Beginning on July

13 1, 2004 and through June 30, 2005, the use in this State of

14 motor vehicles of the second division: (i) with a gross vehicle

15 weight rating in excess of 8,000 pounds; (ii) that are subject

16 to the commercial distribution fee imposed under Section

17 3-815.1 of the Illinois Vehicle Code; and (iii) that are

18 primarily used for commercial purposes. Through June 30, 2005,

19 this exemption applies to repair and replacement parts added

20 after the initial purchase of such a motor vehicle if that

21 motor vehicle is used in a manner that would qualify for the

22 rolling stock exemption otherwise provided for in this Act. For

23 purposes of this paragraph, the term "used for commercial

24 purposes" means the transportation of persons or property in

25 furtherance of any commercial or industrial enterprise,

26 whether for-hire or not.

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1 (34) Beginning January 1, 2008, tangible personal property

2 used in the construction or maintenance of a community water

3 supply, as defined under Section 3.145 of the Environmental

4 Protection Act, that is operated by a not-for-profit

5 corporation that holds a valid water supply permit issued under

6 Title IV of the Environmental Protection Act. This paragraph is

7 exempt from the provisions of Section 3-90.

8 (35) Beginning January 1, 2010, materials, parts,

9 equipment, components, and furnishings incorporated into or

10 upon an aircraft as part of the modification, refurbishment,

11 completion, replacement, repair, or maintenance of the

12 aircraft. This exemption includes consumable supplies used in

13 the modification, refurbishment, completion, replacement,

14 repair, and maintenance of aircraft, but excludes any

15 materials, parts, equipment, components, and consumable

16 supplies used in the modification, replacement, repair, and

17 maintenance of aircraft engines or power plants, whether such

18 engines or power plants are installed or uninstalled upon any

19 such aircraft. "Consumable supplies" include, but are not

20 limited to, adhesive, tape, sandpaper, general purpose

21 lubricants, cleaning solution, latex gloves, and protective

22 films. This exemption applies only to those organizations that

23 (i) hold an Air Agency Certificate and are empowered to operate

24 an approved repair station by the Federal Aviation

25 Administration, (ii) have a Class IV Rating, and (iii) conduct

26 operations in accordance with Part 145 of the Federal Aviation

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1 Regulations. The exemption does not include aircraft operated

2 by a commercial air carrier providing scheduled passenger air

3 service pursuant to authority issued under Part 121 or Part 129

4 of the Federal Aviation Regulations.

5 (36) Tangible personal property purchased by a

6 public-facilities corporation, as described in Section

7 11-65-10 of the Illinois Municipal Code, for purposes of

8 constructing or furnishing a municipal convention hall, but

9 only if the legal title to the municipal convention hall is

10 transferred to the municipality without any further

11 consideration by or on behalf of the municipality at the time

12 of the completion of the municipal convention hall or upon the

13 retirement or redemption of any bonds or other debt instruments

14 issued by the public-facilities corporation in connection with

15 the development of the municipal convention hall. This

16 exemption includes existing public-facilities corporations as

17 provided in Section 11-65-25 of the Illinois Municipal Code.

18 This paragraph is exempt from the provisions of Section 3-90.

19 (Source: P.A. 96-116, eff. 7-31-09; 96-339, eff. 7-1-10;

20 96-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff.

21 7-2-10; 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-431, eff.

22 8-16-11; 97-636, eff. 6-1-12; 97-767, eff. 7-9-12.)

23 Section 10. The Service Use Tax Act is amended by changing

24 Section 3-5 as follows:

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1 (35 ILCS 110/3-5)

2 Sec. 3-5. Exemptions. Use of the following tangible

3 personal property is exempt from the tax imposed by this Act:

4 (1) Personal property purchased from a corporation,

5 society, association, foundation, institution, or

6 organization, other than a limited liability company, that is

7 organized and operated as a not-for-profit service enterprise

8 for the benefit of persons 65 years of age or older if the

9 personal property was not purchased by the enterprise for the

10 purpose of resale by the enterprise.

11 (2) Personal property purchased by a non-profit Illinois

12 county fair association for use in conducting, operating, or

13 promoting the county fair.

14 (3) Personal property purchased by a not-for-profit arts or

15 cultural organization that establishes, by proof required by

16 the Department by rule, that it has received an exemption under

17 Section 501(c)(3) of the Internal Revenue Code and that is

18 organized and operated primarily for the presentation or

19 support of arts or cultural programming, activities, or

20 services. These organizations include, but are not limited to,

21 music and dramatic arts organizations such as symphony

22 orchestras and theatrical groups, arts and cultural service

23 organizations, local arts councils, visual arts organizations,

24 and media arts organizations. On and after the effective date

25 of this amendatory Act of the 92nd General Assembly, however,

26 an entity otherwise eligible for this exemption shall not make

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1 tax-free purchases unless it has an active identification

2 number issued by the Department.

3 (4) Legal tender, currency, medallions, or gold or silver

4 coinage issued by the State of Illinois, the government of the

5 United States of America, or the government of any foreign

6 country, and bullion.

7 (5) Until July 1, 2003 and beginning again on September 1,

8 2004 through August 30, 2014, graphic arts machinery and

9 equipment, including repair and replacement parts, both new and

10 used, and including that manufactured on special order or

11 purchased for lease, certified by the purchaser to be used

12 primarily for graphic arts production. Equipment includes

13 chemicals or chemicals acting as catalysts but only if the

14 chemicals or chemicals acting as catalysts effect a direct and

15 immediate change upon a graphic arts product.

16 (6) Personal property purchased from a teacher-sponsored

17 student organization affiliated with an elementary or

18 secondary school located in Illinois.

19 (7) Farm machinery and equipment, both new and used,

20 including that manufactured on special order, certified by the

21 purchaser to be used primarily for production agriculture or

22 State or federal agricultural programs, including individual

23 replacement parts for the machinery and equipment, including

24 machinery and equipment purchased for lease, and including

25 implements of husbandry defined in Section 1-130 of the

26 Illinois Vehicle Code, farm machinery and agricultural

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1 chemical and fertilizer spreaders, and nurse wagons required to

2 be registered under Section 3-809 of the Illinois Vehicle Code,

3 but excluding other motor vehicles required to be registered

4 under the Illinois Vehicle Code. Horticultural polyhouses or

5 hoop houses used for propagating, growing, or overwintering

6 plants shall be considered farm machinery and equipment under

7 this item (7). Agricultural chemical tender tanks and dry boxes

8 shall include units sold separately from a motor vehicle

9 required to be licensed and units sold mounted on a motor

10 vehicle required to be licensed if the selling price of the

11 tender is separately stated.

12 Farm machinery and equipment shall include precision

13 farming equipment that is installed or purchased to be

14 installed on farm machinery and equipment including, but not

15 limited to, tractors, harvesters, sprayers, planters, seeders,

16 or spreaders. Precision farming equipment includes, but is not

17 limited to, soil testing sensors, computers, monitors,

18 software, global positioning and mapping systems, and other

19 such equipment.

20 Farm machinery and equipment also includes computers,

21 sensors, software, and related equipment used primarily in the

22 computer-assisted operation of production agriculture

23 facilities, equipment, and activities such as, but not limited

24 to, the collection, monitoring, and correlation of animal and

25 crop data for the purpose of formulating animal diets and

26 agricultural chemicals. This item (7) is exempt from the

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1 provisions of Section 3-75.

2 (8) Until June 30, 2013, fuel ~~Fuel~~ and petroleum products

3 sold to or used by an air common carrier, certified by the

4 carrier to be used for consumption, shipment, or storage in the

5 conduct of its business as an air common carrier, for a flight

6 destined for or returning from a location or locations outside

7 the United States without regard to previous or subsequent

8 domestic stopovers.

9 Beginning July 1, 2013, fuel and petroleum products sold to

10 or used by an air carrier, certified by the carrier to be used

11 for consumption, shipment, or storage in the conduct of its

12 business as an air common carrier, for a flight that (i) is

13 engaged in foreign trade or (ii) is engaged in trade between

14 the United States and any of its possessions, and (iii)

15 transports at least one individual or package for hire from the

16 city of origination to the city of final destination on the

17 same aircraft, without regard to a change in the flight number

18 of that aircraft.

19 (9) Proceeds of mandatory service charges separately

20 stated on customers' bills for the purchase and consumption of

21 food and beverages acquired as an incident to the purchase of a

22 service from a serviceman, to the extent that the proceeds of

23 the service charge are in fact turned over as tips or as a

24 substitute for tips to the employees who participate directly

25 in preparing, serving, hosting or cleaning up the food or

26 beverage function with respect to which the service charge is

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1 imposed.

2 (10) Until July 1, 2003, oil field exploration, drilling,

3 and production equipment, including (i) rigs and parts of rigs,

4 rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and

5 tubular goods, including casing and drill strings, (iii) pumps

6 and pump-jack units, (iv) storage tanks and flow lines, (v) any

7 individual replacement part for oil field exploration,

8 drilling, and production equipment, and (vi) machinery and

9 equipment purchased for lease; but excluding motor vehicles

10 required to be registered under the Illinois Vehicle Code.

11 (11) Proceeds from the sale of photoprocessing machinery

12 and equipment, including repair and replacement parts, both new

13 and used, including that manufactured on special order,

14 certified by the purchaser to be used primarily for

15 photoprocessing, and including photoprocessing machinery and

16 equipment purchased for lease.

17 (12) Until July 1, 2003, and beginning again on the

18 effective date of this amendatory Act of the 97th General

19 Assembly and thereafter, coal and aggregate exploration,

20 mining, offhighway hauling, processing, maintenance, and

21 reclamation equipment, including replacement parts and

22 equipment, and including equipment purchased for lease, but

23 excluding motor vehicles required to be registered under the

24 Illinois Vehicle Code.

25 (13) Semen used for artificial insemination of livestock

26 for direct agricultural production.

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1 (14) Horses, or interests in horses, registered with and

2 meeting the requirements of any of the Arabian Horse Club

3 Registry of America, Appaloosa Horse Club, American Quarter

4 Horse Association, United States Trotting Association, or

5 Jockey Club, as appropriate, used for purposes of breeding or

6 racing for prizes. This item (14) is exempt from the provisions

7 of Section 3-75, and the exemption provided for under this item

8 (14) applies for all periods beginning May 30, 1995, but no

9 claim for credit or refund is allowed on or after the effective

10 date of this amendatory Act of the 95th General Assembly for

11 such taxes paid during the period beginning May 30, 2000 and

12 ending on the effective date of this amendatory Act of the 95th

13 General Assembly.

14 (15) Computers and communications equipment utilized for

15 any hospital purpose and equipment used in the diagnosis,

16 analysis, or treatment of hospital patients purchased by a

17 lessor who leases the equipment, under a lease of one year or

18 longer executed or in effect at the time the lessor would

19 otherwise be subject to the tax imposed by this Act, to a

20 hospital that has been issued an active tax exemption

21 identification number by the Department under Section 1g of the

22 Retailers' Occupation Tax Act. If the equipment is leased in a

23 manner that does not qualify for this exemption or is used in

24 any other non-exempt manner, the lessor shall be liable for the

25 tax imposed under this Act or the Use Tax Act, as the case may

26 be, based on the fair market value of the property at the time

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1 the non-qualifying use occurs. No lessor shall collect or

2 attempt to collect an amount (however designated) that purports

3 to reimburse that lessor for the tax imposed by this Act or the

4 Use Tax Act, as the case may be, if the tax has not been paid by

5 the lessor. If a lessor improperly collects any such amount

6 from the lessee, the lessee shall have a legal right to claim a

7 refund of that amount from the lessor. If, however, that amount

8 is not refunded to the lessee for any reason, the lessor is

9 liable to pay that amount to the Department.

10 (16) Personal property purchased by a lessor who leases the

11 property, under a lease of one year or longer executed or in

12 effect at the time the lessor would otherwise be subject to the

13 tax imposed by this Act, to a governmental body that has been

14 issued an active tax exemption identification number by the

15 Department under Section 1g of the Retailers' Occupation Tax

16 Act. If the property is leased in a manner that does not

17 qualify for this exemption or is used in any other non-exempt

18 manner, the lessor shall be liable for the tax imposed under

19 this Act or the Use Tax Act, as the case may be, based on the

20 fair market value of the property at the time the

21 non-qualifying use occurs. No lessor shall collect or attempt

22 to collect an amount (however designated) that purports to

23 reimburse that lessor for the tax imposed by this Act or the

24 Use Tax Act, as the case may be, if the tax has not been paid by

25 the lessor. If a lessor improperly collects any such amount

26 from the lessee, the lessee shall have a legal right to claim a

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1 refund of that amount from the lessor. If, however, that amount

2 is not refunded to the lessee for any reason, the lessor is

3 liable to pay that amount to the Department.

4 (17) Beginning with taxable years ending on or after

5 December 31, 1995 and ending with taxable years ending on or

6 before December 31, 2004, personal property that is donated for

7 disaster relief to be used in a State or federally declared

8 disaster area in Illinois or bordering Illinois by a

9 manufacturer or retailer that is registered in this State to a

10 corporation, society, association, foundation, or institution

11 that has been issued a sales tax exemption identification

12 number by the Department that assists victims of the disaster

13 who reside within the declared disaster area.

14 (18) Beginning with taxable years ending on or after

15 December 31, 1995 and ending with taxable years ending on or

16 before December 31, 2004, personal property that is used in the

17 performance of infrastructure repairs in this State, including

18 but not limited to municipal roads and streets, access roads,

19 bridges, sidewalks, waste disposal systems, water and sewer

20 line extensions, water distribution and purification

21 facilities, storm water drainage and retention facilities, and

22 sewage treatment facilities, resulting from a State or

23 federally declared disaster in Illinois or bordering Illinois

24 when such repairs are initiated on facilities located in the

25 declared disaster area within 6 months after the disaster.

26 (19) Beginning July 1, 1999, game or game birds purchased

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1 at a "game breeding and hunting preserve area" as that term is

2 used in the Wildlife Code. This paragraph is exempt from the

3 provisions of Section 3-75.

4 (20) A motor vehicle, as that term is defined in Section

5 1-146 of the Illinois Vehicle Code, that is donated to a

6 corporation, limited liability company, society, association,

7 foundation, or institution that is determined by the Department

8 to be organized and operated exclusively for educational

9 purposes. For purposes of this exemption, "a corporation,

10 limited liability company, society, association, foundation,

11 or institution organized and operated exclusively for

12 educational purposes" means all tax-supported public schools,

13 private schools that offer systematic instruction in useful

14 branches of learning by methods common to public schools and

15 that compare favorably in their scope and intensity with the

16 course of study presented in tax-supported schools, and

17 vocational or technical schools or institutes organized and

18 operated exclusively to provide a course of study of not less

19 than 6 weeks duration and designed to prepare individuals to

20 follow a trade or to pursue a manual, technical, mechanical,

21 industrial, business, or commercial occupation.

22 (21) Beginning January 1, 2000, personal property,

23 including food, purchased through fundraising events for the

24 benefit of a public or private elementary or secondary school,

25 a group of those schools, or one or more school districts if

26 the events are sponsored by an entity recognized by the school

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1 district that consists primarily of volunteers and includes

2 parents and teachers of the school children. This paragraph

3 does not apply to fundraising events (i) for the benefit of

4 private home instruction or (ii) for which the fundraising

5 entity purchases the personal property sold at the events from

6 another individual or entity that sold the property for the

7 purpose of resale by the fundraising entity and that profits

8 from the sale to the fundraising entity. This paragraph is

9 exempt from the provisions of Section 3-75.

10 (22) Beginning January 1, 2000 and through December 31,

11 2001, new or used automatic vending machines that prepare and

12 serve hot food and beverages, including coffee, soup, and other

13 items, and replacement parts for these machines. Beginning

14 January 1, 2002 and through June 30, 2003, machines and parts

15 for machines used in commercial, coin-operated amusement and

16 vending business if a use or occupation tax is paid on the

17 gross receipts derived from the use of the commercial,

18 coin-operated amusement and vending machines. This paragraph

19 is exempt from the provisions of Section 3-75.

20 (23) Beginning August 23, 2001 and through June 30, 2016,

21 food for human consumption that is to be consumed off the

22 premises where it is sold (other than alcoholic beverages, soft

23 drinks, and food that has been prepared for immediate

24 consumption) and prescription and nonprescription medicines,

25 drugs, medical appliances, and insulin, urine testing

26 materials, syringes, and needles used by diabetics, for human

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1 use, when purchased for use by a person receiving medical

2 assistance under Article V of the Illinois Public Aid Code who

3 resides in a licensed long-term care facility, as defined in

4 the Nursing Home Care Act, or in a licensed facility as defined

5 in the ID/DD Community Care Act or the Specialized Mental

6 Health Rehabilitation Act.

7 (24) Beginning on the effective date of this amendatory Act

8 of the 92nd General Assembly, computers and communications

9 equipment utilized for any hospital purpose and equipment used

10 in the diagnosis, analysis, or treatment of hospital patients

11 purchased by a lessor who leases the equipment, under a lease

12 of one year or longer executed or in effect at the time the

13 lessor would otherwise be subject to the tax imposed by this

14 Act, to a hospital that has been issued an active tax exemption

15 identification number by the Department under Section 1g of the

16 Retailers' Occupation Tax Act. If the equipment is leased in a

17 manner that does not qualify for this exemption or is used in

18 any other nonexempt manner, the lessor shall be liable for the

19 tax imposed under this Act or the Use Tax Act, as the case may

20 be, based on the fair market value of the property at the time

21 the nonqualifying use occurs. No lessor shall collect or

22 attempt to collect an amount (however designated) that purports

23 to reimburse that lessor for the tax imposed by this Act or the

24 Use Tax Act, as the case may be, if the tax has not been paid by

25 the lessor. If a lessor improperly collects any such amount

26 from the lessee, the lessee shall have a legal right to claim a

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1 refund of that amount from the lessor. If, however, that amount

2 is not refunded to the lessee for any reason, the lessor is

3 liable to pay that amount to the Department. This paragraph is

4 exempt from the provisions of Section 3-75.

5 (25) Beginning on the effective date of this amendatory Act

6 of the 92nd General Assembly, personal property purchased by a

7 lessor who leases the property, under a lease of one year or

8 longer executed or in effect at the time the lessor would

9 otherwise be subject to the tax imposed by this Act, to a

10 governmental body that has been issued an active tax exemption

11 identification number by the Department under Section 1g of the

12 Retailers' Occupation Tax Act. If the property is leased in a

13 manner that does not qualify for this exemption or is used in

14 any other nonexempt manner, the lessor shall be liable for the

15 tax imposed under this Act or the Use Tax Act, as the case may

16 be, based on the fair market value of the property at the time

17 the nonqualifying use occurs. No lessor shall collect or

18 attempt to collect an amount (however designated) that purports

19 to reimburse that lessor for the tax imposed by this Act or the

20 Use Tax Act, as the case may be, if the tax has not been paid by

21 the lessor. If a lessor improperly collects any such amount

22 from the lessee, the lessee shall have a legal right to claim a

23 refund of that amount from the lessor. If, however, that amount

24 is not refunded to the lessee for any reason, the lessor is

25 liable to pay that amount to the Department. This paragraph is

26 exempt from the provisions of Section 3-75.

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1 (26) Beginning January 1, 2008, tangible personal property

2 used in the construction or maintenance of a community water

3 supply, as defined under Section 3.145 of the Environmental

4 Protection Act, that is operated by a not-for-profit

5 corporation that holds a valid water supply permit issued under

6 Title IV of the Environmental Protection Act. This paragraph is

7 exempt from the provisions of Section 3-75.

8 (27) Beginning January 1, 2010, materials, parts,

9 equipment, components, and furnishings incorporated into or

10 upon an aircraft as part of the modification, refurbishment,

11 completion, replacement, repair, or maintenance of the

12 aircraft. This exemption includes consumable supplies used in

13 the modification, refurbishment, completion, replacement,

14 repair, and maintenance of aircraft, but excludes any

15 materials, parts, equipment, components, and consumable

16 supplies used in the modification, replacement, repair, and

17 maintenance of aircraft engines or power plants, whether such

18 engines or power plants are installed or uninstalled upon any

19 such aircraft. "Consumable supplies" include, but are not

20 limited to, adhesive, tape, sandpaper, general purpose

21 lubricants, cleaning solution, latex gloves, and protective

22 films. This exemption applies only to those organizations that

23 (i) hold an Air Agency Certificate and are empowered to operate

24 an approved repair station by the Federal Aviation

25 Administration, (ii) have a Class IV Rating, and (iii) conduct

26 operations in accordance with Part 145 of the Federal Aviation

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1 Regulations. The exemption does not include aircraft operated

2 by a commercial air carrier providing scheduled passenger air

3 service pursuant to authority issued under Part 121 or Part 129

4 of the Federal Aviation Regulations.

5 (28) Tangible personal property purchased by a

6 public-facilities corporation, as described in Section

7 11-65-10 of the Illinois Municipal Code, for purposes of

8 constructing or furnishing a municipal convention hall, but

9 only if the legal title to the municipal convention hall is

10 transferred to the municipality without any further

11 consideration by or on behalf of the municipality at the time

12 of the completion of the municipal convention hall or upon the

13 retirement or redemption of any bonds or other debt instruments

14 issued by the public-facilities corporation in connection with

15 the development of the municipal convention hall. This

16 exemption includes existing public-facilities corporations as

17 provided in Section 11-65-25 of the Illinois Municipal Code.

18 This paragraph is exempt from the provisions of Section 3-75.

19 (Source: P.A. 96-116, eff. 7-31-09; 96-339, eff. 7-1-10;

20 96-532, eff. 8-14-09; 96-759, eff. 1-1-10; 96-1000, eff.

21 7-2-10; 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-431, eff.

22 8-16-11; 97-636, eff. 6-1-12; 97-767, eff. 7-9-12.)

23 Section 15. The Service Occupation Tax Act is amended by

24 changing Section 3-5 as follows:

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1 (35 ILCS 115/3-5)

2 Sec. 3-5. Exemptions. The following tangible personal

3 property is exempt from the tax imposed by this Act:

4 (1) Personal property sold by a corporation, society,

5 association, foundation, institution, or organization, other

6 than a limited liability company, that is organized and

7 operated as a not-for-profit service enterprise for the benefit

8 of persons 65 years of age or older if the personal property

9 was not purchased by the enterprise for the purpose of resale

10 by the enterprise.

11 (2) Personal property purchased by a not-for-profit

12 Illinois county fair association for use in conducting,

13 operating, or promoting the county fair.

14 (3) Personal property purchased by any not-for-profit arts

15 or cultural organization that establishes, by proof required by

16 the Department by rule, that it has received an exemption under

17 Section 501(c)(3) of the Internal Revenue Code and that is

18 organized and operated primarily for the presentation or

19 support of arts or cultural programming, activities, or

20 services. These organizations include, but are not limited to,

21 music and dramatic arts organizations such as symphony

22 orchestras and theatrical groups, arts and cultural service

23 organizations, local arts councils, visual arts organizations,

24 and media arts organizations. On and after the effective date

25 of this amendatory Act of the 92nd General Assembly, however,

26 an entity otherwise eligible for this exemption shall not make

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