Bill Text: IL HB3902 | 2019-2020 | 101st General Assembly | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

---

Bill Title: Reinserts the provisions of the introduced bill with changes and an updated statutory base. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the exemption for materials, parts, equipment, components, and furnishings incorporated into or upon an aircraft applies through December 31, 2024 (in the introduced bill, the exemption applies permanently). Provides that no claim for credit or refund is allowed for taxes paid as a result of the disallowance of the exemption on or after January 1, 2015 and prior to the effective date of the amendatory Act. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Passed) 2020-02-06 - Public Act . . . . . . . . . 101-0629 [HB3902 Detail]

Download: Illinois-2019-HB3902-Engrossed.html

---

HB3902 Engrossed LRB101 13854 HLH 62714 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing Section
3-5 as follows:
(35 ILCS 105/3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by a not-for-profit arts or
cultural organization that establishes, by proof required by
the Department by rule, that it has received an exemption under
Section 501(c)(3) of the Internal Revenue Code and that is
organized and operated primarily for the presentation or

HB3902 Engrossed - 2 - LRB101 13854 HLH 62714 b
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after July 1, 2001 (the
effective date of Public Act 92-35), however, an entity
otherwise eligible for this exemption shall not make tax-free
purchases unless it has an active identification number issued
by the Department.
(4) Personal property purchased by a governmental body, by
a corporation, society, association, foundation, or
institution organized and operated exclusively for charitable,
religious, or educational purposes, or by a not-for-profit
corporation, society, association, foundation, institution, or
organization that has no compensated officers or employees and
that is organized and operated primarily for the recreation of
persons 55 years of age or older. A limited liability company
may qualify for the exemption under this paragraph only if the
limited liability company is organized and operated
exclusively for educational purposes. On and after July 1,
1987, however, no entity otherwise eligible for this exemption
shall make tax-free purchases unless it has an active exemption
identification number issued by the Department.
(5) Until July 1, 2003, a passenger car that is a
replacement vehicle to the extent that the purchase price of

HB3902 Engrossed - 3 - LRB101 13854 HLH 62714 b
the car is subject to the Replacement Vehicle Tax.
(6) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new and
used, and including that manufactured on special order,
certified by the purchaser to be used primarily for graphic
arts production, and including machinery and equipment
purchased for lease. Equipment includes chemicals or chemicals
acting as catalysts but only if the chemicals or chemicals
acting as catalysts effect a direct and immediate change upon a
graphic arts product. Beginning on July 1, 2017, graphic arts
machinery and equipment is included in the manufacturing and
assembling machinery and equipment exemption under paragraph
(18).
(7) Farm chemicals.
(8) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(9) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(10) A motor vehicle that is used for automobile renting,
as defined in the Automobile Renting Occupation and Use Tax
Act.
(11) Farm machinery and equipment, both new and used,

HB3902 Engrossed - 4 - LRB101 13854 HLH 62714 b
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required to
be registered under Section 3-809 of the Illinois Vehicle Code,
but excluding other motor vehicles required to be registered
under the Illinois Vehicle Code. Horticultural polyhouses or
hoop houses used for propagating, growing, or overwintering
plants shall be considered farm machinery and equipment under
this item (11). Agricultural chemical tender tanks and dry
boxes shall include units sold separately from a motor vehicle
required to be licensed and units sold mounted on a motor
vehicle required to be licensed if the selling price of the
tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,
software, global positioning and mapping systems, and other
such equipment.

HB3902 Engrossed - 5 - LRB101 13854 HLH 62714 b
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals. This item (11) is exempt from the
provisions of Section 3-90.
(12) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common 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 destined
for or returning from a location or locations outside the
United States without regard to previous or subsequent domestic
stopovers.
Beginning July 1, 2013, 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 is engaged in trade between the
United States and any of its possessions and (ii) 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.
(13) Proceeds of mandatory service charges separately

HB3902 Engrossed - 6 - LRB101 13854 HLH 62714 b
stated on customers' bills for the purchase and consumption of
food and beverages purchased at retail from a retailer, to the
extent that the proceeds of the service charge are in fact
turned over as tips or as a substitute for tips to the
employees who participate directly in preparing, serving,
hosting or cleaning up the food or beverage function with
respect to which the service charge is imposed.
(14) Until July 1, 2003, oil field exploration, drilling,
and production equipment, including (i) rigs and parts of rigs,
rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
tubular goods, including casing and drill strings, (iii) pumps
and pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(15) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including that
manufactured on special order, certified by the purchaser to be
used primarily for photoprocessing, and including
photoprocessing machinery and equipment purchased for lease.
(16) Until July 1, 2023, coal and aggregate exploration,
mining, off-highway hauling, processing, maintenance, and
reclamation equipment, including replacement parts and
equipment, and including equipment purchased for lease, but
excluding motor vehicles required to be registered under the

HB3902 Engrossed - 7 - LRB101 13854 HLH 62714 b
Illinois Vehicle Code. The changes made to this Section by
Public Act 97-767 apply on and after July 1, 2003, but no claim
for credit or refund is allowed on or after August 16, 2013
(the effective date of Public Act 98-456) for such taxes paid
during the period beginning July 1, 2003 and ending on August
16, 2013 (the effective date of Public Act 98-456).
(17) Until July 1, 2003, distillation machinery and
equipment, sold as a unit or kit, assembled or installed by the
retailer, certified by the user to be used only for the
production of ethyl alcohol that will be used for consumption
as motor fuel or as a component of motor fuel for the personal
use of the user, and not subject to sale or resale.
(18) Manufacturing and assembling machinery and equipment
used primarily in the process of manufacturing or assembling
tangible personal property for wholesale or retail sale or
lease, whether that sale or lease is made directly by the
manufacturer or by some other person, whether the materials
used in the process are owned by the manufacturer or some other
person, or whether that sale or lease is made apart from or as
an incident to the seller's engaging in the service occupation
of producing machines, tools, dies, jigs, patterns, gauges, or
other similar items of no commercial value on special order for
a particular purchaser. The exemption provided by this
paragraph (18) includes production related tangible personal
property, as defined in Section 3-50, purchased on or after
July 1, 2019. The exemption provided by this paragraph (18)

HB3902 Engrossed - 8 - LRB101 13854 HLH 62714 b
does not include machinery and equipment used in (i) the
generation of electricity for wholesale or retail sale; (ii)
the generation or treatment of natural or artificial gas for
wholesale or retail sale that is delivered to customers through
pipes, pipelines, or mains; or (iii) the treatment of water for
wholesale or retail sale that is delivered to customers through
pipes, pipelines, or mains. The provisions of Public Act 98-583
are declaratory of existing law as to the meaning and scope of
this exemption. Beginning on July 1, 2017, the exemption
provided by this paragraph (18) includes, but is not limited
to, graphic arts machinery and equipment, as defined in
paragraph (6) of this Section.
(19) Personal property delivered to a purchaser or
purchaser's donee inside Illinois when the purchase order for
that personal property was received by a florist located
outside Illinois who has a florist located inside Illinois
deliver the personal property.
(20) Semen used for artificial insemination of livestock
for direct agricultural production.
(21) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (21) is exempt from the provisions
of Section 3-90, and the exemption provided for under this item

HB3902 Engrossed - 9 - LRB101 13854 HLH 62714 b
(21) applies for all periods beginning May 30, 1995, but no
claim for credit or refund is allowed on or after January 1,
2008 for such taxes paid during the period beginning May 30,
2000 and ending on January 1, 2008.
(22) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. If the equipment is leased in a
manner that does not qualify for this exemption or is used in
any other non-exempt manner, the lessor shall be liable for the
tax imposed under this Act or the Service Use Tax Act, as the
case may be, based on the fair market value of the property at
the time the non-qualifying use occurs. No lessor shall collect
or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Service Use Tax Act, as the case may be, if the tax
has not been paid by the lessor. If a lessor improperly
collects any such amount from the lessee, the lessee shall have
a legal right to claim a refund of that amount from the lessor.
If, however, that amount is not refunded to the lessee for any
reason, the lessor is liable to pay that amount to the

HB3902 Engrossed - 10 - LRB101 13854 HLH 62714 b
Department.
(23) Personal property purchased by a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time the lessor would otherwise be subject to the
tax imposed by this Act, to a governmental body that has been
issued an active sales tax exemption identification number by
the Department under Section 1g of the Retailers' Occupation
Tax Act. If the property is leased in a manner that does not
qualify for this exemption or used in any other non-exempt
manner, the lessor shall be liable for the tax imposed under
this Act or the Service Use Tax Act, as the case may be, based
on the fair market value of the property at the time the
non-qualifying use occurs. No lessor shall collect or attempt
to collect an amount (however designated) that purports to
reimburse that lessor for the tax imposed by this Act or the
Service Use Tax Act, as the case may be, if the tax has not been
paid by the lessor. If a lessor improperly collects any such
amount from the lessee, the lessee shall have a legal right to
claim a refund of that amount from the lessor. If, however,
that amount is not refunded to the lessee for any reason, the
lessor is liable to pay that amount to the Department.
(24) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated for
disaster relief to be used in a State or federally declared
disaster area in Illinois or bordering Illinois by a

HB3902 Engrossed - 11 - LRB101 13854 HLH 62714 b
manufacturer or retailer that is registered in this State to a
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(25) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in the
performance of infrastructure repairs in this State, including
but not limited to municipal roads and streets, access roads,
bridges, sidewalks, waste disposal systems, water and sewer
line extensions, water distribution and purification
facilities, storm water drainage and retention facilities, and
sewage treatment facilities, resulting from a State or
federally declared disaster in Illinois or bordering Illinois
when such repairs are initiated on facilities located in the
declared disaster area within 6 months after the disaster.
(26) Beginning July 1, 1999, game or game birds purchased
at a "game breeding and hunting preserve area" as that term is
used in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-90.
(27) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the Department
to be organized and operated exclusively for educational

HB3902 Engrossed - 12 - LRB101 13854 HLH 62714 b
purposes. For purposes of this exemption, "a corporation,
limited liability company, society, association, foundation,
or institution organized and operated exclusively for
educational purposes" means all tax-supported public schools,
private schools that offer systematic instruction in useful
branches of learning by methods common to public schools and
that compare favorably in their scope and intensity with the
course of study presented in tax-supported schools, and
vocational or technical schools or institutes organized and
operated exclusively to provide a course of study of not less
than 6 weeks duration and designed to prepare individuals to
follow a trade or to pursue a manual, technical, mechanical,
industrial, business, or commercial occupation.
(28) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary school,
a group of those schools, or one or more school districts if
the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that profits
from the sale to the fundraising entity. This paragraph is

HB3902 Engrossed - 13 - LRB101 13854 HLH 62714 b
exempt from the provisions of Section 3-90.
(29) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and other
items, and replacement parts for these machines. Beginning
January 1, 2002 and through June 30, 2003, machines and parts
for machines used in commercial, coin-operated amusement and
vending business if a use or occupation tax is paid on the
gross receipts derived from the use of the commercial,
coin-operated amusement and vending machines. This paragraph
is exempt from the provisions of Section 3-90.
(30) Beginning January 1, 2001 and through June 30, 2016,
food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages, soft
drinks, and food that has been prepared for immediate
consumption) and prescription and nonprescription medicines,
drugs, medical appliances, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, when purchased for use by a person receiving medical
assistance under Article V of the Illinois Public Aid Code who
resides in a licensed long-term care facility, as defined in
the Nursing Home Care Act, or in a licensed facility as defined
in the ID/DD Community Care Act, the MC/DD Act, or the
Specialized Mental Health Rehabilitation Act of 2013.
(31) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), computers and communications equipment

HB3902 Engrossed - 14 - LRB101 13854 HLH 62714 b
utilized for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients
purchased by a lessor who leases the equipment, under a lease
of one year or longer executed or in effect at the time the
lessor would otherwise be subject to the tax imposed by this
Act, to a hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. If the equipment is leased in a
manner that does not qualify for this exemption or is used in
any other nonexempt manner, the lessor shall be liable for the
tax imposed under this Act or the Service Use Tax Act, as the
case may be, based on the fair market value of the property at
the time the nonqualifying use occurs. No lessor shall collect
or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Service Use Tax Act, as the case may be, if the tax
has not been paid by the lessor. If a lessor improperly
collects any such amount from the lessee, the lessee shall have
a legal right to claim a refund of that amount from the lessor.
If, however, that amount is not refunded to the lessee for any
reason, the lessor is liable to pay that amount to the
Department. This paragraph is exempt from the provisions of
Section 3-90.
(32) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), personal property purchased by a lessor who
leases the property, under a lease of one year or longer

HB3902 Engrossed - 15 - LRB101 13854 HLH 62714 b
executed or in effect at the time the lessor would otherwise be
subject to the tax imposed by this Act, to a governmental body
that has been issued an active sales tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. If the property is leased in a
manner that does not qualify for this exemption or used in any
other nonexempt manner, the lessor shall be liable for the tax
imposed under this Act or the Service Use Tax Act, as the case
may be, based on the fair market value of the property at the
time the nonqualifying use occurs. No lessor shall collect or
attempt to collect an amount (however designated) that purports
to reimburse that lessor for the tax imposed by this Act or the
Service Use Tax Act, as the case may be, if the tax has not been
paid by the lessor. If a lessor improperly collects any such
amount from the lessee, the lessee shall have a legal right to
claim a refund of that amount from the lessor. If, however,
that amount is not refunded to the lessee for any reason, the
lessor is liable to pay that amount to the Department. This
paragraph is exempt from the provisions of Section 3-90.
(33) On and after July 1, 2003 and through June 30, 2004,
the use in this State of motor vehicles of the second division
with a gross vehicle weight in excess of 8,000 pounds and that
are subject to the commercial distribution fee imposed under
Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
1, 2004 and through June 30, 2005, the use in this State of
motor vehicles of the second division: (i) with a gross vehicle

HB3902 Engrossed - 16 - LRB101 13854 HLH 62714 b
weight rating in excess of 8,000 pounds; (ii) that are subject
to the commercial distribution fee imposed under Section
3-815.1 of the Illinois Vehicle Code; and (iii) that are
primarily used for commercial purposes. Through June 30, 2005,
this exemption applies to repair and replacement parts added
after the initial purchase of such a motor vehicle if that
motor vehicle is used in a manner that would qualify for the
rolling stock exemption otherwise provided for in this Act. For
purposes of this paragraph, the term "used for commercial
purposes" means the transportation of persons or property in
furtherance of any commercial or industrial enterprise,
whether for-hire or not.
(34) Beginning January 1, 2008, tangible personal property
used in the construction or maintenance of a community water
supply, as defined under Section 3.145 of the Environmental
Protection Act, that is operated by a not-for-profit
corporation that holds a valid water supply permit issued under
Title IV of the Environmental Protection Act. This paragraph is
exempt from the provisions of Section 3-90.
(35) Beginning January 1, 2010 and continuing through
December 31, 2024, materials, parts, equipment, components,
and furnishings incorporated into or upon an aircraft as part
of the modification, refurbishment, completion, replacement,
repair, or maintenance of the aircraft. This exemption includes
consumable supplies used in the modification, refurbishment,
completion, replacement, repair, and maintenance of aircraft,

HB3902 Engrossed - 17 - LRB101 13854 HLH 62714 b
but excludes any materials, parts, equipment, components, and
consumable supplies used in the modification, replacement,
repair, and maintenance of aircraft engines or power plants,
whether such engines or power plants are installed or
uninstalled upon any such aircraft. "Consumable supplies"
include, but are not limited to, adhesive, tape, sandpaper,
general purpose lubricants, cleaning solution, latex gloves,
and protective films. This exemption applies only to the use of
qualifying tangible personal property by persons who modify,
refurbish, complete, repair, replace, or maintain aircraft and
who (i) hold an Air Agency Certificate and are empowered to
operate an approved repair station by the Federal Aviation
Administration, (ii) have a Class IV Rating, and (iii) conduct
operations in accordance with Part 145 of the Federal Aviation
Regulations. The exemption does not include aircraft operated
by a commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part 129
of the Federal Aviation Regulations. The changes made to this
paragraph (35) by Public Act 98-534 are declarative of existing
law. It is the intent of the General Assembly that the
exemption under this paragraph (35) applies continuously from
January 1, 2010 through December 31, 2024; however, no claim
for credit or refund is allowed for taxes paid as a result of
the disallowance of this exemption on or after January 1, 2015
and prior to the effective date of this amendatory Act of the
101st General Assembly.

HB3902 Engrossed - 18 - LRB101 13854 HLH 62714 b
(36) Tangible personal property purchased by a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall, but
only if the legal title to the municipal convention hall is
transferred to the municipality without any further
consideration by or on behalf of the municipality at the time
of the completion of the municipal convention hall or upon the
retirement or redemption of any bonds or other debt instruments
issued by the public-facilities corporation in connection with
the development of the municipal convention hall. This
exemption includes existing public-facilities corporations as
provided in Section 11-65-25 of the Illinois Municipal Code.
This paragraph is exempt from the provisions of Section 3-90.
(37) Beginning January 1, 2017, menstrual pads, tampons,
and menstrual cups.
(38) Merchandise that is subject to the Rental Purchase
Agreement Occupation and Use Tax. The purchaser must certify
that the item is purchased to be rented subject to a rental
purchase agreement, as defined in the Rental Purchase Agreement
Act, and provide proof of registration under the Rental
Purchase Agreement Occupation and Use Tax Act. This paragraph
is exempt from the provisions of Section 3-90.
(39) Tangible personal property purchased by a purchaser
who is exempt from the tax imposed by this Act by operation of
federal law. This paragraph is exempt from the provisions of

HB3902 Engrossed - 19 - LRB101 13854 HLH 62714 b
Section 3-90.
(40) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or subcontractor
of the owner, operator, or tenant. Data centers that would have
qualified for a certificate of exemption prior to January 1,
2020 had Public Act 101-31 this amendatory Act of the 101st
General Assembly been in effect, may apply for and obtain an
exemption for subsequent purchases of computer equipment or
enabling software purchased or leased to upgrade, supplement,
or replace computer equipment or enabling software purchased or
leased in the original investment that would have qualified.
The Department of Commerce and Economic Opportunity shall
grant a certificate of exemption under this item (40) to
qualified data centers as defined by Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois.
For the purposes of this item (40):
"Data center" means a building or a series of buildings
rehabilitated or constructed to house working servers in
one physical location or multiple sites within the State of
Illinois.
"Qualified tangible personal property" means:

HB3902 Engrossed - 20 - LRB101 13854 HLH 62714 b
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. The term "qualified tangible personal
property" also includes building materials physically
incorporated in to the qualifying data center. To document
the exemption allowed under this Section, the retailer must
obtain from the purchaser a copy of the certificate of
eligibility issued by the Department of Commerce and
Economic Opportunity.

HB3902 Engrossed - 21 - LRB101 13854 HLH 62714 b
This item (40) is exempt from the provisions of Section
3-90.
(Source: P.A. 100-22, eff. 7-6-17; 100-437, eff. 1-1-18;
100-594, eff. 6-29-18; 100-863, eff. 8-14-18; 100-1171, eff.
1-4-19; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-81, eff.
7-12-19; revised 9-23-19.)
Section 10. The Service Use Tax Act is amended by changing
Section 3-5 as follows:
(35 ILCS 110/3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a non-profit Illinois
county fair association for use in conducting, operating, or
promoting the county fair.
(3) Personal property purchased by a not-for-profit arts or
cultural organization that establishes, by proof required by
the Department by rule, that it has received an exemption under

HB3902 Engrossed - 22 - LRB101 13854 HLH 62714 b
Section 501(c)(3) of the Internal Revenue Code and that is
organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after July 1, 2001 (the
effective date of Public Act 92-35), however, an entity
otherwise eligible for this exemption shall not make tax-free
purchases unless it has an active identification number issued
by the Department.
(4) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(5) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new and
used, and including that manufactured on special order or
purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a graphic arts product. Beginning on July
1, 2017, graphic arts machinery and equipment is included in

HB3902 Engrossed - 23 - LRB101 13854 HLH 62714 b
the manufacturing and assembling machinery and equipment
exemption under Section 2 of this Act.
(6) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required to
be registered under Section 3-809 of the Illinois Vehicle Code,
but excluding other motor vehicles required to be registered
under the Illinois Vehicle Code. Horticultural polyhouses or
hoop houses used for propagating, growing, or overwintering
plants shall be considered farm machinery and equipment under
this item (7). Agricultural chemical tender tanks and dry boxes
shall include units sold separately from a motor vehicle
required to be licensed and units sold mounted on a motor
vehicle required to be licensed if the selling price of the
tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be

HB3902 Engrossed - 24 - LRB101 13854 HLH 62714 b
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,
software, global positioning and mapping systems, and other
such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals. This item (7) is exempt from the
provisions of Section 3-75.
(8) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common 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 destined
for or returning from a location or locations outside the
United States without regard to previous or subsequent domestic
stopovers.
Beginning July 1, 2013, 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 is engaged in trade between the

HB3902 Engrossed - 25 - LRB101 13854 HLH 62714 b
United States and any of its possessions and (ii) 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.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption of
food and beverages acquired as an incident to the purchase of a
service from a serviceman, to the extent that the proceeds of
the service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(10) Until July 1, 2003, oil field exploration, drilling,
and production equipment, including (i) rigs and parts of rigs,
rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
tubular goods, including casing and drill strings, (iii) pumps
and pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(11) Proceeds from the sale of photoprocessing machinery
and equipment, including repair and replacement parts, both new
and used, including that manufactured on special order,

HB3902 Engrossed - 26 - LRB101 13854 HLH 62714 b
certified by the purchaser to be used primarily for
photoprocessing, and including photoprocessing machinery and
equipment purchased for lease.
(12) Until July 1, 2023, coal and aggregate exploration,
mining, off-highway hauling, processing, maintenance, and
reclamation equipment, including replacement parts and
equipment, and including equipment purchased for lease, but
excluding motor vehicles required to be registered under the
Illinois Vehicle Code. The changes made to this Section by
Public Act 97-767 apply on and after July 1, 2003, but no claim
for credit or refund is allowed on or after August 16, 2013
(the effective date of Public Act 98-456) for such taxes paid
during the period beginning July 1, 2003 and ending on August
16, 2013 (the effective date of Public Act 98-456).
(13) Semen used for artificial insemination of livestock
for direct agricultural production.
(14) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (14) is exempt from the provisions
of Section 3-75, and the exemption provided for under this item
(14) applies for all periods beginning May 30, 1995, but no
claim for credit or refund is allowed on or after January 1,
2008 (the effective date of Public Act 95-88) for such taxes

HB3902 Engrossed - 27 - LRB101 13854 HLH 62714 b
paid during the period beginning May 30, 2000 and ending on
January 1, 2008 (the effective date of Public Act 95-88).
(15) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. If the equipment is leased in a
manner that does not qualify for this exemption or is used in
any other non-exempt manner, the lessor shall be liable for the
tax imposed under this Act or the Use Tax Act, as the case may
be, based on the fair market value of the property at the time
the non-qualifying use occurs. No lessor shall collect or
attempt to collect an amount (however designated) that purports
to reimburse that lessor for the tax imposed by this Act or the
Use Tax Act, as the case may be, if the tax has not been paid by
the lessor. If a lessor improperly collects any such amount
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that amount
is not refunded to the lessee for any reason, the lessor is
liable to pay that amount to the Department.
(16) Personal property purchased by a lessor who leases the
property, under a lease of one year or longer executed or in

HB3902 Engrossed - 28 - LRB101 13854 HLH 62714 b
effect at the time the lessor would otherwise be subject to the
tax imposed by this Act, to a governmental body that has been
issued an active tax exemption identification number by the
Department under Section 1g of the Retailers' Occupation Tax
Act. If the property is leased in a manner that does not
qualify for this exemption or is used in any other non-exempt
manner, the lessor shall be liable for the tax imposed under
this Act or the Use Tax Act, as the case may be, based on the
fair market value of the property at the time the
non-qualifying use occurs. No lessor shall collect or attempt
to collect an amount (however designated) that purports to
reimburse that lessor for the tax imposed by this Act or the
Use Tax Act, as the case may be, if the tax has not been paid by
the lessor. If a lessor improperly collects any such amount
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that amount
is not refunded to the lessee for any reason, the lessor is
liable to pay that amount to the Department.
(17) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated for
disaster relief to be used in a State or federally declared
disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to a
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification

HB3902 Engrossed - 29 - LRB101 13854 HLH 62714 b
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in the
performance of infrastructure repairs in this State, including
but not limited to municipal roads and streets, access roads,
bridges, sidewalks, waste disposal systems, water and sewer
line extensions, water distribution and purification
facilities, storm water drainage and retention facilities, and
sewage treatment facilities, resulting from a State or
federally declared disaster in Illinois or bordering Illinois
when such repairs are initiated on facilities located in the
declared disaster area within 6 months after the disaster.
(19) Beginning July 1, 1999, game or game birds purchased
at a "game breeding and hunting preserve area" as that term is
used in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-75.
(20) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the Department
to be organized and operated exclusively for educational
purposes. For purposes of this exemption, "a corporation,
limited liability company, society, association, foundation,
or institution organized and operated exclusively for

HB3902 Engrossed - 30 - LRB101 13854 HLH 62714 b
educational purposes" means all tax-supported public schools,
private schools that offer systematic instruction in useful
branches of learning by methods common to public schools and
that compare favorably in their scope and intensity with the
course of study presented in tax-supported schools, and
vocational or technical schools or institutes organized and
operated exclusively to provide a course of study of not less
than 6 weeks duration and designed to prepare individuals to
follow a trade or to pursue a manual, technical, mechanical,
industrial, business, or commercial occupation.
(21) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary school,
a group of those schools, or one or more school districts if
the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that profits
from the sale to the fundraising entity. This paragraph is
exempt from the provisions of Section 3-75.
(22) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and

HB3902 Engrossed - 31 - LRB101 13854 HLH 62714 b
serve hot food and beverages, including coffee, soup, and other
items, and replacement parts for these machines. Beginning
January 1, 2002 and through June 30, 2003, machines and parts
for machines used in commercial, coin-operated amusement and
vending business if a use or occupation tax is paid on the
gross receipts derived from the use of the commercial,
coin-operated amusement and vending machines. This paragraph
is exempt from the provisions of Section 3-75.
(23) Beginning August 23, 2001 and through June 30, 2016,
food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages, soft
drinks, and food that has been prepared for immediate
consumption) and prescription and nonprescription medicines,
drugs, medical appliances, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, when purchased for use by a person receiving medical
assistance under Article V of the Illinois Public Aid Code who
resides in a licensed long-term care facility, as defined in
the Nursing Home Care Act, or in a licensed facility as defined
in the ID/DD Community Care Act, the MC/DD Act, or the
Specialized Mental Health Rehabilitation Act of 2013.
(24) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), computers and communications equipment
utilized for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients
purchased by a lessor who leases the equipment, under a lease

HB3902 Engrossed - 32 - LRB101 13854 HLH 62714 b
of one year or longer executed or in effect at the time the
lessor would otherwise be subject to the tax imposed by this
Act, to a hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. If the equipment is leased in a
manner that does not qualify for this exemption or is used in
any other nonexempt manner, the lessor shall be liable for the
tax imposed under this Act or the Use Tax Act, as the case may
be, based on the fair market value of the property at the time
the nonqualifying use occurs. No lessor shall collect or
attempt to collect an amount (however designated) that purports
to reimburse that lessor for the tax imposed by this Act or the
Use Tax Act, as the case may be, if the tax has not been paid by
the lessor. If a lessor improperly collects any such amount
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that amount
is not refunded to the lessee for any reason, the lessor is
liable to pay that amount to the Department. This paragraph is
exempt from the provisions of Section 3-75.
(25) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), personal property purchased by a lessor who
leases the property, under a lease of one year or longer
executed or in effect at the time the lessor would otherwise be
subject to the tax imposed by this Act, to a governmental body
that has been issued an active tax exemption identification
number by the Department under Section 1g of the Retailers'

HB3902 Engrossed - 33 - LRB101 13854 HLH 62714 b
Occupation Tax Act. If the property is leased in a manner that
does not qualify for this exemption or is used in any other
nonexempt manner, the lessor shall be liable for the tax
imposed under this Act or the Use Tax Act, as the case may be,
based on the fair market value of the property at the time the
nonqualifying use occurs. No lessor shall collect or attempt to
collect an amount (however designated) that purports to
reimburse that lessor for the tax imposed by this Act or the
Use Tax Act, as the case may be, if the tax has not been paid by
the lessor. If a lessor improperly collects any such amount
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that amount
is not refunded to the lessee for any reason, the lessor is
liable to pay that amount to the Department. This paragraph is
exempt from the provisions of Section 3-75.
(26) Beginning January 1, 2008, tangible personal property
used in the construction or maintenance of a community water
supply, as defined under Section 3.145 of the Environmental
Protection Act, that is operated by a not-for-profit
corporation that holds a valid water supply permit issued under
Title IV of the Environmental Protection Act. This paragraph is
exempt from the provisions of Section 3-75.
(27) Beginning January 1, 2010 and continuing through
December 31, 2024, materials, parts, equipment, components,
and furnishings incorporated into or upon an aircraft as part
of the modification, refurbishment, completion, replacement,

HB3902 Engrossed - 34 - LRB101 13854 HLH 62714 b
repair, or maintenance of the aircraft. This exemption includes
consumable supplies used in the modification, refurbishment,
completion, replacement, repair, and maintenance of aircraft,
but excludes any materials, parts, equipment, components, and
consumable supplies used in the modification, replacement,
repair, and maintenance of aircraft engines or power plants,
whether such engines or power plants are installed or
uninstalled upon any such aircraft. "Consumable supplies"
include, but are not limited to, adhesive, tape, sandpaper,
general purpose lubricants, cleaning solution, latex gloves,
and protective films. This exemption applies only to the use of
qualifying tangible personal property transferred incident to
the modification, refurbishment, completion, replacement,
repair, or maintenance of aircraft by persons who (i) hold an
Air Agency Certificate and are empowered to operate an approved
repair station by the Federal Aviation Administration, (ii)
have a Class IV Rating, and (iii) conduct operations in
accordance with Part 145 of the Federal Aviation Regulations.
The exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part 129
of the Federal Aviation Regulations. The changes made to this
paragraph (27) by Public Act 98-534 are declarative of existing
law. It is the intent of the General Assembly that the
exemption under this paragraph (27) applies continuously from
January 1, 2010 through December 31, 2024; however, no claim

HB3902 Engrossed - 35 - LRB101 13854 HLH 62714 b
for credit or refund is allowed for taxes paid as a result of
the disallowance of this exemption on or after January 1, 2015
and prior to the effective date of this amendatory Act of the
101st General Assembly.
(28) Tangible personal property purchased by a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall, but
only if the legal title to the municipal convention hall is
transferred to the municipality without any further
consideration by or on behalf of the municipality at the time
of the completion of the municipal convention hall or upon the
retirement or redemption of any bonds or other debt instruments
issued by the public-facilities corporation in connection with
the development of the municipal convention hall. This
exemption includes existing public-facilities corporations as
provided in Section 11-65-25 of the Illinois Municipal Code.
This paragraph is exempt from the provisions of Section 3-75.
(29) Beginning January 1, 2017, menstrual pads, tampons,
and menstrual cups.
(30) Tangible personal property transferred to a purchaser
who is exempt from the tax imposed by this Act by operation of
federal law. This paragraph is exempt from the provisions of
Section 3-75.
(31) Qualified tangible personal property used in the
construction or operation of a data center that has been

HB3902 Engrossed - 36 - LRB101 13854 HLH 62714 b
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or subcontractor
of the owner, operator, or tenant. Data centers that would have
qualified for a certificate of exemption prior to January 1,
2020 had this amendatory Act of the 101st General Assembly been
in effect, may apply for and obtain an exemption for subsequent
purchases of computer equipment or enabling software purchased
or leased to upgrade, supplement, or replace computer equipment
or enabling software purchased or leased in the original
investment that would have qualified.
The Department of Commerce and Economic Opportunity shall
grant a certificate of exemption under this item (31) to
qualified data centers as defined by Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois.
For the purposes of this item (31):
"Data center" means a building or a series of buildings
rehabilitated or constructed to house working servers in
one physical location or multiple sites within the State of
Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency

HB3902 Engrossed - 37 - LRB101 13854 HLH 62714 b
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. The term "qualified tangible personal
property" also includes building materials physically
incorporated in to the qualifying data center. To document
the exemption allowed under this Section, the retailer must
obtain from the purchaser a copy of the certificate of
eligibility issued by the Department of Commerce and
Economic Opportunity.
This item (31) is exempt from the provisions of Section
3-75.
(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;

HB3902 Engrossed - 38 - LRB101 13854 HLH 62714 b
100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
7-12-19.)
Section 15. The Service Occupation Tax Act is amended by
changing Section 3-5 as follows:
(35 ILCS 115/3-5)
Sec. 3-5. Exemptions. The following tangible personal
property is exempt from the tax imposed by this Act:
(1) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the benefit
of persons 65 years of age or older if the personal property
was not purchased by the enterprise for the purpose of resale
by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by any not-for-profit arts
or cultural organization that establishes, by proof required by
the Department by rule, that it has received an exemption under
Section 501(c)(3) of the Internal Revenue Code and that is
organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,

HB3902 Engrossed - 39 - LRB101 13854 HLH 62714 b
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after July 1, 2001 (the
effective date of Public Act 92-35), however, an entity
otherwise eligible for this exemption shall not make tax-free
purchases unless it has an active identification number issued
by the Department.
(4) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(5) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new and
used, and including that manufactured on special order or
purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a graphic arts product. Beginning on July
1, 2017, graphic arts machinery and equipment is included in
the manufacturing and assembling machinery and equipment
exemption under Section 2 of this Act.
(6) Personal property sold by a teacher-sponsored student
organization affiliated with an elementary or secondary school

HB3902 Engrossed - 40 - LRB101 13854 HLH 62714 b
located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required to
be registered under Section 3-809 of the Illinois Vehicle Code,
but excluding other motor vehicles required to be registered
under the Illinois Vehicle Code. Horticultural polyhouses or
hoop houses used for propagating, growing, or overwintering
plants shall be considered farm machinery and equipment under
this item (7). Agricultural chemical tender tanks and dry boxes
shall include units sold separately from a motor vehicle
required to be licensed and units sold mounted on a motor
vehicle required to be licensed if the selling price of the
tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,

HB3902 Engrossed - 41 - LRB101 13854 HLH 62714 b
software, global positioning and mapping systems, and other
such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals. This item (7) is exempt from the
provisions of Section 3-55.
(8) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common 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 destined
for or returning from a location or locations outside the
United States without regard to previous or subsequent domestic
stopovers.
Beginning July 1, 2013, 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 is engaged in trade between the
United States and any of its possessions and (ii) 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

HB3902 Engrossed - 42 - LRB101 13854 HLH 62714 b
that aircraft.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(10) Until July 1, 2003, oil field exploration, drilling,
and production equipment, including (i) rigs and parts of rigs,
rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
tubular goods, including casing and drill strings, (iii) pumps
and pump-jack units, (iv) storage tanks and flow lines, (v) any
individual replacement part for oil field exploration,
drilling, and production equipment, and (vi) machinery and
equipment purchased for lease; but excluding motor vehicles
required to be registered under the Illinois Vehicle Code.
(11) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including that
manufactured on special order, certified by the purchaser to be
used primarily for photoprocessing, and including
photoprocessing machinery and equipment purchased for lease.
(12) Until July 1, 2023, coal and aggregate exploration,
mining, off-highway hauling, processing, maintenance, and
reclamation equipment, including replacement parts and

HB3902 Engrossed - 43 - LRB101 13854 HLH 62714 b
equipment, and including equipment purchased for lease, but
excluding motor vehicles required to be registered under the
Illinois Vehicle Code. The changes made to this Section by
Public Act 97-767 apply on and after July 1, 2003, but no claim
for credit or refund is allowed on or after August 16, 2013
(the effective date of Public Act 98-456) for such taxes paid
during the period beginning July 1, 2003 and ending on August
16, 2013 (the effective date of Public Act 98-456).
(13) Beginning January 1, 1992 and through June 30, 2016,
food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages, soft
drinks and food that has been prepared for immediate
consumption) and prescription and non-prescription medicines,
drugs, medical appliances, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, when purchased for use by a person receiving medical
assistance under Article V of the Illinois Public Aid Code who
resides in a licensed long-term care facility, as defined in
the Nursing Home Care Act, or in a licensed facility as defined
in the ID/DD Community Care Act, the MC/DD Act, or the
Specialized Mental Health Rehabilitation Act of 2013.
(14) Semen used for artificial insemination of livestock
for direct agricultural production.
(15) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter

HB3902 Engrossed - 44 - LRB101 13854 HLH 62714 b
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (15) is exempt from the provisions
of Section 3-55, and the exemption provided for under this item
(15) applies for all periods beginning May 30, 1995, but no
claim for credit or refund is allowed on or after January 1,
2008 (the effective date of Public Act 95-88) for such taxes
paid during the period beginning May 30, 2000 and ending on
January 1, 2008 (the effective date of Public Act 95-88).
(16) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act.
(17) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time of the purchase, to a governmental body that
has been issued an active tax exemption identification number
by the Department under Section 1g of the Retailers' Occupation
Tax Act.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated for

HB3902 Engrossed - 45 - LRB101 13854 HLH 62714 b
disaster relief to be used in a State or federally declared
disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to a
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(19) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in the
performance of infrastructure repairs in this State, including
but not limited to municipal roads and streets, access roads,
bridges, sidewalks, waste disposal systems, water and sewer
line extensions, water distribution and purification
facilities, storm water drainage and retention facilities, and
sewage treatment facilities, resulting from a State or
federally declared disaster in Illinois or bordering Illinois
when such repairs are initiated on facilities located in the
declared disaster area within 6 months after the disaster.
(20) Beginning July 1, 1999, game or game birds sold at a
"game breeding and hunting preserve area" as that term is used
in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-55.
(21) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,

HB3902 Engrossed - 46 - LRB101 13854 HLH 62714 b
foundation, or institution that is determined by the Department
to be organized and operated exclusively for educational
purposes. For purposes of this exemption, "a corporation,
limited liability company, society, association, foundation,
or institution organized and operated exclusively for
educational purposes" means all tax-supported public schools,
private schools that offer systematic instruction in useful
branches of learning by methods common to public schools and
that compare favorably in their scope and intensity with the
course of study presented in tax-supported schools, and
vocational or technical schools or institutes organized and
operated exclusively to provide a course of study of not less
than 6 weeks duration and designed to prepare individuals to
follow a trade or to pursue a manual, technical, mechanical,
industrial, business, or commercial occupation.
(22) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary school,
a group of those schools, or one or more school districts if
the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the

HB3902 Engrossed - 47 - LRB101 13854 HLH 62714 b
purpose of resale by the fundraising entity and that profits
from the sale to the fundraising entity. This paragraph is
exempt from the provisions of Section 3-55.
(23) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and other
items, and replacement parts for these machines. Beginning
January 1, 2002 and through June 30, 2003, machines and parts
for machines used in commercial, coin-operated amusement and
vending business if a use or occupation tax is paid on the
gross receipts derived from the use of the commercial,
coin-operated amusement and vending machines. This paragraph
is exempt from the provisions of Section 3-55.
(24) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), computers and communications equipment
utilized for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients sold to
a lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. This paragraph is exempt from
the provisions of Section 3-55.
(25) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), personal property sold to a lessor who
leases the property, under a lease of one year or longer

HB3902 Engrossed - 48 - LRB101 13854 HLH 62714 b
executed or in effect at the time of the purchase, to a
governmental body that has been issued an active tax exemption
identification number by the Department under Section 1g of the
Retailers' Occupation Tax Act. This paragraph is exempt from
the provisions of Section 3-55.
(26) Beginning on January 1, 2002 and through June 30,
2016, tangible personal property purchased from an Illinois
retailer by a taxpayer engaged in centralized purchasing
activities in Illinois who will, upon receipt of the property
in Illinois, temporarily store the property in Illinois (i) for
the purpose of subsequently transporting it outside this State
for use or consumption thereafter solely outside this State or
(ii) for the purpose of being processed, fabricated, or
manufactured into, attached to, or incorporated into other
tangible personal property to be transported outside this State
and thereafter used or consumed solely outside this State. The
Director of Revenue shall, pursuant to rules adopted in
accordance with the Illinois Administrative Procedure Act,
issue a permit to any taxpayer in good standing with the
Department who is eligible for the exemption under this
paragraph (26). The permit issued under this paragraph (26)
shall authorize the holder, to the extent and in the manner
specified in the rules adopted under this Act, to purchase
tangible personal property from a retailer exempt from the
taxes imposed by this Act. Taxpayers shall maintain all
necessary books and records to substantiate the use and

HB3902 Engrossed - 49 - LRB101 13854 HLH 62714 b
consumption of all such tangible personal property outside of
the State of Illinois.
(27) Beginning January 1, 2008, tangible personal property
used in the construction or maintenance of a community water
supply, as defined under Section 3.145 of the Environmental
Protection Act, that is operated by a not-for-profit
corporation that holds a valid water supply permit issued under
Title IV of the Environmental Protection Act. This paragraph is
exempt from the provisions of Section 3-55.
(28) Tangible personal property sold to a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall, but
only if the legal title to the municipal convention hall is
transferred to the municipality without any further
consideration by or on behalf of the municipality at the time
of the completion of the municipal convention hall or upon the
retirement or redemption of any bonds or other debt instruments
issued by the public-facilities corporation in connection with
the development of the municipal convention hall. This
exemption includes existing public-facilities corporations as
provided in Section 11-65-25 of the Illinois Municipal Code.
This paragraph is exempt from the provisions of Section 3-55.
(29) Beginning January 1, 2010 and continuing through
December 31, 2024, materials, parts, equipment, components,
and furnishings incorporated into or upon an aircraft as part

HB3902 Engrossed - 50 - LRB101 13854 HLH 62714 b
of the modification, refurbishment, completion, replacement,
repair, or maintenance of the aircraft. This exemption includes
consumable supplies used in the modification, refurbishment,
completion, replacement, repair, and maintenance of aircraft,
but excludes any materials, parts, equipment, components, and
consumable supplies used in the modification, replacement,
repair, and maintenance of aircraft engines or power plants,
whether such engines or power plants are installed or
uninstalled upon any such aircraft. "Consumable supplies"
include, but are not limited to, adhesive, tape, sandpaper,
general purpose lubricants, cleaning solution, latex gloves,
and protective films. This exemption applies only to the
transfer of qualifying tangible personal property incident to
the modification, refurbishment, completion, replacement,
repair, or maintenance of an aircraft by persons who (i) hold
an Air Agency Certificate and are empowered to operate an
approved repair station by the Federal Aviation
Administration, (ii) have a Class IV Rating, and (iii) conduct
operations in accordance with Part 145 of the Federal Aviation
Regulations. The exemption does not include aircraft operated
by a commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part 129
of the Federal Aviation Regulations. The changes made to this
paragraph (29) by Public Act 98-534 are declarative of existing
law. It is the intent of the General Assembly that the
exemption under this paragraph (29) applies continuously from

HB3902 Engrossed - 51 - LRB101 13854 HLH 62714 b
January 1, 2010 through December 31, 2024; however, no claim
for credit or refund is allowed for taxes paid as a result of
the disallowance of this exemption on or after January 1, 2015
and prior to the effective date of this amendatory Act of the
101st General Assembly.
(30) Beginning January 1, 2017, menstrual pads, tampons,
and menstrual cups.
(31) Tangible personal property transferred to a purchaser
who is exempt from tax by operation of federal law. This
paragraph is exempt from the provisions of Section 3-55.
(32) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or subcontractor
of the owner, operator, or tenant. Data centers that would have
qualified for a certificate of exemption prior to January 1,
2020 had this amendatory Act of the 101st General Assembly been
in effect, may apply for and obtain an exemption for subsequent
purchases of computer equipment or enabling software purchased
or leased to upgrade, supplement, or replace computer equipment
or enabling software purchased or leased in the original
investment that would have qualified.
The Department of Commerce and Economic Opportunity shall
grant a certificate of exemption under this item (32) to

HB3902 Engrossed - 52 - LRB101 13854 HLH 62714 b
qualified data centers as defined by Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois.
For the purposes of this item (32):
"Data center" means a building or a series of buildings
rehabilitated or constructed to house working servers in
one physical location or multiple sites within the State of
Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible

HB3902 Engrossed - 53 - LRB101 13854 HLH 62714 b
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. The term "qualified tangible personal
property" also includes building materials physically
incorporated in to the qualifying data center. To document
the exemption allowed under this Section, the retailer must
obtain from the purchaser a copy of the certificate of
eligibility issued by the Department of Commerce and
Economic Opportunity.
This item (32) is exempt from the provisions of Section
3-55.
(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;
100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
7-12-19.)
Section 20. The Retailers' Occupation Tax Act is amended by
changing Section 2-5 as follows:
(35 ILCS 120/2-5)
Sec. 2-5. Exemptions. Gross receipts from proceeds from the
sale of the following tangible personal property are exempt
from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production

HB3902 Engrossed - 54 - LRB101 13854 HLH 62714 b
agriculture or State or federal agricultural programs,
including individual replacement parts for the machinery
and equipment, including machinery and equipment purchased
for lease, and including implements of husbandry defined in
Section 1-130 of the Illinois Vehicle Code, farm machinery
and agricultural chemical and fertilizer spreaders, and
nurse wagons required to be registered under Section 3-809
of the Illinois Vehicle Code, but excluding other motor
vehicles required to be registered under the Illinois
Vehicle Code. Horticultural polyhouses or hoop houses used
for propagating, growing, or overwintering plants shall be
considered farm machinery and equipment under this item
(2). Agricultural chemical tender tanks and dry boxes shall
include units sold separately from a motor vehicle required
to be licensed and units sold mounted on a motor vehicle
required to be licensed, if the selling price of the tender
is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but
not limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment
includes, but is not limited to, soil testing sensors,
computers, monitors, software, global positioning and
mapping systems, and other such equipment.
Farm machinery and equipment also includes computers,

HB3902 Engrossed - 55 - LRB101 13854 HLH 62714 b
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals. This item (2) is exempt
from the provisions of Section 2-70.
(3) Until July 1, 2003, distillation machinery and
equipment, sold as a unit or kit, assembled or installed by
the retailer, certified by the user to be used only for the
production of ethyl alcohol that will be used for
consumption as motor fuel or as a component of motor fuel
for the personal use of the user, and not subject to sale
or resale.
(4) Until July 1, 2003 and beginning again September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both
new and used, and including that manufactured on special
order or purchased for lease, certified by the purchaser to
be used primarily for graphic arts production. Equipment
includes chemicals or chemicals acting as catalysts but
only if the chemicals or chemicals acting as catalysts
effect a direct and immediate change upon a graphic arts
product. Beginning on July 1, 2017, graphic arts machinery
and equipment is included in the manufacturing and
assembling machinery and equipment exemption under

HB3902 Engrossed - 56 - LRB101 13854 HLH 62714 b
paragraph (14).
(5) A motor vehicle that is used for automobile
renting, as defined in the Automobile Renting Occupation
and Use Tax Act. This paragraph is exempt from the
provisions of Section 2-70.
(6) Personal property sold by a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Until July 1, 2003, proceeds of that portion of the
selling price of a passenger car the sale of which is
subject to the Replacement Vehicle Tax.
(8) Personal property sold to an Illinois county fair
association for use in conducting, operating, or promoting
the county fair.
(9) Personal property sold to a not-for-profit arts or
cultural organization that establishes, by proof required
by the Department by rule, that it has received an
exemption under Section 501(c)(3) of the Internal Revenue
Code and that is organized and operated primarily for the
presentation or support of arts or cultural programming,
activities, or services. These organizations include, but
are not limited to, music and dramatic arts organizations
such as symphony orchestras and theatrical groups, arts and
cultural service organizations, local arts councils,
visual arts organizations, and media arts organizations.
On and after July 1, 2001 (the effective date of Public Act

HB3902 Engrossed - 57 - LRB101 13854 HLH 62714 b
92-35), however, an entity otherwise eligible for this
exemption shall not make tax-free purchases unless it has
an active identification number issued by the Department.
(10) Personal property sold by a corporation, society,
association, foundation, institution, or organization,
other than a limited liability company, that is organized
and operated as a not-for-profit service enterprise for the
benefit of persons 65 years of age or older if the personal
property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(11) Personal property sold to a governmental body, to
a corporation, society, association, foundation, or
institution organized and operated exclusively for
charitable, religious, or educational purposes, or to a
not-for-profit corporation, society, association,
foundation, institution, or organization that has no
compensated officers or employees and that is organized and
operated primarily for the recreation of persons 55 years
of age or older. A limited liability company may qualify
for the exemption under this paragraph only if the limited
liability company is organized and operated exclusively
for educational purposes. On and after July 1, 1987,
however, no entity otherwise eligible for this exemption
shall make tax-free purchases unless it has an active
identification number issued by the Department.
(12) (Blank).

HB3902 Engrossed - 58 - LRB101 13854 HLH 62714 b
(12-5) On and after July 1, 2003 and through June 30,
2004, motor vehicles of the second division with a gross
vehicle weight in excess of 8,000 pounds that are subject
to the commercial distribution fee imposed under Section
3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
2004 and through June 30, 2005, the use in this State of
motor vehicles of the second division: (i) with a gross
vehicle weight rating in excess of 8,000 pounds; (ii) that
are subject to the commercial distribution fee imposed
under Section 3-815.1 of the Illinois Vehicle Code; and
(iii) that are primarily used for commercial purposes.
Through June 30, 2005, this exemption applies to repair and
replacement parts added after the initial purchase of such
a motor vehicle if that motor vehicle is used in a manner
that would qualify for the rolling stock exemption
otherwise provided for in this Act. For purposes of this
paragraph, "used for commercial purposes" means the
transportation of persons or property in furtherance of any
commercial or industrial enterprise whether for-hire or
not.
(13) Proceeds from sales to owners, lessors, or
shippers of tangible personal property that is utilized by
interstate carriers for hire for use as rolling stock
moving in interstate commerce and equipment operated by a
telecommunications provider, licensed as a common carrier
by the Federal Communications Commission, which is

HB3902 Engrossed - 59 - LRB101 13854 HLH 62714 b
permanently installed in or affixed to aircraft moving in
interstate commerce.
(14) Machinery and equipment that will be used by the
purchaser, or a lessee of the purchaser, primarily in the
process of manufacturing or assembling tangible personal
property for wholesale or retail sale or lease, whether the
sale or lease is made directly by the manufacturer or by
some other person, whether the materials used in the
process are owned by the manufacturer or some other person,
or whether the sale or lease is made apart from or as an
incident to the seller's engaging in the service occupation
of producing machines, tools, dies, jigs, patterns,
gauges, or other similar items of no commercial value on
special order for a particular purchaser. The exemption
provided by this paragraph (14) does not include machinery
and equipment used in (i) the generation of electricity for
wholesale or retail sale; (ii) the generation or treatment
of natural or artificial gas for wholesale or retail sale
that is delivered to customers through pipes, pipelines, or
mains; or (iii) the treatment of water for wholesale or
retail sale that is delivered to customers through pipes,
pipelines, or mains. The provisions of Public Act 98-583
are declaratory of existing law as to the meaning and scope
of this exemption. Beginning on July 1, 2017, the exemption
provided by this paragraph (14) includes, but is not
limited to, graphic arts machinery and equipment, as

HB3902 Engrossed - 60 - LRB101 13854 HLH 62714 b
defined in paragraph (4) of this Section.
(15) Proceeds of mandatory service charges separately
stated on customers' bills for purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate
directly in preparing, serving, hosting or cleaning up the
food or beverage function with respect to which the service
charge is imposed.
(16) Tangible personal property sold to a purchaser if
the purchaser is exempt from use tax by operation of
federal law. This paragraph is exempt from the provisions
of Section 2-70.
(17) Tangible personal property sold to a common
carrier by rail or motor that receives the physical
possession of the property in Illinois and that transports
the property, or shares with another common carrier in the
transportation of the property, out of Illinois on a
standard uniform bill of lading showing the seller of the
property as the shipper or consignor of the property to a
destination outside Illinois, for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the
government of any foreign country, and bullion.
(19) Until July 1, 2003, oil field exploration,

HB3902 Engrossed - 61 - LRB101 13854 HLH 62714 b
drilling, and production equipment, including (i) rigs and
parts of rigs, rotary rigs, cable tool rigs, and workover
rigs, (ii) pipe and tubular goods, including casing and
drill strings, (iii) pumps and pump-jack units, (iv)
storage tanks and flow lines, (v) any individual
replacement part for oil field exploration, drilling, and
production equipment, and (vi) machinery and equipment
purchased for lease; but excluding motor vehicles required
to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment,
including repair and replacement parts, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for photoprocessing, and
including photoprocessing machinery and equipment
purchased for lease.
(21) Until July 1, 2023, coal and aggregate
exploration, mining, off-highway hauling, processing,
maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required
to be registered under the Illinois Vehicle Code. The
changes made to this Section by Public Act 97-767 apply on
and after July 1, 2003, but no claim for credit or refund
is allowed on or after August 16, 2013 (the effective date
of Public Act 98-456) for such taxes paid during the period
beginning July 1, 2003 and ending on August 16, 2013 (the

HB3902 Engrossed - 62 - LRB101 13854 HLH 62714 b
effective date of Public Act 98-456).
(22) Until June 30, 2013, 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 destined for or returning from a location or
locations outside the United States without regard to
previous or subsequent domestic stopovers.
Beginning July 1, 2013, 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 is engaged
in trade between the United States and any of its
possessions and (ii) 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.
(23) A transaction in which the purchase order is
received by a florist who is located outside Illinois, but
who has a florist located in Illinois deliver the property
to the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships,
barges, or vessels that are used primarily in or for the
transportation of property or the conveyance of persons for
hire on rivers bordering on this State if the fuel is

HB3902 Engrossed - 63 - LRB101 13854 HLH 62714 b
delivered by the seller to the purchaser's barge, ship, or
vessel while it is afloat upon that bordering river.
(25) Except as provided in item (25-5) of this Section,
a motor vehicle sold in this State to a nonresident even
though the motor vehicle is delivered to the nonresident in
this State, if the motor vehicle is not to be titled in
this State, and if a drive-away permit is issued to the
motor vehicle as provided in Section 3-603 of the Illinois
Vehicle Code or if the nonresident purchaser has vehicle
registration plates to transfer to the motor vehicle upon
returning to his or her home state. The issuance of the
drive-away permit or having the out-of-state registration
plates to be transferred is prima facie evidence that the
motor vehicle will not be titled in this State.
(25-5) The exemption under item (25) does not apply if
the state in which the motor vehicle will be titled does
not allow a reciprocal exemption for a motor vehicle sold
and delivered in that state to an Illinois resident but
titled in Illinois. The tax collected under this Act on the
sale of a motor vehicle in this State to a resident of
another state that does not allow a reciprocal exemption
shall be imposed at a rate equal to the state's rate of tax
on taxable property in the state in which the purchaser is
a resident, except that the tax shall not exceed the tax
that would otherwise be imposed under this Act. At the time
of the sale, the purchaser shall execute a statement,

HB3902 Engrossed - 64 - LRB101 13854 HLH 62714 b
signed under penalty of perjury, of his or her intent to
title the vehicle in the state in which the purchaser is a
resident within 30 days after the sale and of the fact of
the payment to the State of Illinois of tax in an amount
equivalent to the state's rate of tax on taxable property
in his or her state of residence and shall submit the
statement to the appropriate tax collection agency in his
or her state of residence. In addition, the retailer must
retain a signed copy of the statement in his or her
records. Nothing in this item shall be construed to require
the removal of the vehicle from this state following the
filing of an intent to title the vehicle in the purchaser's
state of residence if the purchaser titles the vehicle in
his or her state of residence within 30 days after the date
of sale. The tax collected under this Act in accordance
with this item (25-5) shall be proportionately distributed
as if the tax were collected at the 6.25% general rate
imposed under this Act.
(25-7) Beginning on July 1, 2007, no tax is imposed
under this Act on the sale of an aircraft, as defined in
Section 3 of the Illinois Aeronautics Act, if all of the
following conditions are met:
(1) the aircraft leaves this State within 15 days
after the later of either the issuance of the final
billing for the sale of the aircraft, or the authorized
approval for return to service, completion of the

HB3902 Engrossed - 65 - LRB101 13854 HLH 62714 b
maintenance record entry, and completion of the test
flight and ground test for inspection, as required by
14 C.F.R. 91.407;
(2) the aircraft is not based or registered in this
State after the sale of the aircraft; and
(3) the seller retains in his or her books and
records and provides to the Department a signed and
dated certification from the purchaser, on a form
prescribed by the Department, certifying that the
requirements of this item (25-7) are met. The
certificate must also include the name and address of
the purchaser, the address of the location where the
aircraft is to be titled or registered, the address of
the primary physical location of the aircraft, and
other information that the Department may reasonably
require.
For purposes of this item (25-7):
"Based in this State" means hangared, stored, or
otherwise used, excluding post-sale customizations as
defined in this Section, for 10 or more days in each
12-month period immediately following the date of the sale
of the aircraft.
"Registered in this State" means an aircraft
registered with the Department of Transportation,
Aeronautics Division, or titled or registered with the
Federal Aviation Administration to an address located in

HB3902 Engrossed - 66 - LRB101 13854 HLH 62714 b
this State.
This paragraph (25-7) is exempt from the provisions of
Section 2-70.
(26) Semen used for artificial insemination of
livestock for direct agricultural production.
(27) Horses, or interests in horses, registered with
and meeting the requirements of any of the Arabian Horse
Club Registry of America, Appaloosa Horse Club, American
Quarter Horse Association, United States Trotting
Association, or Jockey Club, as appropriate, used for
purposes of breeding or racing for prizes. This item (27)
is exempt from the provisions of Section 2-70, and the
exemption provided for under this item (27) applies for all
periods beginning May 30, 1995, but no claim for credit or
refund is allowed on or after January 1, 2008 (the
effective date of Public Act 95-88) for such taxes paid
during the period beginning May 30, 2000 and ending on
January 1, 2008 (the effective date of Public Act 95-88).
(28) Computers and communications equipment utilized
for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients
sold to a lessor who leases the equipment, under a lease of
one year or longer executed or in effect at the time of the
purchase, to a hospital that has been issued an active tax
exemption identification number by the Department under
Section 1g of this Act.

HB3902 Engrossed - 67 - LRB101 13854 HLH 62714 b
(29) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or
in effect at the time of the purchase, to a governmental
body that has been issued an active tax exemption
identification number by the Department under Section 1g of
this Act.
(30) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on
or before December 31, 2004, personal property that is
donated for disaster relief to be used in a State or
federally declared disaster area in Illinois or bordering
Illinois by a manufacturer or retailer that is registered
in this State to a corporation, society, association,
foundation, or institution that has been issued a sales tax
exemption identification number by the Department that
assists victims of the disaster who reside within the
declared disaster area.
(31) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on
or before December 31, 2004, personal property that is used
in the performance of infrastructure repairs in this State,
including but not limited to municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and
retention facilities, and sewage treatment facilities,

HB3902 Engrossed - 68 - LRB101 13854 HLH 62714 b
resulting from a State or federally declared disaster in
Illinois or bordering Illinois when such repairs are
initiated on facilities located in the declared disaster
area within 6 months after the disaster.
(32) Beginning July 1, 1999, game or game birds sold at
a "game breeding and hunting preserve area" as that term is
used in the Wildlife Code. This paragraph is exempt from
the provisions of Section 2-70.
(33) A motor vehicle, as that term is defined in
Section 1-146 of the Illinois Vehicle Code, that is donated
to a corporation, limited liability company, society,
association, foundation, or institution that is determined
by the Department to be organized and operated exclusively
for educational purposes. For purposes of this exemption,
"a corporation, limited liability company, society,
association, foundation, or institution organized and
operated exclusively for educational purposes" means all
tax-supported public schools, private schools that offer
systematic instruction in useful branches of learning by
methods common to public schools and that compare favorably
in their scope and intensity with the course of study
presented in tax-supported schools, and vocational or
technical schools or institutes organized and operated
exclusively to provide a course of study of not less than 6
weeks duration and designed to prepare individuals to
follow a trade or to pursue a manual, technical,

HB3902 Engrossed - 69 - LRB101 13854 HLH 62714 b
mechanical, industrial, business, or commercial
occupation.
(34) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for
the benefit of a public or private elementary or secondary
school, a group of those schools, or one or more school
districts if the events are sponsored by an entity
recognized by the school district that consists primarily
of volunteers and includes parents and teachers of the
school children. This paragraph does not apply to
fundraising events (i) for the benefit of private home
instruction or (ii) for which the fundraising entity
purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that
profits from the sale to the fundraising entity. This
paragraph is exempt from the provisions of Section 2-70.
(35) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare
and serve hot food and beverages, including coffee, soup,
and other items, and replacement parts for these machines.
Beginning January 1, 2002 and through June 30, 2003,
machines and parts for machines used in commercial,
coin-operated amusement and vending business if a use or
occupation tax is paid on the gross receipts derived from
the use of the commercial, coin-operated amusement and

HB3902 Engrossed - 70 - LRB101 13854 HLH 62714 b
vending machines. This paragraph is exempt from the
provisions of Section 2-70.
(35-5) Beginning August 23, 2001 and through June 30,
2016, food for human consumption that is to be consumed off
the premises where it is sold (other than alcoholic
beverages, soft drinks, and food that has been prepared for
immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances, and
insulin, urine testing materials, syringes, and needles
used by diabetics, for human use, when purchased for use by
a person receiving medical assistance under Article V of
the Illinois Public Aid Code who resides in a licensed
long-term care facility, as defined in the Nursing Home
Care Act, or a licensed facility as defined in the ID/DD
Community Care Act, the MC/DD Act, or the Specialized
Mental Health Rehabilitation Act of 2013.
(36) Beginning August 2, 2001, computers and
communications equipment utilized for any hospital purpose
and equipment used in the diagnosis, analysis, or treatment
of hospital patients sold to a lessor who leases the
equipment, under a lease of one year or longer executed or
in effect at the time of the purchase, to a hospital that
has been issued an active tax exemption identification
number by the Department under Section 1g of this Act. This
paragraph is exempt from the provisions of Section 2-70.
(37) Beginning August 2, 2001, personal property sold

HB3902 Engrossed - 71 - LRB101 13854 HLH 62714 b
to a lessor who leases the property, under a lease of one
year or longer executed or in effect at the time of the
purchase, to a governmental body that has been issued an
active tax exemption identification number by the
Department under Section 1g of this Act. This paragraph is
exempt from the provisions of Section 2-70.
(38) Beginning on January 1, 2002 and through June 30,
2016, tangible personal property purchased from an
Illinois retailer by a taxpayer engaged in centralized
purchasing activities in Illinois who will, upon receipt of
the property in Illinois, temporarily store the property in
Illinois (i) for the purpose of subsequently transporting
it outside this State for use or consumption thereafter
solely outside this State or (ii) for the purpose of being
processed, fabricated, or manufactured into, attached to,
or incorporated into other tangible personal property to be
transported outside this State and thereafter used or
consumed solely outside this State. The Director of Revenue
shall, pursuant to rules adopted in accordance with the
Illinois Administrative Procedure Act, issue a permit to
any taxpayer in good standing with the Department who is
eligible for the exemption under this paragraph (38). The
permit issued under this paragraph (38) shall authorize the
holder, to the extent and in the manner specified in the
rules adopted under this Act, to purchase tangible personal
property from a retailer exempt from the taxes imposed by

HB3902 Engrossed - 72 - LRB101 13854 HLH 62714 b
this Act. Taxpayers shall maintain all necessary books and
records to substantiate the use and consumption of all such
tangible personal property outside of the State of
Illinois.
(39) Beginning January 1, 2008, tangible personal
property used in the construction or maintenance of a
community water supply, as defined under Section 3.145 of
the Environmental Protection Act, that is operated by a
not-for-profit corporation that holds a valid water supply
permit issued under Title IV of the Environmental
Protection Act. This paragraph is exempt from the
provisions of Section 2-70.
(40) Beginning January 1, 2010 and continuing through
December 31, 2024, materials, parts, equipment,
components, and furnishings incorporated into or upon an
aircraft as part of the modification, refurbishment,
completion, replacement, repair, or maintenance of the
aircraft. This exemption includes consumable supplies used
in the modification, refurbishment, completion,
replacement, repair, and maintenance of aircraft, but
excludes any materials, parts, equipment, components, and
consumable supplies used in the modification, replacement,
repair, and maintenance of aircraft engines or power
plants, whether such engines or power plants are installed
or uninstalled upon any such aircraft. "Consumable
supplies" include, but are not limited to, adhesive, tape,

HB3902 Engrossed - 73 - LRB101 13854 HLH 62714 b
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films. This exemption applies
only to the sale of qualifying tangible personal property
to persons who modify, refurbish, complete, replace, or
maintain an aircraft and who (i) hold an Air Agency
Certificate and are empowered to operate an approved repair
station by the Federal Aviation Administration, (ii) have a
Class IV Rating, and (iii) conduct operations in accordance
with Part 145 of the Federal Aviation Regulations. The
exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part
129 of the Federal Aviation Regulations. The changes made
to this paragraph (40) by Public Act 98-534 are declarative
of existing law. It is the intent of the General Assembly
that the exemption under this paragraph (40) applies
continuously from January 1, 2010 through December 31,
2024; however, no claim for credit or refund is allowed for
taxes paid as a result of the disallowance of this
exemption on or after January 1, 2015 and prior to the
effective date of this amendatory Act of the 101st General
Assembly.
(41) Tangible personal property sold to a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall,

HB3902 Engrossed - 74 - LRB101 13854 HLH 62714 b
but only if the legal title to the municipal convention
hall is transferred to the municipality without any further
consideration by or on behalf of the municipality at the
time of the completion of the municipal convention hall or
upon the retirement or redemption of any bonds or other
debt instruments issued by the public-facilities
corporation in connection with the development of the
municipal convention hall. This exemption includes
existing public-facilities corporations as provided in
Section 11-65-25 of the Illinois Municipal Code. This
paragraph is exempt from the provisions of Section 2-70.
(42) Beginning January 1, 2017, menstrual pads,
tampons, and menstrual cups.
(43) Merchandise that is subject to the Rental Purchase
Agreement Occupation and Use Tax. The purchaser must
certify that the item is purchased to be rented subject to
a rental purchase agreement, as defined in the Rental
Purchase Agreement Act, and provide proof of registration
under the Rental Purchase Agreement Occupation and Use Tax
Act. This paragraph is exempt from the provisions of
Section 2-70.
(44) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or

HB3902 Engrossed - 75 - LRB101 13854 HLH 62714 b
tenant of the data center or by a contractor or
subcontractor of the owner, operator, or tenant. Data
centers that would have qualified for a certificate of
exemption prior to January 1, 2020 had this amendatory Act
of the 101st General Assembly been in effect, may apply for
and obtain an exemption for subsequent purchases of
computer equipment or enabling software purchased or
leased to upgrade, supplement, or replace computer
equipment or enabling software purchased or leased in the
original investment that would have qualified.
The Department of Commerce and Economic Opportunity
shall grant a certificate of exemption under this item (44)
to qualified data centers as defined by Section 605-1025 of
the Department of Commerce and Economic Opportunity Law of
the Civil Administrative Code of Illinois.
For the purposes of this item (44):
"Data center" means a building or a series of
buildings rehabilitated or constructed to house
working servers in one physical location or multiple
sites within the State of Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks;

HB3902 Engrossed - 76 - LRB101 13854 HLH 62714 b
cabinets; telecommunications cabling infrastructure;
raised floor systems; peripheral components or
systems; software; mechanical, electrical, or plumbing
systems; battery systems; cooling systems and towers;
temperature control systems; other cabling; and other
data center infrastructure equipment and systems
necessary to operate qualified tangible personal
property, including fixtures; and component parts of
any of the foregoing, including installation,
maintenance, repair, refurbishment, and replacement of
qualified tangible personal property to generate,
transform, transmit, distribute, or manage electricity
necessary to operate qualified tangible personal
property; and all other tangible personal property
that is essential to the operations of a computer data
center. The term "qualified tangible personal
property" also includes building materials physically
incorporated in to the qualifying data center. To
document the exemption allowed under this Section, the
retailer must obtain from the purchaser a copy of the
certificate of eligibility issued by the Department of
Commerce and Economic Opportunity.
This item (44) is exempt from the provisions of Section
2-70.
(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff.

HB3902 Engrossed - 77 - LRB101 13854 HLH 62714 b
8-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81,
eff. 7-12-19.)
Section 99. Effective date. This Act takes effect upon
becoming law.