Bill Text: IL HB5477 | 2021-2022 | 102nd General Assembly | Introduced

---

Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the general rate of tax under the Acts is 6% (currently, 6.25%). Effective immediately.

Sponsorship: Partisan Bill (Republican 2)

Status: (Introduced - Dead) 2022-03-16 - Added Chief Co-Sponsor Rep. Amy Elik [HB5477 Detail]

Download: Illinois-2021-HB5477-Introduced.html

---

102ND GENERAL ASSEMBLY State of Illinois 2021 and 2022 HB5477 Introduced , by Rep. Paul Jacobs SYNOPSIS AS INTRODUCED:
35 ILCS 105/2 from Ch. 120, par. 439.2
35 ILCS 105/3-6
35 ILCS 105/3-10
35 ILCS 105/3-55 from Ch. 120, par. 439.3-55
35 ILCS 105/3-85
35 ILCS 105/9 from Ch. 120, par. 439.9
35 ILCS 110/2 from Ch. 120, par. 439.32
35 ILCS 110/3-10 from Ch. 120, par. 439.33-10
35 ILCS 110/3-70
35 ILCS 110/9 from Ch. 120, par. 439.39
35 ILCS 115/2 from Ch. 120, par. 439.102
35 ILCS 115/3-10 from Ch. 120, par. 439.103-10
35 ILCS 115/9 from Ch. 120, par. 439.109
35 ILCS 120/1 from Ch. 120, par. 440
35 ILCS 120/2-5
35 ILCS 120/2-8
35 ILCS 120/2-10
35 ILCS 120/2d from Ch. 120, par. 441d
35 ILCS 120/3 from Ch. 120, par. 442
35 ILCS 120/5l from Ch. 120, par. 444l
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the general rate of tax under the Acts is 6% (currently, 6.25%). Effective immediately.
LRB102 25061 HLH 34321 b
A BILL FOR
HB5477 LRB102 25061 HLH 34321 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 Sections
2, 3-6, 3-10, 3-55, 3-85, and 9 as follows:
(35 ILCS 105/2) (from Ch. 120, par. 439.2)
Sec. 2. Definitions.
"Use" means the exercise by any person of any right or
power over tangible personal property incident to the
ownership of that property, except that it does not include
the sale of such property in any form as tangible personal
property in the regular course of business to the extent that
such property is not first subjected to a use for which it was
purchased, and does not include the use of such property by its
owner for demonstration purposes: Provided that the property
purchased is deemed to be purchased for the purpose of resale,
despite first being used, to the extent to which it is resold
as an ingredient of an intentionally produced product or
by-product of manufacturing. "Use" does not mean the
demonstration use or interim use of tangible personal property
by a retailer before he sells that tangible personal property.
For watercraft or aircraft, if the period of demonstration use
or interim use by the retailer exceeds 18 months, the retailer

HB5477 - 2 - LRB102 25061 HLH 34321 b
shall pay on the retailers' original cost price the tax
imposed by this Act, and no credit for that tax is permitted if
the watercraft or aircraft is subsequently sold by the
retailer. "Use" does not mean the physical incorporation of
tangible personal property, to the extent not first subjected
to a use for which it was purchased, as an ingredient or
constituent, into other tangible personal property (a) which
is sold in the regular course of business or (b) which the
person incorporating such ingredient or constituent therein
has undertaken at the time of such purchase to cause to be
transported in interstate commerce to destinations outside the
State of Illinois: Provided that the property purchased is
deemed to be purchased for the purpose of resale, despite
first being used, to the extent to which it is resold as an
ingredient of an intentionally produced product or by-product
of manufacturing.
"Watercraft" means a Class 2, Class 3, or Class 4
watercraft as defined in Section 3-2 of the Boat Registration
and Safety Act, a personal watercraft, or any boat equipped
with an inboard motor.
"Purchase at retail" means the acquisition of the
ownership of or title to tangible personal property through a
sale at retail.
"Purchaser" means anyone who, through a sale at retail,
acquires the ownership of tangible personal property for a
valuable consideration.

HB5477 - 3 - LRB102 25061 HLH 34321 b
"Sale at retail" means any transfer of the ownership of or
title to tangible personal property to a purchaser, for the
purpose of use, and not for the purpose of resale in any form
as tangible personal property to the extent not first
subjected to a use for which it was purchased, for a valuable
consideration: Provided that the property purchased is deemed
to be purchased for the purpose of resale, despite first being
used, to the extent to which it is resold as an ingredient of
an intentionally produced product or by-product of
manufacturing. For this purpose, slag produced as an incident
to manufacturing pig iron or steel and sold is considered to be
an intentionally produced by-product of manufacturing. "Sale
at retail" includes any such transfer made for resale unless
made in compliance with Section 2c of the Retailers'
Occupation Tax Act, as incorporated by reference into Section
12 of this Act. Transactions whereby the possession of the
property is transferred but the seller retains the title as
security for payment of the selling price are sales.
"Sale at retail" shall also be construed to include any
Illinois florist's sales transaction in which the purchase
order is received in Illinois by a florist and the sale is for
use or consumption, but the Illinois florist has a florist in
another state deliver the property to the purchaser or the
purchaser's donee in such other state.
Nonreusable tangible personal property that is used by
persons engaged in the business of operating a restaurant,

HB5477 - 4 - LRB102 25061 HLH 34321 b
cafeteria, or drive-in is a sale for resale when it is
transferred to customers in the ordinary course of business as
part of the sale of food or beverages and is used to deliver,
package, or consume food or beverages, regardless of where
consumption of the food or beverages occurs. Examples of those
items include, but are not limited to nonreusable, paper and
plastic cups, plates, baskets, boxes, sleeves, buckets or
other containers, utensils, straws, placemats, napkins, doggie
bags, and wrapping or packaging materials that are transferred
to customers as part of the sale of food or beverages in the
ordinary course of business.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of tangible personal property.
"Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits, property other than as hereinafter provided,
and services, but, prior to January 1, 2020 and beginning
again on January 1, 2022, not including the value of or credit
given for traded-in tangible personal property where the item
that is traded-in is of like kind and character as that which
is being sold; beginning January 1, 2020 and until January 1,
2022, "selling price" includes the portion of the value of or
credit given for traded-in motor vehicles of the First
Division as defined in Section 1-146 of the Illinois Vehicle

HB5477 - 5 - LRB102 25061 HLH 34321 b
Code of like kind and character as that which is being sold
that exceeds $10,000. "Selling price" shall be determined
without any deduction on account of the cost of the property
sold, the cost of materials used, labor or service cost or any
other expense whatsoever, but does not include interest or
finance charges which appear as separate items on the bill of
sale or sales contract nor charges that are added to prices by
sellers on account of the seller's tax liability under the
Retailers' Occupation Tax Act, or on account of the seller's
duty to collect, from the purchaser, the tax that is imposed by
this Act, or, except as otherwise provided with respect to any
cigarette tax imposed by a home rule unit, on account of the
seller's tax liability under any local occupation tax
administered by the Department, or, except as otherwise
provided with respect to any cigarette tax imposed by a home
rule unit on account of the seller's duty to collect, from the
purchasers, the tax that is imposed under any local use tax
administered by the Department. Effective December 1, 1985,
"selling price" shall include charges that are added to prices
by sellers on account of the seller's tax liability under the
Cigarette Tax Act, on account of the seller's duty to collect,
from the purchaser, the tax imposed under the Cigarette Use
Tax Act, and on account of the seller's duty to collect, from
the purchaser, any cigarette tax imposed by a home rule unit.
Notwithstanding any law to the contrary, for any motor
vehicle, as defined in Section 1-146 of the Vehicle Code, that

HB5477 - 6 - LRB102 25061 HLH 34321 b
is sold on or after January 1, 2015 for the purpose of leasing
the vehicle for a defined period that is longer than one year
and (1) is a motor vehicle of the second division that: (A) is
a self-contained motor vehicle designed or permanently
converted to provide living quarters for recreational,
camping, or travel use, with direct walk through access to the
living quarters from the driver's seat; (B) is of the van
configuration designed for the transportation of not less than
7 nor more than 16 passengers; or (C) has a gross vehicle
weight rating of 8,000 pounds or less or (2) is a motor vehicle
of the first division, "selling price" or "amount of sale"
means the consideration received by the lessor pursuant to the
lease contract, including amounts due at lease signing and all
monthly or other regular payments charged over the term of the
lease. Also included in the selling price is any amount
received by the lessor from the lessee for the leased vehicle
that is not calculated at the time the lease is executed,
including, but not limited to, excess mileage charges and
charges for excess wear and tear. For sales that occur in
Illinois, with respect to any amount received by the lessor
from the lessee for the leased vehicle that is not calculated
at the time the lease is executed, the lessor who purchased the
motor vehicle does not incur the tax imposed by the Use Tax Act
on those amounts, and the retailer who makes the retail sale of
the motor vehicle to the lessor is not required to collect the
tax imposed by this Act or to pay the tax imposed by the

HB5477 - 7 - LRB102 25061 HLH 34321 b
Retailers' Occupation Tax Act on those amounts. However, the
lessor who purchased the motor vehicle assumes the liability
for reporting and paying the tax on those amounts directly to
the Department in the same form (Illinois Retailers'
Occupation Tax, and local retailers' occupation taxes, if
applicable) in which the retailer would have reported and paid
such tax if the retailer had accounted for the tax to the
Department. For amounts received by the lessor from the lessee
that are not calculated at the time the lease is executed, the
lessor must file the return and pay the tax to the Department
by the due date otherwise required by this Act for returns
other than transaction returns. If the retailer is entitled
under this Act to a discount for collecting and remitting the
tax imposed under this Act to the Department with respect to
the sale of the motor vehicle to the lessor, then the right to
the discount provided in this Act shall be transferred to the
lessor with respect to the tax paid by the lessor for any
amount received by the lessor from the lessee for the leased
vehicle that is not calculated at the time the lease is
executed; provided that the discount is only allowed if the
return is timely filed and for amounts timely paid. The
"selling price" of a motor vehicle that is sold on or after
January 1, 2015 for the purpose of leasing for a defined period
of longer than one year shall not be reduced by the value of or
credit given for traded-in tangible personal property owned by
the lessor, nor shall it be reduced by the value of or credit

HB5477 - 8 - LRB102 25061 HLH 34321 b
given for traded-in tangible personal property owned by the
lessee, regardless of whether the trade-in value thereof is
assigned by the lessee to the lessor. In the case of a motor
vehicle that is sold for the purpose of leasing for a defined
period of longer than one year, the sale occurs at the time of
the delivery of the vehicle, regardless of the due date of any
lease payments. A lessor who incurs a Retailers' Occupation
Tax liability on the sale of a motor vehicle coming off lease
may not take a credit against that liability for the Use Tax
the lessor paid upon the purchase of the motor vehicle (or for
any tax the lessor paid with respect to any amount received by
the lessor from the lessee for the leased vehicle that was not
calculated at the time the lease was executed) if the selling
price of the motor vehicle at the time of purchase was
calculated using the definition of "selling price" as defined
in this paragraph. Notwithstanding any other provision of this
Act to the contrary, lessors shall file all returns and make
all payments required under this paragraph to the Department
by electronic means in the manner and form as required by the
Department. This paragraph does not apply to leases of motor
vehicles for which, at the time the lease is entered into, the
term of the lease is not a defined period, including leases
with a defined initial period with the option to continue the
lease on a month-to-month or other basis beyond the initial
defined period.
The phrase "like kind and character" shall be liberally

HB5477 - 9 - LRB102 25061 HLH 34321 b
construed (including but not limited to any form of motor
vehicle for any form of motor vehicle, or any kind of farm or
agricultural implement for any other kind of farm or
agricultural implement), while not including a kind of item
which, if sold at retail by that retailer, would be exempt from
retailers' occupation tax and use tax as an isolated or
occasional sale.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, limited liability company, or a receiver,
executor, trustee, guardian or other representative appointed
by order of any court.
"Retailer" means and includes every person engaged in the
business of making sales at retail as defined in this Section.
A person who holds himself or herself out as being engaged
(or who habitually engages) in selling tangible personal
property at retail is a retailer hereunder with respect to
such sales (and not primarily in a service occupation)
notwithstanding the fact that such person designs and produces
such tangible personal property on special order for the
purchaser and in such a way as to render the property of value
only to such purchaser, if such tangible personal property so
produced on special order serves substantially the same
function as stock or standard items of tangible personal
property that are sold at retail.

HB5477 - 10 - LRB102 25061 HLH 34321 b
A person whose activities are organized and conducted
primarily as a not-for-profit service enterprise, and who
engages in selling tangible personal property at retail
(whether to the public or merely to members and their guests)
is a retailer with respect to such transactions, excepting
only a person organized and operated exclusively for
charitable, religious or educational purposes either (1), to
the extent of sales by such person to its members, students,
patients or inmates of tangible personal property to be used
primarily for the purposes of such person, or (2), to the
extent of sales by such person of tangible personal property
which is not sold or offered for sale by persons organized for
profit. The selling of school books and school supplies by
schools at retail to students is not "primarily for the
purposes of" the school which does such selling. This
paragraph does not apply to nor subject to taxation occasional
dinners, social or similar activities of a person organized
and operated exclusively for charitable, religious or
educational purposes, whether or not such activities are open
to the public.
A person who is the recipient of a grant or contract under
Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
serves meals to participants in the federal Nutrition Program
for the Elderly in return for contributions established in
amount by the individual participant pursuant to a schedule of
suggested fees as provided for in the federal Act is not a

HB5477 - 11 - LRB102 25061 HLH 34321 b
retailer under this Act with respect to such transactions.
Persons who engage in the business of transferring
tangible personal property upon the redemption of trading
stamps are retailers hereunder when engaged in such business.
The isolated or occasional sale of tangible personal
property at retail by a person who does not hold himself out as
being engaged (or who does not habitually engage) in selling
such tangible personal property at retail or a sale through a
bulk vending machine does not make such person a retailer
hereunder. However, any person who is engaged in a business
which is not subject to the tax imposed by the Retailers'
Occupation Tax Act because of involving the sale of or a
contract to sell real estate or a construction contract to
improve real estate, but who, in the course of conducting such
business, transfers tangible personal property to users or
consumers in the finished form in which it was purchased, and
which does not become real estate, under any provision of a
construction contract or real estate sale or real estate sales
agreement entered into with some other person arising out of
or because of such nontaxable business, is a retailer to the
extent of the value of the tangible personal property so
transferred. If, in such transaction, a separate charge is
made for the tangible personal property so transferred, the
value of such property, for the purposes of this Act, is the
amount so separately charged, but not less than the cost of
such property to the transferor; if no separate charge is

HB5477 - 12 - LRB102 25061 HLH 34321 b
made, the value of such property, for the purposes of this Act,
is the cost to the transferor of such tangible personal
property.
"Retailer maintaining a place of business in this State",
or any like term, means and includes any of the following
retailers:
(1) A retailer having or maintaining within this
State, directly or by a subsidiary, an office,
distribution house, sales house, warehouse or other place
of business, or any agent or other representative
operating within this State under the authority of the
retailer or its subsidiary, irrespective of whether such
place of business or agent or other representative is
located here permanently or temporarily, or whether such
retailer or subsidiary is licensed to do business in this
State. However, the ownership of property that is located
at the premises of a printer with which the retailer has
contracted for printing and that consists of the final
printed product, property that becomes a part of the final
printed product, or copy from which the printed product is
produced shall not result in the retailer being deemed to
have or maintain an office, distribution house, sales
house, warehouse, or other place of business within this
State.
(1.1) A retailer having a contract with a person
located in this State under which the person, for a

HB5477 - 13 - LRB102 25061 HLH 34321 b
commission or other consideration based upon the sale of
tangible personal property by the retailer, directly or
indirectly refers potential customers to the retailer by
providing to the potential customers a promotional code or
other mechanism that allows the retailer to track
purchases referred by such persons. Examples of mechanisms
that allow the retailer to track purchases referred by
such persons include but are not limited to the use of a
link on the person's Internet website, promotional codes
distributed through the person's hand-delivered or mailed
material, and promotional codes distributed by the person
through radio or other broadcast media. The provisions of
this paragraph (1.1) shall apply only if the cumulative
gross receipts from sales of tangible personal property by
the retailer to customers who are referred to the retailer
by all persons in this State under such contracts exceed
$10,000 during the preceding 4 quarterly periods ending on
the last day of March, June, September, and December. A
retailer meeting the requirements of this paragraph (1.1)
shall be presumed to be maintaining a place of business in
this State but may rebut this presumption by submitting
proof that the referrals or other activities pursued
within this State by such persons were not sufficient to
meet the nexus standards of the United States Constitution
during the preceding 4 quarterly periods.
(1.2) Beginning July 1, 2011, a retailer having a

HB5477 - 14 - LRB102 25061 HLH 34321 b
contract with a person located in this State under which:
(A) the retailer sells the same or substantially
similar line of products as the person located in this
State and does so using an identical or substantially
similar name, trade name, or trademark as the person
located in this State; and
(B) the retailer provides a commission or other
consideration to the person located in this State
based upon the sale of tangible personal property by
the retailer.
The provisions of this paragraph (1.2) shall apply
only if the cumulative gross receipts from sales of
tangible personal property by the retailer to customers in
this State under all such contracts exceed $10,000 during
the preceding 4 quarterly periods ending on the last day
of March, June, September, and December.
(2) (Blank).
(3) (Blank).
(4) (Blank).
(5) (Blank).
(6) (Blank).
(7) (Blank).
(8) (Blank).
(9) Beginning October 1, 2018, a retailer making sales
of tangible personal property to purchasers in Illinois
from outside of Illinois if:

HB5477 - 15 - LRB102 25061 HLH 34321 b
(A) the cumulative gross receipts from sales of
tangible personal property to purchasers in Illinois
are $100,000 or more; or
(B) the retailer enters into 200 or more separate
transactions for the sale of tangible personal
property to purchasers in Illinois.
The retailer shall determine on a quarterly basis,
ending on the last day of March, June, September, and
December, whether he or she meets the criteria of either
subparagraph (A) or (B) of this paragraph (9) for the
preceding 12-month period. If the retailer meets the
threshold of either subparagraph (A) or (B) for a 12-month
period, he or she is considered a retailer maintaining a
place of business in this State and is required to collect
and remit the tax imposed under this Act and file returns
for one year. At the end of that one-year period, the
retailer shall determine whether he or she met the
threshold of either subparagraph (A) or (B) during the
preceding 12-month period. If the retailer met the
criteria in either subparagraph (A) or (B) for the
preceding 12-month period, he or she is considered a
retailer maintaining a place of business in this State and
is required to collect and remit the tax imposed under
this Act and file returns for the subsequent year. If at
the end of a one-year period a retailer that was required
to collect and remit the tax imposed under this Act

HB5477 - 16 - LRB102 25061 HLH 34321 b
determines that he or she did not meet the threshold in
either subparagraph (A) or (B) during the preceding
12-month period, the retailer shall subsequently determine
on a quarterly basis, ending on the last day of March,
June, September, and December, whether he or she meets the
threshold of either subparagraph (A) or (B) for the
preceding 12-month period.
Beginning January 1, 2020, neither the gross receipts
from nor the number of separate transactions for sales of
tangible personal property to purchasers in Illinois that
a retailer makes through a marketplace facilitator and for
which the retailer has received a certification from the
marketplace facilitator pursuant to Section 2d of this Act
shall be included for purposes of determining whether he
or she has met the thresholds of this paragraph (9).
(10) Beginning January 1, 2020, a marketplace
facilitator that meets a threshold set forth in subsection
(b) of Section 2d of this Act.
"Bulk vending machine" means a vending machine, containing
unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children which, when a
coin or coins of a denomination not larger than $0.50 are
inserted, are dispensed in equal portions, at random and
without selection by the customer.
"General rate" means (i) 6.25% prior to July 1, 2022 and
(ii) 6% on or after July 1, 2022.

HB5477 - 17 - LRB102 25061 HLH 34321 b
(Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 1-1-20;
101-604, eff. 1-1-20; 102-353, eff. 1-1-22.)
(35 ILCS 105/3-6)
Sec. 3-6. Sales tax holiday items.
(a) The tangible personal property described in this
subsection qualifies for the 1.25% reduced rate of tax for the
period set forth in Section 3-10 of this Act (hereinafter
referred to as the Sales Tax Holiday Period). The reduced rate
on these items shall be administered under the provisions of
subsection (b) of this Section. The following items are
subject to the reduced rate:
(1) Clothing items that each have a retail selling
price of less than $100.
"Clothing" means, unless otherwise specified in this
Section, all human wearing apparel suitable for general
use. "Clothing" does not include clothing accessories,
protective equipment, or sport or recreational equipment.
"Clothing" includes, but is not limited to: household and
shop aprons; athletic supporters; bathing suits and caps;
belts and suspenders; boots; coats and jackets; ear muffs;
footlets; gloves and mittens for general use; hats and
caps; hosiery; insoles for shoes; lab coats; neckties;
overshoes; pantyhose; rainwear; rubber pants; sandals;
scarves; shoes and shoelaces; slippers; sneakers; socks
and stockings; steel-toed shoes; underwear; and school

HB5477 - 18 - LRB102 25061 HLH 34321 b
uniforms.
"Clothing accessories" means, but is not limited to:
briefcases; cosmetics; hair notions, including, but not
limited to barrettes, hair bows, and hair nets; handbags;
handkerchiefs; jewelry; non-prescription sunglasses;
umbrellas; wallets; watches; and wigs and hair pieces.
"Protective equipment" means, but is not limited to:
breathing masks; clean room apparel and equipment; ear and
hearing protectors; face shields; hard hats; helmets;
paint or dust respirators; protective gloves; safety
glasses and goggles; safety belts; tool belts; and
welder's gloves and masks.
"Sport or recreational equipment" means, but is not
limited to: ballet and tap shoes; cleated or spiked
athletic shoes; gloves, including, but not limited to,
baseball, bowling, boxing, hockey, and golf gloves;
goggles; hand and elbow guards; life preservers and vests;
mouth guards; roller and ice skates; shin guards; shoulder
pads; ski boots; waders; and wetsuits and fins.
(2) School supplies. "School supplies" means, unless
otherwise specified in this Section, items used by a
student in a course of study. The purchase of school
supplies for use by persons other than students for use in
a course of study are not eligible for the reduced rate of
tax. "School supplies" do not include school art supplies;
school instructional materials; cameras; film and memory

HB5477 - 19 - LRB102 25061 HLH 34321 b
cards; videocameras, tapes, and videotapes; computers;
cell phones; Personal Digital Assistants (PDAs); handheld
electronic schedulers; and school computer supplies.
"School supplies" includes, but is not limited to:
binders; book bags; calculators; cellophane tape;
blackboard chalk; compasses; composition books; crayons;
erasers; expandable, pocket, plastic, and manila folders;
glue, paste, and paste sticks; highlighters; index cards;
index card boxes; legal pads; lunch boxes; markers;
notebooks; paper, including loose leaf ruled notebook
paper, copy paper, graph paper, tracing paper, manila
paper, colored paper, poster board, and construction
paper; pencils; pencil leads; pens; ink and ink refills
for pens; pencil boxes and other school supply boxes;
pencil sharpeners; protractors; rulers; scissors; and
writing tablets.
"School art supply" means an item commonly used by a
student in a course of study for artwork and includes only
the following items: clay and glazes; acrylic, tempera,
and oil paint; paintbrushes for artwork; sketch and
drawing pads; and watercolors.
"School instructional material" means written material
commonly used by a student in a course of study as a
reference and to learn the subject being taught and
includes only the following items: reference books;
reference maps and globes; textbooks; and workbooks.

HB5477 - 20 - LRB102 25061 HLH 34321 b
"School computer supply" means an item commonly used
by a student in a course of study in which a computer is
used and applies only to the following items: flashdrives
and other computer data storage devices; data storage
media, such as diskettes and compact disks; boxes and
cases for disk storage; external ports or drives; computer
cases; computer cables; computer printers; and printer
cartridges, toner, and ink.
(b) Administration. Notwithstanding any other provision of
this Act, the reduced rate of tax under Section 3-10 of this
Act for clothing and school supplies shall be administered by
the Department under the provisions of this subsection (b).
(1) Bundled sales. Items that qualify for the reduced
rate of tax that are bundled together with items that do
not qualify for the reduced rate of tax and that are sold
for one itemized price will be subject to the reduced rate
of tax only if the value of the items that qualify for the
reduced rate of tax exceeds the value of the items that do
not qualify for the reduced rate of tax.
(2) Coupons and discounts. An unreimbursed discount by
the seller reduces the sales price of the property so that
the discounted sales price determines whether the sales
price is within a sales tax holiday price threshold. A
coupon or other reduction in the sales price is treated as
a discount if the seller is not reimbursed for the coupon
or reduction amount by a third party.

HB5477 - 21 - LRB102 25061 HLH 34321 b
(3) Splitting of items normally sold together.
Articles that are normally sold as a single unit must
continue to be sold in that manner. Such articles cannot
be priced separately and sold as individual items in order
to obtain the reduced rate of tax. For example, a pair of
shoes cannot have each shoe sold separately so that the
sales price of each shoe is within a sales tax holiday
price threshold.
(4) Rain checks. A rain check is a procedure that
allows a customer to purchase an item at a certain price at
a later time because the particular item was out of stock.
Eligible property that customers purchase during the Sales
Tax Holiday Period with the use of a rain check will
qualify for the reduced rate of tax regardless of when the
rain check was issued. Issuance of a rain check during the
Sales Tax Holiday Period will not qualify eligible
property for the reduced rate of tax if the property is
actually purchased after the Sales Tax Holiday Period.
(5) Exchanges. The procedure for an exchange in
regards to a sales tax holiday is as follows:
(A) If a customer purchases an item of eligible
property during the Sales Tax Holiday Period, but
later exchanges the item for a similar eligible item,
even if a different size, different color, or other
feature, no additional tax is due even if the exchange
is made after the Sales Tax Holiday Period.

HB5477 - 22 - LRB102 25061 HLH 34321 b
(B) If a customer purchases an item of eligible
property during the Sales Tax Holiday Period, but
after the Sales Tax Holiday Period has ended, the
customer returns the item and receives credit on the
purchase of a different item, the 6.25% general
merchandise sales tax rate is due on the sale of the
newly purchased item.
(C) If a customer purchases an item of eligible
property before the Sales Tax Holiday Period, but
during the Sales Tax Holiday Period the customer
returns the item and receives credit on the purchase
of a different item of eligible property, the reduced
rate of tax is due on the sale of the new item if the
new item is purchased during the Sales Tax Holiday
Period.
(6) Delivery charges. Delivery charges, including
shipping, handling and service charges, are part of the
sales price of eligible property.
(7) Order date and back orders. For the purpose of a
sales tax holiday, eligible property qualifies for the
reduced rate of tax if: (i) the item is both delivered to
and paid for by the customer during the Sales Tax Holiday
Period or (ii) the customer orders and pays for the item
and the seller accepts the order during the Sales Tax
Holiday Period for immediate shipment, even if delivery is
made after the Sales Tax Holiday Period. The seller

HB5477 - 23 - LRB102 25061 HLH 34321 b
accepts an order when the seller has taken action to fill
the order for immediate shipment. Actions to fill an order
include placement of an "in date" stamp on an order or
assignment of an "order number" to an order within the
Sales Tax Holiday Period. An order is for immediate
shipment when the customer does not request delayed
shipment. An order is for immediate shipment
notwithstanding that the shipment may be delayed because
of a backlog of orders or because stock is currently
unavailable to, or on back order by, the seller.
(8) Returns. For a 60-day period immediately after the
Sales Tax Holiday Period, if a customer returns an item
that would qualify for the reduced rate of tax, credit for
or refund of sales tax shall be given only at the reduced
rate unless the customer provides a receipt or invoice
that shows tax was paid at the 6.25% general merchandise
rate, or the seller has sufficient documentation to show
that tax was paid at the 6.25% general merchandise rate on
the specific item. This 60-day period is set solely for
the purpose of designating a time period during which the
customer must provide documentation that shows that the
appropriate sales tax rate was paid on returned
merchandise. The 60-day period is not intended to change a
seller's policy on the time period during which the seller
will accept returns.
(c) The Department may implement the provisions of this

HB5477 - 24 - LRB102 25061 HLH 34321 b
Section through the use of emergency rules, along with
permanent rules filed concurrently with such emergency rules,
in accordance with the provisions of Section 5-45 of the
Illinois Administrative Procedure Act. For purposes of the
Illinois Administrative Procedure Act, the adoption of rules
to implement the provisions of this Section shall be deemed an
emergency and necessary for the public interest, safety, and
welfare.
(Source: P.A. 96-1012, eff. 7-7-10.)
(35 ILCS 105/3-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax under imposed by this Act is imposed at the
general rate on of 6.25% of either the selling price or the
fair market value, if any, of the tangible personal property.
In all cases where property functionally used or consumed is
the same as the property that was purchased at retail, then the
tax is imposed on the selling price of the property. In all
cases where property functionally used or consumed is a
by-product or waste product that has been refined,
manufactured, or produced from property purchased at retail,
then the tax is imposed on the lower of the fair market value,
if any, of the specific property so used in this State or on
the selling price of the property purchased at retail. For
purposes of this Section "fair market value" means the price
at which property would change hands between a willing buyer

HB5477 - 25 - LRB102 25061 HLH 34321 b
and a willing seller, neither being under any compulsion to
buy or sell and both having reasonable knowledge of the
relevant facts. The fair market value shall be established by
Illinois sales by the taxpayer of the same property as that
functionally used or consumed, or if there are no such sales by
the taxpayer, then comparable sales or purchases of property
of like kind and character in Illinois.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
the Use Tax Act, the tax is imposed at the rate of 1.25%.
Beginning on August 6, 2010 through August 15, 2010, with
respect to sales tax holiday items as defined in Section 3-6 of
this Act, the tax is imposed at the rate of 1.25%.
With respect to gasohol, the tax imposed by this Act
applies to (i) 70% of the proceeds of sales made on or after
January 1, 1990, and before July 1, 2003, (ii) 80% of the
proceeds of sales made on or after July 1, 2003 and on or
before July 1, 2017, and (iii) 100% of the proceeds of sales
made thereafter. If, at any time, however, the tax under this
Act on sales of gasohol is imposed at the rate of 1.25%, then
the tax imposed by this Act applies to 100% of the proceeds of
sales of gasohol made during that time.
With respect to majority blended ethanol fuel, the tax
imposed by this Act does not apply to the proceeds of sales
made on or after July 1, 2003 and on or before December 31,

HB5477 - 26 - LRB102 25061 HLH 34321 b
2023 but applies to 100% of the proceeds of sales made
thereafter.
With respect to biodiesel blends with no less than 1% and
no more than 10% biodiesel, the tax imposed by this Act applies
to (i) 80% of the proceeds of sales made on or after July 1,
2003 and on or before December 31, 2018 and (ii) 100% of the
proceeds of sales made thereafter. If, at any time, however,
the tax under this Act on sales of biodiesel blends with no
less than 1% and no more than 10% biodiesel is imposed at the
rate of 1.25%, then the tax imposed by this Act applies to 100%
of the proceeds of sales of biodiesel blends with no less than
1% and no more than 10% biodiesel made during that time.
With respect to 100% biodiesel and biodiesel blends with
more than 10% but no more than 99% biodiesel, the tax imposed
by this Act does not apply to the proceeds of sales made on or
after July 1, 2003 and on or before December 31, 2023 but
applies to 100% of the proceeds of sales made thereafter.
With respect to food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption) and prescription and nonprescription
medicines, drugs, medical appliances, products classified as
Class III medical devices by the United States Food and Drug
Administration that are used for cancer treatment pursuant to
a prescription, as well as any accessories and components

HB5477 - 27 - LRB102 25061 HLH 34321 b
related to those devices, modifications to a motor vehicle for
the purpose of rendering it usable by a person with a
disability, and insulin, blood sugar testing materials,
syringes, and needles used by human diabetics, the tax is
imposed at the rate of 1%. For the purposes of this Section,
until September 1, 2009: the term "soft drinks" means any
complete, finished, ready-to-use, non-alcoholic drink, whether
carbonated or not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of whatever
kind or description that are contained in any closed or sealed
bottle, can, carton, or container, regardless of size; but
"soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in the
Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" do not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and

HB5477 - 28 - LRB102 25061 HLH 34321 b
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of

HB5477 - 29 - LRB102 25061 HLH 34321 b
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"
label includes:
(A) A "Drug Facts" panel; or
(B) A statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on the effective date of this amendatory Act of
the 98th General Assembly, "prescription and nonprescription
medicines and drugs" includes medical cannabis purchased from
a registered dispensing organization under the Compassionate
Use of Medical Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the
Compassionate Use of Medical Cannabis Program Act.
If the property that is purchased at retail from a
retailer is acquired outside Illinois and used outside
Illinois before being brought to Illinois for use here and is
taxable under this Act, the "selling price" on which the tax is
computed shall be reduced by an amount that represents a
reasonable allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;

HB5477 - 30 - LRB102 25061 HLH 34321 b
102-4, eff. 4-27-21.)
(35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
Sec. 3-55. Multistate exemption. To prevent actual or
likely multistate taxation, the tax imposed by this Act does
not apply to the use of tangible personal property in this
State under the following circumstances:
(a) The use, in this State, of tangible personal property
acquired outside this State by a nonresident individual and
brought into this State by the individual for his or her own
use while temporarily within this State or while passing
through this State.
(b) (Blank).
(c) The use, in this State, by 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 as long as so used by the interstate
carriers for hire, and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently
installed in or affixed to aircraft moving in interstate
commerce.
(d) The use, in this State, of tangible personal property
that is acquired outside this State and caused to be brought
into this State by a person who has already paid a tax in
another State in respect to the sale, purchase, or use of that

HB5477 - 31 - LRB102 25061 HLH 34321 b
property, to the extent of the amount of the tax properly due
and paid in the other State.
(e) The temporary storage, in this State, of tangible
personal property that is acquired outside this State and
that, after being brought into this State and stored here
temporarily, is used solely outside this State or is
physically attached to or incorporated into other tangible
personal property that is used solely outside this State, or
is altered by converting, fabricating, manufacturing,
printing, processing, or shaping, and, as altered, is used
solely outside this State.
(f) The temporary storage in this State of building
materials and fixtures that are acquired either in this State
or outside this State by an Illinois registered combination
retailer and construction contractor, and that the purchaser
thereafter uses outside this State by incorporating that
property into real estate located outside this State.
(g) The use or purchase of tangible personal property by 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.
(h) Except as provided in subsection (h-1), the use, in

HB5477 - 32 - LRB102 25061 HLH 34321 b
this State, of a motor vehicle that was 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 shall be prima facie evidence that
the motor vehicle will not be titled in this State.
(h-1) The exemption under subsection (h) does not apply if
the state in which the motor vehicle will be titled does not
allow a reciprocal exemption for the use in that state of 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, 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

HB5477 - 33 - LRB102 25061 HLH 34321 b
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 subsection 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
subsection (h-1) shall be proportionately distributed as if
the tax were collected at the 6.25% general rate imposed under
this Act.
(h-2) The following exemptions apply with respect to
certain aircraft:
(1) Beginning on July 1, 2007, no tax is imposed under
this Act on the purchase of an aircraft, as defined in
Section 3 of the Illinois Aeronautics Act, if all of the
following conditions are met:
(A) the aircraft leaves this State within 15 days
after the later of either the issuance of the final
billing for the purchase of the aircraft or the
authorized approval for return to service, completion
of the maintenance record entry, and completion of the
test flight and ground test for inspection, as

HB5477 - 34 - LRB102 25061 HLH 34321 b
required by 14 C.F.R. 91.407;
(B) the aircraft is not based or registered in
this State after the purchase of the aircraft; and
(C) the purchaser provides the Department with a
signed and dated certification, on a form prescribed
by the Department, certifying that the requirements of
this item (1) 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.
(2) Beginning on July 1, 2007, no tax is imposed under
this Act on the use of an aircraft, as defined in Section 3
of the Illinois Aeronautics Act, that is temporarily
located in this State for the purpose of a prepurchase
evaluation if all of the following conditions are met:
(A) the aircraft is not based or registered in
this State after the prepurchase evaluation; and
(B) the purchaser provides the Department with a
signed and dated certification, on a form prescribed
by the Department, certifying that the requirements of
this item (2) 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

HB5477 - 35 - LRB102 25061 HLH 34321 b
titled or registered, the address of the primary
physical location of the aircraft, and other
information that the Department may reasonably
require.
(3) Beginning on July 1, 2007, no tax is imposed under
this Act on the use of an aircraft, as defined in Section 3
of the Illinois Aeronautics Act, that is temporarily
located in this State for the purpose of a post-sale
customization if all of the following conditions are met:
(A) the aircraft leaves this State within 15 days
after the authorized approval for return to service,
completion of the maintenance record entry, and
completion of the test flight and ground test for
inspection, as required by 14 C.F.R. 91.407;
(B) the aircraft is not based or registered in
this State either before or after the post-sale
customization; and
(C) the purchaser provides the Department with a
signed and dated certification, on a form prescribed
by the Department, certifying that the requirements of
this item (3) 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

HB5477 - 36 - LRB102 25061 HLH 34321 b
require.
If tax becomes due under this subsection (h-2) because of
the purchaser's use of the aircraft in this State, the
purchaser shall file a return with the Department and pay the
tax on the fair market value of the aircraft. This return and
payment of the tax must be made no later than 30 days after the
aircraft is used in a taxable manner in this State. The tax is
based on the fair market value of the aircraft on the date that
it is first used in a taxable manner in this State.
For purposes of this subsection (h-2):
"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.
"Post-sale customization" means any improvement,
maintenance, or repair that is performed on an aircraft
following a transfer of ownership of the aircraft.
"Prepurchase evaluation" means an examination of an
aircraft to provide a potential purchaser with information
relevant to the potential purchase.
"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 this State.
This subsection (h-2) is exempt from the provisions of
Section 3-90.

HB5477 - 37 - LRB102 25061 HLH 34321 b
(i) Beginning July 1, 1999, the use, in this State, of fuel
acquired outside this State and brought into this State in the
fuel supply tanks of locomotives engaged in freight hauling
and passenger service for interstate commerce. This subsection
is exempt from the provisions of Section 3-90.
(j) Beginning on January 1, 2002 and through June 30,
2016, the use of 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 subsection (j). The permit issued under this subsection
(j) 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

HB5477 - 38 - LRB102 25061 HLH 34321 b
consumption of all such tangible personal property outside of
the State of Illinois.
(Source: P.A. 100-321, eff. 8-24-17.)
(35 ILCS 105/3-85)
Sec. 3-85. Manufacturer's Purchase Credit. For purchases
of machinery and equipment made on and after January 1, 1995
through June 30, 2003, and on and after September 1, 2004
through August 30, 2014, a purchaser of manufacturing
machinery and equipment that qualifies for the exemption
provided by paragraph (18) of Section 3-5 of this Act earns a
credit in an amount equal to a fixed percentage of the tax
which would have been incurred under this Act on those
purchases. For purchases of graphic arts machinery and
equipment made on or after July 1, 1996 and through June 30,
2003, and on and after September 1, 2004 through August 30,
2014, a purchaser of graphic arts machinery and equipment that
qualifies for the exemption provided by paragraph (6) of
Section 3-5 of this Act earns a credit in an amount equal to a
fixed percentage of the tax that would have been incurred
under this Act on those purchases. The credit earned for
purchases of manufacturing machinery and equipment or graphic
arts machinery and equipment shall be referred to as the
Manufacturer's Purchase Credit. A graphic arts producer is a
person engaged in graphic arts production as defined in
Section 2-30 of the Retailers' Occupation Tax Act. Beginning

HB5477 - 39 - LRB102 25061 HLH 34321 b
July 1, 1996, all references in this Section to manufacturers
or manufacturing shall also be deemed to refer to graphic arts
producers or graphic arts production.
The amount of credit shall be a percentage of the tax that
would have been incurred on the purchase of manufacturing
machinery and equipment or graphic arts machinery and
equipment if the exemptions provided by paragraph (6) or
paragraph (18) of Section 3-5 of this Act had not been
applicable. The percentage shall be as follows:
(1) 15% for purchases made on or before June 30, 1995.
(2) 25% for purchases made after June 30, 1995, and on
or before June 30, 1996.
(3) 40% for purchases made after June 30, 1996, and on
or before June 30, 1997.
(4) 50% for purchases made on or after July 1, 1997.
(a) Manufacturer's Purchase Credit earned prior to July 1,
2003. This subsection (a) applies to Manufacturer's Purchase
Credit earned prior to July 1, 2003. A purchaser of production
related tangible personal property desiring to use the
Manufacturer's Purchase Credit shall certify to the seller
prior to October 1, 2003 that the purchaser is satisfying all
or part of the liability under the Use Tax Act or the Service
Use Tax Act that is due on the purchase of the production
related tangible personal property by use of Manufacturer's
Purchase Credit. The Manufacturer's Purchase Credit
certification must be dated and shall include the name and

HB5477 - 40 - LRB102 25061 HLH 34321 b
address of the purchaser, the purchaser's registration number,
if registered, the credit being applied, and a statement that
the State Use Tax or Service Use Tax liability is being
satisfied with the manufacturer's or graphic arts producer's
accumulated purchase credit. Certification may be incorporated
into the manufacturer's or graphic arts producer's purchase
order. Manufacturer's Purchase Credit certification provided
by the manufacturer or graphic arts producer prior to October
1, 2003 may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed the
general rate percentage 6.25% of the receipts subject to tax
from a qualifying purchase, but only if the retailer or
serviceman reports the Manufacturer's Purchase Credit claimed
as required by the Department. A Manufacturer's Purchase
Credit reported on any original or amended return filed under
this Act after October 20, 2003 shall be disallowed. The
Manufacturer's Purchase Credit earned by purchase of exempt
manufacturing machinery and equipment or graphic arts
machinery and equipment is a non-transferable credit. A
manufacturer or graphic arts producer that enters into a
contract involving the installation of tangible personal
property into real estate within a manufacturing or graphic
arts production facility may, prior to October 1, 2003,
authorize a construction contractor to utilize credit
accumulated by the manufacturer or graphic arts producer to

HB5477 - 41 - LRB102 25061 HLH 34321 b
purchase the tangible personal property. A manufacturer or
graphic arts producer intending to use accumulated credit to
purchase such tangible personal property shall execute a
written contract authorizing the contractor to utilize a
specified dollar amount of credit. The contractor shall
furnish, prior to October 1, 2003, the supplier with the
manufacturer's or graphic arts producer's name, registration
or resale number, and a statement that a specific amount of the
Use Tax or Service Use Tax liability, not to exceed the general
rate percentage 6.25% of the selling price, is being satisfied
with the credit. The manufacturer or graphic arts producer
shall remain liable to timely report all information required
by the annual Report of Manufacturer's Purchase Credit Used
for all credit utilized by a construction contractor.
No Manufacturer's Purchase Credit earned prior to July 1,
2003 may be used after October 1, 2003. The Manufacturer's
Purchase Credit may be used to satisfy liability under the Use
Tax Act or the Service Use Tax Act due on the purchase of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or by
a lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by

HB5477 - 42 - LRB102 25061 HLH 34321 b
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as preproduction material handling, receiving, quality
control, inventory control, storage, staging, and packaging
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as
described in Section 2-30 of the Retailers' Occupation Tax Act
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible
personal property used or consumed in activities such as
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all
tangible personal property used or consumed by the purchaser
for research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing facility, in
sales, purchasing, accounting, fiscal management, marketing,
personnel recruitment or selection, or landscaping or (ii)

HB5477 - 43 - LRB102 25061 HLH 34321 b
tangible personal property required to be titled or registered
with a department, agency, or unit of federal, state, or local
government. The Manufacturer's Purchase Credit may be used,
prior to October 1, 2003, to satisfy the tax arising either
from the purchase of machinery and equipment on or after
January 1, 1995 for which the exemption provided by paragraph
(18) of Section 3-5 of this Act was erroneously claimed, or the
purchase of machinery and equipment on or after July 1, 1996
for which the exemption provided by paragraph (6) of Section
3-5 of this Act was erroneously claimed, but not in
satisfaction of penalty, if any, and interest for failure to
pay the tax when due. A purchaser of production related
tangible personal property who is required to pay Illinois Use
Tax or Service Use Tax on the purchase directly to the
Department may, prior to October 1, 2003, utilize the
Manufacturer's Purchase Credit in satisfaction of the tax
arising from that purchase, but not in satisfaction of penalty
and interest. A purchaser who uses the Manufacturer's Purchase
Credit to purchase property which is later determined not to
be production related tangible personal property may be liable
for tax, penalty, and interest on the purchase of that
property as of the date of purchase but shall be entitled to
use the disallowed Manufacturer's Purchase Credit, so long as
it has not expired and is used prior to October 1, 2003, on
qualifying purchases of production related tangible personal
property not previously subject to credit usage. The

HB5477 - 44 - LRB102 25061 HLH 34321 b
Manufacturer's Purchase Credit earned by a manufacturer or
graphic arts producer expires the last day of the second
calendar year following the calendar year in which the credit
arose. No Manufacturer's Purchase Credit may be used after
September 30, 2003 regardless of when that credit was earned.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Earned for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts
machinery on which the credit was earned; (ii) the total State
Use Tax or Service Use Tax which would have been due on those
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's

HB5477 - 45 - LRB102 25061 HLH 34321 b
Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms as
prescribed or approved by the Department and shall state, for
each month of the calendar year: (i) the total purchase price
of production related tangible personal property purchased
from Illinois suppliers; (ii) the total purchase price of
production related tangible personal property purchased from
out-of-state suppliers; (iii) the total amount of credit used
during such month; and (iv) such other information as the
Department may reasonably require. A purchaser using
Manufacturer's Purchase Credit shall maintain records that
identify, as to each purchase of production related tangible
personal property on which the purchaser used Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit used on each purchase.
No annual report shall be filed before May 1, 1996 or after
June 30, 2004. A purchaser that fails to file an annual Report
of Manufacturer's Purchase Credit Earned or an annual Report
of Manufacturer's Purchase Credit Used by the last day of the

HB5477 - 46 - LRB102 25061 HLH 34321 b
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser
have agreed to an extension of the statute of limitations for
the issuance of a notice of tax liability as provided in
Section 4 of the Retailers' Occupation Tax Act. If the time for
assessment or refund has been extended, then amended reports
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. No Manufacturer's Purchase
Credit report filed with the Department for periods prior to
January 1, 1995 shall be approved. Manufacturer's Purchase
Credit claimed on an amended report may be used, until October
1, 2003, to satisfy tax liability under the Use Tax Act or the
Service Use Tax Act (i) on qualifying purchases of production
related tangible personal property made after the date the
amended report is filed or (ii) assessed by the Department on
qualifying purchases of production related tangible personal
property made in the case of manufacturers on or after January
1, 1995, or in the case of graphic arts producers on or after
July 1, 1996.
If the purchaser is not the manufacturer or a graphic arts

HB5477 - 47 - LRB102 25061 HLH 34321 b
producer, but rents or leases the use of the property to a
manufacturer or graphic arts producer, the purchaser may earn,
report, and use Manufacturer's Purchase Credit in the same
manner as a manufacturer or graphic arts producer.
A purchaser shall not be entitled to any Manufacturer's
Purchase Credit for a purchase that is required to be reported
and is not timely reported as provided in this Section. A
purchaser remains liable for (i) any tax that was satisfied by
use of a Manufacturer's Purchase Credit, as of the date of
purchase, if that use is not timely reported as required in
this Section and (ii) for any applicable penalties and
interest for failing to pay the tax when due. No
Manufacturer's Purchase Credit may be used after September 30,
2003 to satisfy any tax liability imposed under this Act,
including any audit liability.
(b) Manufacturer's Purchase Credit earned on and after
September 1, 2004. This subsection (b) applies to
Manufacturer's Purchase Credit earned on and after September
1, 2004. Manufacturer's Purchase Credit earned on or after
September 1, 2004 may only be used to satisfy the Use Tax or
Service Use Tax liability incurred on production related
tangible personal property purchased on or after September 1,
2004. A purchaser of production related tangible personal
property desiring to use the Manufacturer's Purchase Credit
shall certify to the seller that the purchaser is satisfying
all or part of the liability under the Use Tax Act or the

HB5477 - 48 - LRB102 25061 HLH 34321 b
Service Use Tax Act that is due on the purchase of the
production related tangible personal property by use of
Manufacturer's Purchase Credit. The Manufacturer's Purchase
Credit certification must be dated and shall include the name
and address of the purchaser, the purchaser's registration
number, if registered, the credit being applied, and a
statement that the State Use Tax or Service Use Tax liability
is being satisfied with the manufacturer's or graphic arts
producer's accumulated purchase credit. Certification may be
incorporated into the manufacturer's or graphic arts
producer's purchase order. Manufacturer's Purchase Credit
certification provided by the manufacturer or graphic arts
producer may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed the
general rate percentage 6.25% of the receipts subject to tax
from a qualifying purchase, but only if the retailer or
serviceman reports the Manufacturer's Purchase Credit claimed
as required by the Department. The Manufacturer's Purchase
Credit earned by purchase of exempt manufacturing machinery
and equipment or graphic arts machinery and equipment is a
non-transferable credit. A manufacturer or graphic arts
producer that enters into a contract involving the
installation of tangible personal property into real estate
within a manufacturing or graphic arts production facility
may, on or after September 1, 2004, authorize a construction

HB5477 - 49 - LRB102 25061 HLH 34321 b
contractor to utilize credit accumulated by the manufacturer
or graphic arts producer to purchase the tangible personal
property. A manufacturer or graphic arts producer intending to
use accumulated credit to purchase such tangible personal
property shall execute a written contract authorizing the
contractor to utilize a specified dollar amount of credit. The
contractor shall furnish the supplier with the manufacturer's
or graphic arts producer's name, registration or resale
number, and a statement that a specific amount of the Use Tax
or Service Use Tax liability, not to exceed the general rate
percentage 6.25% of the selling price, is being satisfied with
the credit. The manufacturer or graphic arts producer shall
remain liable to timely report all information required by the
annual Report of Manufacturer's Purchase Credit Used for all
credit utilized by a construction contractor.
The Manufacturer's Purchase Credit may be used to satisfy
liability under the Use Tax Act or the Service Use Tax Act due
on the purchase, made on or after September 1, 2004, of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or by
a lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by

HB5477 - 50 - LRB102 25061 HLH 34321 b
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as preproduction material handling, receiving, quality
control, inventory control, storage, staging, and packaging
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as
described in Section 2-30 of the Retailers' Occupation Tax Act
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible
personal property used or consumed in activities such as
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all
tangible personal property used or consumed by the purchaser
for research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing facility, in
sales, purchasing, accounting, fiscal management, marketing,
personnel recruitment or selection, or landscaping or (ii)

HB5477 - 51 - LRB102 25061 HLH 34321 b
tangible personal property required to be titled or registered
with a department, agency, or unit of federal, state, or local
government. The Manufacturer's Purchase Credit may be used to
satisfy the tax arising either from the purchase of machinery
and equipment on or after September 1, 2004 for which the
exemption provided by paragraph (18) of Section 3-5 of this
Act was erroneously claimed, or the purchase of machinery and
equipment on or after September 1, 2004 for which the
exemption provided by paragraph (6) of Section 3-5 of this Act
was erroneously claimed, but not in satisfaction of penalty,
if any, and interest for failure to pay the tax when due. A
purchaser of production related tangible personal property
that is purchased on or after September 1, 2004 who is required
to pay Illinois Use Tax or Service Use Tax on the purchase
directly to the Department may utilize the Manufacturer's
Purchase Credit in satisfaction of the tax arising from that
purchase, but not in satisfaction of penalty and interest. A
purchaser who uses the Manufacturer's Purchase Credit to
purchase property on and after September 1, 2004 which is
later determined not to be production related tangible
personal property may be liable for tax, penalty, and interest
on the purchase of that property as of the date of purchase but
shall be entitled to use the disallowed Manufacturer's
Purchase Credit, so long as it has not expired and is used on
qualifying purchases of production related tangible personal
property not previously subject to credit usage. The

HB5477 - 52 - LRB102 25061 HLH 34321 b
Manufacturer's Purchase Credit earned by a manufacturer or
graphic arts producer expires the last day of the second
calendar year following the calendar year in which the credit
arose. A purchaser earning Manufacturer's Purchase Credit
shall sign and file an annual Report of Manufacturer's
Purchase Credit Earned for each calendar year no later than
the last day of the sixth month following the calendar year in
which a Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts
machinery on which the credit was earned; (ii) the total State
Use Tax or Service Use Tax which would have been due on those
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's
Purchase Credit earned on each purchase. A purchaser using
Manufacturer's Purchase Credit shall sign and file an annual

HB5477 - 53 - LRB102 25061 HLH 34321 b
Report of Manufacturer's Purchase Credit Used for each
calendar year no later than the last day of the sixth month
following the calendar year in which a Manufacturer's Purchase
Credit is used. A Report of Manufacturer's Purchase Credit
Used shall be filed on forms as prescribed or approved by the
Department and shall state, for each month of the calendar
year: (i) the total purchase price of production related
tangible personal property purchased from Illinois suppliers;
(ii) the total purchase price of production related tangible
personal property purchased from out-of-state suppliers; (iii)
the total amount of credit used during such month; and (iv)
such other information as the Department may reasonably
require. A purchaser using Manufacturer's Purchase Credit
shall maintain records that identify, as to each purchase of
production related tangible personal property on which the
purchaser used Manufacturer's Purchase Credit, the vendor
(including, if applicable, either the vendor's registration
number or Federal Employer Identification Number), the
purchase price, and the amount of Manufacturer's Purchase
Credit used on each purchase.
A purchaser that fails to file an annual Report of
Manufacturer's Purchase Credit Earned or an annual Report of
Manufacturer's Purchase Credit Used by the last day of the
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to

HB5477 - 54 - LRB102 25061 HLH 34321 b
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser
have agreed to an extension of the statute of limitations for
the issuance of a notice of tax liability as provided in
Section 4 of the Retailers' Occupation Tax Act. If the time for
assessment or refund has been extended, then amended reports
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. Manufacturer's Purchase
Credit claimed on an amended report may be used to satisfy tax
liability under the Use Tax Act or the Service Use Tax Act (i)
on qualifying purchases of production related tangible
personal property made after the date the amended report is
filed or (ii) assessed by the Department on qualifying
production related tangible personal property purchased on or
after September 1, 2004. If the purchaser is not the
manufacturer or a graphic arts producer, but rents or leases
the use of the property to a manufacturer or graphic arts
producer, the purchaser may earn, report, and use
Manufacturer's Purchase Credit in the same manner as a
manufacturer or graphic arts producer. A purchaser shall not
be entitled to any Manufacturer's Purchase Credit for a
purchase that is required to be reported and is not timely
reported as provided in this Section. A purchaser remains

HB5477 - 55 - LRB102 25061 HLH 34321 b
liable for (i) any tax that was satisfied by use of a
Manufacturer's Purchase Credit, as of the date of purchase, if
that use is not timely reported as required in this Section and
(ii) for any applicable penalties and interest for failing to
pay the tax when due.
(Source: P.A. 96-116, eff. 7-31-09.)
(35 ILCS 105/9) (from Ch. 120, par. 439.9)
Sec. 9. Except as to motor vehicles, watercraft, aircraft,
and trailers that are required to be registered with an agency
of this State, each retailer required or authorized to collect
the tax imposed by this Act shall pay to the Department the
amount of such tax (except as otherwise provided) at the time
when he is required to file his return for the period during
which such tax was collected, less a discount of 2.1% prior to
January 1, 1990, and 1.75% on and after January 1, 1990, or $5
per calendar year, whichever is greater, which is allowed to
reimburse the retailer for expenses incurred in collecting the
tax, keeping records, preparing and filing returns, remitting
the tax and supplying data to the Department on request. The
discount under this Section is not allowed for the 1.25%
portion of taxes paid on aviation fuel that is subject to the
revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
47133. In the case of retailers who report and pay the tax on a
transaction by transaction basis, as provided in this Section,
such discount shall be taken with each such tax remittance

HB5477 - 56 - LRB102 25061 HLH 34321 b
instead of when such retailer files his periodic return. The
discount allowed under this Section is allowed only for
returns that are filed in the manner required by this Act. The
Department may disallow the discount for retailers whose
certificate of registration is revoked at the time the return
is filed, but only if the Department's decision to revoke the
certificate of registration has become final. A retailer need
not remit that part of any tax collected by him to the extent
that he is required to remit and does remit the tax imposed by
the Retailers' Occupation Tax Act, with respect to the sale of
the same property.
Where such tangible personal property is sold under a
conditional sales contract, or under any other form of sale
wherein the payment of the principal sum, or a part thereof, is
extended beyond the close of the period for which the return is
filed, the retailer, in collecting the tax (except as to motor
vehicles, watercraft, aircraft, and trailers that are required
to be registered with an agency of this State), may collect for
each tax return period, only the tax applicable to that part of
the selling price actually received during such tax return
period.
Except as provided in this Section, on or before the
twentieth day of each calendar month, such retailer shall file
a return for the preceding calendar month. Such return shall
be filed on forms prescribed by the Department and shall
furnish such information as the Department may reasonably

HB5477 - 57 - LRB102 25061 HLH 34321 b
require. On and after January 1, 2018, except for returns for
motor vehicles, watercraft, aircraft, and trailers that are
required to be registered with an agency of this State, with
respect to retailers whose annual gross receipts average
$20,000 or more, all returns required to be filed pursuant to
this Act shall be filed electronically. Retailers who
demonstrate that they do not have access to the Internet or
demonstrate hardship in filing electronically may petition the
Department to waive the electronic filing requirement.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter. The
taxpayer shall also file a return with the Department for each
of the first two months of each calendar quarter, on or before
the twentieth day of the following calendar month, stating:
1. The name of the seller;
2. The address of the principal place of business from
which he engages in the business of selling tangible
personal property at retail in this State;
3. The total amount of taxable receipts received by
him during the preceding calendar month from sales of
tangible personal property by him during such preceding
calendar month, including receipts from charge and time
sales, but less all deductions allowed by law;
4. The amount of credit provided in Section 2d of this

HB5477 - 58 - LRB102 25061 HLH 34321 b
Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the Department
may require.
Each retailer required or authorized to collect the tax
imposed by this Act on aviation fuel sold at retail in this
State during the preceding calendar month shall, instead of
reporting and paying tax on aviation fuel as otherwise
required by this Section, report and pay such tax on a separate
aviation fuel tax return. The requirements related to the
return shall be as otherwise provided in this Section.
Notwithstanding any other provisions of this Act to the
contrary, retailers collecting tax on aviation fuel shall file
all aviation fuel tax returns and shall make all aviation fuel
tax payments by electronic means in the manner and form
required by the Department. For purposes of this Section,
"aviation fuel" means jet fuel and aviation gasoline.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to be
due on the return shall be deemed assessed.
Notwithstanding any other provision of this Act to the
contrary, retailers subject to tax on cannabis shall file all
cannabis tax returns and shall make all cannabis tax payments
by electronic means in the manner and form required by the

HB5477 - 59 - LRB102 25061 HLH 34321 b
Department.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who has
an average monthly tax liability of $100,000 or more shall
make all payments required by rules of the Department by
electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October 1,
2000, a taxpayer who has an annual tax liability of $200,000 or
more shall make all payments required by rules of the
Department by electronic funds transfer. The term "annual tax
liability" shall be the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year. The term "average monthly
tax liability" means the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year divided by 12. Beginning
on October 1, 2002, a taxpayer who has a tax liability in the
amount set forth in subsection (b) of Section 2505-210 of the
Department of Revenue Law shall make all payments required by
rules of the Department by electronic funds transfer.

HB5477 - 60 - LRB102 25061 HLH 34321 b
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required
to make payments by electronic funds transfer shall make those
payments for a minimum of one year beginning on October 1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic funds
transfer and any taxpayers authorized to voluntarily make
payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
Before October 1, 2000, if the taxpayer's average monthly
tax liability to the Department under this Act, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act, the
Service Use Tax Act was $10,000 or more during the preceding 4
complete calendar quarters, he shall file a return with the
Department each month by the 20th day of the month next
following the month during which such tax liability is
incurred and shall make payments to the Department on or
before the 7th, 15th, 22nd and last day of the month during
which such liability is incurred. On and after October 1,
2000, if the taxpayer's average monthly tax liability to the

HB5477 - 61 - LRB102 25061 HLH 34321 b
Department under this Act, the Retailers' Occupation Tax Act,
the Service Occupation Tax Act, and the Service Use Tax Act was
$20,000 or more during the preceding 4 complete calendar
quarters, he shall file a return with the Department each
month by the 20th day of the month next following the month
during which such tax liability is incurred and shall make
payment to the Department on or before the 7th, 15th, 22nd and
last day of the month during which such liability is incurred.
If the month during which such tax liability is incurred began
prior to January 1, 1985, each payment shall be in an amount
equal to 1/4 of the taxpayer's actual liability for the month
or an amount set by the Department not to exceed 1/4 of the
average monthly liability of the taxpayer to the Department
for the preceding 4 complete calendar quarters (excluding the
month of highest liability and the month of lowest liability
in such 4 quarter period). If the month during which such tax
liability is incurred begins on or after January 1, 1985, and
prior to January 1, 1987, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 27.5% of the taxpayer's liability for the same
calendar month of the preceding year. If the month during
which such tax liability is incurred begins on or after
January 1, 1987, and prior to January 1, 1988, each payment
shall be in an amount equal to 22.5% of the taxpayer's actual
liability for the month or 26.25% of the taxpayer's liability
for the same calendar month of the preceding year. If the month

HB5477 - 62 - LRB102 25061 HLH 34321 b
during which such tax liability is incurred begins on or after
January 1, 1988, and prior to January 1, 1989, or begins on or
after January 1, 1996, each payment shall be in an amount equal
to 22.5% of the taxpayer's actual liability for the month or
25% of the taxpayer's liability for the same calendar month of
the preceding year. If the month during which such tax
liability is incurred begins on or after January 1, 1989, and
prior to January 1, 1996, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 25% of the taxpayer's liability for the same calendar
month of the preceding year or 100% of the taxpayer's actual
liability for the quarter monthly reporting period. The amount
of such quarter monthly payments shall be credited against the
final tax liability of the taxpayer's return for that month.
Before October 1, 2000, once applicable, the requirement of
the making of quarter monthly payments to the Department shall
continue until such taxpayer's average monthly liability to
the Department during the preceding 4 complete calendar
quarters (excluding the month of highest liability and the
month of lowest liability) is less than $9,000, or until such
taxpayer's average monthly liability to the Department as
computed for each calendar quarter of the 4 preceding complete
calendar quarter period is less than $10,000. However, if a
taxpayer can show the Department that a substantial change in
the taxpayer's business has occurred which causes the taxpayer
to anticipate that his average monthly tax liability for the

HB5477 - 63 - LRB102 25061 HLH 34321 b
reasonably foreseeable future will fall below the $10,000
threshold stated above, then such taxpayer may petition the
Department for change in such taxpayer's reporting status. On
and after October 1, 2000, once applicable, the requirement of
the making of quarter monthly payments to the Department shall
continue until such taxpayer's average monthly liability to
the Department during the preceding 4 complete calendar
quarters (excluding the month of highest liability and the
month of lowest liability) is less than $19,000 or until such
taxpayer's average monthly liability to the Department as
computed for each calendar quarter of the 4 preceding complete
calendar quarter period is less than $20,000. However, if a
taxpayer can show the Department that a substantial change in
the taxpayer's business has occurred which causes the taxpayer
to anticipate that his average monthly tax liability for the
reasonably foreseeable future will fall below the $20,000
threshold stated above, then such taxpayer may petition the
Department for a change in such taxpayer's reporting status.
The Department shall change such taxpayer's reporting status
unless it finds that such change is seasonal in nature and not
likely to be long term. If any such quarter monthly payment is
not paid at the time or in the amount required by this Section,
then the taxpayer shall be liable for penalties and interest
on the difference between the minimum amount due and the
amount of such quarter monthly payment actually and timely
paid, except insofar as the taxpayer has previously made

HB5477 - 64 - LRB102 25061 HLH 34321 b
payments for that month to the Department in excess of the
minimum payments previously due as provided in this Section.
The Department shall make reasonable rules and regulations to
govern the quarter monthly payment amount and quarter monthly
payment dates for taxpayers who file on other than a calendar
monthly basis.
If any such payment provided for in this Section exceeds
the taxpayer's liabilities under this Act, the Retailers'
Occupation Tax Act, the Service Occupation Tax Act and the
Service Use Tax Act, as shown by an original monthly return,
the Department shall issue to the taxpayer a credit memorandum
no later than 30 days after the date of payment, which
memorandum may be submitted by the taxpayer to the Department
in payment of tax liability subsequently to be remitted by the
taxpayer to the Department or be assigned by the taxpayer to a
similar taxpayer under this Act, the Retailers' Occupation Tax
Act, the Service Occupation Tax Act or the Service Use Tax Act,
in accordance with reasonable rules and regulations to be
prescribed by the Department, except that if such excess
payment is shown on an original monthly return and is made
after December 31, 1986, no credit memorandum shall be issued,
unless requested by the taxpayer. If no such request is made,
the taxpayer may credit such excess payment against tax
liability subsequently to be remitted by the taxpayer to the
Department under this Act, the Retailers' Occupation Tax Act,
the Service Occupation Tax Act or the Service Use Tax Act, in

HB5477 - 65 - LRB102 25061 HLH 34321 b
accordance with reasonable rules and regulations prescribed by
the Department. If the Department subsequently determines that
all or any part of the credit taken was not actually due to the
taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall
be reduced by 2.1% or 1.75% of the difference between the
credit taken and that actually due, and the taxpayer shall be
liable for penalties and interest on such difference.
If the retailer is otherwise required to file a monthly
return and if the retailer's average monthly tax liability to
the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February, and March of a given
year being due by April 20 of such year; with the return for
April, May and June of a given year being due by July 20 of
such year; with the return for July, August and September of a
given year being due by October 20 of such year, and with the
return for October, November and December of a given year
being due by January 20 of the following year.
If the retailer is otherwise required to file a monthly or
quarterly return and if the retailer's average monthly tax
liability to the Department does not exceed $50, the
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January 20
of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as

HB5477 - 66 - LRB102 25061 HLH 34321 b
monthly returns.
Notwithstanding any other provision in this Act concerning
the time within which a retailer may file his return, in the
case of any retailer who ceases to engage in a kind of business
which makes him responsible for filing returns under this Act,
such retailer shall file a final return under this Act with the
Department not more than one month after discontinuing such
business.
In addition, with respect to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered with
an agency of this State, except as otherwise provided in this
Section, every retailer selling this kind of tangible personal
property shall file, with the Department, upon a form to be
prescribed and supplied by the Department, a separate return
for each such item of tangible personal property which the
retailer sells, except that if, in the same transaction, (i) a
retailer of aircraft, watercraft, motor vehicles or trailers
transfers more than one aircraft, watercraft, motor vehicle or
trailer to another aircraft, watercraft, motor vehicle or
trailer retailer for the purpose of resale or (ii) a retailer
of aircraft, watercraft, motor vehicles, or trailers transfers
more than one aircraft, watercraft, motor vehicle, or trailer
to a purchaser for use as a qualifying rolling stock as
provided in Section 3-55 of this Act, then that seller may
report the transfer of all the aircraft, watercraft, motor
vehicles or trailers involved in that transaction to the

HB5477 - 67 - LRB102 25061 HLH 34321 b
Department on the same uniform invoice-transaction reporting
return form. For purposes of this Section, "watercraft" means
a Class 2, Class 3, or Class 4 watercraft as defined in Section
3-2 of the Boat Registration and Safety Act, a personal
watercraft, or any boat equipped with an inboard motor.
In addition, with respect to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered with
an agency of this State, every person who is engaged in the
business of leasing or renting such items and who, in
connection with such business, sells any such item to a
retailer for the purpose of resale is, notwithstanding any
other provision of this Section to the contrary, authorized to
meet the return-filing requirement of this Act by reporting
the transfer of all the aircraft, watercraft, motor vehicles,
or trailers transferred for resale during a month to the
Department on the same uniform invoice-transaction reporting
return form on or before the 20th of the month following the
month in which the transfer takes place. Notwithstanding any
other provision of this Act to the contrary, all returns filed
under this paragraph must be filed by electronic means in the
manner and form as required by the Department.
The transaction reporting return in the case of motor
vehicles or trailers that are required to be registered with
an agency of this State, shall be the same document as the
Uniform Invoice referred to in Section 5-402 of the Illinois
Vehicle Code and must show the name and address of the seller;

HB5477 - 68 - LRB102 25061 HLH 34321 b
the name and address of the purchaser; the amount of the
selling price including the amount allowed by the retailer for
traded-in property, if any; the amount allowed by the retailer
for the traded-in tangible personal property, if any, to the
extent to which Section 2 of this Act allows an exemption for
the value of traded-in property; the balance payable after
deducting such trade-in allowance from the total selling
price; the amount of tax due from the retailer with respect to
such transaction; the amount of tax collected from the
purchaser by the retailer on such transaction (or satisfactory
evidence that such tax is not due in that particular instance,
if that is claimed to be the fact); the place and date of the
sale; a sufficient identification of the property sold; such
other information as is required in Section 5-402 of the
Illinois Vehicle Code, and such other information as the
Department may reasonably require.
The transaction reporting return in the case of watercraft
and aircraft must show the name and address of the seller; the
name and address of the purchaser; the amount of the selling
price including the amount allowed by the retailer for
traded-in property, if any; the amount allowed by the retailer
for the traded-in tangible personal property, if any, to the
extent to which Section 2 of this Act allows an exemption for
the value of traded-in property; the balance payable after
deducting such trade-in allowance from the total selling
price; the amount of tax due from the retailer with respect to

HB5477 - 69 - LRB102 25061 HLH 34321 b
such transaction; the amount of tax collected from the
purchaser by the retailer on such transaction (or satisfactory
evidence that such tax is not due in that particular instance,
if that is claimed to be the fact); the place and date of the
sale, a sufficient identification of the property sold, and
such other information as the Department may reasonably
require.
Such transaction reporting return shall be filed not later
than 20 days after the date of delivery of the item that is
being sold, but may be filed by the retailer at any time sooner
than that if he chooses to do so. The transaction reporting
return and tax remittance or proof of exemption from the tax
that is imposed by this Act may be transmitted to the
Department by way of the State agency with which, or State
officer with whom, the tangible personal property must be
titled or registered (if titling or registration is required)
if the Department and such agency or State officer determine
that this procedure will expedite the processing of
applications for title or registration.
With each such transaction reporting return, the retailer
shall remit the proper amount of tax due (or shall submit
satisfactory evidence that the sale is not taxable if that is
the case), to the Department or its agents, whereupon the
Department shall issue, in the purchaser's name, a tax receipt
(or a certificate of exemption if the Department is satisfied
that the particular sale is tax exempt) which such purchaser

HB5477 - 70 - LRB102 25061 HLH 34321 b
may submit to the agency with which, or State officer with
whom, he must title or register the tangible personal property
that is involved (if titling or registration is required) in
support of such purchaser's application for an Illinois
certificate or other evidence of title or registration to such
tangible personal property.
No retailer's failure or refusal to remit tax under this
Act precludes a user, who has paid the proper tax to the
retailer, from obtaining his certificate of title or other
evidence of title or registration (if titling or registration
is required) upon satisfying the Department that such user has
paid the proper tax (if tax is due) to the retailer. The
Department shall adopt appropriate rules to carry out the
mandate of this paragraph.
If the user who would otherwise pay tax to the retailer
wants the transaction reporting return filed and the payment
of tax or proof of exemption made to the Department before the
retailer is willing to take these actions and such user has not
paid the tax to the retailer, such user may certify to the fact
of such delay by the retailer, and may (upon the Department
being satisfied of the truth of such certification) transmit
the information required by the transaction reporting return
and the remittance for tax or proof of exemption directly to
the Department and obtain his tax receipt or exemption
determination, in which event the transaction reporting return
and tax remittance (if a tax payment was required) shall be

HB5477 - 71 - LRB102 25061 HLH 34321 b
credited by the Department to the proper retailer's account
with the Department, but without the 2.1% or 1.75% discount
provided for in this Section being allowed. When the user pays
the tax directly to the Department, he shall pay the tax in the
same amount and in the same form in which it would be remitted
if the tax had been remitted to the Department by the retailer.
Where a retailer collects the tax with respect to the
selling price of tangible personal property which he sells and
the purchaser thereafter returns such tangible personal
property and the retailer refunds the selling price thereof to
the purchaser, such retailer shall also refund, to the
purchaser, the tax so collected from the purchaser. When
filing his return for the period in which he refunds such tax
to the purchaser, the retailer may deduct the amount of the tax
so refunded by him to the purchaser from any other use tax
which such retailer may be required to pay or remit to the
Department, as shown by such return, if the amount of the tax
to be deducted was previously remitted to the Department by
such retailer. If the retailer has not previously remitted the
amount of such tax to the Department, he is entitled to no
deduction under this Act upon refunding such tax to the
purchaser.
Any retailer filing a return under this Section shall also
include (for the purpose of paying tax thereon) the total tax
covered by such return upon the selling price of tangible
personal property purchased by him at retail from a retailer,

HB5477 - 72 - LRB102 25061 HLH 34321 b
but as to which the tax imposed by this Act was not collected
from the retailer filing such return, and such retailer shall
remit the amount of such tax to the Department when filing such
return.
If experience indicates such action to be practicable, the
Department may prescribe and furnish a combination or joint
return which will enable retailers, who are required to file
returns hereunder and also under the Retailers' Occupation Tax
Act, to furnish all the return information required by both
Acts on the one form.
Where the retailer has more than one business registered
with the Department under separate registration under this
Act, such retailer may not file each return that is due as a
single return covering all such registered businesses, but
shall file separate returns for each such registered business.
Beginning January 1, 1990, each month the Department shall
pay into the State and Local Sales Tax Reform Fund, a special
fund in the State Treasury which is hereby created, the net
revenue realized for the preceding month from the 1% tax
imposed under this Act.
Beginning January 1, 1990, each month the Department shall
pay into the County and Mass Transit District Fund 4% of the
net revenue realized for the preceding month from the 6.25%
general rate on the selling price of tangible personal
property which is purchased outside Illinois at retail from a
retailer and which is titled or registered by an agency of this

HB5477 - 73 - LRB102 25061 HLH 34321 b
State's government.
Beginning January 1, 1990, each month the Department shall
pay into the State and Local Sales Tax Reform Fund, a special
fund in the State Treasury, 20% of the net revenue realized for
the preceding month from the 6.25% general rate on the selling
price of tangible personal property, other than (i) tangible
personal property which is purchased outside Illinois at
retail from a retailer and which is titled or registered by an
agency of this State's government and (ii) aviation fuel sold
on or after December 1, 2019. This exception for aviation fuel
only applies for so long as the revenue use requirements of 49
U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the State.
For aviation fuel sold on or after December 1, 2019, each
month the Department shall pay into the State Aviation Program
Fund 20% of the net revenue realized for the preceding month
from the 6.25% general rate on the selling price of aviation
fuel, less an amount estimated by the Department to be
required for refunds of the 20% portion of the tax on aviation
fuel under this Act, which amount shall be deposited into the
Aviation Fuel Sales Tax Refund Fund. The Department shall only
pay moneys into the State Aviation Program Fund and the
Aviation Fuels Sales Tax Refund Fund under this Act for so long
as the revenue use requirements of 49 U.S.C. 47107(b) and 49
U.S.C. 47133 are binding on the State.
Beginning August 1, 2000, each month the Department shall
pay into the State and Local Sales Tax Reform Fund 100% of the

HB5477 - 74 - LRB102 25061 HLH 34321 b
net revenue realized for the preceding month from the 1.25%
rate on the selling price of motor fuel and gasohol. Beginning
September 1, 2010, each month the Department shall pay into
the State and Local Sales Tax Reform Fund 100% of the net
revenue realized for the preceding month from the 1.25% rate
on the selling price of sales tax holiday items.
Beginning January 1, 1990, each month the Department shall
pay into the Local Government Tax Fund 16% of the net revenue
realized for the preceding month from the 6.25% general rate
on the selling price of tangible personal property which is
purchased outside Illinois at retail from a retailer and which
is titled or registered by an agency of this State's
government.
Beginning October 1, 2009, each month the Department shall
pay into the Capital Projects Fund an amount that is equal to
an amount estimated by the Department to represent 80% of the
net revenue realized for the preceding month from the sale of
candy, grooming and hygiene products, and soft drinks that had
been taxed at a rate of 1% prior to September 1, 2009 but that
are now taxed at the general rate 6.25%.
Beginning July 1, 2011, each month the Department shall
pay into the Clean Air Act Permit Fund 80% of the net revenue
realized for the preceding month from the 6.25% general rate
on the selling price of sorbents used in Illinois in the
process of sorbent injection as used to comply with the
Environmental Protection Act or the federal Clean Air Act, but

HB5477 - 75 - LRB102 25061 HLH 34321 b
the total payment into the Clean Air Act Permit Fund under this
Act and the Retailers' Occupation Tax Act shall not exceed
$2,000,000 in any fiscal year.
Beginning July 1, 2013, each month the Department shall
pay into the Underground Storage Tank Fund from the proceeds
collected under this Act, the Service Use Tax Act, the Service
Occupation Tax Act, and the Retailers' Occupation Tax Act an
amount equal to the average monthly deficit in the Underground
Storage Tank Fund during the prior year, as certified annually
by the Illinois Environmental Protection Agency, but the total
payment into the Underground Storage Tank Fund under this Act,
the Service Use Tax Act, the Service Occupation Tax Act, and
the Retailers' Occupation Tax Act shall not exceed $18,000,000
in any State fiscal year. As used in this paragraph, the
"average monthly deficit" shall be equal to the difference
between the average monthly claims for payment by the fund and
the average monthly revenues deposited into the fund,
excluding payments made pursuant to this paragraph.
Beginning July 1, 2015, of the remainder of the moneys
received by the Department under this Act, the Service Use Tax
Act, the Service Occupation Tax Act, and the Retailers'
Occupation Tax Act, each month the Department shall deposit
$500,000 into the State Crime Laboratory Fund.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into the
Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on

HB5477 - 76 - LRB102 25061 HLH 34321 b
and after July 1, 1989, 3.8% thereof shall be paid into the
Build Illinois Fund; provided, however, that if in any fiscal
year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
may be, of the moneys received by the Department and required
to be paid into the Build Illinois Fund pursuant to Section 3
of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
Act, Section 9 of the Service Use Tax Act, and Section 9 of the
Service Occupation Tax Act, such Acts being hereinafter called
the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
may be, of moneys being hereinafter called the "Tax Act
Amount", and (2) the amount transferred to the Build Illinois
Fund from the State and Local Sales Tax Reform Fund shall be
less than the Annual Specified Amount (as defined in Section 3
of the Retailers' Occupation Tax Act), an amount equal to the
difference shall be immediately paid into the Build Illinois
Fund from other moneys received by the Department pursuant to
the Tax Acts; and further provided, that if on the last
business day of any month the sum of (1) the Tax Act Amount
required to be deposited into the Build Illinois Bond Account
in the Build Illinois Fund during such month and (2) the amount
transferred during such month to the Build Illinois Fund from
the State and Local Sales Tax Reform Fund shall have been less
than 1/12 of the Annual Specified Amount, an amount equal to
the difference shall be immediately paid into the Build
Illinois Fund from other moneys received by the Department
pursuant to the Tax Acts; and, further provided, that in no

HB5477 - 77 - LRB102 25061 HLH 34321 b
event shall the payments required under the preceding proviso
result in aggregate payments into the Build Illinois Fund
pursuant to this clause (b) for any fiscal year in excess of
the greater of (i) the Tax Act Amount or (ii) the Annual
Specified Amount for such fiscal year; and, further provided,
that the amounts payable into the Build Illinois Fund under
this clause (b) shall be payable only until such time as the
aggregate amount on deposit under each trust indenture
securing Bonds issued and outstanding pursuant to the Build
Illinois Bond Act is sufficient, taking into account any
future investment income, to fully provide, in accordance with
such indenture, for the defeasance of or the payment of the
principal of, premium, if any, and interest on the Bonds
secured by such indenture and on any Bonds expected to be
issued thereafter and all fees and costs payable with respect
thereto, all as certified by the Director of the Bureau of the
Budget (now Governor's Office of Management and Budget). If on
the last business day of any month in which Bonds are
outstanding pursuant to the Build Illinois Bond Act, the
aggregate of the moneys deposited in the Build Illinois Bond
Account in the Build Illinois Fund in such month shall be less
than the amount required to be transferred in such month from
the Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the

HB5477 - 78 - LRB102 25061 HLH 34321 b
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois Fund
as provided in the preceding paragraph or in any amendment
thereto hereafter enacted, the following specified monthly
installment of the amount requested in the certificate of the
Chairman of the Metropolitan Pier and Exposition Authority
provided under Section 8.25f of the State Finance Act, but not
in excess of the sums designated as "Total Deposit", shall be
deposited in the aggregate from collections under Section 9 of
the Use Tax Act, Section 9 of the Service Use Tax Act, Section
9 of the Service Occupation Tax Act, and Section 3 of the
Retailers' Occupation Tax Act into the McCormick Place
Expansion Project Fund in the specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000

HB5477 - 79 - LRB102 25061 HLH 34321 b
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 93,000,000
2003 99,000,000
2004 103,000,000
2005 108,000,000
2006 113,000,000
2007 119,000,000
2008 126,000,000
2009 132,000,000
2010 139,000,000
2011 146,000,000
2012 153,000,000
2013 161,000,000
2014 170,000,000
2015 179,000,000
2016 189,000,000
2017 199,000,000
2018 210,000,000
2019 221,000,000
2020 233,000,000

HB5477 - 80 - LRB102 25061 HLH 34321 b
2021 300,000,000
2022 300,000,000
2023 300,000,000
2024 300,000,000
2025 300,000,000
2026 300,000,000
2027 375,000,000
2028 375,000,000
2029 375,000,000
2030 375,000,000
2031 375,000,000
2032 375,000,000
2033 375,000,000
2034 375,000,000
2035 375,000,000
2036 450,000,000
and
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority Act,
but not after fiscal year 2060.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the

HB5477 - 81 - LRB102 25061 HLH 34321 b
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year, but
not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Capital Projects
Fund, the Clean Air Act Permit Fund, the Build Illinois Fund,
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, for aviation fuel sold on or after December 1, 2019,
the Department shall each month deposit into the Aviation Fuel
Sales Tax Refund Fund an amount estimated by the Department to
be required for refunds of the 80% portion of the tax on
aviation fuel under this Act. The Department shall only
deposit moneys into the Aviation Fuel Sales Tax Refund Fund
under this paragraph for so long as the revenue use
requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
binding on the State.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the

HB5477 - 82 - LRB102 25061 HLH 34321 b
preceding paragraphs or in any amendments thereto hereafter
enacted, beginning July 1, 1993 and ending on September 30,
2013, the Department shall each month pay into the Illinois
Tax Increment Fund 0.27% of 80% of the net revenue realized for
the preceding month from the 6.25% general rate on the selling
price of tangible personal property.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, beginning with the receipt of the first report of
taxes paid by an eligible business and continuing for a
25-year period, the Department shall each month pay into the
Energy Infrastructure Fund 80% of the net revenue realized
from the 6.25% general rate on the selling price of
Illinois-mined coal that was sold to an eligible business. For
purposes of this paragraph, the term "eligible business" means
a new electric generating facility certified pursuant to
Section 605-332 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, and the Energy Infrastructure Fund
pursuant to the preceding paragraphs or in any amendments to
this Section hereafter enacted, beginning on the first day of
the first calendar month to occur on or after August 26, 2014
(the effective date of Public Act 98-1098), each month, from

HB5477 - 83 - LRB102 25061 HLH 34321 b
the collections made under Section 9 of the Use Tax Act,
Section 9 of the Service Use Tax Act, Section 9 of the Service
Occupation Tax Act, and Section 3 of the Retailers' Occupation
Tax Act, the Department shall pay into the Tax Compliance and
Administration Fund, to be used, subject to appropriation, to
fund additional auditors and compliance personnel at the
Department of Revenue, an amount equal to 1/12 of 5% of 80% of
the cash receipts collected during the preceding fiscal year
by the Audit Bureau of the Department under the Use Tax Act,
the Service Use Tax Act, the Service Occupation Tax Act, the
Retailers' Occupation Tax Act, and associated local occupation
and use taxes administered by the Department.
Subject to payments of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, the Energy Infrastructure Fund, and the
Tax Compliance and Administration Fund as provided in this
Section, beginning on July 1, 2018 the Department shall pay
each month into the Downstate Public Transportation Fund the
moneys required to be so paid under Section 2-3 of the
Downstate Public Transportation Act.
Subject to successful execution and delivery of a
public-private agreement between the public agency and private
entity and completion of the civic build, beginning on July 1,
2023, of the remainder of the moneys received by the
Department under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and this Act, the Department shall

HB5477 - 84 - LRB102 25061 HLH 34321 b
deposit the following specified deposits in the aggregate from
collections under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and the Retailers' Occupation Tax
Act, as required under Section 8.25g of the State Finance Act
for distribution consistent with the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
The moneys received by the Department pursuant to this Act and
required to be deposited into the Civic and Transit
Infrastructure Fund are subject to the pledge, claim, and
charge set forth in Section 25-55 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
As used in this paragraph, "civic build", "private entity",
"public-private agreement", and "public agency" have the
meanings provided in Section 25-10 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
Fiscal Year............................Total Deposit
2024....................................$200,000,000
2025....................................$206,000,000
2026....................................$212,200,000
2027....................................$218,500,000
2028....................................$225,100,000
2029....................................$288,700,000
2030....................................$298,900,000
2031....................................$309,300,000
2032....................................$320,100,000
2033....................................$331,200,000

HB5477 - 85 - LRB102 25061 HLH 34321 b
2034....................................$341,200,000
2035....................................$351,400,000
2036....................................$361,900,000
2037....................................$372,800,000
2038....................................$384,000,000
2039....................................$395,500,000
2040....................................$407,400,000
2041....................................$419,600,000
2042....................................$432,200,000
2043....................................$445,100,000
Beginning July 1, 2021 and until July 1, 2022, subject to
the payment of amounts into the State and Local Sales Tax
Reform Fund, the Build Illinois Fund, the McCormick Place
Expansion Project Fund, the Illinois Tax Increment Fund, the
Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 16% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning July 1,
2022 and until July 1, 2023, subject to the payment of amounts
into the State and Local Sales Tax Reform Fund, the Build
Illinois Fund, the McCormick Place Expansion Project Fund, the
Illinois Tax Increment Fund, the Energy Infrastructure Fund,
and the Tax Compliance and Administration Fund as provided in
this Section, the Department shall pay each month into the
Road Fund the amount estimated to represent 32% of the net

HB5477 - 86 - LRB102 25061 HLH 34321 b
revenue realized from the taxes imposed on motor fuel and
gasohol. Beginning July 1, 2023 and until July 1, 2024,
subject to the payment of amounts into the State and Local
Sales Tax Reform Fund, the Build Illinois Fund, the McCormick
Place Expansion Project Fund, the Illinois Tax Increment Fund,
the Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 48% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning July 1,
2024 and until July 1, 2025, subject to the payment of amounts
into the State and Local Sales Tax Reform Fund, the Build
Illinois Fund, the McCormick Place Expansion Project Fund, the
Illinois Tax Increment Fund, the Energy Infrastructure Fund,
and the Tax Compliance and Administration Fund as provided in
this Section, the Department shall pay each month into the
Road Fund the amount estimated to represent 64% of the net
revenue realized from the taxes imposed on motor fuel and
gasohol. Beginning on July 1, 2025, subject to the payment of
amounts into the State and Local Sales Tax Reform Fund, the
Build Illinois Fund, the McCormick Place Expansion Project
Fund, the Illinois Tax Increment Fund, the Energy
Infrastructure Fund, and the Tax Compliance and Administration
Fund as provided in this Section, the Department shall pay
each month into the Road Fund the amount estimated to
represent 80% of the net revenue realized from the taxes

HB5477 - 87 - LRB102 25061 HLH 34321 b
imposed on motor fuel and gasohol. As used in this paragraph
"motor fuel" has the meaning given to that term in Section 1.1
of the Motor Fuel Tax Act, and "gasohol" has the meaning given
to that term in Section 3-40 of this Act.
Of the remainder of the moneys received by the Department
pursuant to this Act, 75% thereof shall be paid into the State
Treasury and 25% shall be reserved in a special account and
used only for the transfer to the Common School Fund as part of
the monthly transfer from the General Revenue Fund in
accordance with Section 8a of the State Finance Act.
As soon as possible after the first day of each month, upon
certification of the Department of Revenue, the Comptroller
shall order transferred and the Treasurer shall transfer from
the General Revenue Fund to the Motor Fuel Tax Fund an amount
equal to 1.7% of 80% of the net revenue realized under this Act
for the second preceding month. Beginning April 1, 2000, this
transfer is no longer required and shall not be made.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.
For greater simplicity of administration, manufacturers,
importers and wholesalers whose products are sold at retail in
Illinois by numerous retailers, and who wish to do so, may
assume the responsibility for accounting and paying to the
Department all tax accruing under this Act with respect to

HB5477 - 88 - LRB102 25061 HLH 34321 b
such sales, if the retailers who are affected do not make
written objection to the Department to this arrangement.
(Source: P.A. 100-303, eff. 8-24-17; 100-363, eff. 7-1-18;
100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; 101-10, Article
15, Section 15-10, eff. 6-5-19; 101-10, Article 25, Section
25-105, eff. 6-5-19; 101-27, eff. 6-25-19; 101-32, eff.
6-28-19; 101-604, eff. 12-13-19; 101-636, eff. 6-10-20.)
Section 10. The Service Use Tax Act is amended by changing
Sections 2, 3-10, 3-70, and 9 as follows:
(35 ILCS 110/2) (from Ch. 120, par. 439.32)
Sec. 2. Definitions. In this Act:
"Use" means the exercise by any person of any right or
power over tangible personal property incident to the
ownership of that property, but does not include the sale or
use for demonstration by him of that property in any form as
tangible personal property in the regular course of business.
"Use" does not mean the interim use of tangible personal
property nor the physical incorporation of tangible personal
property, as an ingredient or constituent, into other tangible
personal property, (a) which is sold in the regular course of
business or (b) which the person incorporating such ingredient
or constituent therein has undertaken at the time of such
purchase to cause to be transported in interstate commerce to
destinations outside the State of Illinois.

HB5477 - 89 - LRB102 25061 HLH 34321 b
"Purchased from a serviceman" means the acquisition of the
ownership of, or title to, tangible personal property through
a sale of service.
"Purchaser" means any person who, through a sale of
service, acquires the ownership of, or title to, any tangible
personal property.
"Cost price" means the consideration paid by the
serviceman for a purchase valued in money, whether paid in
money or otherwise, including cash, credits and services, and
shall be determined without any deduction on account of the
supplier's cost of the property sold or on account of any other
expense incurred by the supplier. When a serviceman contracts
out part or all of the services required in his sale of
service, it shall be presumed that the cost price to the
serviceman of the property transferred to him or her by his or
her subcontractor is equal to 50% of the subcontractor's
charges to the serviceman in the absence of proof of the
consideration paid by the subcontractor for the purchase of
such property.
"Selling price" means the consideration for a sale valued
in money whether received in money or otherwise, including
cash, credits and service, and shall be determined without any
deduction on account of the serviceman's cost of the property
sold, the cost of materials used, labor or service cost or any
other expense whatsoever, but does not include interest or
finance charges which appear as separate items on the bill of

HB5477 - 90 - LRB102 25061 HLH 34321 b
sale or sales contract nor charges that are added to prices by
sellers on account of the seller's duty to collect, from the
purchaser, the tax that is imposed by this Act.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, public or
private corporation, limited liability company, and any
receiver, executor, trustee, guardian or other representative
appointed by order of any court.
"Sale of service" means any transaction except:
(1) a retail sale of tangible personal property
taxable under the Retailers' Occupation Tax Act or under
the Use Tax Act.
(2) a sale of tangible personal property for the
purpose of resale made in compliance with Section 2c of
the Retailers' Occupation Tax Act.
(3) except as hereinafter provided, a sale or transfer
of tangible personal property as an incident to the
rendering of service for or by any governmental body, or
for or by any corporation, society, association,
foundation or institution organized and operated
exclusively for charitable, religious or educational
purposes or any not-for-profit corporation, society,
association, foundation, institution or organization which
has no compensated officers or employees and which is
organized and operated primarily for the recreation of

HB5477 - 91 - LRB102 25061 HLH 34321 b
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.
(4) (blank).
(4a) a sale or transfer of tangible personal property
as an incident to the rendering of service for owners,
lessors, or shippers of tangible personal property which
is utilized by interstate carriers for hire for use as
rolling stock moving in interstate commerce so long as so
used by interstate carriers for hire, and equipment
operated by a telecommunications provider, licensed as a
common carrier by the Federal Communications Commission,
which is permanently installed in or affixed to aircraft
moving in interstate commerce.
(4a-5) on and after July 1, 2003 and through June 30,
2004, a sale or transfer of a motor vehicle of the second
division with a gross vehicle weight in excess of 8,000
pounds as an incident to the rendering of service if that
motor vehicle is 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

HB5477 - 92 - LRB102 25061 HLH 34321 b
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.
(5) a sale or transfer of machinery and equipment used
primarily in the process of the manufacturing or
assembling, either in an existing, an expanded or a new
manufacturing facility, of tangible personal property for
wholesale or retail sale or lease, whether such 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 such sale or lease is made apart from or as an
incident to the seller's engaging in a service occupation
and the applicable tax is a Service Use Tax or Service
Occupation Tax, rather than Use Tax or Retailers'
Occupation Tax. The exemption provided by this paragraph
(5) includes production related tangible personal
property, as defined in Section 3-50 of the Use Tax Act,
purchased on or after July 1, 2019. The exemption provided

HB5477 - 93 - LRB102 25061 HLH 34321 b
by this paragraph (5) 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. The exemption under this
paragraph (5) is exempt from the provisions of Section
3-75.
(5a) the repairing, reconditioning or remodeling, for
a common carrier by rail, of tangible personal property
which belongs to such carrier for hire, and as to which
such carrier receives the physical possession of the
repaired, reconditioned or remodeled item of tangible
personal property in Illinois, and which such carrier
transports, or shares with another common carrier in the
transportation of such property, out of Illinois on a
standard uniform bill of lading showing the person who
repaired, reconditioned or remodeled the property to a
destination outside Illinois, for use outside Illinois.
(5b) a sale or transfer of tangible personal property
which is produced by the seller thereof on special order
in such a way as to have made the applicable tax the

HB5477 - 94 - LRB102 25061 HLH 34321 b
Service Occupation Tax or the Service Use Tax, rather than
the Retailers' Occupation Tax or the Use Tax, for an
interstate carrier by rail which receives the physical
possession of such property in Illinois, and which
transports such property, or shares with another common
carrier in the transportation of such property, out of
Illinois on a standard uniform bill of lading showing the
seller of the property as the shipper or consignor of such
property to a destination outside Illinois, for use
outside Illinois.
(6) until July 1, 2003, a sale or transfer of
distillation machinery and equipment, sold as a unit or
kit and assembled or installed by the retailer, which
machinery and equipment is 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 such user and not
subject to sale or resale.
(7) at the election of any serviceman not required to
be otherwise registered as a retailer under Section 2a of
the Retailers' Occupation Tax Act, made for each fiscal
year sales of service in which the aggregate annual cost
price of tangible personal property transferred as an
incident to the sales of service is less than 35%, or 75%
in the case of servicemen transferring prescription drugs
or servicemen engaged in graphic arts production, of the

HB5477 - 95 - LRB102 25061 HLH 34321 b
aggregate annual total gross receipts from all sales of
service. The purchase of such tangible personal property
by the serviceman shall be subject to tax under the
Retailers' Occupation Tax Act and the Use Tax Act.
However, if a primary serviceman who has made the election
described in this paragraph subcontracts service work to a
secondary serviceman who has also made the election
described in this paragraph, the primary serviceman does
not incur a Use Tax liability if the secondary serviceman
(i) has paid or will pay Use Tax on his or her cost price
of any tangible personal property transferred to the
primary serviceman and (ii) certifies that fact in writing
to the primary serviceman.
Tangible personal property transferred incident to the
completion of a maintenance agreement is exempt from the tax
imposed pursuant to this Act.
Exemption (5) also includes machinery and equipment used
in the general maintenance or repair of such exempt machinery
and equipment or for in-house manufacture of exempt machinery
and equipment. On and after July 1, 2017, exemption (5) also
includes graphic arts machinery and equipment, as defined in
paragraph (5) of Section 3-5. The machinery and equipment
exemption 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

HB5477 - 96 - LRB102 25061 HLH 34321 b
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. For the purposes of
exemption (5), each of these terms shall have the following
meanings: (1) "manufacturing process" shall mean the
production of any article of tangible personal property,
whether such article is a finished product or an article for
use in the process of manufacturing or assembling a different
article of tangible personal property, by procedures commonly
regarded as manufacturing, processing, fabricating, or
refining which changes some existing material or materials
into a material with a different form, use or name. In relation
to a recognized integrated business composed of a series of
operations which collectively constitute manufacturing, or
individually constitute manufacturing operations, the
manufacturing process shall be deemed to commence with the
first operation or stage of production in the series, and
shall not be deemed to end until the completion of the final
product in the last operation or stage of production in the
series; and further, for purposes of exemption (5),
photoprocessing is deemed to be a manufacturing process of
tangible personal property for wholesale or retail sale; (2)
"assembling process" shall mean the production of any article
of tangible personal property, whether such article is a

HB5477 - 97 - LRB102 25061 HLH 34321 b
finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by the combination of existing materials in
a manner commonly regarded as assembling which results in a
material of a different form, use or name; (3) "machinery"
shall mean major mechanical machines or major components of
such machines contributing to a manufacturing or assembling
process; and (4) "equipment" shall include any independent
device or tool separate from any machinery but essential to an
integrated manufacturing or assembly process; including
computers used primarily in a manufacturer's computer assisted
design, computer assisted manufacturing (CAD/CAM) system; or
any subunit or assembly comprising a component of any
machinery or auxiliary, adjunct or attachment parts of
machinery, such as tools, dies, jigs, fixtures, patterns and
molds; or any parts which require periodic replacement in the
course of normal operation; but shall not include hand tools.
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 product being
manufactured or assembled for wholesale or retail sale or
lease. The purchaser of such machinery and equipment who has
an active resale registration number shall furnish such number
to the seller at the time of purchase. The purchaser of such
machinery and equipment and tools without an active resale
registration number shall prepare a certificate of exemption

HB5477 - 98 - LRB102 25061 HLH 34321 b
stating facts establishing the exemption, which certificate
shall be available to the Department for inspection or audit.
The Department shall prescribe the form of the certificate.
Any informal rulings, opinions or letters issued by the
Department in response to an inquiry or request for any
opinion from any person regarding the coverage and
applicability of exemption (5) to specific devices shall be
published, maintained as a public record, and made available
for public inspection and copying. If the informal ruling,
opinion or letter contains trade secrets or other confidential
information, where possible the Department shall delete such
information prior to publication. Whenever such informal
rulings, opinions, or letters contain any policy of general
applicability, the Department shall formulate and adopt such
policy as a rule in accordance with the provisions of the
Illinois Administrative Procedure Act.
On and after July 1, 1987, no entity otherwise eligible
under exemption (3) of this Section shall make tax-free
purchases unless it has an active exemption identification
number issued by the Department.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of service or of tangible personal
property within the meaning of this Act.
"Serviceman" means any person who is engaged in the

HB5477 - 99 - LRB102 25061 HLH 34321 b
occupation of making sales of service.
"Sale at retail" means "sale at retail" as defined in the
Retailers' Occupation Tax Act.
"Supplier" means any person who makes sales of tangible
personal property to servicemen for the purpose of resale as
an incident to a sale of service.
"Serviceman maintaining a place of business in this
State", or any like term, means and includes any serviceman:
(1) having or maintaining within this State, directly
or by a subsidiary, an office, distribution house, sales
house, warehouse or other place of business, or any agent
or other representative operating within this State under
the authority of the serviceman or its subsidiary,
irrespective of whether such place of business or agent or
other representative is located here permanently or
temporarily, or whether such serviceman or subsidiary is
licensed to do business in this State;
(1.1) having a contract with a person located in this
State under which the person, for a commission or other
consideration based on the sale of service by the
serviceman, directly or indirectly refers potential
customers to the serviceman by providing to the potential
customers a promotional code or other mechanism that
allows the serviceman to track purchases referred by such
persons. Examples of mechanisms that allow the serviceman
to track purchases referred by such persons include but

HB5477 - 100 - LRB102 25061 HLH 34321 b
are not limited to the use of a link on the person's
Internet website, promotional codes distributed through
the person's hand-delivered or mailed material, and
promotional codes distributed by the person through radio
or other broadcast media. The provisions of this paragraph
(1.1) shall apply only if the cumulative gross receipts
from sales of service by the serviceman to customers who
are referred to the serviceman by all persons in this
State under such contracts exceed $10,000 during the
preceding 4 quarterly periods ending on the last day of
March, June, September, and December; a serviceman meeting
the requirements of this paragraph (1.1) shall be presumed
to be maintaining a place of business in this State but may
rebut this presumption by submitting proof that the
referrals or other activities pursued within this State by
such persons were not sufficient to meet the nexus
standards of the United States Constitution during the
preceding 4 quarterly periods;
(1.2) beginning July 1, 2011, having a contract with a
person located in this State under which:
(A) the serviceman sells the same or substantially
similar line of services as the person located in this
State and does so using an identical or substantially
similar name, trade name, or trademark as the person
located in this State; and
(B) the serviceman provides a commission or other

HB5477 - 101 - LRB102 25061 HLH 34321 b
consideration to the person located in this State
based upon the sale of services by the serviceman.
The provisions of this paragraph (1.2) shall apply only if
the cumulative gross receipts from sales of service by the
serviceman to customers in this State under all such
contracts exceed $10,000 during the preceding 4 quarterly
periods ending on the last day of March, June, September,
and December;
(2) soliciting orders for tangible personal property
by means of a telecommunication or television shopping
system (which utilizes toll free numbers) which is
intended by the retailer to be broadcast by cable
television or other means of broadcasting, to consumers
located in this State;
(3) pursuant to a contract with a broadcaster or
publisher located in this State, soliciting orders for
tangible personal property by means of advertising which
is disseminated primarily to consumers located in this
State and only secondarily to bordering jurisdictions;
(4) soliciting orders for tangible personal property
by mail if the solicitations are substantial and recurring
and if the retailer benefits from any banking, financing,
debt collection, telecommunication, or marketing
activities occurring in this State or benefits from the
location in this State of authorized installation,
servicing, or repair facilities;

HB5477 - 102 - LRB102 25061 HLH 34321 b
(5) being owned or controlled by the same interests
which own or control any retailer engaging in business in
the same or similar line of business in this State;
(6) having a franchisee or licensee operating under
its trade name if the franchisee or licensee is required
to collect the tax under this Section;
(7) pursuant to a contract with a cable television
operator located in this State, soliciting orders for
tangible personal property by means of advertising which
is transmitted or distributed over a cable television
system in this State;
(8) engaging in activities in Illinois, which
activities in the state in which the supply business
engaging in such activities is located would constitute
maintaining a place of business in that state; or
(9) beginning October 1, 2018, making sales of service
to purchasers in Illinois from outside of Illinois if:
(A) the cumulative gross receipts from sales of
service to purchasers in Illinois are $100,000 or
more; or
(B) the serviceman enters into 200 or more
separate transactions for sales of service to
purchasers in Illinois.
The serviceman shall determine on a quarterly basis,
ending on the last day of March, June, September, and
December, whether he or she meets the criteria of either

HB5477 - 103 - LRB102 25061 HLH 34321 b
subparagraph (A) or (B) of this paragraph (9) for the
preceding 12-month period. If the serviceman meets the
criteria of either subparagraph (A) or (B) for a 12-month
period, he or she is considered a serviceman maintaining a
place of business in this State and is required to collect
and remit the tax imposed under this Act and file returns
for one year. At the end of that one-year period, the
serviceman shall determine whether the serviceman met the
criteria of either subparagraph (A) or (B) during the
preceding 12-month period. If the serviceman met the
criteria in either subparagraph (A) or (B) for the
preceding 12-month period, he or she is considered a
serviceman maintaining a place of business in this State
and is required to collect and remit the tax imposed under
this Act and file returns for the subsequent year. If at
the end of a one-year period a serviceman that was
required to collect and remit the tax imposed under this
Act determines that he or she did not meet the criteria in
either subparagraph (A) or (B) during the preceding
12-month period, the serviceman subsequently shall
determine on a quarterly basis, ending on the last day of
March, June, September, and December, whether he or she
meets the criteria of either subparagraph (A) or (B) for
the preceding 12-month period.
Beginning January 1, 2020, neither the gross receipts
from nor the number of separate transactions for sales of

HB5477 - 104 - LRB102 25061 HLH 34321 b
service to purchasers in Illinois that a serviceman makes
through a marketplace facilitator and for which the
serviceman has received a certification from the
marketplace facilitator pursuant to Section 2d of this Act
shall be included for purposes of determining whether he
or she has met the thresholds of this paragraph (9).
(10) Beginning January 1, 2020, a marketplace
facilitator, as defined in Section 2d of this Act.
"General rate" means (i) 6.25% prior to July 1, 2022 and
(ii) 6% on or after July 1, 2022.
(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
100-587, eff. 6-4-18; 100-863, eff. 8-14-18; 101-9, Article
10, Section 10-15, eff. 6-5-19; 101-9, Article 25, Section
25-10, eff. 6-5-19; 101-604, eff. 12-13-19.)
(35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax under imposed by this Act is imposed at the
general rate on of 6.25% of the selling price of tangible
personal property transferred as an incident to the sale of
service, but, for the purpose of computing this tax, in no
event shall the selling price be less than the cost price of
the property to the serviceman.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

HB5477 - 105 - LRB102 25061 HLH 34321 b
the Use Tax Act, the tax is imposed at the rate of 1.25%.
With respect to gasohol, as defined in the Use Tax Act, the
tax imposed by this Act applies to (i) 70% of the selling price
of property transferred as an incident to the sale of service
on or after January 1, 1990, and before July 1, 2003, (ii) 80%
of the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
July 1, 2017, and (iii) 100% of the selling price thereafter.
If, at any time, however, the tax under this Act on sales of
gasohol, as defined in the Use Tax Act, is imposed at the rate
of 1.25%, then the tax imposed by this Act applies to 100% of
the proceeds of sales of gasohol made during that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
December 31, 2023 but applies to 100% of the selling price
thereafter.
With respect to biodiesel blends, as defined in the Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by this Act applies to (i) 80% of the selling
price of property transferred as an incident to the sale of
service on or after July 1, 2003 and on or before December 31,
2018 and (ii) 100% of the proceeds of the selling price
thereafter. If, at any time, however, the tax under this Act on
sales of biodiesel blends, as defined in the Use Tax Act, with

HB5477 - 106 - LRB102 25061 HLH 34321 b
no less than 1% and no more than 10% biodiesel is imposed at
the rate of 1.25%, then the tax imposed by this Act applies to
100% of the proceeds of sales of biodiesel blends with no less
than 1% and no more than 10% biodiesel made during that time.
With respect to 100% biodiesel, as defined in the Use Tax
Act, and biodiesel blends, as defined in the Use Tax Act, with
more than 10% but no more than 99% biodiesel, the tax imposed
by this Act does not apply to the proceeds of the selling price
of property transferred as an incident to the sale of service
on or after July 1, 2003 and on or before December 31, 2023 but
applies to 100% of the selling price thereafter.
At the election of any registered serviceman made for each
fiscal year, sales of service in which the aggregate annual
cost price of tangible personal property transferred as an
incident to the sales of service is less than 35%, or 75% in
the case of servicemen transferring prescription drugs or
servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of
service, the tax imposed by this Act shall be based on the
serviceman's cost price of the tangible personal property
transferred as an incident to the sale of those services.
The tax shall be imposed at the rate of 1% on food prepared
for immediate consumption and transferred incident to a sale
of service subject to this Act or the Service Occupation Tax
Act by an entity licensed under the Hospital Licensing Act,
the Nursing Home Care Act, the Assisted Living and Shared

HB5477 - 107 - LRB102 25061 HLH 34321 b
Housing Act, the ID/DD Community Care Act, the MC/DD Act, the
Specialized Mental Health Rehabilitation Act of 2013, or the
Child Care Act of 1969, or an entity that holds a permit issued
pursuant to the Life Care Facilities Act. The tax shall also be
imposed at the rate of 1% on food for human consumption that is
to be consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption and is not otherwise included in this
paragraph) and prescription and nonprescription medicines,
drugs, medical appliances, products classified as Class III
medical devices by the United States Food and Drug
Administration that are used for cancer treatment pursuant to
a prescription, as well as any accessories and components
related to those devices, modifications to a motor vehicle for
the purpose of rendering it usable by a person with a
disability, and insulin, blood sugar testing materials,
syringes, and needles used by human diabetics. For the
purposes of this Section, until September 1, 2009: the term
"soft drinks" means any complete, finished, ready-to-use,
non-alcoholic drink, whether carbonated or not, including but
not limited to soda water, cola, fruit juice, vegetable juice,
carbonated water, and all other preparations commonly known as
soft drinks of whatever kind or description that are contained
in any closed or sealed bottle, can, carton, or container,
regardless of size; but "soft drinks" does not include coffee,

HB5477 - 108 - LRB102 25061 HLH 34321 b
tea, non-carbonated water, infant formula, milk or milk
products as defined in the Grade A Pasteurized Milk and Milk
Products Act, or drinks containing 50% or more natural fruit
or vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" do not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a

HB5477 - 109 - LRB102 25061 HLH 34321 b
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"
label includes:
(A) A "Drug Facts" panel; or
(B) A statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered
dispensing organization under the Compassionate Use of Medical

HB5477 - 110 - LRB102 25061 HLH 34321 b
Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the
Compassionate Use of Medical Cannabis Program Act.
If the property that is acquired from a serviceman is
acquired outside Illinois and used outside Illinois before
being brought to Illinois for use here and is taxable under
this Act, the "selling price" on which the tax is computed
shall be reduced by an amount that represents a reasonable
allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
102-4, eff. 4-27-21; 102-16, eff. 6-17-21.)
(35 ILCS 110/3-70)
Sec. 3-70. Manufacturer's Purchase Credit. For purchases
of machinery and equipment made on and after January 1, 1995
and through June 30, 2003, and on and after September 1, 2004
through August 30, 2014, a purchaser of manufacturing
machinery and equipment that qualifies for the exemption
provided by Section 2 of this Act earns a credit in an amount
equal to a fixed percentage of the tax which would have been
incurred under this Act on those purchases. For purchases of
graphic arts machinery and equipment made on or after July 1,

HB5477 - 111 - LRB102 25061 HLH 34321 b
1996 through June 30, 2003, and on and after September 1, 2004
through August 30, 2014, a purchase of graphic arts machinery
and equipment that qualifies for the exemption provided by
paragraph (5) of Section 3-5 of this Act earns a credit in an
amount equal to a fixed percentage of the tax that would have
been incurred under this Act on those purchases. The credit
earned for the purchase of manufacturing machinery and
equipment and graphic arts machinery and equipment shall be
referred to as the Manufacturer's Purchase Credit. A graphic
arts producer is a person engaged in graphic arts production
as defined in Section 3-30 of the Service Occupation Tax Act.
Beginning July 1, 1996, all references in this Section to
manufacturers or manufacturing shall also refer to graphic
arts producers or graphic arts production.
The amount of credit shall be a percentage of the tax that
would have been incurred on the purchase of the manufacturing
machinery and equipment or graphic arts machinery and
equipment if the exemptions provided by Section 2 or paragraph
(5) of Section 3-5 of this Act had not been applicable.
All purchases prior to October 1, 2003 of manufacturing
machinery and equipment and graphic arts machinery and
equipment that qualify for the exemptions provided by
paragraph (5) of Section 2 or paragraph (5) of Section 3-5 of
this Act qualify for the credit without regard to whether the
serviceman elected, or could have elected, under paragraph (7)
of Section 2 of this Act to exclude the transaction from this

HB5477 - 112 - LRB102 25061 HLH 34321 b
Act. If the serviceman's billing to the service customer
separately states a selling price for the exempt manufacturing
machinery or equipment or the exempt graphic arts machinery
and equipment, the credit shall be calculated, as otherwise
provided herein, based on that selling price. If the
serviceman's billing does not separately state a selling price
for the exempt manufacturing machinery and equipment or the
exempt graphic arts machinery and equipment, the credit shall
be calculated, as otherwise provided herein, based on 50% of
the entire billing. If the serviceman contracts to design,
develop, and produce special order manufacturing machinery and
equipment or special order graphic arts machinery and
equipment, and the billing does not separately state a selling
price for such special order machinery and equipment, the
credit shall be calculated, as otherwise provided herein,
based on 50% of the entire billing. The provisions of this
paragraph are effective for purchases made on or after January
1, 1995.
The percentage shall be as follows:
(1) 15% for purchases made on or before June 30, 1995.
(2) 25% for purchases made after June 30, 1995, and on
or before June 30, 1996.
(3) 40% for purchases made after June 30, 1996, and on
or before June 30, 1997.
(4) 50% for purchases made on or after July 1, 1997.
(a) Manufacturer's Purchase Credit earned prior to July 1,

HB5477 - 113 - LRB102 25061 HLH 34321 b
2003. This subsection (a) applies to Manufacturer's Purchase
Credit earned prior to July 1, 2003. A purchaser of production
related tangible personal property desiring to use the
Manufacturer's Purchase Credit shall certify to the seller
prior to October 1, 2003 that the purchaser is satisfying all
or part of the liability under the Use Tax Act or the Service
Use Tax Act that is due on the purchase of the production
related tangible personal property by use of a Manufacturer's
Purchase Credit. The Manufacturer's Purchase Credit
certification must be dated and shall include the name and
address of the purchaser, the purchaser's registration number,
if registered, the credit being applied, and a statement that
the State Use Tax or Service Use Tax liability is being
satisfied with the manufacturer's or graphic arts producer's
accumulated purchase credit. Certification may be incorporated
into the manufacturer's or graphic arts producer's purchase
order. Manufacturer's Purchase Credit certification provided
by the manufacturer or graphic arts producer prior to October
1, 2003 may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed the
general rate percentage 6.25% of the receipts subject to tax
from a qualifying purchase, but only if the retailer or
serviceman reports the Manufacturer's Purchase Credit claimed
as required by the Department. A Manufacturer's Purchase
Credit reported on any original or amended return filed under

HB5477 - 114 - LRB102 25061 HLH 34321 b
this Act after October 20, 2003 shall be disallowed. The
Manufacturer's Purchase Credit earned by purchase of exempt
manufacturing machinery and equipment or graphic arts
machinery and equipment is a non-transferable credit. A
manufacturer or graphic arts producer that enters into a
contract involving the installation of tangible personal
property into real estate within a manufacturing or graphic
arts production facility, prior to October 1, 2003, may
authorize a construction contractor to utilize credit
accumulated by the manufacturer or graphic arts producer to
purchase the tangible personal property. A manufacturer or
graphic arts producer intending to use accumulated credit to
purchase such tangible personal property shall execute a
written contract authorizing the contractor to utilize a
specified dollar amount of credit. The contractor shall
furnish, prior to October 1, 2003, the supplier with the
manufacturer's or graphic arts producer's name, registration
or resale number, and a statement that a specific amount of the
Use Tax or Service Use Tax liability, not to exceed the general
rate percentage 6.25% of the selling price, is being satisfied
with the credit. The manufacturer or graphic arts producer
shall remain liable to timely report all information required
by the annual Report of Manufacturer's Purchase Credit Used
for credit utilized by a construction contractor.
No Manufacturer's Purchase Credit earned prior to July 1,
2003 may be used after October 1, 2003. The Manufacturer's

HB5477 - 115 - LRB102 25061 HLH 34321 b
Purchase Credit may be used to satisfy liability under the Use
Tax Act or the Service Use Tax Act due on the purchase of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or a
lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as pre-production material handling, receiving, quality
control, inventory control, storage, staging, and packaging
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as
described in Section 2-30 of the Retailers' Occupation Tax Act
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible
personal property used or consumed in activities such as

HB5477 - 116 - LRB102 25061 HLH 34321 b
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all
tangible personal property used or consumed by the purchaser
for research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing or graphic
arts facility, in sales, purchasing, accounting, fiscal
management, marketing, personnel recruitment or selection, or
landscaping or (ii) tangible personal property required to be
titled or registered with a department, agency, or unit of
federal, state, or local government. The Manufacturer's
Purchase Credit may be used, prior to October 1, 2003, to
satisfy the tax arising either from the purchase of machinery
and equipment on or after January 1, 1995 for which the
manufacturing machinery and equipment exemption provided by
Section 2 of this Act was erroneously claimed, or the purchase
of machinery and equipment on or after July 1, 1996 for which
the exemption provided by paragraph (5) of Section 3-5 of this
Act was erroneously claimed, but not in satisfaction of
penalty, if any, and interest for failure to pay the tax when
due. A purchaser of production related tangible personal
property who is required to pay Illinois Use Tax or Service Use
Tax on the purchase directly to the Department may, prior to
October 1, 2003, utilize the Manufacturer's Purchase Credit in

HB5477 - 117 - LRB102 25061 HLH 34321 b
satisfaction of the tax arising from that purchase, but not in
satisfaction of penalty and interest. A purchaser who uses the
Manufacturer's Purchase Credit to purchase property which is
later determined not to be production related tangible
personal property may be liable for tax, penalty, and interest
on the purchase of that property as of the date of purchase but
shall be entitled to use the disallowed Manufacturer's
Purchase Credit, so long as it has not expired and is used
prior to October 1, 2003, on qualifying purchases of
production related tangible personal property not previously
subject to credit usage. The Manufacturer's Purchase Credit
earned by a manufacturer or graphic arts producer expires the
last day of the second calendar year following the calendar
year in which the credit arose. No Manufacturer's Purchase
Credit may be used after September 30, 2003 regardless of when
that credit was earned.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Earned for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts
machinery on which the credit was earned; (ii) the total State

HB5477 - 118 - LRB102 25061 HLH 34321 b
Use Tax or Service Use Tax which would have been due on those
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's
Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms as
prescribed or approved by the Department and shall state, for
each month of the calendar year: (i) the total purchase price
of production related tangible personal property purchased
from Illinois suppliers; (ii) the total purchase price of
production related tangible personal property purchased from
out-of-state suppliers; (iii) the total amount of credit used
during such month; and (iv) such other information as the
Department may reasonably require. A purchaser using

HB5477 - 119 - LRB102 25061 HLH 34321 b
Manufacturer's Purchase Credit shall maintain records that
identify, as to each purchase of production related tangible
personal property on which the purchaser used Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit used on each purchase.
No annual report shall be filed before May 1, 1996 or after
June 30, 2004. A purchaser that fails to file an annual Report
of Manufacturer's Purchase Credit Earned or an annual Report
of Manufacturer's Purchase Credit Used by the last day of the
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser
have agreed to an extension of the statute of limitations for
the issuance of a notice of tax liability as provided in
Section 4 of the Retailers' Occupation Tax Act. If the time for
assessment or refund has been extended, then amended reports
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. No Manufacturer's Purchase
Credit report filed with the Department for periods prior to

HB5477 - 120 - LRB102 25061 HLH 34321 b
January 1, 1995 shall be approved. Manufacturer's Purchase
Credit claimed on an amended report may be used, prior to
October 1, 2003, to satisfy tax liability under the Use Tax Act
or the Service Use Tax Act (i) on qualifying purchases of
production related tangible personal property made after the
date the amended report is filed or (ii) assessed by the
Department on qualifying purchases of production related
tangible personal property made in the case of manufacturers
on or after January 1, 1995, or in the case of graphic arts
producers on or after July 1, 1996.
If the purchaser is not the manufacturer or a graphic arts
producer, but rents or leases the use of the property to a
manufacturer or a graphic arts producer, the purchaser may
earn, report, and use Manufacturer's Purchase Credit in the
same manner as a manufacturer or graphic arts producer.
A purchaser shall not be entitled to any Manufacturer's
Purchase Credit for a purchase that is required to be reported
and is not timely reported as provided in this Section. A
purchaser remains liable for (i) any tax that was satisfied by
use of a Manufacturer's Purchase Credit, as of the date of
purchase, if that use is not timely reported as required in
this Section and (ii) for any applicable penalties and
interest for failing to pay the tax when due. No
Manufacturer's Purchase Credit may be used after September 30,
2003 to satisfy any tax liability imposed under this Act,
including any audit liability.

HB5477 - 121 - LRB102 25061 HLH 34321 b
(b) Manufacturer's Purchase Credit earned on and after
September 1, 2004. This subsection (b) applies to
Manufacturer's Purchase Credit earned on or after September 1,
2004. Manufacturer's Purchase Credit earned on or after
September 1, 2004 may only be used to satisfy the Use Tax or
Service Use Tax liability incurred on production related
tangible personal property purchased on or after September 1,
2004. A purchaser of production related tangible personal
property desiring to use the Manufacturer's Purchase Credit
shall certify to the seller that the purchaser is satisfying
all or part of the liability under the Use Tax Act or the
Service Use Tax Act that is due on the purchase of the
production related tangible personal property by use of a
Manufacturer's Purchase Credit. The Manufacturer's Purchase
Credit certification must be dated and shall include the name
and address of the purchaser, the purchaser's registration
number, if registered, the credit being applied, and a
statement that the State Use Tax or Service Use Tax liability
is being satisfied with the manufacturer's or graphic arts
producer's accumulated purchase credit. Certification may be
incorporated into the manufacturer's or graphic arts
producer's purchase order. Manufacturer's Purchase Credit
certification provided by the manufacturer or graphic arts
producer may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed the

HB5477 - 122 - LRB102 25061 HLH 34321 b
general rate percentage 6.25% of the receipts subject to tax
from a qualifying purchase, but only if the retailer or
serviceman reports the Manufacturer's Purchase Credit claimed
as required by the Department. The Manufacturer's Purchase
Credit earned by purchase of exempt manufacturing machinery
and equipment or graphic arts machinery and equipment is a
non-transferable credit. A manufacturer or graphic arts
producer that enters into a contract involving the
installation of tangible personal property into real estate
within a manufacturing or graphic arts production facility
may, on or after September 1, 2004, authorize a construction
contractor to utilize credit accumulated by the manufacturer
or graphic arts producer to purchase the tangible personal
property. A manufacturer or graphic arts producer intending to
use accumulated credit to purchase such tangible personal
property shall execute a written contract authorizing the
contractor to utilize a specified dollar amount of credit. The
contractor shall furnish the supplier with the manufacturer's
or graphic arts producer's name, registration or resale
number, and a statement that a specific amount of the Use Tax
or Service Use Tax liability, not to exceed the general rate
percentage 6.25% of the selling price, is being satisfied with
the credit. The manufacturer or graphic arts producer shall
remain liable to timely report all information required by the
annual Report of Manufacturer's Purchase Credit Used for
credit utilized by a construction contractor.

HB5477 - 123 - LRB102 25061 HLH 34321 b
The Manufacturer's Purchase Credit may be used to satisfy
liability under the Use Tax Act or the Service Use Tax Act due
on the purchase, made on or after September 1, 2004, of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or a
lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as pre-production material handling, receiving, quality
control, inventory control, storage, staging, and packaging
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as
described in Section 2-30 of the Retailers' Occupation Tax Act
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible

HB5477 - 124 - LRB102 25061 HLH 34321 b
personal property used or consumed in activities such as
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all
tangible personal property used or consumed by the purchaser
for research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing or graphic
arts facility, in sales, purchasing, accounting, fiscal
management, marketing, personnel recruitment or selection, or
landscaping or (ii) tangible personal property required to be
titled or registered with a department, agency, or unit of
federal, state, or local government. The Manufacturer's
Purchase Credit may be used to satisfy the tax arising either
from the purchase of machinery and equipment on or after
September 1, 2004 for which the manufacturing machinery and
equipment exemption provided by Section 2 of this Act was
erroneously claimed, or the purchase of machinery and
equipment on or after September 1, 2004 for which the
exemption provided by paragraph (5) of Section 3-5 of this Act
was erroneously claimed, but not in satisfaction of penalty,
if any, and interest for failure to pay the tax when due. A
purchaser of production related tangible personal property
that is purchased on or after September 1, 2004 who is required
to pay Illinois Use Tax or Service Use Tax on the purchase

HB5477 - 125 - LRB102 25061 HLH 34321 b
directly to the Department may utilize the Manufacturer's
Purchase Credit in satisfaction of the tax arising from that
purchase, but not in satisfaction of penalty and interest. A
purchaser who uses the Manufacturer's Purchase Credit to
purchase property on and after September 1, 2004 which is
later determined not to be production related tangible
personal property may be liable for tax, penalty, and interest
on the purchase of that property as of the date of purchase but
shall be entitled to use the disallowed Manufacturer's
Purchase Credit, so long as it has not expired, on qualifying
purchases of production related tangible personal property not
previously subject to credit usage. The Manufacturer's
Purchase Credit earned by a manufacturer or graphic arts
producer expires the last day of the second calendar year
following the calendar year in which the credit arose.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Earned for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts
machinery on which the credit was earned; (ii) the total State
Use Tax or Service Use Tax which would have been due on those

HB5477 - 126 - LRB102 25061 HLH 34321 b
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's
Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms as
prescribed or approved by the Department and shall state, for
each month of the calendar year: (i) the total purchase price
of production related tangible personal property purchased
from Illinois suppliers; (ii) the total purchase price of
production related tangible personal property purchased from
out-of-state suppliers; (iii) the total amount of credit used
during such month; and (iv) such other information as the
Department may reasonably require. A purchaser using
Manufacturer's Purchase Credit shall maintain records that

HB5477 - 127 - LRB102 25061 HLH 34321 b
identify, as to each purchase of production related tangible
personal property on which the purchaser used Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit used on each purchase.
A purchaser that fails to file an annual Report of
Manufacturer's Purchase Credit Earned or an annual Report of
Manufacturer's Purchase Credit Used by the last day of the
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser
have agreed to an extension of the statute of limitations for
the issuance of a notice of tax liability as provided in
Section 4 of the Retailers' Occupation Tax Act. If the time for
assessment or refund has been extended, then amended reports
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. Manufacturer's Purchase
Credit claimed on an amended report may be used to satisfy tax
liability under the Use Tax Act or the Service Use Tax Act (i)
on qualifying purchases of production related tangible

HB5477 - 128 - LRB102 25061 HLH 34321 b
personal property made after the date the amended report is
filed or (ii) assessed by the Department on qualifying
production related tangible personal property purchased on or
after September 1, 2004.
If the purchaser is not the manufacturer or a graphic arts
producer, but rents or leases the use of the property to a
manufacturer or a graphic arts producer, the purchaser may
earn, report, and use Manufacturer's Purchase Credit in the
same manner as a manufacturer or graphic arts producer. A
purchaser shall not be entitled to any Manufacturer's Purchase
Credit for a purchase that is required to be reported and is
not timely reported as provided in this Section. A purchaser
remains liable for (i) any tax that was satisfied by use of a
Manufacturer's Purchase Credit, as of the date of purchase, if
that use is not timely reported as required in this Section and
(ii) for any applicable penalties and interest for failing to
pay the tax when due.
(Source: P.A. 96-116, eff. 7-31-09.)
(35 ILCS 110/9) (from Ch. 120, par. 439.39)
Sec. 9. Each serviceman required or authorized to collect
the tax herein imposed shall pay to the Department the amount
of such tax (except as otherwise provided) at the time when he
is required to file his return for the period during which such
tax was collected, less a discount of 2.1% prior to January 1,
1990 and 1.75% on and after January 1, 1990, or $5 per calendar

HB5477 - 129 - LRB102 25061 HLH 34321 b
year, whichever is greater, which is allowed to reimburse the
serviceman for expenses incurred in collecting the tax,
keeping records, preparing and filing returns, remitting the
tax and supplying data to the Department on request. The
discount under this Section is not allowed for the 1.25%
portion of taxes paid on aviation fuel that is subject to the
revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
47133. The discount allowed under this Section is allowed only
for returns that are filed in the manner required by this Act.
The Department may disallow the discount for servicemen whose
certificate of registration is revoked at the time the return
is filed, but only if the Department's decision to revoke the
certificate of registration has become final. A serviceman
need not remit that part of any tax collected by him to the
extent that he is required to pay and does pay the tax imposed
by the Service Occupation Tax Act with respect to his sale of
service involving the incidental transfer by him of the same
property.
Except as provided hereinafter in this Section, on or
before the twentieth day of each calendar month, such
serviceman shall file a return for the preceding calendar
month in accordance with reasonable Rules and Regulations to
be promulgated by the Department. Such return shall be filed
on a form prescribed by the Department and shall contain such
information as the Department may reasonably require. On and
after January 1, 2018, with respect to servicemen whose annual

HB5477 - 130 - LRB102 25061 HLH 34321 b
gross receipts average $20,000 or more, all returns required
to be filed pursuant to this Act shall be filed
electronically. Servicemen who demonstrate that they do not
have access to the Internet or demonstrate hardship in filing
electronically may petition the Department to waive the
electronic filing requirement.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter. The
taxpayer shall also file a return with the Department for each
of the first two months of each calendar quarter, on or before
the twentieth day of the following calendar month, stating:
1. The name of the seller;
2. The address of the principal place of business from
which he engages in business as a serviceman in this
State;
3. The total amount of taxable receipts received by
him during the preceding calendar month, including
receipts from charge and time sales, but less all
deductions allowed by law;
4. The amount of credit provided in Section 2d of this
Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the Department

HB5477 - 131 - LRB102 25061 HLH 34321 b
may require.
Each serviceman required or authorized to collect the tax
imposed by this Act on aviation fuel transferred as an
incident of a sale of service in this State during the
preceding calendar month shall, instead of reporting and
paying tax on aviation fuel as otherwise required by this
Section, report and pay such tax on a separate aviation fuel
tax return. The requirements related to the return shall be as
otherwise provided in this Section. Notwithstanding any other
provisions of this Act to the contrary, servicemen collecting
tax on aviation fuel shall file all aviation fuel tax returns
and shall make all aviation fuel tax payments by electronic
means in the manner and form required by the Department. For
purposes of this Section, "aviation fuel" means jet fuel and
aviation gasoline.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to be
due on the return shall be deemed assessed.
Notwithstanding any other provision of this Act to the
contrary, servicemen subject to tax on cannabis shall file all
cannabis tax returns and shall make all cannabis tax payments
by electronic means in the manner and form required by the
Department.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all

HB5477 - 132 - LRB102 25061 HLH 34321 b
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who has
an average monthly tax liability of $100,000 or more shall
make all payments required by rules of the Department by
electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October 1,
2000, a taxpayer who has an annual tax liability of $200,000 or
more shall make all payments required by rules of the
Department by electronic funds transfer. The term "annual tax
liability" shall be the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year. The term "average monthly
tax liability" means the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year divided by 12. Beginning
on October 1, 2002, a taxpayer who has a tax liability in the
amount set forth in subsection (b) of Section 2505-210 of the
Department of Revenue Law shall make all payments required by
rules of the Department by electronic funds transfer.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required

HB5477 - 133 - LRB102 25061 HLH 34321 b
to make payments by electronic funds transfer shall make those
payments for a minimum of one year beginning on October 1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic funds
transfer and any taxpayers authorized to voluntarily make
payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
If the serviceman is otherwise required to file a monthly
return and if the serviceman's average monthly tax liability
to the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February and March of a given year
being due by April 20 of such year; with the return for April,
May and June of a given year being due by July 20 of such year;
with the return for July, August and September of a given year
being due by October 20 of such year, and with the return for
October, November and December of a given year being due by
January 20 of the following year.
If the serviceman is otherwise required to file a monthly
or quarterly return and if the serviceman's average monthly
tax liability to the Department does not exceed $50, the

HB5477 - 134 - LRB102 25061 HLH 34321 b
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January 20
of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act concerning
the time within which a serviceman may file his return, in the
case of any serviceman who ceases to engage in a kind of
business which makes him responsible for filing returns under
this Act, such serviceman shall file a final return under this
Act with the Department not more than 1 month after
discontinuing such business.
Where a serviceman collects the tax with respect to the
selling price of property which he sells and the purchaser
thereafter returns such property and the serviceman refunds
the selling price thereof to the purchaser, such serviceman
shall also refund, to the purchaser, the tax so collected from
the purchaser. When filing his return for the period in which
he refunds such tax to the purchaser, the serviceman may
deduct the amount of the tax so refunded by him to the
purchaser from any other Service Use Tax, Service Occupation
Tax, retailers' occupation tax or use tax which such
serviceman may be required to pay or remit to the Department,
as shown by such return, provided that the amount of the tax to
be deducted shall previously have been remitted to the

HB5477 - 135 - LRB102 25061 HLH 34321 b
Department by such serviceman. If the serviceman shall not
previously have remitted the amount of such tax to the
Department, he shall be entitled to no deduction hereunder
upon refunding such tax to the purchaser.
Any serviceman filing a return hereunder shall also
include the total tax upon the selling price of tangible
personal property purchased for use by him as an incident to a
sale of service, and such serviceman shall remit the amount of
such tax to the Department when filing such return.
If experience indicates such action to be practicable, the
Department may prescribe and furnish a combination or joint
return which will enable servicemen, who are required to file
returns hereunder and also under the Service Occupation Tax
Act, to furnish all the return information required by both
Acts on the one form.
Where the serviceman has more than one business registered
with the Department under separate registration hereunder,
such serviceman shall not file each return that is due as a
single return covering all such registered businesses, but
shall file separate returns for each such registered business.
Beginning January 1, 1990, each month the Department shall
pay into the State and Local Tax Reform Fund, a special fund in
the State Treasury, the net revenue realized for the preceding
month from the 1% tax imposed under this Act.
Beginning January 1, 1990, each month the Department shall
pay into the State and Local Sales Tax Reform Fund 20% of the

HB5477 - 136 - LRB102 25061 HLH 34321 b
net revenue realized for the preceding month from the 6.25%
general rate on transfers of tangible personal property, other
than (i) tangible personal property which is purchased outside
Illinois at retail from a retailer and which is titled or
registered by an agency of this State's government and (ii)
aviation fuel sold on or after December 1, 2019. This
exception for aviation fuel only applies for so long as the
revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
47133 are binding on the State.
For aviation fuel sold on or after December 1, 2019, each
month the Department shall pay into the State Aviation Program
Fund 20% of the net revenue realized for the preceding month
from the 6.25% general rate on the selling price of aviation
fuel, less an amount estimated by the Department to be
required for refunds of the 20% portion of the tax on aviation
fuel under this Act, which amount shall be deposited into the
Aviation Fuel Sales Tax Refund Fund. The Department shall only
pay moneys into the State Aviation Program Fund and the
Aviation Fuel Sales Tax Refund Fund under this Act for so long
as the revenue use requirements of 49 U.S.C. 47107(b) and 49
U.S.C. 47133 are binding on the State.
Beginning August 1, 2000, each month the Department shall
pay into the State and Local Sales Tax Reform Fund 100% of the
net revenue realized for the preceding month from the 1.25%
rate on the selling price of motor fuel and gasohol.
Beginning October 1, 2009, each month the Department shall

HB5477 - 137 - LRB102 25061 HLH 34321 b
pay into the Capital Projects Fund an amount that is equal to
an amount estimated by the Department to represent 80% of the
net revenue realized for the preceding month from the sale of
candy, grooming and hygiene products, and soft drinks that had
been taxed at a rate of 1% prior to September 1, 2009 but that
are now taxed at the general rate 6.25%.
Beginning July 1, 2013, each month the Department shall
pay into the Underground Storage Tank Fund from the proceeds
collected under this Act, the Use Tax Act, the Service
Occupation Tax Act, and the Retailers' Occupation Tax Act an
amount equal to the average monthly deficit in the Underground
Storage Tank Fund during the prior year, as certified annually
by the Illinois Environmental Protection Agency, but the total
payment into the Underground Storage Tank Fund under this Act,
the Use Tax Act, the Service Occupation Tax Act, and the
Retailers' Occupation Tax Act shall not exceed $18,000,000 in
any State fiscal year. As used in this paragraph, the "average
monthly deficit" shall be equal to the difference between the
average monthly claims for payment by the fund and the average
monthly revenues deposited into the fund, excluding payments
made pursuant to this paragraph.
Beginning July 1, 2015, of the remainder of the moneys
received by the Department under the Use Tax Act, this Act, the
Service Occupation Tax Act, and the Retailers' Occupation Tax
Act, each month the Department shall deposit $500,000 into the
State Crime Laboratory Fund.

HB5477 - 138 - LRB102 25061 HLH 34321 b
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into the
Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
and after July 1, 1989, 3.8% thereof shall be paid into the
Build Illinois Fund; provided, however, that if in any fiscal
year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
may be, of the moneys received by the Department and required
to be paid into the Build Illinois Fund pursuant to Section 3
of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
Act, Section 9 of the Service Use Tax Act, and Section 9 of the
Service Occupation Tax Act, such Acts being hereinafter called
the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
may be, of moneys being hereinafter called the "Tax Act
Amount", and (2) the amount transferred to the Build Illinois
Fund from the State and Local Sales Tax Reform Fund shall be
less than the Annual Specified Amount (as defined in Section 3
of the Retailers' Occupation Tax Act), an amount equal to the
difference shall be immediately paid into the Build Illinois
Fund from other moneys received by the Department pursuant to
the Tax Acts; and further provided, that if on the last
business day of any month the sum of (1) the Tax Act Amount
required to be deposited into the Build Illinois Bond Account
in the Build Illinois Fund during such month and (2) the amount
transferred during such month to the Build Illinois Fund from
the State and Local Sales Tax Reform Fund shall have been less
than 1/12 of the Annual Specified Amount, an amount equal to

HB5477 - 139 - LRB102 25061 HLH 34321 b
the difference shall be immediately paid into the Build
Illinois Fund from other moneys received by the Department
pursuant to the Tax Acts; and, further provided, that in no
event shall the payments required under the preceding proviso
result in aggregate payments into the Build Illinois Fund
pursuant to this clause (b) for any fiscal year in excess of
the greater of (i) the Tax Act Amount or (ii) the Annual
Specified Amount for such fiscal year; and, further provided,
that the amounts payable into the Build Illinois Fund under
this clause (b) shall be payable only until such time as the
aggregate amount on deposit under each trust indenture
securing Bonds issued and outstanding pursuant to the Build
Illinois Bond Act is sufficient, taking into account any
future investment income, to fully provide, in accordance with
such indenture, for the defeasance of or the payment of the
principal of, premium, if any, and interest on the Bonds
secured by such indenture and on any Bonds expected to be
issued thereafter and all fees and costs payable with respect
thereto, all as certified by the Director of the Bureau of the
Budget (now Governor's Office of Management and Budget). If on
the last business day of any month in which Bonds are
outstanding pursuant to the Build Illinois Bond Act, the
aggregate of the moneys deposited in the Build Illinois Bond
Account in the Build Illinois Fund in such month shall be less
than the amount required to be transferred in such month from
the Build Illinois Bond Account to the Build Illinois Bond

HB5477 - 140 - LRB102 25061 HLH 34321 b
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois Fund
as provided in the preceding paragraph or in any amendment
thereto hereafter enacted, the following specified monthly
installment of the amount requested in the certificate of the
Chairman of the Metropolitan Pier and Exposition Authority
provided under Section 8.25f of the State Finance Act, but not
in excess of the sums designated as "Total Deposit", shall be
deposited in the aggregate from collections under Section 9 of
the Use Tax Act, Section 9 of the Service Use Tax Act, Section
9 of the Service Occupation Tax Act, and Section 3 of the
Retailers' Occupation Tax Act into the McCormick Place
Expansion Project Fund in the specified fiscal years.

HB5477 - 141 - LRB102 25061 HLH 34321 b
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 93,000,000
2003 99,000,000
2004 103,000,000
2005 108,000,000
2006 113,000,000
2007 119,000,000
2008 126,000,000
2009 132,000,000
2010 139,000,000
2011 146,000,000
2012 153,000,000
2013 161,000,000
2014 170,000,000
2015 179,000,000
2016 189,000,000

HB5477 - 142 - LRB102 25061 HLH 34321 b
2017 199,000,000
2018 210,000,000
2019 221,000,000
2020 233,000,000
2021 300,000,000
2022 300,000,000
2023 300,000,000
2024 300,000,000
2025 300,000,000
2026 300,000,000
2027 375,000,000
2028 375,000,000
2029 375,000,000
2030 375,000,000
2031 375,000,000
2032 375,000,000
2033 375,000,000
2034 375,000,000
2035 375,000,000
2036 450,000,000
and
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and

HB5477 - 143 - LRB102 25061 HLH 34321 b
Exposition Authority Act,
but not after fiscal year 2060.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year, but
not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Capital Projects
Fund, the Clean Air Act Permit Fund, the Build Illinois Fund,
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, for aviation fuel sold on or after December 1, 2019,
the Department shall each month deposit into the Aviation Fuel
Sales Tax Refund Fund an amount estimated by the Department to
be required for refunds of the 80% portion of the tax on
aviation fuel under this Act. The Department shall only
deposit moneys into the Aviation Fuel Sales Tax Refund Fund
under this paragraph for so long as the revenue use

HB5477 - 144 - LRB102 25061 HLH 34321 b
requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
binding on the State.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, beginning July 1, 1993 and ending on September 30,
2013, the Department shall each month pay into the Illinois
Tax Increment Fund 0.27% of 80% of the net revenue realized for
the preceding month from the 6.25% general rate on the selling
price of tangible personal property.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, beginning with the receipt of the first report of
taxes paid by an eligible business and continuing for a
25-year period, the Department shall each month pay into the
Energy Infrastructure Fund 80% of the net revenue realized
from the 6.25% general rate on the selling price of
Illinois-mined coal that was sold to an eligible business. For
purposes of this paragraph, the term "eligible business" means
a new electric generating facility certified pursuant to
Section 605-332 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, and the Energy Infrastructure Fund

HB5477 - 145 - LRB102 25061 HLH 34321 b
pursuant to the preceding paragraphs or in any amendments to
this Section hereafter enacted, beginning on the first day of
the first calendar month to occur on or after August 26, 2014
(the effective date of Public Act 98-1098), each month, from
the collections made under Section 9 of the Use Tax Act,
Section 9 of the Service Use Tax Act, Section 9 of the Service
Occupation Tax Act, and Section 3 of the Retailers' Occupation
Tax Act, the Department shall pay into the Tax Compliance and
Administration Fund, to be used, subject to appropriation, to
fund additional auditors and compliance personnel at the
Department of Revenue, an amount equal to 1/12 of 5% of 80% of
the cash receipts collected during the preceding fiscal year
by the Audit Bureau of the Department under the Use Tax Act,
the Service Use Tax Act, the Service Occupation Tax Act, the
Retailers' Occupation Tax Act, and associated local occupation
and use taxes administered by the Department.
Subject to payments of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, the Energy Infrastructure Fund, and the
Tax Compliance and Administration Fund as provided in this
Section, beginning on July 1, 2018 the Department shall pay
each month into the Downstate Public Transportation Fund the
moneys required to be so paid under Section 2-3 of the
Downstate Public Transportation Act.
Subject to successful execution and delivery of a
public-private agreement between the public agency and private

HB5477 - 146 - LRB102 25061 HLH 34321 b
entity and completion of the civic build, beginning on July 1,
2023, of the remainder of the moneys received by the
Department under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and this Act, the Department shall
deposit the following specified deposits in the aggregate from
collections under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and the Retailers' Occupation Tax
Act, as required under Section 8.25g of the State Finance Act
for distribution consistent with the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
The moneys received by the Department pursuant to this Act and
required to be deposited into the Civic and Transit
Infrastructure Fund are subject to the pledge, claim, and
charge set forth in Section 25-55 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
As used in this paragraph, "civic build", "private entity",
"public-private agreement", and "public agency" have the
meanings provided in Section 25-10 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
Fiscal Year............................Total Deposit
2024....................................$200,000,000
2025....................................$206,000,000
2026....................................$212,200,000
2027....................................$218,500,000
2028....................................$225,100,000
2029....................................$288,700,000

HB5477 - 147 - LRB102 25061 HLH 34321 b
2030....................................$298,900,000
2031....................................$309,300,000
2032....................................$320,100,000
2033....................................$331,200,000
2034....................................$341,200,000
2035....................................$351,400,000
2036....................................$361,900,000
2037....................................$372,800,000
2038....................................$384,000,000
2039....................................$395,500,000
2040....................................$407,400,000
2041....................................$419,600,000
2042....................................$432,200,000
2043....................................$445,100,000
Beginning July 1, 2021 and until July 1, 2022, subject to
the payment of amounts into the State and Local Sales Tax
Reform Fund, the Build Illinois Fund, the McCormick Place
Expansion Project Fund, the Illinois Tax Increment Fund, the
Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 16% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning July 1,
2022 and until July 1, 2023, subject to the payment of amounts
into the State and Local Sales Tax Reform Fund, the Build
Illinois Fund, the McCormick Place Expansion Project Fund, the

HB5477 - 148 - LRB102 25061 HLH 34321 b
Illinois Tax Increment Fund, the Energy Infrastructure Fund,
and the Tax Compliance and Administration Fund as provided in
this Section, the Department shall pay each month into the
Road Fund the amount estimated to represent 32% of the net
revenue realized from the taxes imposed on motor fuel and
gasohol. Beginning July 1, 2023 and until July 1, 2024,
subject to the payment of amounts into the State and Local
Sales Tax Reform Fund, the Build Illinois Fund, the McCormick
Place Expansion Project Fund, the Illinois Tax Increment Fund,
the Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 48% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning July 1,
2024 and until July 1, 2025, subject to the payment of amounts
into the State and Local Sales Tax Reform Fund, the Build
Illinois Fund, the McCormick Place Expansion Project Fund, the
Illinois Tax Increment Fund, the Energy Infrastructure Fund,
and the Tax Compliance and Administration Fund as provided in
this Section, the Department shall pay each month into the
Road Fund the amount estimated to represent 64% of the net
revenue realized from the taxes imposed on motor fuel and
gasohol. Beginning on July 1, 2025, subject to the payment of
amounts into the State and Local Sales Tax Reform Fund, the
Build Illinois Fund, the McCormick Place Expansion Project
Fund, the Illinois Tax Increment Fund, the Energy

HB5477 - 149 - LRB102 25061 HLH 34321 b
Infrastructure Fund, and the Tax Compliance and Administration
Fund as provided in this Section, the Department shall pay
each month into the Road Fund the amount estimated to
represent 80% of the net revenue realized from the taxes
imposed on motor fuel and gasohol. As used in this paragraph
"motor fuel" has the meaning given to that term in Section 1.1
of the Motor Fuel Tax Act, and "gasohol" has the meaning given
to that term in Section 3-40 of the Use Tax Act.
Of the remainder of the moneys received by the Department
pursuant to this Act, 75% thereof shall be paid into the
General Revenue Fund of the State Treasury and 25% shall be
reserved in a special account and used only for the transfer to
the Common School Fund as part of the monthly transfer from the
General Revenue Fund in accordance with Section 8a of the
State Finance Act.
As soon as possible after the first day of each month, upon
certification of the Department of Revenue, the Comptroller
shall order transferred and the Treasurer shall transfer from
the General Revenue Fund to the Motor Fuel Tax Fund an amount
equal to 1.7% of 80% of the net revenue realized under this Act
for the second preceding month. Beginning April 1, 2000, this
transfer is no longer required and shall not be made.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.

HB5477 - 150 - LRB102 25061 HLH 34321 b
(Source: P.A. 100-303, eff. 8-24-17; 100-363, eff. 7-1-18;
100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; 101-10, Article
15, Section 15-15, eff. 6-5-19; 101-10, Article 25, Section
25-110, eff. 6-5-19; 101-27, eff. 6-25-19; 101-32, eff.
6-28-19; 101-604, eff. 12-13-19; 101-636, eff. 6-10-20.)
Section 15. The Service Occupation Tax Act is amended by
changing Sections 2, 3-10, and 9 as follows:
(35 ILCS 115/2) (from Ch. 120, par. 439.102)
Sec. 2. In this Act:
"Transfer" means any transfer of the title to property or
of the ownership of property whether or not the transferor
retains title as security for the payment of amounts due him
from the transferee.
"Cost Price" means the consideration paid by the
serviceman for a purchase valued in money, whether paid in
money or otherwise, including cash, credits and services, and
shall be determined without any deduction on account of the
supplier's cost of the property sold or on account of any other
expense incurred by the supplier. When a serviceman contracts
out part or all of the services required in his sale of
service, it shall be presumed that the cost price to the
serviceman of the property transferred to him by his or her
subcontractor is equal to 50% of the subcontractor's charges
to the serviceman in the absence of proof of the consideration

HB5477 - 151 - LRB102 25061 HLH 34321 b
paid by the subcontractor for the purchase of such property.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint venture, public or
private corporation, limited liability company, and any
receiver, executor, trustee, guardian or other representative
appointed by order of any court.
"Sale of Service" means any transaction except:
(a) A retail sale of tangible personal property taxable
under the Retailers' Occupation Tax Act or under the Use Tax
Act.
(b) A sale of tangible personal property for the purpose
of resale made in compliance with Section 2c of the Retailers'
Occupation Tax Act.
(c) Except as hereinafter provided, a sale or transfer of
tangible personal property as an incident to the rendering of
service for or by any governmental body or for or by any
corporation, society, association, foundation or institution
organized and operated exclusively for charitable, religious
or educational purposes or any not-for-profit corporation,
society, association, foundation, institution or organization
which has no compensated officers or employees and which 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

HB5477 - 152 - LRB102 25061 HLH 34321 b
exclusively for educational purposes.
(d) (Blank).
(d-1) A sale or transfer of tangible personal property as
an incident to the rendering of service for owners, lessors or
shippers of tangible personal property which 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 permanently
installed in or affixed to aircraft moving in interstate
commerce.
(d-1.1) On and after July 1, 2003 and through June 30,
2004, a sale or transfer of a motor vehicle of the second
division with a gross vehicle weight in excess of 8,000 pounds
as an incident to the rendering of service if that motor
vehicle is 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

HB5477 - 153 - LRB102 25061 HLH 34321 b
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.
(d-2) The repairing, reconditioning or remodeling, for a
common carrier by rail, of tangible personal property which
belongs to such carrier for hire, and as to which such carrier
receives the physical possession of the repaired,
reconditioned or remodeled item of tangible personal property
in Illinois, and which such carrier transports, or shares with
another common carrier in the transportation of such property,
out of Illinois on a standard uniform bill of lading showing
the person who repaired, reconditioned or remodeled the
property as the shipper or consignor of such property to a
destination outside Illinois, for use outside Illinois.
(d-3) A sale or transfer of tangible personal property
which is produced by the seller thereof on special order in
such a way as to have made the applicable tax the Service
Occupation Tax or the Service Use Tax, rather than the
Retailers' Occupation Tax or the Use Tax, for an interstate
carrier by rail which receives the physical possession of such
property in Illinois, and which transports such property, or
shares with another common carrier in the transportation of
such property, out of Illinois on a standard uniform bill of
lading showing the seller of the property as the shipper or

HB5477 - 154 - LRB102 25061 HLH 34321 b
consignor of such property to a destination outside Illinois,
for use outside Illinois.
(d-4) Until January 1, 1997, a sale, by a registered
serviceman paying tax under this Act to the Department, of
special order printed materials delivered outside Illinois and
which are not returned to this State, if delivery is made by
the seller or agent of the seller, including an agent who
causes the product to be delivered outside Illinois by a
common carrier or the U.S. postal service.
(e) A sale or transfer of machinery and equipment used
primarily in the process of the manufacturing or assembling,
either in an existing, an expanded or a new manufacturing
facility, of tangible personal property for wholesale or
retail sale or lease, whether such 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 such sale or
lease is made apart from or as an incident to the seller's
engaging in a service occupation and the applicable tax is a
Service Occupation Tax or Service Use Tax, rather than
Retailers' Occupation Tax or Use Tax. The exemption provided
by this paragraph (e) includes production related tangible
personal property, as defined in Section 3-50 of the Use Tax
Act, purchased on or after July 1, 2019. The exemption
provided by this paragraph (e) does not include machinery and
equipment used in (i) the generation of electricity for

HB5477 - 155 - LRB102 25061 HLH 34321 b
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. The
exemption under this subsection (e) is exempt from the
provisions of Section 3-75.
(f) Until July 1, 2003, the sale or transfer of
distillation machinery and equipment, sold as a unit or kit
and assembled or installed by the retailer, which machinery
and equipment is 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 such user and not subject to sale or resale.
(g) At the election of any serviceman not required to be
otherwise registered as a retailer under Section 2a of the
Retailers' Occupation Tax Act, made for each fiscal year sales
of service in which the aggregate annual cost price of
tangible personal property transferred as an incident to the
sales of service is less than 35% (75% in the case of
servicemen transferring prescription drugs or servicemen
engaged in graphic arts production) of the aggregate annual
total gross receipts from all sales of service. The purchase
of such tangible personal property by the serviceman shall be

HB5477 - 156 - LRB102 25061 HLH 34321 b
subject to tax under the Retailers' Occupation Tax Act and the
Use Tax Act. However, if a primary serviceman who has made the
election described in this paragraph subcontracts service work
to a secondary serviceman who has also made the election
described in this paragraph, the primary serviceman does not
incur a Use Tax liability if the secondary serviceman (i) has
paid or will pay Use Tax on his or her cost price of any
tangible personal property transferred to the primary
serviceman and (ii) certifies that fact in writing to the
primary serviceman.
Tangible personal property transferred incident to the
completion of a maintenance agreement is exempt from the tax
imposed pursuant to this Act.
Exemption (e) also includes machinery and equipment used
in the general maintenance or repair of such exempt machinery
and equipment or for in-house manufacture of exempt machinery
and equipment. On and after July 1, 2017, exemption (e) also
includes graphic arts machinery and equipment, as defined in
paragraph (5) of Section 3-5. The machinery and equipment
exemption 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

HB5477 - 157 - LRB102 25061 HLH 34321 b
of Public Act 98-583 are declaratory of existing law as to the
meaning and scope of this exemption. For the purposes of
exemption (e), each of these terms shall have the following
meanings: (1) "manufacturing process" shall mean the
production of any article of tangible personal property,
whether such article is a finished product or an article for
use in the process of manufacturing or assembling a different
article of tangible personal property, by procedures commonly
regarded as manufacturing, processing, fabricating, or
refining which changes some existing material or materials
into a material with a different form, use or name. In relation
to a recognized integrated business composed of a series of
operations which collectively constitute manufacturing, or
individually constitute manufacturing operations, the
manufacturing process shall be deemed to commence with the
first operation or stage of production in the series, and
shall not be deemed to end until the completion of the final
product in the last operation or stage of production in the
series; and further for purposes of exemption (e),
photoprocessing is deemed to be a manufacturing process of
tangible personal property for wholesale or retail sale; (2)
"assembling process" shall mean the production of any article
of tangible personal property, whether such article is a
finished product or an article for use in the process of
manufacturing or assembling a different article of tangible
personal property, by the combination of existing materials in

HB5477 - 158 - LRB102 25061 HLH 34321 b
a manner commonly regarded as assembling which results in a
material of a different form, use or name; (3) "machinery"
shall mean major mechanical machines or major components of
such machines contributing to a manufacturing or assembling
process; and (4) "equipment" shall include any independent
device or tool separate from any machinery but essential to an
integrated manufacturing or assembly process; including
computers used primarily in a manufacturer's computer assisted
design, computer assisted manufacturing (CAD/CAM) system; or
any subunit or assembly comprising a component of any
machinery or auxiliary, adjunct or attachment parts of
machinery, such as tools, dies, jigs, fixtures, patterns and
molds; or any parts which require periodic replacement in the
course of normal operation; but shall not include hand tools.
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 product being
manufactured or assembled for wholesale or retail sale or
lease. The purchaser of such machinery and equipment who has
an active resale registration number shall furnish such number
to the seller at the time of purchase. The purchaser of such
machinery and equipment and tools without an active resale
registration number shall furnish to the seller a certificate
of exemption stating facts establishing the exemption, which
certificate shall be available to the Department for
inspection or audit.

HB5477 - 159 - LRB102 25061 HLH 34321 b
Except as provided in Section 2d of this Act, the rolling
stock exemption applies to rolling stock used by an interstate
carrier for hire, even just between points in Illinois, if
such rolling stock transports, for hire, persons whose
journeys or property whose shipments originate or terminate
outside Illinois.
Any informal rulings, opinions or letters issued by the
Department in response to an inquiry or request for any
opinion from any person regarding the coverage and
applicability of exemption (e) to specific devices shall be
published, maintained as a public record, and made available
for public inspection and copying. If the informal ruling,
opinion or letter contains trade secrets or other confidential
information, where possible the Department shall delete such
information prior to publication. Whenever such informal
rulings, opinions, or letters contain any policy of general
applicability, the Department shall formulate and adopt such
policy as a rule in accordance with the provisions of the
Illinois Administrative Procedure Act.
On and after July 1, 1987, no entity otherwise eligible
under exemption (c) of this Section shall make tax-free
purchases unless it has an active exemption identification
number issued by the Department.
"Serviceman" means any person who is engaged in the
occupation of making sales of service.
"Sale at Retail" means "sale at retail" as defined in the

HB5477 - 160 - LRB102 25061 HLH 34321 b
Retailers' Occupation Tax Act.
"Supplier" means any person who makes sales of tangible
personal property to servicemen for the purpose of resale as
an incident to a sale of service.
"General rate" means (i) 6.25% prior to July 1, 2022 and
(ii) 6% on or after July 1, 2022.
(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
100-863, eff. 8-14-18; 101-9, eff. 6-5-19; 101-604, eff.
12-13-19.)
(35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax under imposed by this Act is imposed at the
general rate on of 6.25% of the "selling price", as defined in
Section 2 of the Service Use Tax Act, of the tangible personal
property. For the purpose of computing this tax, in no event
shall the "selling price" be less than the cost price to the
serviceman of the tangible personal property transferred. The
selling price of each item of tangible personal property
transferred as an incident of a sale of service may be shown as
a distinct and separate item on the serviceman's billing to
the service customer. If the selling price is not so shown, the
selling price of the tangible personal property is deemed to
be 50% of the serviceman's entire billing to the service
customer. When, however, a serviceman contracts to design,
develop, and produce special order machinery or equipment, the

HB5477 - 161 - LRB102 25061 HLH 34321 b
tax imposed by this Act shall be based on the serviceman's cost
price of the tangible personal property transferred incident
to the completion of the contract.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
the Use Tax Act, the tax is imposed at the rate of 1.25%.
With respect to gasohol, as defined in the Use Tax Act, the
tax imposed by this Act shall apply to (i) 70% of the cost
price of property transferred as an incident to the sale of
service on or after January 1, 1990, and before July 1, 2003,
(ii) 80% of the selling price of property transferred as an
incident to the sale of service on or after July 1, 2003 and on
or before July 1, 2017, and (iii) 100% of the cost price
thereafter. If, at any time, however, the tax under this Act on
sales of gasohol, as defined in the Use Tax Act, is imposed at
the rate of 1.25%, then the tax imposed by this Act applies to
100% of the proceeds of sales of gasohol made during that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
December 31, 2023 but applies to 100% of the selling price
thereafter.
With respect to biodiesel blends, as defined in the Use
Tax Act, with no less than 1% and no more than 10% biodiesel,

HB5477 - 162 - LRB102 25061 HLH 34321 b
the tax imposed by this Act applies to (i) 80% of the selling
price of property transferred as an incident to the sale of
service on or after July 1, 2003 and on or before December 31,
2018 and (ii) 100% of the proceeds of the selling price
thereafter. If, at any time, however, the tax under this Act on
sales of biodiesel blends, as defined in the Use Tax Act, with
no less than 1% and no more than 10% biodiesel is imposed at
the rate of 1.25%, then the tax imposed by this Act applies to
100% of the proceeds of sales of biodiesel blends with no less
than 1% and no more than 10% biodiesel made during that time.
With respect to 100% biodiesel, as defined in the Use Tax
Act, and biodiesel blends, as defined in the Use Tax Act, with
more than 10% but no more than 99% biodiesel material, the tax
imposed by this Act does not apply to the proceeds of the
selling price of property transferred as an incident to the
sale of service on or after July 1, 2003 and on or before
December 31, 2023 but applies to 100% of the selling price
thereafter.
At the election of any registered serviceman made for each
fiscal year, sales of service in which the aggregate annual
cost price of tangible personal property transferred as an
incident to the sales of service is less than 35%, or 75% in
the case of servicemen transferring prescription drugs or
servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of
service, the tax imposed by this Act shall be based on the

HB5477 - 163 - LRB102 25061 HLH 34321 b
serviceman's cost price of the tangible personal property
transferred incident to the sale of those services.
The tax shall be imposed at the rate of 1% on food prepared
for immediate consumption and transferred incident to a sale
of service subject to this Act or the Service Occupation Tax
Act by an entity licensed under the Hospital Licensing Act,
the Nursing Home Care Act, the Assisted Living and Shared
Housing Act, the ID/DD Community Care Act, the MC/DD Act, the
Specialized Mental Health Rehabilitation Act of 2013, or the
Child Care Act of 1969, or an entity that holds a permit issued
pursuant to the Life Care Facilities Act. The tax shall also be
imposed at the rate of 1% on food for human consumption that is
to be consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption and is not otherwise included in this
paragraph) and prescription and nonprescription medicines,
drugs, medical appliances, products classified as Class III
medical devices by the United States Food and Drug
Administration that are used for cancer treatment pursuant to
a prescription, as well as any accessories and components
related to those devices, modifications to a motor vehicle for
the purpose of rendering it usable by a person with a
disability, and insulin, blood sugar testing materials,
syringes, and needles used by human diabetics. For the
purposes of this Section, until September 1, 2009: the term

HB5477 - 164 - LRB102 25061 HLH 34321 b
"soft drinks" means any complete, finished, ready-to-use,
non-alcoholic drink, whether carbonated or not, including but
not limited to soda water, cola, fruit juice, vegetable juice,
carbonated water, and all other preparations commonly known as
soft drinks of whatever kind or description that are contained
in any closed or sealed can, carton, or container, regardless
of size; but "soft drinks" does not include coffee, tea,
non-carbonated water, infant formula, milk or milk products as
defined in the Grade A Pasteurized Milk and Milk Products Act,
or drinks containing 50% or more natural fruit or vegetable
juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" do not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold

HB5477 - 165 - LRB102 25061 HLH 34321 b
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"
label includes:
(A) A "Drug Facts" panel; or

HB5477 - 166 - LRB102 25061 HLH 34321 b
(B) A statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered
dispensing organization under the Compassionate Use of Medical
Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the
Compassionate Use of Medical Cannabis Program Act.
(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
102-4, eff. 4-27-21; 102-16, eff. 6-17-21.)
(35 ILCS 115/9) (from Ch. 120, par. 439.109)
Sec. 9. Each serviceman required or authorized to collect
the tax herein imposed shall pay to the Department the amount
of such tax at the time when he is required to file his return
for the period during which such tax was collectible, less a
discount of 2.1% prior to January 1, 1990, and 1.75% on and
after January 1, 1990, or $5 per calendar year, whichever is
greater, which is allowed to reimburse the serviceman for
expenses incurred in collecting the tax, keeping records,
preparing and filing returns, remitting the tax and supplying

HB5477 - 167 - LRB102 25061 HLH 34321 b
data to the Department on request. The discount under this
Section is not allowed for the 1.25% portion of taxes paid on
aviation fuel that is subject to the revenue use requirements
of 49 U.S.C. 47107(b) and 49 U.S.C. 47133. The discount
allowed under this Section is allowed only for returns that
are filed in the manner required by this Act. The Department
may disallow the discount for servicemen whose certificate of
registration is revoked at the time the return is filed, but
only if the Department's decision to revoke the certificate of
registration has become final.
Where such tangible personal property is sold under a
conditional sales contract, or under any other form of sale
wherein the payment of the principal sum, or a part thereof, is
extended beyond the close of the period for which the return is
filed, the serviceman, in collecting the tax may collect, for
each tax return period, only the tax applicable to the part of
the selling price actually received during such tax return
period.
Except as provided hereinafter in this Section, on or
before the twentieth day of each calendar month, such
serviceman shall file a return for the preceding calendar
month in accordance with reasonable rules and regulations to
be promulgated by the Department of Revenue. Such return shall
be filed on a form prescribed by the Department and shall
contain such information as the Department may reasonably
require. On and after January 1, 2018, with respect to

HB5477 - 168 - LRB102 25061 HLH 34321 b
servicemen whose annual gross receipts average $20,000 or
more, all returns required to be filed pursuant to this Act
shall be filed electronically. Servicemen who demonstrate that
they do not have access to the Internet or demonstrate
hardship in filing electronically may petition the Department
to waive the electronic filing requirement.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter. The
taxpayer shall also file a return with the Department for each
of the first two months of each calendar quarter, on or before
the twentieth day of the following calendar month, stating:
1. The name of the seller;
2. The address of the principal place of business from
which he engages in business as a serviceman in this
State;
3. The total amount of taxable receipts received by
him during the preceding calendar month, including
receipts from charge and time sales, but less all
deductions allowed by law;
4. The amount of credit provided in Section 2d of this
Act;
5. The amount of tax due;
5-5. The signature of the taxpayer; and
6. Such other reasonable information as the Department

HB5477 - 169 - LRB102 25061 HLH 34321 b
may require.
Each serviceman required or authorized to collect the tax
herein imposed on aviation fuel acquired as an incident to the
purchase of a service in this State during the preceding
calendar month shall, instead of reporting and paying tax as
otherwise required by this Section, report and pay such tax on
a separate aviation fuel tax return. The requirements related
to the return shall be as otherwise provided in this Section.
Notwithstanding any other provisions of this Act to the
contrary, servicemen transferring aviation fuel incident to
sales of service shall file all aviation fuel tax returns and
shall make all aviation fuel tax payments by electronic means
in the manner and form required by the Department. For
purposes of this Section, "aviation fuel" means jet fuel and
aviation gasoline.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to be
due on the return shall be deemed assessed.
Notwithstanding any other provision of this Act to the
contrary, servicemen subject to tax on cannabis shall file all
cannabis tax returns and shall make all cannabis tax payments
by electronic means in the manner and form required by the
Department.
Prior to October 1, 2003, and on and after September 1,
2004 a serviceman may accept a Manufacturer's Purchase Credit

HB5477 - 170 - LRB102 25061 HLH 34321 b
certification from a purchaser in satisfaction of Service Use
Tax as provided in Section 3-70 of the Service Use Tax Act if
the purchaser provides the appropriate documentation as
required by Section 3-70 of the Service Use Tax Act. A
Manufacturer's Purchase Credit certification, accepted prior
to October 1, 2003 or on or after September 1, 2004 by a
serviceman as provided in Section 3-70 of the Service Use Tax
Act, may be used by that serviceman to satisfy Service
Occupation Tax liability in the amount claimed in the
certification, not to exceed the general rate percentage 6.25%
of the receipts subject to tax from a qualifying purchase. A
Manufacturer's Purchase Credit reported on any original or
amended return filed under this Act after October 20, 2003 for
reporting periods prior to September 1, 2004 shall be
disallowed. Manufacturer's Purchase Credit reported on annual
returns due on or after January 1, 2005 will be disallowed for
periods prior to September 1, 2004. No Manufacturer's Purchase
Credit may be used after September 30, 2003 through August 31,
2004 to satisfy any tax liability imposed under this Act,
including any audit liability.
If the serviceman's average monthly tax liability to the
Department does not exceed $200, the Department may authorize
his returns to be filed on a quarter annual basis, with the
return for January, February and March of a given year being
due by April 20 of such year; with the return for April, May
and June of a given year being due by July 20 of such year;

HB5477 - 171 - LRB102 25061 HLH 34321 b
with the return for July, August and September of a given year
being due by October 20 of such year, and with the return for
October, November and December of a given year being due by
January 20 of the following year.
If the serviceman's average monthly tax liability to the
Department does not exceed $50, the Department may authorize
his returns to be filed on an annual basis, with the return for
a given year being due by January 20 of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act concerning
the time within which a serviceman may file his return, in the
case of any serviceman who ceases to engage in a kind of
business which makes him responsible for filing returns under
this Act, such serviceman shall file a final return under this
Act with the Department not more than 1 month after
discontinuing such business.
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who has
an average monthly tax liability of $100,000 or more shall
make all payments required by rules of the Department by
electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000

HB5477 - 172 - LRB102 25061 HLH 34321 b
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October 1,
2000, a taxpayer who has an annual tax liability of $200,000 or
more shall make all payments required by rules of the
Department by electronic funds transfer. The term "annual tax
liability" shall be the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year. The term "average monthly
tax liability" means the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year divided by 12. Beginning
on October 1, 2002, a taxpayer who has a tax liability in the
amount set forth in subsection (b) of Section 2505-210 of the
Department of Revenue Law shall make all payments required by
rules of the Department by electronic funds transfer.
Before August 1 of each year beginning in 1993, the
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required
to make payments by electronic funds transfer shall make those
payments for a minimum of one year beginning on October 1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic funds

HB5477 - 173 - LRB102 25061 HLH 34321 b
transfer and any taxpayers authorized to voluntarily make
payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
Where a serviceman collects the tax with respect to the
selling price of tangible personal property which he sells and
the purchaser thereafter returns such tangible personal
property and the serviceman refunds the selling price thereof
to the purchaser, such serviceman shall also refund, to the
purchaser, the tax so collected from the purchaser. When
filing his return for the period in which he refunds such tax
to the purchaser, the serviceman may deduct the amount of the
tax so refunded by him to the purchaser from any other Service
Occupation Tax, Service Use Tax, Retailers' Occupation Tax or
Use Tax which such serviceman may be required to pay or remit
to the Department, as shown by such return, provided that the
amount of the tax to be deducted shall previously have been
remitted to the Department by such serviceman. If the
serviceman shall not previously have remitted the amount of
such tax to the Department, he shall be entitled to no
deduction hereunder upon refunding such tax to the purchaser.
If experience indicates such action to be practicable, the
Department may prescribe and furnish a combination or joint
return which will enable servicemen, who are required to file

HB5477 - 174 - LRB102 25061 HLH 34321 b
returns hereunder and also under the Retailers' Occupation Tax
Act, the Use Tax Act or the Service Use Tax Act, to furnish all
the return information required by all said Acts on the one
form.
Where the serviceman has more than one business registered
with the Department under separate registrations hereunder,
such serviceman shall file separate returns for each
registered business.
Beginning January 1, 1990, each month the Department shall
pay into the Local Government Tax Fund the revenue realized
for the preceding month from the 1% tax imposed under this Act.
Beginning January 1, 1990, each month the Department shall
pay into the County and Mass Transit District Fund 4% of the
revenue realized for the preceding month from the 6.25%
general rate on sales of tangible personal property other than
aviation fuel sold on or after December 1, 2019. This
exception for aviation fuel only applies for so long as the
revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
47133 are binding on the State.
Beginning August 1, 2000, each month the Department shall
pay into the County and Mass Transit District Fund 20% of the
net revenue realized for the preceding month from the 1.25%
rate on the selling price of motor fuel and gasohol.
Beginning January 1, 1990, each month the Department shall
pay into the Local Government Tax Fund 16% of the revenue
realized for the preceding month from the 6.25% general rate

HB5477 - 175 - LRB102 25061 HLH 34321 b
on transfers of tangible personal property other than aviation
fuel sold on or after December 1, 2019. This exception for
aviation fuel only applies for so long as the revenue use
requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
binding on the State.
For aviation fuel sold on or after December 1, 2019, each
month the Department shall pay into the State Aviation Program
Fund 20% of the net revenue realized for the preceding month
from the 6.25% general rate on the selling price of aviation
fuel, less an amount estimated by the Department to be
required for refunds of the 20% portion of the tax on aviation
fuel under this Act, which amount shall be deposited into the
Aviation Fuel Sales Tax Refund Fund. The Department shall only
pay moneys into the State Aviation Program Fund and the
Aviation Fuel Sales Tax Refund Fund under this Act for so long
as the revenue use requirements of 49 U.S.C. 47107(b) and 49
U.S.C. 47133 are binding on the State.
Beginning August 1, 2000, each month the Department shall
pay into the Local Government Tax Fund 80% of the net revenue
realized for the preceding month from the 1.25% rate on the
selling price of motor fuel and gasohol.
Beginning October 1, 2009, each month the Department shall
pay into the Capital Projects Fund an amount that is equal to
an amount estimated by the Department to represent 80% of the
net revenue realized for the preceding month from the sale of
candy, grooming and hygiene products, and soft drinks that had

HB5477 - 176 - LRB102 25061 HLH 34321 b
been taxed at a rate of 1% prior to September 1, 2009 but that
are now taxed at the general rate 6.25%.
Beginning July 1, 2013, each month the Department shall
pay into the Underground Storage Tank Fund from the proceeds
collected under this Act, the Use Tax Act, the Service Use Tax
Act, and the Retailers' Occupation Tax Act an amount equal to
the average monthly deficit in the Underground Storage Tank
Fund during the prior year, as certified annually by the
Illinois Environmental Protection Agency, but the total
payment into the Underground Storage Tank Fund under this Act,
the Use Tax Act, the Service Use Tax Act, and the Retailers'
Occupation Tax Act shall not exceed $18,000,000 in any State
fiscal year. As used in this paragraph, the "average monthly
deficit" shall be equal to the difference between the average
monthly claims for payment by the fund and the average monthly
revenues deposited into the fund, excluding payments made
pursuant to this paragraph.
Beginning July 1, 2015, of the remainder of the moneys
received by the Department under the Use Tax Act, the Service
Use Tax Act, this Act, and the Retailers' Occupation Tax Act,
each month the Department shall deposit $500,000 into the
State Crime Laboratory Fund.
Of the remainder of the moneys received by the Department
pursuant to this Act, (a) 1.75% thereof shall be paid into the
Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
and after July 1, 1989, 3.8% thereof shall be paid into the

HB5477 - 177 - LRB102 25061 HLH 34321 b
Build Illinois Fund; provided, however, that if in any fiscal
year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
may be, of the moneys received by the Department and required
to be paid into the Build Illinois Fund pursuant to Section 3
of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
Act, Section 9 of the Service Use Tax Act, and Section 9 of the
Service Occupation Tax Act, such Acts being hereinafter called
the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
may be, of moneys being hereinafter called the "Tax Act
Amount", and (2) the amount transferred to the Build Illinois
Fund from the State and Local Sales Tax Reform Fund shall be
less than the Annual Specified Amount (as defined in Section 3
of the Retailers' Occupation Tax Act), an amount equal to the
difference shall be immediately paid into the Build Illinois
Fund from other moneys received by the Department pursuant to
the Tax Acts; and further provided, that if on the last
business day of any month the sum of (1) the Tax Act Amount
required to be deposited into the Build Illinois Account in
the Build Illinois Fund during such month and (2) the amount
transferred during such month to the Build Illinois Fund from
the State and Local Sales Tax Reform Fund shall have been less
than 1/12 of the Annual Specified Amount, an amount equal to
the difference shall be immediately paid into the Build
Illinois Fund from other moneys received by the Department
pursuant to the Tax Acts; and, further provided, that in no
event shall the payments required under the preceding proviso

HB5477 - 178 - LRB102 25061 HLH 34321 b
result in aggregate payments into the Build Illinois Fund
pursuant to this clause (b) for any fiscal year in excess of
the greater of (i) the Tax Act Amount or (ii) the Annual
Specified Amount for such fiscal year; and, further provided,
that the amounts payable into the Build Illinois Fund under
this clause (b) shall be payable only until such time as the
aggregate amount on deposit under each trust indenture
securing Bonds issued and outstanding pursuant to the Build
Illinois Bond Act is sufficient, taking into account any
future investment income, to fully provide, in accordance with
such indenture, for the defeasance of or the payment of the
principal of, premium, if any, and interest on the Bonds
secured by such indenture and on any Bonds expected to be
issued thereafter and all fees and costs payable with respect
thereto, all as certified by the Director of the Bureau of the
Budget (now Governor's Office of Management and Budget). If on
the last business day of any month in which Bonds are
outstanding pursuant to the Build Illinois Bond Act, the
aggregate of the moneys deposited in the Build Illinois Bond
Account in the Build Illinois Fund in such month shall be less
than the amount required to be transferred in such month from
the Build Illinois Bond Account to the Build Illinois Bond
Retirement and Interest Fund pursuant to Section 13 of the
Build Illinois Bond Act, an amount equal to such deficiency
shall be immediately paid from other moneys received by the
Department pursuant to the Tax Acts to the Build Illinois

HB5477 - 179 - LRB102 25061 HLH 34321 b
Fund; provided, however, that any amounts paid to the Build
Illinois Fund in any fiscal year pursuant to this sentence
shall be deemed to constitute payments pursuant to clause (b)
of the preceding sentence and shall reduce the amount
otherwise payable for such fiscal year pursuant to clause (b)
of the preceding sentence. The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois Fund
as provided in the preceding paragraph or in any amendment
thereto hereafter enacted, the following specified monthly
installment of the amount requested in the certificate of the
Chairman of the Metropolitan Pier and Exposition Authority
provided under Section 8.25f of the State Finance Act, but not
in excess of the sums designated as "Total Deposit", shall be
deposited in the aggregate from collections under Section 9 of
the Use Tax Act, Section 9 of the Service Use Tax Act, Section
9 of the Service Occupation Tax Act, and Section 3 of the
Retailers' Occupation Tax Act into the McCormick Place
Expansion Project Fund in the specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000

HB5477 - 180 - LRB102 25061 HLH 34321 b
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 93,000,000
2003 99,000,000
2004 103,000,000
2005 108,000,000
2006 113,000,000
2007 119,000,000
2008 126,000,000
2009 132,000,000
2010 139,000,000
2011 146,000,000
2012 153,000,000
2013 161,000,000
2014 170,000,000
2015 179,000,000
2016 189,000,000
2017 199,000,000
2018 210,000,000
2019 221,000,000
2020 233,000,000

HB5477 - 181 - LRB102 25061 HLH 34321 b
2021 300,000,000
2022 300,000,000
2023 300,000,000
2024 300,000,000
2025 300,000,000
2026 300,000,000
2027 375,000,000
2028 375,000,000
2029 375,000,000
2030 375,000,000
2031 375,000,000
2032 375,000,000
2033 375,000,000
2034 375,000,000
2035 375,000,000
2036 450,000,000
and
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority Act,
but not after fiscal year 2060.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the

HB5477 - 182 - LRB102 25061 HLH 34321 b
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year, but
not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Capital Projects
Fund, the Build Illinois Fund, and the McCormick Place
Expansion Project Fund pursuant to the preceding paragraphs or
in any amendments thereto hereafter enacted, for aviation fuel
sold on or after December 1, 2019, the Department shall each
month deposit into the Aviation Fuel Sales Tax Refund Fund an
amount estimated by the Department to be required for refunds
of the 80% portion of the tax on aviation fuel under this Act.
The Department shall only deposit moneys into the Aviation
Fuel Sales Tax Refund Fund under this paragraph for so long as
the revenue use requirements of 49 U.S.C. 47107(b) and 49
U.S.C. 47133 are binding on the State.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter

HB5477 - 183 - LRB102 25061 HLH 34321 b
enacted, beginning July 1, 1993 and ending on September 30,
2013, the Department shall each month pay into the Illinois
Tax Increment Fund 0.27% of 80% of the net revenue realized for
the preceding month from the 6.25% general rate on the selling
price of tangible personal property.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, beginning with the receipt of the first report of
taxes paid by an eligible business and continuing for a
25-year period, the Department shall each month pay into the
Energy Infrastructure Fund 80% of the net revenue realized
from the 6.25% general rate on the selling price of
Illinois-mined coal that was sold to an eligible business. For
purposes of this paragraph, the term "eligible business" means
a new electric generating facility certified pursuant to
Section 605-332 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, and the Energy Infrastructure Fund
pursuant to the preceding paragraphs or in any amendments to
this Section hereafter enacted, beginning on the first day of
the first calendar month to occur on or after August 26, 2014
(the effective date of Public Act 98-1098), each month, from
the collections made under Section 9 of the Use Tax Act,

HB5477 - 184 - LRB102 25061 HLH 34321 b
Section 9 of the Service Use Tax Act, Section 9 of the Service
Occupation Tax Act, and Section 3 of the Retailers' Occupation
Tax Act, the Department shall pay into the Tax Compliance and
Administration Fund, to be used, subject to appropriation, to
fund additional auditors and compliance personnel at the
Department of Revenue, an amount equal to 1/12 of 5% of 80% of
the cash receipts collected during the preceding fiscal year
by the Audit Bureau of the Department under the Use Tax Act,
the Service Use Tax Act, the Service Occupation Tax Act, the
Retailers' Occupation Tax Act, and associated local occupation
and use taxes administered by the Department.
Subject to payments of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, the Energy Infrastructure Fund, and the
Tax Compliance and Administration Fund as provided in this
Section, beginning on July 1, 2018 the Department shall pay
each month into the Downstate Public Transportation Fund the
moneys required to be so paid under Section 2-3 of the
Downstate Public Transportation Act.
Subject to successful execution and delivery of a
public-private agreement between the public agency and private
entity and completion of the civic build, beginning on July 1,
2023, of the remainder of the moneys received by the
Department under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and this Act, the Department shall
deposit the following specified deposits in the aggregate from

HB5477 - 185 - LRB102 25061 HLH 34321 b
collections under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and the Retailers' Occupation Tax
Act, as required under Section 8.25g of the State Finance Act
for distribution consistent with the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
The moneys received by the Department pursuant to this Act and
required to be deposited into the Civic and Transit
Infrastructure Fund are subject to the pledge, claim and
charge set forth in Section 25-55 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
As used in this paragraph, "civic build", "private entity",
"public-private agreement", and "public agency" have the
meanings provided in Section 25-10 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
Fiscal Year............................Total Deposit
2024....................................$200,000,000
2025....................................$206,000,000
2026....................................$212,200,000
2027....................................$218,500,000
2028....................................$225,100,000
2029....................................$288,700,000
2030....................................$298,900,000
2031....................................$309,300,000
2032....................................$320,100,000
2033....................................$331,200,000
2034....................................$341,200,000

HB5477 - 186 - LRB102 25061 HLH 34321 b
2035....................................$351,400,000
2036....................................$361,900,000
2037....................................$372,800,000
2038....................................$384,000,000
2039....................................$395,500,000
2040....................................$407,400,000
2041....................................$419,600,000
2042....................................$432,200,000
2043....................................$445,100,000
Beginning July 1, 2021 and until July 1, 2022, subject to
the payment of amounts into the County and Mass Transit
District Fund, the Local Government Tax Fund, the Build
Illinois Fund, the McCormick Place Expansion Project Fund, the
Illinois Tax Increment Fund, the Energy Infrastructure Fund,
and the Tax Compliance and Administration Fund as provided in
this Section, the Department shall pay each month into the
Road Fund the amount estimated to represent 16% of the net
revenue realized from the taxes imposed on motor fuel and
gasohol. Beginning July 1, 2022 and until July 1, 2023,
subject to the payment of amounts into the County and Mass
Transit District Fund, the Local Government Tax Fund, the
Build Illinois Fund, the McCormick Place Expansion Project
Fund, the Illinois Tax Increment Fund, the Energy
Infrastructure Fund, and the Tax Compliance and Administration
Fund as provided in this Section, the Department shall pay
each month into the Road Fund the amount estimated to

HB5477 - 187 - LRB102 25061 HLH 34321 b
represent 32% of the net revenue realized from the taxes
imposed on motor fuel and gasohol. Beginning July 1, 2023 and
until July 1, 2024, subject to the payment of amounts into the
County and Mass Transit District Fund, the Local Government
Tax Fund, the Build Illinois Fund, the McCormick Place
Expansion Project Fund, the Illinois Tax Increment Fund, the
Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 48% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning July 1,
2024 and until July 1, 2025, subject to the payment of amounts
into the County and Mass Transit District Fund, the Local
Government Tax Fund, the Build Illinois Fund, the McCormick
Place Expansion Project Fund, the Illinois Tax Increment Fund,
the Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 64% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning on July
1, 2025, subject to the payment of amounts into the County and
Mass Transit District Fund, the Local Government Tax Fund, the
Build Illinois Fund, the McCormick Place Expansion Project
Fund, the Illinois Tax Increment Fund, the Energy
Infrastructure Fund, and the Tax Compliance and Administration
Fund as provided in this Section, the Department shall pay

HB5477 - 188 - LRB102 25061 HLH 34321 b
each month into the Road Fund the amount estimated to
represent 80% of the net revenue realized from the taxes
imposed on motor fuel and gasohol. As used in this paragraph
"motor fuel" has the meaning given to that term in Section 1.1
of the Motor Fuel Tax Act, and "gasohol" has the meaning given
to that term in Section 3-40 of the Use Tax Act.
Of the remainder of the moneys received by the Department
pursuant to this Act, 75% shall be paid into the General
Revenue Fund of the State Treasury and 25% shall be reserved in
a special account and used only for the transfer to the Common
School Fund as part of the monthly transfer from the General
Revenue Fund in accordance with Section 8a of the State
Finance Act.
The Department may, upon separate written notice to a
taxpayer, require the taxpayer to prepare and file with the
Department on a form prescribed by the Department within not
less than 60 days after receipt of the notice an annual
information return for the tax year specified in the notice.
Such annual return to the Department shall include a statement
of gross receipts as shown by the taxpayer's last Federal
income tax return. If the total receipts of the business as
reported in the Federal income tax return do not agree with the
gross receipts reported to the Department of Revenue for the
same period, the taxpayer shall attach to his annual return a
schedule showing a reconciliation of the 2 amounts and the
reasons for the difference. The taxpayer's annual return to

HB5477 - 189 - LRB102 25061 HLH 34321 b
the Department shall also disclose the cost of goods sold by
the taxpayer during the year covered by such return, opening
and closing inventories of such goods for such year, cost of
goods used from stock or taken from stock and given away by the
taxpayer during such year, pay roll information of the
taxpayer's business during such year and any additional
reasonable information which the Department deems would be
helpful in determining the accuracy of the monthly, quarterly
or annual returns filed by such taxpayer as hereinbefore
provided for in this Section.
If the annual information return required by this Section
is not filed when and as required, the taxpayer shall be liable
as follows:
(i) Until January 1, 1994, the taxpayer shall be
liable for a penalty equal to 1/6 of 1% of the tax due from
such taxpayer under this Act during the period to be
covered by the annual return for each month or fraction of
a month until such return is filed as required, the
penalty to be assessed and collected in the same manner as
any other penalty provided for in this Act.
(ii) On and after January 1, 1994, the taxpayer shall
be liable for a penalty as described in Section 3-4 of the
Uniform Penalty and Interest Act.
The chief executive officer, proprietor, owner or highest
ranking manager shall sign the annual return to certify the
accuracy of the information contained therein. Any person who

HB5477 - 190 - LRB102 25061 HLH 34321 b
willfully signs the annual return containing false or
inaccurate information shall be guilty of perjury and punished
accordingly. The annual return form prescribed by the
Department shall include a warning that the person signing the
return may be liable for perjury.
The foregoing portion of this Section concerning the
filing of an annual information return shall not apply to a
serviceman who is not required to file an income tax return
with the United States Government.
As soon as possible after the first day of each month, upon
certification of the Department of Revenue, the Comptroller
shall order transferred and the Treasurer shall transfer from
the General Revenue Fund to the Motor Fuel Tax Fund an amount
equal to 1.7% of 80% of the net revenue realized under this Act
for the second preceding month. Beginning April 1, 2000, this
transfer is no longer required and shall not be made.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.
For greater simplicity of administration, it shall be
permissible for manufacturers, importers and wholesalers whose
products are sold by numerous servicemen in Illinois, and who
wish to do so, to assume the responsibility for accounting and
paying to the Department all tax accruing under this Act with
respect to such sales, if the servicemen who are affected do

HB5477 - 191 - LRB102 25061 HLH 34321 b
not make written objection to the Department to this
arrangement.
(Source: P.A. 100-303, eff. 8-24-17; 100-363, eff. 7-1-18;
100-863, eff. 8-14-18; 100-1171, eff. 1-4-19; 101-10, Article
15, Section 15-20, eff. 6-5-19; 101-10, Article 25, Section
25-115, eff. 6-5-19; 101-27, eff. 6-25-19; 101-32, eff.
6-28-19; 101-604, eff. 12-13-19; 101-636, eff. 6-10-20.)
Section 20. The Retailers' Occupation Tax Act is amended
by changing Sections 1, 2-5, 2-8, 2-10, 2d, 3, and 5l as
follows:
(35 ILCS 120/1) (from Ch. 120, par. 440)
Sec. 1. Definitions. "Sale at retail" means any transfer
of the ownership of or title to tangible personal property to a
purchaser, for the purpose of use or consumption, and not for
the purpose of resale in any form as tangible personal
property to the extent not first subjected to a use for which
it was purchased, for a valuable consideration: Provided that
the property purchased is deemed to be purchased for the
purpose of resale, despite first being used, to the extent to
which it is resold as an ingredient of an intentionally
produced product or byproduct of manufacturing. For this
purpose, slag produced as an incident to manufacturing pig
iron or steel and sold is considered to be an intentionally
produced byproduct of manufacturing. Transactions whereby the

HB5477 - 192 - LRB102 25061 HLH 34321 b
possession of the property is transferred but the seller
retains the title as security for payment of the selling price
shall be deemed to be sales.
"Sale at retail" shall be construed to include any
transfer of the ownership of or title to tangible personal
property to a purchaser, for use or consumption by any other
person to whom such purchaser may transfer the tangible
personal property without a valuable consideration, and to
include any transfer, whether made for or without a valuable
consideration, for resale in any form as tangible personal
property unless made in compliance with Section 2c of this
Act.
Sales of tangible personal property, which property, to
the extent not first subjected to a use for which it was
purchased, as an ingredient or constituent, goes into and
forms a part of tangible personal property subsequently the
subject of a "Sale at retail", are not sales at retail as
defined in this Act: Provided that the property purchased is
deemed to be purchased for the purpose of resale, despite
first being used, to the extent to which it is resold as an
ingredient of an intentionally produced product or byproduct
of manufacturing.
"Sale at retail" shall be construed to include any
Illinois florist's sales transaction in which the purchase
order is received in Illinois by a florist and the sale is for
use or consumption, but the Illinois florist has a florist in

HB5477 - 193 - LRB102 25061 HLH 34321 b
another state deliver the property to the purchaser or the
purchaser's donee in such other state.
Nonreusable tangible personal property that is used by
persons engaged in the business of operating a restaurant,
cafeteria, or drive-in is a sale for resale when it is
transferred to customers in the ordinary course of business as
part of the sale of food or beverages and is used to deliver,
package, or consume food or beverages, regardless of where
consumption of the food or beverages occurs. Examples of those
items include, but are not limited to nonreusable, paper and
plastic cups, plates, baskets, boxes, sleeves, buckets or
other containers, utensils, straws, placemats, napkins, doggie
bags, and wrapping or packaging materials that are transferred
to customers as part of the sale of food or beverages in the
ordinary course of business.
The purchase, employment and transfer of such tangible
personal property as newsprint and ink for the primary purpose
of conveying news (with or without other information) is not a
purchase, use or sale of tangible personal property.
A person whose activities are organized and conducted
primarily as a not-for-profit service enterprise, and who
engages in selling tangible personal property at retail
(whether to the public or merely to members and their guests)
is engaged in the business of selling tangible personal
property at retail with respect to such transactions,
excepting only a person organized and operated exclusively for

HB5477 - 194 - LRB102 25061 HLH 34321 b
charitable, religious or educational purposes either (1), to
the extent of sales by such person to its members, students,
patients or inmates of tangible personal property to be used
primarily for the purposes of such person, or (2), to the
extent of sales by such person of tangible personal property
which is not sold or offered for sale by persons organized for
profit. The selling of school books and school supplies by
schools at retail to students is not "primarily for the
purposes of" the school which does such selling. The
provisions of this paragraph shall not apply to nor subject to
taxation occasional dinners, socials or similar activities of
a person organized and operated exclusively for charitable,
religious or educational purposes, whether or not such
activities are open to the public.
A person who is the recipient of a grant or contract under
Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
serves meals to participants in the federal Nutrition Program
for the Elderly in return for contributions established in
amount by the individual participant pursuant to a schedule of
suggested fees as provided for in the federal Act is not
engaged in the business of selling tangible personal property
at retail with respect to such transactions.
"Purchaser" means anyone who, through a sale at retail,
acquires the ownership of or title to tangible personal
property for a valuable consideration.
"Reseller of motor fuel" means any person engaged in the

HB5477 - 195 - LRB102 25061 HLH 34321 b
business of selling or delivering or transferring title of
motor fuel to another person other than for use or
consumption. No person shall act as a reseller of motor fuel
within this State without first being registered as a reseller
pursuant to Section 2c or a retailer pursuant to Section 2a.
"Selling price" or the "amount of sale" means the
consideration for a sale valued in money whether received in
money or otherwise, including cash, credits, property, other
than as hereinafter provided, and services, but, prior to
January 1, 2020 and beginning again on January 1, 2022, not
including the value of or credit given for traded-in tangible
personal property where the item that is traded-in is of like
kind and character as that which is being sold; beginning
January 1, 2020 and until January 1, 2022, "selling price"
includes the portion of the value of or credit given for
traded-in motor vehicles of the First Division as defined in
Section 1-146 of the Illinois Vehicle Code of like kind and
character as that which is being sold that exceeds $10,000.
"Selling price" shall be determined without any deduction on
account of the cost of the property sold, the cost of materials
used, labor or service cost or any other expense whatsoever,
but does not include charges that are added to prices by
sellers on account of the seller's tax liability under this
Act, or on account of the seller's duty to collect, from the
purchaser, the tax that is imposed by the Use Tax Act, or,
except as otherwise provided with respect to any cigarette tax

HB5477 - 196 - LRB102 25061 HLH 34321 b
imposed by a home rule unit, on account of the seller's tax
liability under any local occupation tax administered by the
Department, or, except as otherwise provided with respect to
any cigarette tax imposed by a home rule unit on account of the
seller's duty to collect, from the purchasers, the tax that is
imposed under any local use tax administered by the
Department. Effective December 1, 1985, "selling price" shall
include charges that are added to prices by sellers on account
of the seller's tax liability under the Cigarette Tax Act, on
account of the sellers' duty to collect, from the purchaser,
the tax imposed under the Cigarette Use Tax Act, and on account
of the seller's duty to collect, from the purchaser, any
cigarette tax imposed by a home rule unit.
Notwithstanding any law to the contrary, for any motor
vehicle, as defined in Section 1-146 of the Vehicle Code, that
is sold on or after January 1, 2015 for the purpose of leasing
the vehicle for a defined period that is longer than one year
and (1) is a motor vehicle of the second division that: (A) is
a self-contained motor vehicle designed or permanently
converted to provide living quarters for recreational,
camping, or travel use, with direct walk through access to the
living quarters from the driver's seat; (B) is of the van
configuration designed for the transportation of not less than
7 nor more than 16 passengers; or (C) has a gross vehicle
weight rating of 8,000 pounds or less or (2) is a motor vehicle
of the first division, "selling price" or "amount of sale"

HB5477 - 197 - LRB102 25061 HLH 34321 b
means the consideration received by the lessor pursuant to the
lease contract, including amounts due at lease signing and all
monthly or other regular payments charged over the term of the
lease. Also included in the selling price is any amount
received by the lessor from the lessee for the leased vehicle
that is not calculated at the time the lease is executed,
including, but not limited to, excess mileage charges and
charges for excess wear and tear. For sales that occur in
Illinois, with respect to any amount received by the lessor
from the lessee for the leased vehicle that is not calculated
at the time the lease is executed, the lessor who purchased the
motor vehicle does not incur the tax imposed by the Use Tax Act
on those amounts, and the retailer who makes the retail sale of
the motor vehicle to the lessor is not required to collect the
tax imposed by the Use Tax Act or to pay the tax imposed by
this Act on those amounts. However, the lessor who purchased
the motor vehicle assumes the liability for reporting and
paying the tax on those amounts directly to the Department in
the same form (Illinois Retailers' Occupation Tax, and local
retailers' occupation taxes, if applicable) in which the
retailer would have reported and paid such tax if the retailer
had accounted for the tax to the Department. For amounts
received by the lessor from the lessee that are not calculated
at the time the lease is executed, the lessor must file the
return and pay the tax to the Department by the due date
otherwise required by this Act for returns other than

HB5477 - 198 - LRB102 25061 HLH 34321 b
transaction returns. If the retailer is entitled under this
Act to a discount for collecting and remitting the tax imposed
under this Act to the Department with respect to the sale of
the motor vehicle to the lessor, then the right to the discount
provided in this Act shall be transferred to the lessor with
respect to the tax paid by the lessor for any amount received
by the lessor from the lessee for the leased vehicle that is
not calculated at the time the lease is executed; provided
that the discount is only allowed if the return is timely filed
and for amounts timely paid. The "selling price" of a motor
vehicle that is sold on or after January 1, 2015 for the
purpose of leasing for a defined period of longer than one year
shall not be reduced by the value of or credit given for
traded-in tangible personal property owned by the lessor, nor
shall it be reduced by the value of or credit given for
traded-in tangible personal property owned by the lessee,
regardless of whether the trade-in value thereof is assigned
by the lessee to the lessor. In the case of a motor vehicle
that is sold for the purpose of leasing for a defined period of
longer than one year, the sale occurs at the time of the
delivery of the vehicle, regardless of the due date of any
lease payments. A lessor who incurs a Retailers' Occupation
Tax liability on the sale of a motor vehicle coming off lease
may not take a credit against that liability for the Use Tax
the lessor paid upon the purchase of the motor vehicle (or for
any tax the lessor paid with respect to any amount received by

HB5477 - 199 - LRB102 25061 HLH 34321 b
the lessor from the lessee for the leased vehicle that was not
calculated at the time the lease was executed) if the selling
price of the motor vehicle at the time of purchase was
calculated using the definition of "selling price" as defined
in this paragraph. Notwithstanding any other provision of this
Act to the contrary, lessors shall file all returns and make
all payments required under this paragraph to the Department
by electronic means in the manner and form as required by the
Department. This paragraph does not apply to leases of motor
vehicles for which, at the time the lease is entered into, the
term of the lease is not a defined period, including leases
with a defined initial period with the option to continue the
lease on a month-to-month or other basis beyond the initial
defined period.
The phrase "like kind and character" shall be liberally
construed (including but not limited to any form of motor
vehicle for any form of motor vehicle, or any kind of farm or
agricultural implement for any other kind of farm or
agricultural implement), while not including a kind of item
which, if sold at retail by that retailer, would be exempt from
retailers' occupation tax and use tax as an isolated or
occasional sale.
"Gross receipts" from the sales of tangible personal
property at retail means the total selling price or the amount
of such sales, as hereinbefore defined. In the case of charge
and time sales, the amount thereof shall be included only as

HB5477 - 200 - LRB102 25061 HLH 34321 b
and when payments are received by the seller. Receipts or
other consideration derived by a seller from the sale,
transfer or assignment of accounts receivable to a wholly
owned subsidiary will not be deemed payments prior to the time
the purchaser makes payment on such accounts.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership,
association, joint stock company, joint adventure, public or
private corporation, limited liability company, or a receiver,
executor, trustee, guardian or other representative appointed
by order of any court.
The isolated or occasional sale of tangible personal
property at retail by a person who does not hold himself out as
being engaged (or who does not habitually engage) in selling
such tangible personal property at retail, or a sale through a
bulk vending machine, does not constitute engaging in a
business of selling such tangible personal property at retail
within the meaning of this Act; provided that any person who is
engaged in a business which is not subject to the tax imposed
by this Act because of involving the sale of or a contract to
sell real estate or a construction contract to improve real
estate or a construction contract to engineer, install, and
maintain an integrated system of products, but who, in the
course of conducting such business, transfers tangible
personal property to users or consumers in the finished form
in which it was purchased, and which does not become real

HB5477 - 201 - LRB102 25061 HLH 34321 b
estate or was not engineered and installed, under any
provision of a construction contract or real estate sale or
real estate sales agreement entered into with some other
person arising out of or because of such nontaxable business,
is engaged in the business of selling tangible personal
property at retail to the extent of the value of the tangible
personal property so transferred. If, in such a transaction, a
separate charge is made for the tangible personal property so
transferred, the value of such property, for the purpose of
this Act, shall be the amount so separately charged, but not
less than the cost of such property to the transferor; if no
separate charge is made, the value of such property, for the
purposes of this Act, is the cost to the transferor of such
tangible personal property. Construction contracts for the
improvement of real estate consisting of engineering,
installation, and maintenance of voice, data, video, security,
and all telecommunication systems do not constitute engaging
in a business of selling tangible personal property at retail
within the meaning of this Act if they are sold at one
specified contract price.
A person who holds himself or herself out as being engaged
(or who habitually engages) in selling tangible personal
property at retail is a person engaged in the business of
selling tangible personal property at retail hereunder with
respect to such sales (and not primarily in a service
occupation) notwithstanding the fact that such person designs

HB5477 - 202 - LRB102 25061 HLH 34321 b
and produces such tangible personal property on special order
for the purchaser and in such a way as to render the property
of value only to such purchaser, if such tangible personal
property so produced on special order serves substantially the
same function as stock or standard items of tangible personal
property that are sold at retail.
Persons who engage in the business of transferring
tangible personal property upon the redemption of trading
stamps are engaged in the business of selling such property at
retail and shall be liable for and shall pay the tax imposed by
this Act on the basis of the retail value of the property
transferred upon redemption of such stamps.
"Bulk vending machine" means a vending machine, containing
unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children which, when a
coin or coins of a denomination not larger than $0.50 are
inserted, are dispensed in equal portions, at random and
without selection by the customer.
"Remote retailer" means a retailer that does not maintain
within this State, directly or by a subsidiary, an office,
distribution house, sales house, warehouse or other place of
business, or any agent or other representative operating
within this State under the authority of the retailer or its
subsidiary, irrespective of whether such place of business or
agent is located here permanently or temporarily or whether
such retailer or subsidiary is licensed to do business in this

HB5477 - 203 - LRB102 25061 HLH 34321 b
State.
"Marketplace" means a physical or electronic place, forum,
platform, application, or other method by which a marketplace
seller sells or offers to sell items.
"Marketplace facilitator" means a person who, pursuant to
an agreement with an unrelated third-party marketplace seller,
directly or indirectly through one or more affiliates
facilitates a retail sale by an unrelated third party
marketplace seller by:
(1) listing or advertising for sale by the marketplace
seller in a marketplace, tangible personal property that
is subject to tax under this Act; and
(2) either directly or indirectly, through agreements
or arrangements with third parties, collecting payment
from the customer and transmitting that payment to the
marketplace seller regardless of whether the marketplace
facilitator receives compensation or other consideration
in exchange for its services.
A person who provides advertising services, including
listing products for sale, is not considered a marketplace
facilitator, so long as the advertising service platform or
forum does not engage, directly or indirectly through one or
more affiliated persons, in the activities described in
paragraph (2) of this definition of "marketplace facilitator".
"Marketplace facilitator" does not include any person
licensed under the Auction License Act. This exemption does

HB5477 - 204 - LRB102 25061 HLH 34321 b
not apply to any person who is an Internet auction listing
service, as defined by the Auction License Act.
"Marketplace seller" means a person that makes sales
through a marketplace operated by an unrelated third party
marketplace facilitator.
"General rate" means (i) 6.25% prior to July 1, 2022 and
(ii) 6% on or after July 1, 2022.
(Source: P.A. 101-31, eff. 6-28-19; 101-604, eff. 1-1-20;
102-353, eff. 1-1-22; 102-634, eff. 8-27-21; revised 11-1-21.)
(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
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

HB5477 - 205 - LRB102 25061 HLH 34321 b
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,
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.

HB5477 - 206 - LRB102 25061 HLH 34321 b
(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 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

HB5477 - 207 - LRB102 25061 HLH 34321 b
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
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

HB5477 - 208 - LRB102 25061 HLH 34321 b
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).
(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

HB5477 - 209 - LRB102 25061 HLH 34321 b
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
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

HB5477 - 210 - LRB102 25061 HLH 34321 b
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
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

HB5477 - 211 - LRB102 25061 HLH 34321 b
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,
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

HB5477 - 212 - LRB102 25061 HLH 34321 b
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 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

HB5477 - 213 - LRB102 25061 HLH 34321 b
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
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

HB5477 - 214 - LRB102 25061 HLH 34321 b
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,
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

HB5477 - 215 - LRB102 25061 HLH 34321 b
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 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

HB5477 - 216 - LRB102 25061 HLH 34321 b
(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
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.

HB5477 - 217 - LRB102 25061 HLH 34321 b
(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.
(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

HB5477 - 218 - LRB102 25061 HLH 34321 b
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, 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.

HB5477 - 219 - LRB102 25061 HLH 34321 b
(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, mechanical, industrial, business, or commercial
occupation.
(34) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for

HB5477 - 220 - LRB102 25061 HLH 34321 b
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 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

HB5477 - 221 - LRB102 25061 HLH 34321 b
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
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

HB5477 - 222 - LRB102 25061 HLH 34321 b
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 this Act. Taxpayers shall
maintain all necessary books and records to substantiate
the use and consumption of all such tangible personal

HB5477 - 223 - LRB102 25061 HLH 34321 b
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,
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films. This exemption applies
only to the sale of qualifying tangible personal property

HB5477 - 224 - LRB102 25061 HLH 34321 b
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,
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

HB5477 - 225 - LRB102 25061 HLH 34321 b
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 and through December
31, 2026, 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
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

HB5477 - 226 - LRB102 25061 HLH 34321 b
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;
cabinets; telecommunications cabling infrastructure;
raised floor systems; peripheral components or

HB5477 - 227 - LRB102 25061 HLH 34321 b
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 into 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.
(45) Beginning January 1, 2020 and through December
31, 2020, sales of tangible personal property made by a
marketplace seller over a marketplace for which tax is due
under this Act but for which use tax has been collected and

HB5477 - 228 - LRB102 25061 HLH 34321 b
remitted to the Department by a marketplace facilitator
under Section 2d of the Use Tax Act are exempt from tax
under this Act. A marketplace seller claiming this
exemption shall maintain books and records demonstrating
that the use tax on such sales has been collected and
remitted by a marketplace facilitator. Marketplace sellers
that have properly remitted tax under this Act on such
sales may file a claim for credit as provided in Section 6
of this Act. No claim is allowed, however, for such taxes
for which a credit or refund has been issued to the
marketplace facilitator under the Use Tax Act, or for
which the marketplace facilitator has filed a claim for
credit or refund under the Use Tax Act.
(Source: P.A. 101-31, eff. 6-28-19; 101-81, eff. 7-12-19;
101-629, eff. 2-5-20; 102-16, eff. 6-17-21; 102-634, eff.
8-27-21; revised 11-9-21.)
(35 ILCS 120/2-8)
Sec. 2-8. Sales tax holiday items.
(a) The tangible personal property described in this
subsection qualifies for the 1.25% reduced rate of tax for the
period set forth in Section 2-10 of this Act (hereinafter
referred to as the Sales Tax Holiday Period). The reduced rate
on these items shall be administered under the provisions of
subsection (b) of this Section. The following items are
subject to the reduced rate:

HB5477 - 229 - LRB102 25061 HLH 34321 b
(1) Clothing items that each have a retail selling
price of less than $100.
"Clothing" means, unless otherwise specified in this
Section, all human wearing apparel suitable for general
use. "Clothing" does not include clothing accessories,
protective equipment, or sport or recreational equipment.
"Clothing" includes, but is not limited to: household and
shop aprons; athletic supporters; bathing suits and caps;
belts and suspenders; boots; coats and jackets; ear muffs;
footlets; gloves and mittens for general use; hats and
caps; hosiery; insoles for shoes; lab coats; neckties;
overshoes; pantyhose; rainwear; rubber pants; sandals;
scarves; shoes and shoelaces; slippers; sneakers; socks
and stockings; steel-toed shoes; underwear; and school
uniforms.
"Clothing accessories" means, but is not limited to:
briefcases; cosmetics; hair notions, including, but not
limited to barrettes, hair bows, and hair nets; handbags;
handkerchiefs; jewelry; non-prescription sunglasses;
umbrellas; wallets; watches; and wigs and hair pieces.
"Protective equipment" means, but is not limited to:
breathing masks; clean room apparel and equipment; ear and
hearing protectors; face shields; hard hats; helmets;
paint or dust respirators; protective gloves; safety
glasses and goggles; safety belts; tool belts; and
welder's gloves and masks.

HB5477 - 230 - LRB102 25061 HLH 34321 b
"Sport or recreational equipment" means, but is not
limited to: ballet and tap shoes; cleated or spiked
athletic shoes; gloves, including, but not limited to,
baseball, bowling, boxing, hockey, and golf gloves;
goggles; hand and elbow guards; life preservers and vests;
mouth guards; roller and ice skates; shin guards; shoulder
pads; ski boots; waders; and wetsuits and fins.
(2) School supplies. "School supplies" means, unless
otherwise specified in this Section, items used by a
student in a course of study. The purchase of school
supplies for use by persons other than students for use in
a course of study are not eligible for the reduced rate of
tax. "School supplies" do not include school art supplies;
school instructional materials; cameras; film and memory
cards; videocameras, tapes, and videotapes; computers;
cell phones; Personal Digital Assistants (PDAs); handheld
electronic schedulers; and school computer supplies.
"School supplies" includes, but is not limited to:
binders; book bags; calculators; cellophane tape;
blackboard chalk; compasses; composition books; crayons;
erasers; expandable, pocket, plastic, and manila folders;
glue, paste, and paste sticks; highlighters; index cards;
index card boxes; legal pads; lunch boxes; markers;
notebooks; paper, including loose leaf ruled notebook
paper, copy paper, graph paper, tracing paper, manila
paper, colored paper, poster board, and construction

HB5477 - 231 - LRB102 25061 HLH 34321 b
paper; pencils; pencil leads; pens; ink and ink refills
for pens; pencil boxes and other school supply boxes;
pencil sharpeners; protractors; rulers; scissors; and
writing tablets.
"School art supply" means an item commonly used by a
student in a course of study for artwork and includes only
the following items: clay and glazes; acrylic, tempera,
and oil paint; paintbrushes for artwork; sketch and
drawing pads; and watercolors.
"School instructional material" means written material
commonly used by a student in a course of study as a
reference and to learn the subject being taught and
includes only the following items: reference books;
reference maps and globes; textbooks; and workbooks.
"School computer supply" means an item commonly used
by a student in a course of study in which a computer is
used and applies only to the following items: flashdrives
and other computer data storage devices; data storage
media, such as diskettes and compact disks; boxes and
cases for disk storage; external ports or drives; computer
cases; computer cables; computer printers; and printer
cartridges, toner, and ink.
(b) Administration. Notwithstanding any other provision of
this Act, the reduced rate of tax under Section 3-10 of this
Act for clothing and school supplies shall be administered by
the Department under the provisions of this subsection (b).

HB5477 - 232 - LRB102 25061 HLH 34321 b
(1) Bundled sales. Items that qualify for the reduced
rate of tax that are bundled together with items that do
not qualify for the reduced rate of tax and that are sold
for one itemized price will be subject to the reduced rate
of tax only if the value of the items that qualify for the
reduced rate of tax exceeds the value of the items that do
not qualify for the reduced rate of tax.
(2) Coupons and discounts. An unreimbursed discount by
the seller reduces the sales price of the property so that
the discounted sales price determines whether the sales
price is within a sales tax holiday price threshold. A
coupon or other reduction in the sales price is treated as
a discount if the seller is not reimbursed for the coupon
or reduction amount by a third party.
(3) Splitting of items normally sold together.
Articles that are normally sold as a single unit must
continue to be sold in that manner. Such articles cannot
be priced separately and sold as individual items in order
to obtain the reduced rate of tax. For example, a pair of
shoes cannot have each shoe sold separately so that the
sales price of each shoe is within a sales tax holiday
price threshold.
(4) Rain checks. A rain check is a procedure that
allows a customer to purchase an item at a certain price at
a later time because the particular item was out of stock.
Eligible property that customers purchase during the Sales

HB5477 - 233 - LRB102 25061 HLH 34321 b
Tax Holiday Period with the use of a rain check will
qualify for the reduced rate of tax regardless of when the
rain check was issued. Issuance of a rain check during the
Sales Tax Holiday Period will not qualify eligible
property for the reduced rate of tax if the property is
actually purchased after the Sales Tax Holiday Period.
(5) Exchanges. The procedure for an exchange in
regards to a sales tax holiday is as follows:
(A) If a customer purchases an item of eligible
property during the Sales Tax Holiday Period, but
later exchanges the item for a similar eligible item,
even if a different size, different color, or other
feature, no additional tax is due even if the exchange
is made after the Sales Tax Holiday Period.
(B) If a customer purchases an item of eligible
property during the Sales Tax Holiday Period, but
after the Sales Tax Holiday Period has ended, the
customer returns the item and receives credit on the
purchase of a different item, the 6.25% general
merchandise sales tax rate is due on the sale of the
newly purchased item.
(C) If a customer purchases an item of eligible
property before the Sales Tax Holiday Period, but
during the Sales Tax Holiday Period the customer
returns the item and receives credit on the purchase
of a different item of eligible property, the reduced

HB5477 - 234 - LRB102 25061 HLH 34321 b
rate of tax is due on the sale of the new item if the
new item is purchased during the Sales Tax Holiday
Period.
(6) Delivery charges. Delivery charges, including
shipping, handling and service charges, are part of the
sales price of eligible property.
(7) Order date and back orders. For the purpose of a
sales tax holiday, eligible property qualifies for the
reduced rate of tax if: (i) the item is both delivered to
and paid for by the customer during the Sales Tax Holiday
Period or (ii) the customer orders and pays for the item
and the seller accepts the order during the Sales Tax
Holiday Period for immediate shipment, even if delivery is
made after the Sales Tax Holiday Period. The seller
accepts an order when the seller has taken action to fill
the order for immediate shipment. Actions to fill an order
include placement of an "in date" stamp on an order or
assignment of an "order number" to an order within the
Sales Tax Holiday Period. An order is for immediate
shipment when the customer does not request delayed
shipment. An order is for immediate shipment
notwithstanding that the shipment may be delayed because
of a backlog of orders or because stock is currently
unavailable to, or on back order by, the seller.
(8) Returns. For a 60-day period immediately after the
Sales Tax Holiday Period, if a customer returns an item

HB5477 - 235 - LRB102 25061 HLH 34321 b
that would qualify for the reduced rate of tax, credit for
or refund of sales tax shall be given only at the reduced
rate unless the customer provides a receipt or invoice
that shows tax was paid at the 6.25% general merchandise
rate, or the seller has sufficient documentation to show
that tax was paid at the 6.25% general merchandise rate on
the specific item. This 60-day period is set solely for
the purpose of designating a time period during which the
customer must provide documentation that shows that the
appropriate sales tax rate was paid on returned
merchandise. The 60-day period is not intended to change a
seller's policy on the time period during which the seller
will accept returns.
(c) The Department may implement the provisions of this
Section through the use of emergency rules, along with
permanent rules filed concurrently with such emergency rules,
in accordance with the provisions of Section 5-45 of the
Illinois Administrative Procedure Act. For purposes of the
Illinois Administrative Procedure Act, the adoption of rules
to implement the provisions of this Section shall be deemed an
emergency and necessary for the public interest, safety, and
welfare.
(Source: P.A. 96-1012, eff. 7-7-10.)
(35 ILCS 120/2-10)
Sec. 2-10. Rate of tax. Unless otherwise provided in this

HB5477 - 236 - LRB102 25061 HLH 34321 b
Section, the tax under imposed by this Act is imposed at the
general rate on of 6.25% of gross receipts from sales of
tangible personal property made in the course of business.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
the Use Tax Act, the tax is imposed at the rate of 1.25%.
Beginning on August 6, 2010 through August 15, 2010, with
respect to sales tax holiday items as defined in Section 2-8 of
this Act, the tax is imposed at the rate of 1.25%.
Within 14 days after the effective date of this amendatory
Act of the 91st General Assembly, each retailer of motor fuel
and gasohol shall cause the following notice to be posted in a
prominently visible place on each retail dispensing device
that is used to dispense motor fuel or gasohol in the State of
Illinois: "As of July 1, 2000, the State of Illinois has
eliminated the State's share of sales tax on motor fuel and
gasohol through December 31, 2000. The price on this pump
should reflect the elimination of the tax." The notice shall
be printed in bold print on a sign that is no smaller than 4
inches by 8 inches. The sign shall be clearly visible to
customers. Any retailer who fails to post or maintain a
required sign through December 31, 2000 is guilty of a petty
offense for which the fine shall be $500 per day per each
retail premises where a violation occurs.
With respect to gasohol, as defined in the Use Tax Act, the

HB5477 - 237 - LRB102 25061 HLH 34321 b
tax imposed by this Act applies to (i) 70% of the proceeds of
sales made on or after January 1, 1990, and before July 1,
2003, (ii) 80% of the proceeds of sales made on or after July
1, 2003 and on or before July 1, 2017, and (iii) 100% of the
proceeds of sales made thereafter. If, at any time, however,
the tax under this Act on sales of gasohol, as defined in the
Use Tax Act, is imposed at the rate of 1.25%, then the tax
imposed by this Act applies to 100% of the proceeds of sales of
gasohol made during that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the proceeds of sales made on or after July 1, 2003 and on
or before December 31, 2023 but applies to 100% of the proceeds
of sales made thereafter.
With respect to biodiesel blends, as defined in the Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by this Act applies to (i) 80% of the proceeds
of sales made on or after July 1, 2003 and on or before
December 31, 2018 and (ii) 100% of the proceeds of sales made
thereafter. If, at any time, however, the tax under this Act on
sales of biodiesel blends, as defined in the Use Tax Act, with
no less than 1% and no more than 10% biodiesel is imposed at
the rate of 1.25%, then the tax imposed by this Act applies to
100% of the proceeds of sales of biodiesel blends with no less
than 1% and no more than 10% biodiesel made during that time.
With respect to 100% biodiesel, as defined in the Use Tax

HB5477 - 238 - LRB102 25061 HLH 34321 b
Act, and biodiesel blends, as defined in the Use Tax Act, with
more than 10% but no more than 99% biodiesel, the tax imposed
by this Act does not apply to the proceeds of sales made on or
after July 1, 2003 and on or before December 31, 2023 but
applies to 100% of the proceeds of sales made thereafter.
With respect to food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption) and prescription and nonprescription
medicines, drugs, medical appliances, products classified as
Class III medical devices by the United States Food and Drug
Administration that are used for cancer treatment pursuant to
a prescription, as well as any accessories and components
related to those devices, modifications to a motor vehicle for
the purpose of rendering it usable by a person with a
disability, and insulin, blood sugar testing materials,
syringes, and needles used by human diabetics, the tax is
imposed at the rate of 1%. For the purposes of this Section,
until September 1, 2009: the term "soft drinks" means any
complete, finished, ready-to-use, non-alcoholic drink, whether
carbonated or not, including but not limited to soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of whatever
kind or description that are contained in any closed or sealed
bottle, can, carton, or container, regardless of size; but

HB5477 - 239 - LRB102 25061 HLH 34321 b
"soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in the
Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" do not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a

HB5477 - 240 - LRB102 25061 HLH 34321 b
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"
label includes:
(A) A "Drug Facts" panel; or
(B) A statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on the effective date of this amendatory Act of
the 98th General Assembly, "prescription and nonprescription
medicines and drugs" includes medical cannabis purchased from
a registered dispensing organization under the Compassionate

HB5477 - 241 - LRB102 25061 HLH 34321 b
Use of Medical Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the
Compassionate Use of Medical Cannabis Program Act.
(Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;
102-4, eff. 4-27-21.)
(35 ILCS 120/2d) (from Ch. 120, par. 441d)
Sec. 2d. Tax prepayment by motor fuel retailer.
(a) Any person engaged in the business of selling motor
fuel at retail, as defined in the Motor Fuel Tax Law, and who
is not a licensed distributor or supplier, as defined in the
Motor Fuel Tax Law, shall prepay to his or her distributor,
supplier, or other reseller of motor fuel a portion of the tax
imposed by this Act if the distributor, supplier, or other
reseller of motor fuel is registered under Section 2a or
Section 2c of this Act. The prepayment requirement provided
for in this Section does not apply to liquid propane gas.
(b) Beginning on July 1, 2000 and through December 31,
2000, the Retailers' Occupation Tax paid to the distributor,
supplier, or other reseller shall be an amount equal to $0.01
per gallon of the motor fuel, except gasohol as defined in
Section 2-10 of this Act which shall be an amount equal to
$0.01 per gallon, purchased from the distributor, supplier, or

HB5477 - 242 - LRB102 25061 HLH 34321 b
other reseller.
(c) Before July 1, 2000 and then beginning on January 1,
2001 and through June 30, 2003, the Retailers' Occupation Tax
paid to the distributor, supplier, or other reseller shall be
an amount equal to $0.04 per gallon of the motor fuel, except
gasohol as defined in Section 2-10 of this Act which shall be
an amount equal to $0.03 per gallon, purchased from the
distributor, supplier, or other reseller.
(d) Beginning July 1, 2003 and through December 31, 2010,
the Retailers' Occupation Tax paid to the distributor,
supplier, or other reseller shall be an amount equal to $0.06
per gallon of the motor fuel, except gasohol as defined in
Section 2-10 of this Act which shall be an amount equal to
$0.05 per gallon, purchased from the distributor, supplier, or
other reseller.
(e) Beginning on January 1, 2011 and thereafter, the
Retailers' Occupation Tax paid to the distributor, supplier,
or other reseller shall be at the rate established by the
Department under this subsection. The rate shall be
established by the Department on January 1 and July 1 of each
year using the average selling price, as defined in Section 1
of this Act, per gallon of motor fuel sold in the State during
the previous 6 months and multiplying that amount by the
general rate percentage 6.25% to determine the cents per
gallon rate. In the case of biodiesel blends, as defined in
Section 3-42 of the Use Tax Act, with no less than 1% and no

HB5477 - 243 - LRB102 25061 HLH 34321 b
more than 10% biodiesel, and in the case of gasohol, as defined
in Section 3-40 of the Use Tax Act, the rate shall be 80% of
the rate established by the Department under this subsection
for motor fuel. The Department shall provide persons subject
to this Section notice of the rate established under this
subsection at least 20 days prior to each January 1 and July 1.
Publication of the established rate on the Department's
internet website shall constitute sufficient notice under this
Section. The Department may use data derived from independent
surveys conducted or accumulated by third parties to determine
the average selling price per gallon of motor fuel sold in the
State.
(f) Any person engaged in the business of selling motor
fuel at retail shall be entitled to a credit against tax due
under this Act in an amount equal to the tax paid to the
distributor, supplier, or other reseller.
(g) Every distributor, supplier, or other reseller
registered as provided in Section 2a or Section 2c of this Act
shall remit the prepaid tax on all motor fuel that is due from
any person engaged in the business of selling at retail motor
fuel with the returns filed under Section 2f or Section 3 of
this Act, but the vendors discount provided in Section 3 shall
not apply to the amount of prepaid tax that is remitted. Any
distributor or supplier who fails to properly collect and
remit the tax shall be liable for the tax. For purposes of this
Section, the prepaid tax is due on invoiced gallons sold

HB5477 - 244 - LRB102 25061 HLH 34321 b
during a month by the 20th day of the following month.
(Source: P.A. 96-1384, eff. 7-29-10.)
(35 ILCS 120/3) (from Ch. 120, par. 442)
Sec. 3. Except as provided in this Section, on or before
the twentieth day of each calendar month, every person engaged
in the business of selling tangible personal property at
retail in this State during the preceding calendar month shall
file a return with the Department, stating:
1. The name of the seller;
2. His residence address and the address of his
principal place of business and the address of the
principal place of business (if that is a different
address) from which he engages in the business of selling
tangible personal property at retail in this State;
3. Total amount of receipts received by him during the
preceding calendar month or quarter, as the case may be,
from sales of tangible personal property, and from
services furnished, by him during such preceding calendar
month or quarter;
4. Total amount received by him during the preceding
calendar month or quarter on charge and time sales of
tangible personal property, and from services furnished,
by him prior to the month or quarter for which the return
is filed;
5. Deductions allowed by law;

HB5477 - 245 - LRB102 25061 HLH 34321 b
6. Gross receipts which were received by him during
the preceding calendar month or quarter and upon the basis
of which the tax is imposed;
7. The amount of credit provided in Section 2d of this
Act;
8. The amount of tax due;
9. The signature of the taxpayer; and
10. Such other reasonable information as the
Department may require.
On and after January 1, 2018, except for returns for motor
vehicles, watercraft, aircraft, and trailers that are required
to be registered with an agency of this State, with respect to
retailers whose annual gross receipts average $20,000 or more,
all returns required to be filed pursuant to this Act shall be
filed electronically. Retailers who demonstrate that they do
not have access to the Internet or demonstrate hardship in
filing electronically may petition the Department to waive the
electronic filing requirement.
If a taxpayer fails to sign a return within 30 days after
the proper notice and demand for signature by the Department,
the return shall be considered valid and any amount shown to be
due on the return shall be deemed assessed.
Each return shall be accompanied by the statement of
prepaid tax issued pursuant to Section 2e for which credit is
claimed.
Prior to October 1, 2003, and on and after September 1,

HB5477 - 246 - LRB102 25061 HLH 34321 b
2004 a retailer may accept a Manufacturer's Purchase Credit
certification from a purchaser in satisfaction of Use Tax as
provided in Section 3-85 of the Use Tax Act if the purchaser
provides the appropriate documentation as required by Section
3-85 of the Use Tax Act. A Manufacturer's Purchase Credit
certification, accepted by a retailer prior to October 1, 2003
and on and after September 1, 2004 as provided in Section 3-85
of the Use Tax Act, may be used by that retailer to satisfy
Retailers' Occupation Tax liability in the amount claimed in
the certification, not to exceed the general rate percentage
6.25% of the receipts subject to tax from a qualifying
purchase. A Manufacturer's Purchase Credit reported on any
original or amended return filed under this Act after October
20, 2003 for reporting periods prior to September 1, 2004
shall be disallowed. Manufacturer's Purchase Purchaser Credit
reported on annual returns due on or after January 1, 2005 will
be disallowed for periods prior to September 1, 2004. No
Manufacturer's Purchase Credit may be used after September 30,
2003 through August 31, 2004 to satisfy any tax liability
imposed under this Act, including any audit liability.
The Department may require returns to be filed on a
quarterly basis. If so required, a return for each calendar
quarter shall be filed on or before the twentieth day of the
calendar month following the end of such calendar quarter. The
taxpayer shall also file a return with the Department for each
of the first two months of each calendar quarter, on or before

HB5477 - 247 - LRB102 25061 HLH 34321 b
the twentieth day of the following calendar month, stating:
1. The name of the seller;
2. The address of the principal place of business from
which he engages in the business of selling tangible
personal property at retail in this State;
3. The total amount of taxable receipts received by
him during the preceding calendar month from sales of
tangible personal property by him during such preceding
calendar month, including receipts from charge and time
sales, but less all deductions allowed by law;
4. The amount of credit provided in Section 2d of this
Act;
5. The amount of tax due; and
6. Such other reasonable information as the Department
may require.
Every person engaged in the business of selling aviation
fuel at retail in this State during the preceding calendar
month shall, instead of reporting and paying tax as otherwise
required by this Section, report and pay such tax on a separate
aviation fuel tax return. The requirements related to the
return shall be as otherwise provided in this Section.
Notwithstanding any other provisions of this Act to the
contrary, retailers selling aviation fuel shall file all
aviation fuel tax returns and shall make all aviation fuel tax
payments by electronic means in the manner and form required
by the Department. For purposes of this Section, "aviation

HB5477 - 248 - LRB102 25061 HLH 34321 b
fuel" means jet fuel and aviation gasoline.
Beginning on October 1, 2003, any person who is not a
licensed distributor, importing distributor, or manufacturer,
as defined in the Liquor Control Act of 1934, but is engaged in
the business of selling, at retail, alcoholic liquor shall
file a statement with the Department of Revenue, in a format
and at a time prescribed by the Department, showing the total
amount paid for alcoholic liquor purchased during the
preceding month and such other information as is reasonably
required by the Department. The Department may adopt rules to
require that this statement be filed in an electronic or
telephonic format. Such rules may provide for exceptions from
the filing requirements of this paragraph. For the purposes of
this paragraph, the term "alcoholic liquor" shall have the
meaning prescribed in the Liquor Control Act of 1934.
Beginning on October 1, 2003, every distributor, importing
distributor, and manufacturer of alcoholic liquor as defined
in the Liquor Control Act of 1934, shall file a statement with
the Department of Revenue, no later than the 10th day of the
month for the preceding month during which transactions
occurred, by electronic means, showing the total amount of
gross receipts from the sale of alcoholic liquor sold or
distributed during the preceding month to purchasers;
identifying the purchaser to whom it was sold or distributed;
the purchaser's tax registration number; and such other
information reasonably required by the Department. A

HB5477 - 249 - LRB102 25061 HLH 34321 b
distributor, importing distributor, or manufacturer of
alcoholic liquor must personally deliver, mail, or provide by
electronic means to each retailer listed on the monthly
statement a report containing a cumulative total of that
distributor's, importing distributor's, or manufacturer's
total sales of alcoholic liquor to that retailer no later than
the 10th day of the month for the preceding month during which
the transaction occurred. The distributor, importing
distributor, or manufacturer shall notify the retailer as to
the method by which the distributor, importing distributor, or
manufacturer will provide the sales information. If the
retailer is unable to receive the sales information by
electronic means, the distributor, importing distributor, or
manufacturer shall furnish the sales information by personal
delivery or by mail. For purposes of this paragraph, the term
"electronic means" includes, but is not limited to, the use of
a secure Internet website, e-mail, or facsimile.
If a total amount of less than $1 is payable, refundable or
creditable, such amount shall be disregarded if it is less
than 50 cents and shall be increased to $1 if it is 50 cents or
more.
Notwithstanding any other provision of this Act to the
contrary, retailers subject to tax on cannabis shall file all
cannabis tax returns and shall make all cannabis tax payments
by electronic means in the manner and form required by the
Department.

HB5477 - 250 - LRB102 25061 HLH 34321 b
Beginning October 1, 1993, a taxpayer who has an average
monthly tax liability of $150,000 or more shall make all
payments required by rules of the Department by electronic
funds transfer. Beginning October 1, 1994, a taxpayer who has
an average monthly tax liability of $100,000 or more shall
make all payments required by rules of the Department by
electronic funds transfer. Beginning October 1, 1995, a
taxpayer who has an average monthly tax liability of $50,000
or more shall make all payments required by rules of the
Department by electronic funds transfer. Beginning October 1,
2000, a taxpayer who has an annual tax liability of $200,000 or
more shall make all payments required by rules of the
Department by electronic funds transfer. The term "annual tax
liability" shall be the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year. The term "average monthly
tax liability" shall be the sum of the taxpayer's liabilities
under this Act, and under all other State and local occupation
and use tax laws administered by the Department, for the
immediately preceding calendar year divided by 12. Beginning
on October 1, 2002, a taxpayer who has a tax liability in the
amount set forth in subsection (b) of Section 2505-210 of the
Department of Revenue Law shall make all payments required by
rules of the Department by electronic funds transfer.
Before August 1 of each year beginning in 1993, the

HB5477 - 251 - LRB102 25061 HLH 34321 b
Department shall notify all taxpayers required to make
payments by electronic funds transfer. All taxpayers required
to make payments by electronic funds transfer shall make those
payments for a minimum of one year beginning on October 1.
Any taxpayer not required to make payments by electronic
funds transfer may make payments by electronic funds transfer
with the permission of the Department.
All taxpayers required to make payment by electronic funds
transfer and any taxpayers authorized to voluntarily make
payments by electronic funds transfer shall make those
payments in the manner authorized by the Department.
The Department shall adopt such rules as are necessary to
effectuate a program of electronic funds transfer and the
requirements of this Section.
Any amount which is required to be shown or reported on any
return or other document under this Act shall, if such amount
is not a whole-dollar amount, be increased to the nearest
whole-dollar amount in any case where the fractional part of a
dollar is 50 cents or more, and decreased to the nearest
whole-dollar amount where the fractional part of a dollar is
less than 50 cents.
If the retailer is otherwise required to file a monthly
return and if the retailer's average monthly tax liability to
the Department does not exceed $200, the Department may
authorize his returns to be filed on a quarter annual basis,
with the return for January, February and March of a given year

HB5477 - 252 - LRB102 25061 HLH 34321 b
being due by April 20 of such year; with the return for April,
May and June of a given year being due by July 20 of such year;
with the return for July, August and September of a given year
being due by October 20 of such year, and with the return for
October, November and December of a given year being due by
January 20 of the following year.
If the retailer is otherwise required to file a monthly or
quarterly return and if the retailer's average monthly tax
liability with the Department does not exceed $50, the
Department may authorize his returns to be filed on an annual
basis, with the return for a given year being due by January 20
of the following year.
Such quarter annual and annual returns, as to form and
substance, shall be subject to the same requirements as
monthly returns.
Notwithstanding any other provision in this Act concerning
the time within which a retailer may file his return, in the
case of any retailer who ceases to engage in a kind of business
which makes him responsible for filing returns under this Act,
such retailer shall file a final return under this Act with the
Department not more than one month after discontinuing such
business.
Where the same person has more than one business
registered with the Department under separate registrations
under this Act, such person may not file each return that is
due as a single return covering all such registered

HB5477 - 253 - LRB102 25061 HLH 34321 b
businesses, but shall file separate returns for each such
registered business.
In addition, with respect to motor vehicles, watercraft,
aircraft, and trailers that are required to be registered with
an agency of this State, except as otherwise provided in this
Section, every retailer selling this kind of tangible personal
property shall file, with the Department, upon a form to be
prescribed and supplied by the Department, a separate return
for each such item of tangible personal property which the
retailer sells, except that if, in the same transaction, (i) a
retailer of aircraft, watercraft, motor vehicles or trailers
transfers more than one aircraft, watercraft, motor vehicle or
trailer to another aircraft, watercraft, motor vehicle
retailer or trailer retailer for the purpose of resale or (ii)
a retailer of aircraft, watercraft, motor vehicles, or
trailers transfers more than one aircraft, watercraft, motor
vehicle, or trailer to a purchaser for use as a qualifying
rolling stock as provided in Section 2-5 of this Act, then that
seller may report the transfer of all aircraft, watercraft,
motor vehicles or trailers involved in that transaction to the
Department on the same uniform invoice-transaction reporting
return form. For purposes of this Section, "watercraft" means
a Class 2, Class 3, or Class 4 watercraft as defined in Section
3-2 of the Boat Registration and Safety Act, a personal
watercraft, or any boat equipped with an inboard motor.
In addition, with respect to motor vehicles, watercraft,

HB5477 - 254 - LRB102 25061 HLH 34321 b
aircraft, and trailers that are required to be registered with
an agency of this State, every person who is engaged in the
business of leasing or renting such items and who, in
connection with such business, sells any such item to a
retailer for the purpose of resale is, notwithstanding any
other provision of this Section to the contrary, authorized to
meet the return-filing requirement of this Act by reporting
the transfer of all the aircraft, watercraft, motor vehicles,
or trailers transferred for resale during a month to the
Department on the same uniform invoice-transaction reporting
return form on or before the 20th of the month following the
month in which the transfer takes place. Notwithstanding any
other provision of this Act to the contrary, all returns filed
under this paragraph must be filed by electronic means in the
manner and form as required by the Department.
Any retailer who sells only motor vehicles, watercraft,
aircraft, or trailers that are required to be registered with
an agency of this State, so that all retailers' occupation tax
liability is required to be reported, and is reported, on such
transaction reporting returns and who is not otherwise
required to file monthly or quarterly returns, need not file
monthly or quarterly returns. However, those retailers shall
be required to file returns on an annual basis.
The transaction reporting return, in the case of motor
vehicles or trailers that are required to be registered with
an agency of this State, shall be the same document as the

HB5477 - 255 - LRB102 25061 HLH 34321 b
Uniform Invoice referred to in Section 5-402 of the Illinois
Vehicle Code and must show the name and address of the seller;
the name and address of the purchaser; the amount of the
selling price including the amount allowed by the retailer for
traded-in property, if any; the amount allowed by the retailer
for the traded-in tangible personal property, if any, to the
extent to which Section 1 of this Act allows an exemption for
the value of traded-in property; the balance payable after
deducting such trade-in allowance from the total selling
price; the amount of tax due from the retailer with respect to
such transaction; the amount of tax collected from the
purchaser by the retailer on such transaction (or satisfactory
evidence that such tax is not due in that particular instance,
if that is claimed to be the fact); the place and date of the
sale; a sufficient identification of the property sold; such
other information as is required in Section 5-402 of the
Illinois Vehicle Code, and such other information as the
Department may reasonably require.
The transaction reporting return in the case of watercraft
or aircraft must show the name and address of the seller; the
name and address of the purchaser; the amount of the selling
price including the amount allowed by the retailer for
traded-in property, if any; the amount allowed by the retailer
for the traded-in tangible personal property, if any, to the
extent to which Section 1 of this Act allows an exemption for
the value of traded-in property; the balance payable after

HB5477 - 256 - LRB102 25061 HLH 34321 b
deducting such trade-in allowance from the total selling
price; the amount of tax due from the retailer with respect to
such transaction; the amount of tax collected from the
purchaser by the retailer on such transaction (or satisfactory
evidence that such tax is not due in that particular instance,
if that is claimed to be the fact); the place and date of the
sale, a sufficient identification of the property sold, and
such other information as the Department may reasonably
require.
Such transaction reporting return shall be filed not later
than 20 days after the day of delivery of the item that is
being sold, but may be filed by the retailer at any time sooner
than that if he chooses to do so. The transaction reporting
return and tax remittance or proof of exemption from the
Illinois use tax may be transmitted to the Department by way of
the State agency with which, or State officer with whom the
tangible personal property must be titled or registered (if
titling or registration is required) if the Department and
such agency or State officer determine that this procedure
will expedite the processing of applications for title or
registration.
With each such transaction reporting return, the retailer
shall remit the proper amount of tax due (or shall submit
satisfactory evidence that the sale is not taxable if that is
the case), to the Department or its agents, whereupon the
Department shall issue, in the purchaser's name, a use tax

HB5477 - 257 - LRB102 25061 HLH 34321 b
receipt (or a certificate of exemption if the Department is
satisfied that the particular sale is tax exempt) which such
purchaser may submit to the agency with which, or State
officer with whom, he must title or register the tangible
personal property that is involved (if titling or registration
is required) in support of such purchaser's application for an
Illinois certificate or other evidence of title or
registration to such tangible personal property.
No retailer's failure or refusal to remit tax under this
Act precludes a user, who has paid the proper tax to the
retailer, from obtaining his certificate of title or other
evidence of title or registration (if titling or registration
is required) upon satisfying the Department that such user has
paid the proper tax (if tax is due) to the retailer. The
Department shall adopt appropriate rules to carry out the
mandate of this paragraph.
If the user who would otherwise pay tax to the retailer
wants the transaction reporting return filed and the payment
of the tax or proof of exemption made to the Department before
the retailer is willing to take these actions and such user has
not paid the tax to the retailer, such user may certify to the
fact of such delay by the retailer and may (upon the Department
being satisfied of the truth of such certification) transmit
the information required by the transaction reporting return
and the remittance for tax or proof of exemption directly to
the Department and obtain his tax receipt or exemption

HB5477 - 258 - LRB102 25061 HLH 34321 b
determination, in which event the transaction reporting return
and tax remittance (if a tax payment was required) shall be
credited by the Department to the proper retailer's account
with the Department, but without the 2.1% or 1.75% discount
provided for in this Section being allowed. When the user pays
the tax directly to the Department, he shall pay the tax in the
same amount and in the same form in which it would be remitted
if the tax had been remitted to the Department by the retailer.
Refunds made by the seller during the preceding return
period to purchasers, on account of tangible personal property
returned to the seller, shall be allowed as a deduction under
subdivision 5 of his monthly or quarterly return, as the case
may be, in case the seller had theretofore included the
receipts from the sale of such tangible personal property in a
return filed by him and had paid the tax imposed by this Act
with respect to such receipts.
Where the seller is a corporation, the return filed on
behalf of such corporation shall be signed by the president,
vice-president, secretary or treasurer or by the properly
accredited agent of such corporation.
Where the seller is a limited liability company, the
return filed on behalf of the limited liability company shall
be signed by a manager, member, or properly accredited agent
of the limited liability company.
Except as provided in this Section, the retailer filing
the return under this Section shall, at the time of filing such

HB5477 - 259 - LRB102 25061 HLH 34321 b
return, pay to the Department the amount of tax imposed by this
Act less a discount of 2.1% prior to January 1, 1990 and 1.75%
on and after January 1, 1990, or $5 per calendar year,
whichever is greater, which is allowed to reimburse the
retailer for the expenses incurred in keeping records,
preparing and filing returns, remitting the tax and supplying
data to the Department on request. On and after January 1,
2021, a certified service provider, as defined in the Leveling
the Playing Field for Illinois Retail Act, filing the return
under this Section on behalf of a remote retailer shall, at the
time of such return, pay to the Department the amount of tax
imposed by this Act less a discount of 1.75%. A remote retailer
using a certified service provider to file a return on its
behalf, as provided in the Leveling the Playing Field for
Illinois Retail Act, is not eligible for the discount. The
discount under this Section is not allowed for the 1.25%
portion of taxes paid on aviation fuel that is subject to the
revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
47133. Any prepayment made pursuant to Section 2d of this Act
shall be included in the amount on which such 2.1% or 1.75%
discount is computed. In the case of retailers who report and
pay the tax on a transaction by transaction basis, as provided
in this Section, such discount shall be taken with each such
tax remittance instead of when such retailer files his
periodic return. The discount allowed under this Section is
allowed only for returns that are filed in the manner required

HB5477 - 260 - LRB102 25061 HLH 34321 b
by this Act. The Department may disallow the discount for
retailers whose certificate of registration is revoked at the
time the return is filed, but only if the Department's
decision to revoke the certificate of registration has become
final.
Before October 1, 2000, if the taxpayer's average monthly
tax liability to the Department under this Act, the Use Tax
Act, the Service Occupation Tax Act, and the Service Use Tax
Act, excluding any liability for prepaid sales tax to be
remitted in accordance with Section 2d of this Act, was
$10,000 or more during the preceding 4 complete calendar
quarters, he shall file a return with the Department each
month by the 20th day of the month next following the month
during which such tax liability is incurred and shall make
payments to the Department on or before the 7th, 15th, 22nd and
last day of the month during which such liability is incurred.
On and after October 1, 2000, if the taxpayer's average
monthly tax liability to the Department under this Act, the
Use Tax Act, the Service Occupation Tax Act, and the Service
Use Tax Act, excluding any liability for prepaid sales tax to
be remitted in accordance with Section 2d of this Act, was
$20,000 or more during the preceding 4 complete calendar
quarters, he shall file a return with the Department each
month by the 20th day of the month next following the month
during which such tax liability is incurred and shall make
payment to the Department on or before the 7th, 15th, 22nd and

HB5477 - 261 - LRB102 25061 HLH 34321 b
last day of the month during which such liability is incurred.
If the month during which such tax liability is incurred began
prior to January 1, 1985, each payment shall be in an amount
equal to 1/4 of the taxpayer's actual liability for the month
or an amount set by the Department not to exceed 1/4 of the
average monthly liability of the taxpayer to the Department
for the preceding 4 complete calendar quarters (excluding the
month of highest liability and the month of lowest liability
in such 4 quarter period). If the month during which such tax
liability is incurred begins on or after January 1, 1985 and
prior to January 1, 1987, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 27.5% of the taxpayer's liability for the same
calendar month of the preceding year. If the month during
which such tax liability is incurred begins on or after
January 1, 1987 and prior to January 1, 1988, each payment
shall be in an amount equal to 22.5% of the taxpayer's actual
liability for the month or 26.25% of the taxpayer's liability
for the same calendar month of the preceding year. If the month
during which such tax liability is incurred begins on or after
January 1, 1988, and prior to January 1, 1989, or begins on or
after January 1, 1996, each payment shall be in an amount equal
to 22.5% of the taxpayer's actual liability for the month or
25% of the taxpayer's liability for the same calendar month of
the preceding year. If the month during which such tax
liability is incurred begins on or after January 1, 1989, and

HB5477 - 262 - LRB102 25061 HLH 34321 b
prior to January 1, 1996, each payment shall be in an amount
equal to 22.5% of the taxpayer's actual liability for the
month or 25% of the taxpayer's liability for the same calendar
month of the preceding year or 100% of the taxpayer's actual
liability for the quarter monthly reporting period. The amount
of such quarter monthly payments shall be credited against the
final tax liability of the taxpayer's return for that month.
Before October 1, 2000, once applicable, the requirement of
the making of quarter monthly payments to the Department by
taxpayers having an average monthly tax liability of $10,000
or more as determined in the manner provided above shall
continue until such taxpayer's average monthly liability to
the Department during the preceding 4 complete calendar
quarters (excluding the month of highest liability and the
month of lowest liability) is less than $9,000, or until such
taxpayer's average monthly liability to the Department as
computed for each calendar quarter of the 4 preceding complete
calendar quarter period is less than $10,000. However, if a
taxpayer can show the Department that a substantial change in
the taxpayer's business has occurred which causes the taxpayer
to anticipate that his average monthly tax liability for the
reasonably foreseeable future will fall below the $10,000
threshold stated above, then such taxpayer may petition the
Department for a change in such taxpayer's reporting status.
On and after October 1, 2000, once applicable, the requirement
of the making of quarter monthly payments to the Department by

HB5477 - 263 - LRB102 25061 HLH 34321 b
taxpayers having an average monthly tax liability of $20,000
or more as determined in the manner provided above shall
continue until such taxpayer's average monthly liability to
the Department during the preceding 4 complete calendar
quarters (excluding the month of highest liability and the
month of lowest liability) is less than $19,000 or until such
taxpayer's average monthly liability to the Department as
computed for each calendar quarter of the 4 preceding complete
calendar quarter period is less than $20,000. However, if a
taxpayer can show the Department that a substantial change in
the taxpayer's business has occurred which causes the taxpayer
to anticipate that his average monthly tax liability for the
reasonably foreseeable future will fall below the $20,000
threshold stated above, then such taxpayer may petition the
Department for a change in such taxpayer's reporting status.
The Department shall change such taxpayer's reporting status
unless it finds that such change is seasonal in nature and not
likely to be long term. If any such quarter monthly payment is
not paid at the time or in the amount required by this Section,
then the taxpayer shall be liable for penalties and interest
on the difference between the minimum amount due as a payment
and the amount of such quarter monthly payment actually and
timely paid, except insofar as the taxpayer has previously
made payments for that month to the Department in excess of the
minimum payments previously due as provided in this Section.
The Department shall make reasonable rules and regulations to

HB5477 - 264 - LRB102 25061 HLH 34321 b
govern the quarter monthly payment amount and quarter monthly
payment dates for taxpayers who file on other than a calendar
monthly basis.
The provisions of this paragraph apply before October 1,
2001. Without regard to whether a taxpayer is required to make
quarter monthly payments as specified above, any taxpayer who
is required by Section 2d of this Act to collect and remit
prepaid taxes and has collected prepaid taxes which average in
excess of $25,000 per month during the preceding 2 complete
calendar quarters, shall file a return with the Department as
required by Section 2f and shall make payments to the
Department on or before the 7th, 15th, 22nd and last day of the
month during which such liability is incurred. If the month
during which such tax liability is incurred began prior to
September 1, 1985 (the effective date of Public Act 84-221),
each payment shall be in an amount not less than 22.5% of the
taxpayer's actual liability under Section 2d. If the month
during which such tax liability is incurred begins on or after
January 1, 1986, each payment shall be in an amount equal to
22.5% of the taxpayer's actual liability for the month or
27.5% of the taxpayer's liability for the same calendar month
of the preceding calendar year. If the month during which such
tax liability is incurred begins on or after January 1, 1987,
each payment shall be in an amount equal to 22.5% of the
taxpayer's actual liability for the month or 26.25% of the
taxpayer's liability for the same calendar month of the

HB5477 - 265 - LRB102 25061 HLH 34321 b
preceding year. The amount of such quarter monthly payments
shall be credited against the final tax liability of the
taxpayer's return for that month filed under this Section or
Section 2f, as the case may be. Once applicable, the
requirement of the making of quarter monthly payments to the
Department pursuant to this paragraph shall continue until
such taxpayer's average monthly prepaid tax collections during
the preceding 2 complete calendar quarters is $25,000 or less.
If any such quarter monthly payment is not paid at the time or
in the amount required, the taxpayer shall be liable for
penalties and interest on such difference, except insofar as
the taxpayer has previously made payments for that month in
excess of the minimum payments previously due.
The provisions of this paragraph apply on and after
October 1, 2001. Without regard to whether a taxpayer is
required to make quarter monthly payments as specified above,
any taxpayer who is required by Section 2d of this Act to
collect and remit prepaid taxes and has collected prepaid
taxes that average in excess of $20,000 per month during the
preceding 4 complete calendar quarters shall file a return
with the Department as required by Section 2f and shall make
payments to the Department on or before the 7th, 15th, 22nd and
last day of the month during which the liability is incurred.
Each payment shall be in an amount equal to 22.5% of the
taxpayer's actual liability for the month or 25% of the
taxpayer's liability for the same calendar month of the

HB5477 - 266 - LRB102 25061 HLH 34321 b
preceding year. The amount of the quarter monthly payments
shall be credited against the final tax liability of the
taxpayer's return for that month filed under this Section or
Section 2f, as the case may be. Once applicable, the
requirement of the making of quarter monthly payments to the
Department pursuant to this paragraph shall continue until the
taxpayer's average monthly prepaid tax collections during the
preceding 4 complete calendar quarters (excluding the month of
highest liability and the month of lowest liability) is less
than $19,000 or until such taxpayer's average monthly
liability to the Department as computed for each calendar
quarter of the 4 preceding complete calendar quarters is less
than $20,000. If any such quarter monthly payment is not paid
at the time or in the amount required, the taxpayer shall be
liable for penalties and interest on such difference, except
insofar as the taxpayer has previously made payments for that
month in excess of the minimum payments previously due.
If any payment provided for in this Section exceeds the
taxpayer's liabilities under this Act, the Use Tax Act, the
Service Occupation Tax Act and the Service Use Tax Act, as
shown on an original monthly return, the Department shall, if
requested by the taxpayer, issue to the taxpayer a credit
memorandum no later than 30 days after the date of payment. The
credit evidenced by such credit memorandum may be assigned by
the taxpayer to a similar taxpayer under this Act, the Use Tax
Act, the Service Occupation Tax Act or the Service Use Tax Act,

HB5477 - 267 - LRB102 25061 HLH 34321 b
in accordance with reasonable rules and regulations to be
prescribed by the Department. If no such request is made, the
taxpayer may credit such excess payment against tax liability
subsequently to be remitted to the Department under this Act,
the Use Tax Act, the Service Occupation Tax Act or the Service
Use Tax Act, in accordance with reasonable rules and
regulations prescribed by the Department. If the Department
subsequently determined that all or any part of the credit
taken was not actually due to the taxpayer, the taxpayer's
2.1% and 1.75% vendor's discount shall be reduced by 2.1% or
1.75% of the difference between the credit taken and that
actually due, and that taxpayer shall be liable for penalties
and interest on such difference.
If a retailer of motor fuel is entitled to a credit under
Section 2d of this Act which exceeds the taxpayer's liability
to the Department under this Act for the month for which the
taxpayer is filing a return, the Department shall issue the
taxpayer a credit memorandum for the excess.
Beginning January 1, 1990, each month the Department shall
pay into the Local Government Tax Fund, a special fund in the
State treasury which is hereby created, the net revenue
realized for the preceding month from the 1% tax imposed under
this Act.
Beginning January 1, 1990, each month the Department shall
pay into the County and Mass Transit District Fund, a special
fund in the State treasury which is hereby created, 4% of the

HB5477 - 268 - LRB102 25061 HLH 34321 b
net revenue realized for the preceding month from the 6.25%
general rate other than aviation fuel sold on or after
December 1, 2019. This exception for aviation fuel only
applies for so long as the revenue use requirements of 49
U.S.C. 47107(b) and 49 U.S.C. 47133 are binding on the State.
Beginning August 1, 2000, each month the Department shall
pay into the County and Mass Transit District Fund 20% of the
net revenue realized for the preceding month from the 1.25%
rate on the selling price of motor fuel and gasohol. Beginning
September 1, 2010, each month the Department shall pay into
the County and Mass Transit District Fund 20% of the net
revenue realized for the preceding month from the 1.25% rate
on the selling price of sales tax holiday items.
Beginning January 1, 1990, each month the Department shall
pay into the Local Government Tax Fund 16% of the net revenue
realized for the preceding month from the 6.25% general rate
on the selling price of tangible personal property other than
aviation fuel sold on or after December 1, 2019. This
exception for aviation fuel only applies for so long as the
revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
47133 are binding on the State.
For aviation fuel sold on or after December 1, 2019, each
month the Department shall pay into the State Aviation Program
Fund 20% of the net revenue realized for the preceding month
from the 6.25% general rate on the selling price of aviation
fuel, less an amount estimated by the Department to be

HB5477 - 269 - LRB102 25061 HLH 34321 b
required for refunds of the 20% portion of the tax on aviation
fuel under this Act, which amount shall be deposited into the
Aviation Fuel Sales Tax Refund Fund. The Department shall only
pay moneys into the State Aviation Program Fund and the
Aviation Fuel Sales Tax Refund Fund under this Act for so long
as the revenue use requirements of 49 U.S.C. 47107(b) and 49
U.S.C. 47133 are binding on the State.
Beginning August 1, 2000, each month the Department shall
pay into the Local Government Tax Fund 80% of the net revenue
realized for the preceding month from the 1.25% rate on the
selling price of motor fuel and gasohol. Beginning September
1, 2010, each month the Department shall pay into the Local
Government Tax Fund 80% of the net revenue realized for the
preceding month from the 1.25% rate on the selling price of
sales tax holiday items.
Beginning October 1, 2009, each month the Department shall
pay into the Capital Projects Fund an amount that is equal to
an amount estimated by the Department to represent 80% of the
net revenue realized for the preceding month from the sale of
candy, grooming and hygiene products, and soft drinks that had
been taxed at a rate of 1% prior to September 1, 2009 but that
are now taxed at the general rate 6.25%.
Beginning July 1, 2011, each month the Department shall
pay into the Clean Air Act Permit Fund 80% of the net revenue
realized for the preceding month from the 6.25% general rate
on the selling price of sorbents used in Illinois in the

HB5477 - 270 - LRB102 25061 HLH 34321 b
process of sorbent injection as used to comply with the
Environmental Protection Act or the federal Clean Air Act, but
the total payment into the Clean Air Act Permit Fund under this
Act and the Use Tax Act shall not exceed $2,000,000 in any
fiscal year.
Beginning July 1, 2013, each month the Department shall
pay into the Underground Storage Tank Fund from the proceeds
collected under this Act, the Use Tax Act, the Service Use Tax
Act, and the Service Occupation Tax Act an amount equal to the
average monthly deficit in the Underground Storage Tank Fund
during the prior year, as certified annually by the Illinois
Environmental Protection Agency, but the total payment into
the Underground Storage Tank Fund under this Act, the Use Tax
Act, the Service Use Tax Act, and the Service Occupation Tax
Act shall not exceed $18,000,000 in any State fiscal year. As
used in this paragraph, the "average monthly deficit" shall be
equal to the difference between the average monthly claims for
payment by the fund and the average monthly revenues deposited
into the fund, excluding payments made pursuant to this
paragraph.
Beginning July 1, 2015, of the remainder of the moneys
received by the Department under the Use Tax Act, the Service
Use Tax Act, the Service Occupation Tax Act, and this Act, each
month the Department shall deposit $500,000 into the State
Crime Laboratory Fund.
Of the remainder of the moneys received by the Department

HB5477 - 271 - LRB102 25061 HLH 34321 b
pursuant to this Act, (a) 1.75% thereof shall be paid into the
Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
and after July 1, 1989, 3.8% thereof shall be paid into the
Build Illinois Fund; provided, however, that if in any fiscal
year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
may be, of the moneys received by the Department and required
to be paid into the Build Illinois Fund pursuant to this Act,
Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
Act, and Section 9 of the Service Occupation Tax Act, such Acts
being hereinafter called the "Tax Acts" and such aggregate of
2.2% or 3.8%, as the case may be, of moneys being hereinafter
called the "Tax Act Amount", and (2) the amount transferred to
the Build Illinois Fund from the State and Local Sales Tax
Reform Fund shall be less than the Annual Specified Amount (as
hereinafter defined), an amount equal to the difference shall
be immediately paid into the Build Illinois Fund from other
moneys received by the Department pursuant to the Tax Acts;
the "Annual Specified Amount" means the amounts specified
below for fiscal years 1986 through 1993:
Fiscal Year Annual Specified Amount
1986 $54,800,000
1987 $76,650,000
1988 $80,480,000
1989 $88,510,000
1990 $115,330,000
1991 $145,470,000

HB5477 - 272 - LRB102 25061 HLH 34321 b
1992 $182,730,000
1993 $206,520,000;
and means the Certified Annual Debt Service Requirement (as
defined in Section 13 of the Build Illinois Bond Act) or the
Tax Act Amount, whichever is greater, for fiscal year 1994 and
each fiscal year thereafter; and further provided, that if on
the last business day of any month the sum of (1) the Tax Act
Amount required to be deposited into the Build Illinois Bond
Account in the Build Illinois Fund during such month and (2)
the amount transferred to the Build Illinois Fund from the
State and Local Sales Tax Reform Fund shall have been less than
1/12 of the Annual Specified Amount, an amount equal to the
difference shall be immediately paid into the Build Illinois
Fund from other moneys received by the Department pursuant to
the Tax Acts; and, further provided, that in no event shall the
payments required under the preceding proviso result in
aggregate payments into the Build Illinois Fund pursuant to
this clause (b) for any fiscal year in excess of the greater of
(i) the Tax Act Amount or (ii) the Annual Specified Amount for
such fiscal year. The amounts payable into the Build Illinois
Fund under clause (b) of the first sentence in this paragraph
shall be payable only until such time as the aggregate amount
on deposit under each trust indenture securing Bonds issued
and outstanding pursuant to the Build Illinois Bond Act is
sufficient, taking into account any future investment income,
to fully provide, in accordance with such indenture, for the

HB5477 - 273 - LRB102 25061 HLH 34321 b
defeasance of or the payment of the principal of, premium, if
any, and interest on the Bonds secured by such indenture and on
any Bonds expected to be issued thereafter and all fees and
costs payable with respect thereto, all as certified by the
Director of the Bureau of the Budget (now Governor's Office of
Management and Budget). If on the last business day of any
month in which Bonds are outstanding pursuant to the Build
Illinois Bond Act, the aggregate of moneys deposited in the
Build Illinois Bond Account in the Build Illinois Fund in such
month shall be less than the amount required to be transferred
in such month from the Build Illinois Bond Account to the Build
Illinois Bond Retirement and Interest Fund pursuant to Section
13 of the Build Illinois Bond Act, an amount equal to such
deficiency shall be immediately paid from other moneys
received by the Department pursuant to the Tax Acts to the
Build Illinois Fund; provided, however, that any amounts paid
to the Build Illinois Fund in any fiscal year pursuant to this
sentence shall be deemed to constitute payments pursuant to
clause (b) of the first sentence of this paragraph and shall
reduce the amount otherwise payable for such fiscal year
pursuant to that clause (b). The moneys received by the
Department pursuant to this Act and required to be deposited
into the Build Illinois Fund are subject to the pledge, claim
and charge set forth in Section 12 of the Build Illinois Bond
Act.
Subject to payment of amounts into the Build Illinois Fund

HB5477 - 274 - LRB102 25061 HLH 34321 b
as provided in the preceding paragraph or in any amendment
thereto hereafter enacted, the following specified monthly
installment of the amount requested in the certificate of the
Chairman of the Metropolitan Pier and Exposition Authority
provided under Section 8.25f of the State Finance Act, but not
in excess of sums designated as "Total Deposit", shall be
deposited in the aggregate from collections under Section 9 of
the Use Tax Act, Section 9 of the Service Use Tax Act, Section
9 of the Service Occupation Tax Act, and Section 3 of the
Retailers' Occupation Tax Act into the McCormick Place
Expansion Project Fund in the specified fiscal years.
Fiscal Year Total Deposit
1993 $0
1994 53,000,000
1995 58,000,000
1996 61,000,000
1997 64,000,000
1998 68,000,000
1999 71,000,000
2000 75,000,000
2001 80,000,000
2002 93,000,000
2003 99,000,000
2004 103,000,000
2005 108,000,000
2006 113,000,000

HB5477 - 275 - LRB102 25061 HLH 34321 b
2007 119,000,000
2008 126,000,000
2009 132,000,000
2010 139,000,000
2011 146,000,000
2012 153,000,000
2013 161,000,000
2014 170,000,000
2015 179,000,000
2016 189,000,000
2017 199,000,000
2018 210,000,000
2019 221,000,000
2020 233,000,000
2021 300,000,000
2022 300,000,000
2023 300,000,000
2024 300,000,000
2025 300,000,000
2026 300,000,000
2027 375,000,000
2028 375,000,000
2029 375,000,000
2030 375,000,000
2031 375,000,000
2032 375,000,000

HB5477 - 276 - LRB102 25061 HLH 34321 b
2033 375,000,000
2034 375,000,000
2035 375,000,000
2036 450,000,000
and
each fiscal year
thereafter that bonds
are outstanding under
Section 13.2 of the
Metropolitan Pier and
Exposition Authority Act,
but not after fiscal year 2060.
Beginning July 20, 1993 and in each month of each fiscal
year thereafter, one-eighth of the amount requested in the
certificate of the Chairman of the Metropolitan Pier and
Exposition Authority for that fiscal year, less the amount
deposited into the McCormick Place Expansion Project Fund by
the State Treasurer in the respective month under subsection
(g) of Section 13 of the Metropolitan Pier and Exposition
Authority Act, plus cumulative deficiencies in the deposits
required under this Section for previous months and years,
shall be deposited into the McCormick Place Expansion Project
Fund, until the full amount requested for the fiscal year, but
not in excess of the amount specified above as "Total
Deposit", has been deposited.
Subject to payment of amounts into the Capital Projects

HB5477 - 277 - LRB102 25061 HLH 34321 b
Fund, the Clean Air Act Permit Fund, the Build Illinois Fund,
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, for aviation fuel sold on or after December 1, 2019,
the Department shall each month deposit into the Aviation Fuel
Sales Tax Refund Fund an amount estimated by the Department to
be required for refunds of the 80% portion of the tax on
aviation fuel under this Act. The Department shall only
deposit moneys into the Aviation Fuel Sales Tax Refund Fund
under this paragraph for so long as the revenue use
requirements of 49 U.S.C. 47107(b) and 49 U.S.C. 47133 are
binding on the State.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, beginning July 1, 1993 and ending on September 30,
2013, the Department shall each month pay into the Illinois
Tax Increment Fund 0.27% of 80% of the net revenue realized for
the preceding month from the 6.25% general rate on the selling
price of tangible personal property.
Subject to payment of amounts into the Build Illinois Fund
and the McCormick Place Expansion Project Fund pursuant to the
preceding paragraphs or in any amendments thereto hereafter
enacted, beginning with the receipt of the first report of
taxes paid by an eligible business and continuing for a
25-year period, the Department shall each month pay into the

HB5477 - 278 - LRB102 25061 HLH 34321 b
Energy Infrastructure Fund 80% of the net revenue realized
from the 6.25% general rate on the selling price of
Illinois-mined coal that was sold to an eligible business. For
purposes of this paragraph, the term "eligible business" means
a new electric generating facility certified pursuant to
Section 605-332 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of Illinois.
Subject to payment of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, and the Energy Infrastructure Fund
pursuant to the preceding paragraphs or in any amendments to
this Section hereafter enacted, beginning on the first day of
the first calendar month to occur on or after August 26, 2014
(the effective date of Public Act 98-1098), each month, from
the collections made under Section 9 of the Use Tax Act,
Section 9 of the Service Use Tax Act, Section 9 of the Service
Occupation Tax Act, and Section 3 of the Retailers' Occupation
Tax Act, the Department shall pay into the Tax Compliance and
Administration Fund, to be used, subject to appropriation, to
fund additional auditors and compliance personnel at the
Department of Revenue, an amount equal to 1/12 of 5% of 80% of
the cash receipts collected during the preceding fiscal year
by the Audit Bureau of the Department under the Use Tax Act,
the Service Use Tax Act, the Service Occupation Tax Act, the
Retailers' Occupation Tax Act, and associated local occupation
and use taxes administered by the Department.

HB5477 - 279 - LRB102 25061 HLH 34321 b
Subject to payments of amounts into the Build Illinois
Fund, the McCormick Place Expansion Project Fund, the Illinois
Tax Increment Fund, the Energy Infrastructure Fund, and the
Tax Compliance and Administration Fund as provided in this
Section, beginning on July 1, 2018 the Department shall pay
each month into the Downstate Public Transportation Fund the
moneys required to be so paid under Section 2-3 of the
Downstate Public Transportation Act.
Subject to successful execution and delivery of a
public-private agreement between the public agency and private
entity and completion of the civic build, beginning on July 1,
2023, of the remainder of the moneys received by the
Department under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and this Act, the Department shall
deposit the following specified deposits in the aggregate from
collections under the Use Tax Act, the Service Use Tax Act, the
Service Occupation Tax Act, and the Retailers' Occupation Tax
Act, as required under Section 8.25g of the State Finance Act
for distribution consistent with the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
The moneys received by the Department pursuant to this Act and
required to be deposited into the Civic and Transit
Infrastructure Fund are subject to the pledge, claim and
charge set forth in Section 25-55 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
As used in this paragraph, "civic build", "private entity",

HB5477 - 280 - LRB102 25061 HLH 34321 b
"public-private agreement", and "public agency" have the
meanings provided in Section 25-10 of the Public-Private
Partnership for Civic and Transit Infrastructure Project Act.
Fiscal Year.............................Total Deposit
2024.....................................$200,000,000
2025....................................$206,000,000
2026....................................$212,200,000
2027....................................$218,500,000
2028....................................$225,100,000
2029....................................$288,700,000
2030....................................$298,900,000
2031....................................$309,300,000
2032....................................$320,100,000
2033....................................$331,200,000
2034....................................$341,200,000
2035....................................$351,400,000
2036....................................$361,900,000
2037....................................$372,800,000
2038....................................$384,000,000
2039....................................$395,500,000
2040....................................$407,400,000
2041....................................$419,600,000
2042....................................$432,200,000
2043....................................$445,100,000
Beginning July 1, 2021 and until July 1, 2022, subject to
the payment of amounts into the County and Mass Transit

HB5477 - 281 - LRB102 25061 HLH 34321 b
District Fund, the Local Government Tax Fund, the Build
Illinois Fund, the McCormick Place Expansion Project Fund, the
Illinois Tax Increment Fund, the Energy Infrastructure Fund,
and the Tax Compliance and Administration Fund as provided in
this Section, the Department shall pay each month into the
Road Fund the amount estimated to represent 16% of the net
revenue realized from the taxes imposed on motor fuel and
gasohol. Beginning July 1, 2022 and until July 1, 2023,
subject to the payment of amounts into the County and Mass
Transit District Fund, the Local Government Tax Fund, the
Build Illinois Fund, the McCormick Place Expansion Project
Fund, the Illinois Tax Increment Fund, the Energy
Infrastructure Fund, and the Tax Compliance and Administration
Fund as provided in this Section, the Department shall pay
each month into the Road Fund the amount estimated to
represent 32% of the net revenue realized from the taxes
imposed on motor fuel and gasohol. Beginning July 1, 2023 and
until July 1, 2024, subject to the payment of amounts into the
County and Mass Transit District Fund, the Local Government
Tax Fund, the Build Illinois Fund, the McCormick Place
Expansion Project Fund, the Illinois Tax Increment Fund, the
Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 48% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning July 1,

HB5477 - 282 - LRB102 25061 HLH 34321 b
2024 and until July 1, 2025, subject to the payment of amounts
into the County and Mass Transit District Fund, the Local
Government Tax Fund, the Build Illinois Fund, the McCormick
Place Expansion Project Fund, the Illinois Tax Increment Fund,
the Energy Infrastructure Fund, and the Tax Compliance and
Administration Fund as provided in this Section, the
Department shall pay each month into the Road Fund the amount
estimated to represent 64% of the net revenue realized from
the taxes imposed on motor fuel and gasohol. Beginning on July
1, 2025, subject to the payment of amounts into the County and
Mass Transit District Fund, the Local Government Tax Fund, the
Build Illinois Fund, the McCormick Place Expansion Project
Fund, the Illinois Tax Increment Fund, the Energy
Infrastructure Fund, and the Tax Compliance and Administration
Fund as provided in this Section, the Department shall pay
each month into the Road Fund the amount estimated to
represent 80% of the net revenue realized from the taxes
imposed on motor fuel and gasohol. As used in this paragraph
"motor fuel" has the meaning given to that term in Section 1.1
of the Motor Fuel Tax Act, and "gasohol" has the meaning given
to that term in Section 3-40 of the Use Tax Act.
Of the remainder of the moneys received by the Department
pursuant to this Act, 75% thereof shall be paid into the State
Treasury and 25% shall be reserved in a special account and
used only for the transfer to the Common School Fund as part of
the monthly transfer from the General Revenue Fund in

HB5477 - 283 - LRB102 25061 HLH 34321 b
accordance with Section 8a of the State Finance Act.
The Department may, upon separate written notice to a
taxpayer, require the taxpayer to prepare and file with the
Department on a form prescribed by the Department within not
less than 60 days after receipt of the notice an annual
information return for the tax year specified in the notice.
Such annual return to the Department shall include a statement
of gross receipts as shown by the retailer's last Federal
income tax return. If the total receipts of the business as
reported in the Federal income tax return do not agree with the
gross receipts reported to the Department of Revenue for the
same period, the retailer shall attach to his annual return a
schedule showing a reconciliation of the 2 amounts and the
reasons for the difference. The retailer's annual return to
the Department shall also disclose the cost of goods sold by
the retailer during the year covered by such return, opening
and closing inventories of such goods for such year, costs of
goods used from stock or taken from stock and given away by the
retailer during such year, payroll information of the
retailer's business during such year and any additional
reasonable information which the Department deems would be
helpful in determining the accuracy of the monthly, quarterly
or annual returns filed by such retailer as provided for in
this Section.
If the annual information return required by this Section
is not filed when and as required, the taxpayer shall be liable

HB5477 - 284 - LRB102 25061 HLH 34321 b
as follows:
(i) Until January 1, 1994, the taxpayer shall be
liable for a penalty equal to 1/6 of 1% of the tax due from
such taxpayer under this Act during the period to be
covered by the annual return for each month or fraction of
a month until such return is filed as required, the
penalty to be assessed and collected in the same manner as
any other penalty provided for in this Act.
(ii) On and after January 1, 1994, the taxpayer shall
be liable for a penalty as described in Section 3-4 of the
Uniform Penalty and Interest Act.
The chief executive officer, proprietor, owner or highest
ranking manager shall sign the annual return to certify the
accuracy of the information contained therein. Any person who
willfully signs the annual return containing false or
inaccurate information shall be guilty of perjury and punished
accordingly. The annual return form prescribed by the
Department shall include a warning that the person signing the
return may be liable for perjury.
The provisions of this Section concerning the filing of an
annual information return do not apply to a retailer who is not
required to file an income tax return with the United States
Government.
As soon as possible after the first day of each month, upon
certification of the Department of Revenue, the Comptroller
shall order transferred and the Treasurer shall transfer from

HB5477 - 285 - LRB102 25061 HLH 34321 b
the General Revenue Fund to the Motor Fuel Tax Fund an amount
equal to 1.7% of 80% of the net revenue realized under this Act
for the second preceding month. Beginning April 1, 2000, this
transfer is no longer required and shall not be made.
Net revenue realized for a month shall be the revenue
collected by the State pursuant to this Act, less the amount
paid out during that month as refunds to taxpayers for
overpayment of liability.
For greater simplicity of administration, manufacturers,
importers and wholesalers whose products are sold at retail in
Illinois by numerous retailers, and who wish to do so, may
assume the responsibility for accounting and paying to the
Department all tax accruing under this Act with respect to
such sales, if the retailers who are affected do not make
written objection to the Department to this arrangement.
Any person who promotes, organizes, provides retail
selling space for concessionaires or other types of sellers at
the Illinois State Fair, DuQuoin State Fair, county fairs,
local fairs, art shows, flea markets and similar exhibitions
or events, including any transient merchant as defined by
Section 2 of the Transient Merchant Act of 1987, is required to
file a report with the Department providing the name of the
merchant's business, the name of the person or persons engaged
in merchant's business, the permanent address and Illinois
Retailers Occupation Tax Registration Number of the merchant,
the dates and location of the event and other reasonable

HB5477 - 286 - LRB102 25061 HLH 34321 b
information that the Department may require. The report must
be filed not later than the 20th day of the month next
following the month during which the event with retail sales
was held. Any person who fails to file a report required by
this Section commits a business offense and is subject to a
fine not to exceed $250.
Any person engaged in the business of selling tangible
personal property at retail as a concessionaire or other type
of seller at the Illinois State Fair, county fairs, art shows,
flea markets and similar exhibitions or events, or any
transient merchants, as defined by Section 2 of the Transient
Merchant Act of 1987, may be required to make a daily report of
the amount of such sales to the Department and to make a daily
payment of the full amount of tax due. The Department shall
impose this requirement when it finds that there is a
significant risk of loss of revenue to the State at such an
exhibition or event. Such a finding shall be based on evidence
that a substantial number of concessionaires or other sellers
who are not residents of Illinois will be engaging in the
business of selling tangible personal property at retail at
the exhibition or event, or other evidence of a significant
risk of loss of revenue to the State. The Department shall
notify concessionaires and other sellers affected by the
imposition of this requirement. In the absence of notification
by the Department, the concessionaires and other sellers shall
file their returns as otherwise required in this Section.

HB5477 - 287 - LRB102 25061 HLH 34321 b
(Source: P.A. 101-10, Article 15, Section 15-25, eff. 6-5-19;
101-10, Article 25, Section 25-120, eff. 6-5-19; 101-27, eff.
6-25-19; 101-32, eff. 6-28-19; 101-604, eff. 12-13-19;
101-636, eff. 6-10-20; 102-634, eff. 8-27-21; revised
12-7-21.)
(35 ILCS 120/5l) (from Ch. 120, par. 444l)
Sec. 5l. Building materials exemption; High Impact
Business.
(a) Beginning January 1, 1995, each retailer who makes a
sale of building materials that will be incorporated into a
High Impact Business location as designated by the Department
of Commerce and Economic Opportunity under Section 5.5 of the
Illinois Enterprise Zone Act may deduct receipts from such
sales when calculating only the general 6.25% State rate of
tax imposed by this Act. Beginning on the effective date of
this amendatory Act of 1995, a retailer may also deduct
receipts from such sales when calculating any applicable local
taxes. However, until the effective date of this amendatory
Act of 1995, a retailer may file claims for credit or refund to
recover the amount of any applicable local tax paid on such
sales. No retailer who is eligible for the deduction or credit
under Section 5k of this Act for making a sale of building
materials to be incorporated into real estate in an enterprise
zone by rehabilitation, remodeling or new construction shall
be eligible for the deduction or credit authorized under this

HB5477 - 288 - LRB102 25061 HLH 34321 b
Section.
(b) On and after July 1, 2013, in addition to any other
requirements to document the exemption allowed under this
Section, the retailer must obtain from the purchaser the
purchaser's High Impact Business Building Materials Exemption
Certificate number issued by the Department. A construction
contractor or other entity shall not make tax-free purchases
unless it has an active Exemption Certificate issued by the
Department at the time of purchase.
Upon request from the designated High Impact Business, the
Department shall issue a High Impact Business Building
Materials Exemption Certificate for each construction
contractor or other entity identified by the designated High
Impact Business. The Department shall make the Exemption
Certificates available to each construction contractor or
other entity and the designated High Impact Business. The
request for Building Materials Exemption Certificates from the
designated High Impact Business to the Department must include
the following information:
(1) the name and address of the construction
contractor or other entity;
(2) the name and location or address of the designated
High Impact Business;
(3) the estimated amount of the exemption for each
construction contractor or other entity for which a
request for Exemption Certificate is made, based on a

HB5477 - 289 - LRB102 25061 HLH 34321 b
stated estimated average tax rate and the percentage of
the contract that consists of materials;
(4) the period of time over which supplies for the
project are expected to be purchased; and
(5) other reasonable information as the Department may
require, including but not limited to FEIN numbers, to
determine if the contractor or other entity, or any
partner, or a corporate officer, and in the case of a
limited liability company, any manager or member, of the
construction contractor or other entity, is or has been
the owner, a partner, a corporate officer, and in the case
of a limited liability company, a manager or member, of a
person that is in default for moneys due to the Department
under this Act or any other tax or fee Act administered by
the Department.
The Department shall issue the High Impact Business
Building Materials Exemption Certificates within 3 business
days after receipt of request from the designated High Impact
Business. This requirement does not apply in circumstances
where the Department, for reasonable cause, is unable to issue
the Exemption Certificate within 3 business days. The
Department may refuse to issue an Exemption Certificate if the
owner, any partner, or a corporate officer, and in the case of
a limited liability company, any manager or member, of the
construction contractor or other entity is or has been the
owner, a partner, a corporate officer, and in the case of a

HB5477 - 290 - LRB102 25061 HLH 34321 b
limited liability company, a manager or member, of a person
that is in default for moneys due to the Department under this
Act or any other tax or fee Act administered by the Department.
The High Impact Business Building Materials Exemption
Certificate shall contain language stating that if the
construction contractor or other entity who is issued the
Exemption Certificate makes a tax-exempt purchase, as
described in this Section, that is not eligible for exemption
under this Section or allows another person to make a
tax-exempt purchase, as described in this Section, that is not
eligible for exemption under this Section, then, in addition
to any tax or other penalty imposed, the construction
contractor or other entity is subject to a penalty equal to the
tax that would have been paid by the retailer under this Act as
well as any applicable local retailers' occupation tax on the
purchase that is not eligible for the exemption.
The Department, in its discretion, may require that the
request for High Impact Business Building Materials Exemption
Certificates be submitted electronically. The Department may,
in its discretion, issue the Exemption Certificates
electronically. The High Impact Business Building Materials
Exemption Certificate number shall be designed in such a way
that the Department can identify from the unique number on the
Exemption Certificate issued to a given construction
contractor or other entity, the name of the designated High
Impact Business and the construction contractor or other

HB5477 - 291 - LRB102 25061 HLH 34321 b
entity to whom the Exemption Certificate is issued. The
Exemption Certificate shall contain an expiration date, which
shall be no more than 2 years after the date of issuance. At
the request of the designated High Impact Business, the
Department may renew an Exemption Certificate. After the
Department issues Exemption Certificates for a given
designated High Impact Business, the designated High Impact
Business may notify the Department of additional construction
contractors or other entities eligible for a Building
Materials Exemption Certificate. Upon notification by the
designated High Impact Business and subject to the other
provisions of this subsection (b), the Department shall issue
a High Impact Business Building Materials Exemption
Certificate to each additional construction contractor or
other entity identified by the designated High Impact
Business. A designated High Impact Business may notify the
Department to rescind a Building Materials Exemption
Certificate previously issued by the Department but that has
not yet expired. Upon notification by the designated High
Impact Business and subject to the other provisions of this
subsection (b), the Department shall issue the rescission of
the Building Materials Exemption Certificate to the
construction contractor or other entity identified by the
designated High Impact Business and provide a copy to the
designated High Impact Business.
If the Department of Revenue determines that a

HB5477 - 292 - LRB102 25061 HLH 34321 b
construction contractor or other entity that was issued an
Exemption Certificate under this subsection (b) made a
tax-exempt purchase, as described in this Section, that was
not eligible for exemption under this Section or allowed
another person to make a tax-exempt purchase, as described in
this Section, that was not eligible for exemption under this
Section, then, in addition to any tax or other penalty
imposed, the construction contractor or other entity is
subject to a penalty equal to the tax that would have been paid
by the retailer under this Act as well as any applicable local
retailers' occupation tax on the purchase that was not
eligible for the exemption.
(c) Notwithstanding anything to the contrary in this
Section, for High Impact Businesses for which projects are
already in existence and for which construction contracts are
already in place on July 1, 2013, the request for High Impact
Business Building Materials Exemption Certificates from the
High Impact Business to the Department for these pre-existing
construction contractors and other entities must include the
information required under subsection (b), but not including
the information listed in items (3) and (4). For any new
construction contract entered into on or after July 1, 2013,
however, all of the information in subsection (b) must be
provided.
(Source: P.A. 97-905, eff. 8-7-12; 98-109, eff. 7-25-13.)
Section 99. Effective date. This Act takes effect upon

HB5477 - 293 - LRB102 25061 HLH 34321 b
becoming law.