Illinois-2015-HB5699-Introduced

99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB5699

Introduced , by Rep. Jack D. Franks

SYNOPSIS AS INTRODUCED:

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

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that repair and replacement parts transferred as part of a goodwill repair of

exempt farm machinery and equipment
are also exempt from the taxes imposed

under the Acts.

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FISCAL NOTE ACT MAY APPLY

A BILL FOR

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1 AN ACT concerning revenue.

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

3 represented in the General Assembly:

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

5 3-5 as follows:

6 (35 ILCS 105/3-5)

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

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

9 (1) Personal property purchased from a corporation,

10 society, association, foundation, institution, or

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

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

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

14 personal property was not purchased by the enterprise for the

15 purpose of resale by the enterprise.

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

17 Illinois county fair association for use in conducting,

18 operating, or promoting the county fair.

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

20 cultural organization that establishes, by proof required by

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

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

23 organized and operated primarily for the presentation or

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1 support of arts or cultural programming, activities, or

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

3 music and dramatic arts organizations such as symphony

4 orchestras and theatrical groups, arts and cultural service

5 organizations, local arts councils, visual arts organizations,

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

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

8 an entity otherwise eligible for this exemption shall not make

9 tax-free purchases unless it has an active identification

10 number issued by the Department.

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

12 a corporation, society, association, foundation, or

13 institution organized and operated exclusively for charitable,

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

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

16 organization that has no compensated officers or employees and

17 that is organized and operated primarily for the recreation of

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

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

20 limited liability company is organized and operated

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

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

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

24 identification number issued by the Department.

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

26 replacement vehicle to the extent that the purchase price of

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1 the car is subject to the Replacement Vehicle Tax.

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

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

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

5 used, and including that manufactured on special order,

6 certified by the purchaser to be used primarily for graphic

7 arts production, and including machinery and equipment

8 purchased for lease. Equipment includes chemicals or chemicals

9 acting as catalysts but only if the chemicals or chemicals

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

11 graphic arts product.

12 (7) Farm chemicals.

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

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

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

16 country, and bullion.

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

18 student organization affiliated with an elementary or

19 secondary school located in Illinois.

20 (10) A motor vehicle that is used for automobile renting,

21 as defined in the Automobile Renting Occupation and Use Tax

22 Act.

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

24 including that manufactured on special order, certified by the

25 purchaser to be used primarily for production agriculture or

26 State or federal agricultural programs, including individual

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1 replacement parts for the machinery and equipment, including

2 machinery and equipment purchased for lease, and including

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

4 Illinois Vehicle Code, farm machinery and agricultural

5 chemical and fertilizer spreaders, and nurse wagons required to

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

7 but excluding other motor vehicles required to be registered

8 under the Illinois Vehicle Code. Horticultural polyhouses or

9 hoop houses used for propagating, growing, or overwintering

10 plants shall be considered farm machinery and equipment under

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

12 boxes shall include units sold separately from a motor vehicle

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

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

15 tender is separately stated.

16 Farm machinery and equipment shall include precision

17 farming equipment that is installed or purchased to be

18 installed on farm machinery and equipment including, but not

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

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

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

22 software, global positioning and mapping systems, and other

23 such equipment.

24 Farm machinery and equipment also includes computers,

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

26 computer-assisted operation of production agriculture

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

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

3 crop data for the purpose of formulating animal diets and

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

5 provisions of Section 3-90.

6 Repair and replacement parts transferred as part of a

7 goodwill repair of exempt farm machinery and equipment shall

8 also be exempt from the tax imposed by this Act. For purposes

9 of this item (11), "goodwill repair" means a repair made by a

10 seller for no charge that a seller is not obligated to make.

11 (12) Until June 30, 2013, fuel and petroleum products sold

12 to or used by an air common carrier, certified by the carrier

13 to be used for consumption, shipment, or storage in the conduct

14 of its business as an air common carrier, for a flight destined

15 for or returning from a location or locations outside the

16 United States without regard to previous or subsequent domestic

17 stopovers.

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

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

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

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

22 engaged in foreign trade or is engaged in trade between the

23 United States and any of its possessions and (ii) transports at

24 least one individual or package for hire from the city of

25 origination to the city of final destination on the same

26 aircraft, without regard to a change in the flight number of

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1 that aircraft.

2 (13) Proceeds of mandatory service charges separately

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

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

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

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

7 employees who participate directly in preparing, serving,

8 hosting or cleaning up the food or beverage function with

9 respect to which the service charge is imposed.

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

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

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

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

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

15 individual replacement part for oil field exploration,

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

17 equipment purchased for lease; but excluding motor vehicles

18 required to be registered under the Illinois Vehicle Code.

19 (15) Photoprocessing machinery and equipment, including

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

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

22 used primarily for photoprocessing, and including

23 photoprocessing machinery and equipment purchased for lease.

24 (16) Coal and aggregate exploration, mining, off-highway

25 hauling, processing, maintenance, and reclamation equipment,

26 including replacement parts and equipment, and including

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1 equipment purchased for lease, but excluding motor vehicles

2 required to be registered under the Illinois Vehicle Code. The

3 changes made to this Section by Public Act 97-767 apply on and

4 after July 1, 2003, but no claim for credit or refund is

5 allowed on or after August 16, 2013 (the effective date of

6 Public Act 98-456) for such taxes paid during the period

7 beginning July 1, 2003 and ending on August 16, 2013 (the

8 effective date of Public Act 98-456).

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

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

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

12 production of ethyl alcohol that will be used for consumption

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

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

15 (18) Manufacturing and assembling machinery and equipment

16 used primarily in the process of manufacturing or assembling

17 tangible personal property for wholesale or retail sale or

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

19 manufacturer or by some other person, whether the materials

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

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

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

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

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

25 a particular purchaser. The exemption provided by this

26 paragraph (18) does not include machinery and equipment used in

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1 (i) the generation of electricity for wholesale or retail sale;

2 (ii) the generation or treatment of natural or artificial gas

3 for wholesale or retail sale that is delivered to customers

4 through pipes, pipelines, or mains; or (iii) the treatment of

5 water for wholesale or retail sale that is delivered to

6 customers through pipes, pipelines, or mains. The provisions of

7 Public Act 98-583 are declaratory of existing law as to the

8 meaning and scope of this exemption.

9 (19) Personal property delivered to a purchaser or

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

11 that personal property was received by a florist located

12 outside Illinois who has a florist located inside Illinois

13 deliver the personal property.

14 (20) Semen used for artificial insemination of livestock

15 for direct agricultural production.

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

17 meeting the requirements of any of the Arabian Horse Club

18 Registry of America, Appaloosa Horse Club, American Quarter

19 Horse Association, United States Trotting Association, or

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

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

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

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

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

25 2008 for such taxes paid during the period beginning May 30,

26 2000 and ending on January 1, 2008.

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1 (22) Computers and communications equipment utilized for

2 any hospital purpose and equipment used in the diagnosis,

3 analysis, or treatment of hospital patients purchased by a

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

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

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

7 hospital that has been issued an active tax exemption

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

23 Department.

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

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

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

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

2 issued an active sales tax exemption identification number by

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

22 disaster area in Illinois or bordering Illinois by a

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

24 corporation, society, association, foundation, or institution

25 that has been issued a sales tax exemption identification

26 number by the Department that assists victims of the disaster

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1 who reside within the declared disaster area.

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

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

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

5 performance of infrastructure repairs in this State, including

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

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

8 line extensions, water distribution and purification

9 facilities, storm water drainage and retention facilities, and

10 sewage treatment facilities, resulting from a State or

11 federally declared disaster in Illinois or bordering Illinois

12 when such repairs are initiated on facilities located in the

13 declared disaster area within 6 months after the disaster.

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

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

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

17 provisions of Section 3-90.

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

19 1-146 of the Illinois Vehicle Code, that is donated to a

20 corporation, limited liability company, society, association,

21 foundation, or institution that is determined by the Department

22 to be organized and operated exclusively for educational

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

24 limited liability company, society, association, foundation,

25 or institution organized and operated exclusively for

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

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1 private schools that offer systematic instruction in useful

2 branches of learning by methods common to public schools and

3 that compare favorably in their scope and intensity with the

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

5 vocational or technical schools or institutes organized and

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

7 than 6 weeks duration and designed to prepare individuals to

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

9 industrial, business, or commercial occupation.

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

11 including food, purchased through fundraising events for the

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

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

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

15 district that consists primarily of volunteers and includes

16 parents and teachers of the school children. This paragraph

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

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

19 entity purchases the personal property sold at the events from

20 another individual or entity that sold the property for the

21 purpose of resale by the fundraising entity and that profits

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

23 exempt from the provisions of Section 3-90.

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

25 2001, new or used automatic vending machines that prepare and

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

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1 items, and replacement parts for these machines. Beginning

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

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

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

5 gross receipts derived from the use of the commercial,

6 coin-operated amusement and vending machines. This paragraph

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

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

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

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

11 drinks, and food that has been prepared for immediate

12 consumption) and prescription and nonprescription medicines,

13 drugs, medical appliances, and insulin, urine testing

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

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

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

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

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

19 in the ID/DD Community Care Act, the MC/DD Act, or the

20 Specialized Mental Health Rehabilitation Act of 2013.

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

22 of the 92nd General Assembly, computers and communications

23 equipment utilized for any hospital purpose and equipment used

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

18 Department. This paragraph is exempt from the provisions of

19 Section 3-90.

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

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

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

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

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

25 governmental body that has been issued an active sales tax

26 exemption identification number by the Department under

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

16 from the provisions of Section 3-90.

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

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

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

20 are subject to the commercial distribution fee imposed under

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

22 1, 2004 and through June 30, 2005, the use in this State of

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

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

25 to the commercial distribution fee imposed under Section

26 3-815.1 of the Illinois Vehicle Code; and (iii) that are

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

2 this exemption applies to repair and replacement parts added

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

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

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

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

7 purposes" means the transportation of persons or property in

8 furtherance of any commercial or industrial enterprise,

9 whether for-hire or not.

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

11 used in the construction or maintenance of a community water

12 supply, as defined under Section 3.145 of the Environmental

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

14 corporation that holds a valid water supply permit issued under

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

16 exempt from the provisions of Section 3-90.

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

18 equipment, components, and furnishings incorporated into or

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

20 completion, replacement, repair, or maintenance of the

21 aircraft. This exemption includes consumable supplies used in

22 the modification, refurbishment, completion, replacement,

23 repair, and maintenance of aircraft, but excludes any

24 materials, parts, equipment, components, and consumable

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

26 maintenance of aircraft engines or power plants, whether such

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1 engines or power plants are installed or uninstalled upon any

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

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

4 lubricants, cleaning solution, latex gloves, and protective

5 films. This exemption applies only to the use of qualifying

6 tangible personal property by persons who modify, refurbish,

7 complete, repair, replace, or maintain aircraft and who (i)

8 hold an Air Agency Certificate and are empowered to operate an

9 approved repair station by the Federal Aviation

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

11 operations in accordance with Part 145 of the Federal Aviation

12 Regulations. The exemption does not include aircraft operated

13 by a commercial air carrier providing scheduled passenger air

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

15 of the Federal Aviation Regulations. The changes made to this

16 paragraph (35) by Public Act 98-534 are declarative of existing

17 law.

18 (36) Tangible personal property purchased by a

19 public-facilities corporation, as described in Section

20 11-65-10 of the Illinois Municipal Code, for purposes of

21 constructing or furnishing a municipal convention hall, but

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

23 transferred to the municipality without any further

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

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

26 retirement or redemption of any bonds or other debt instruments

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1 issued by the public-facilities corporation in connection with

2 the development of the municipal convention hall. This

3 exemption includes existing public-facilities corporations as

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

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

6 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

7 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.

8 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.

9 7-29-15.)

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

11 Section 3-5 as follows:

12 (35 ILCS 110/3-5)

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

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

15 (1) Personal property purchased from a corporation,

16 society, association, foundation, institution, or

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

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

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

20 personal property was not purchased by the enterprise for the

21 purpose of resale by the enterprise.

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

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

24 promoting the county fair.

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

2 cultural organization that establishes, by proof required by

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

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

5 organized and operated primarily for the presentation or

6 support of arts or cultural programming, activities, or

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

8 music and dramatic arts organizations such as symphony

9 orchestras and theatrical groups, arts and cultural service

10 organizations, local arts councils, visual arts organizations,

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

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

13 an entity otherwise eligible for this exemption shall not make

14 tax-free purchases unless it has an active identification

15 number issued by the Department.

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

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

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

19 country, and bullion.

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

21 2004 through August 30, 2014, graphic arts machinery and

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

23 used, and including that manufactured on special order or

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

25 primarily for graphic arts production. Equipment includes

26 chemicals or chemicals acting as catalysts but only if the

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1 chemicals or chemicals acting as catalysts effect a direct and

2 immediate change upon a graphic arts product.

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

4 student organization affiliated with an elementary or

5 secondary school located in Illinois.

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

7 including that manufactured on special order, certified by the

8 purchaser to be used primarily for production agriculture or

9 State or federal agricultural programs, including individual

10 replacement parts for the machinery and equipment, including

11 machinery and equipment purchased for lease, and including

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

13 Illinois Vehicle Code, farm machinery and agricultural

14 chemical and fertilizer spreaders, and nurse wagons required to

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

16 but excluding other motor vehicles required to be registered

17 under the Illinois Vehicle Code. Horticultural polyhouses or

18 hoop houses used for propagating, growing, or overwintering

19 plants shall be considered farm machinery and equipment under

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

21 shall include units sold separately from a motor vehicle

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

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

24 tender is separately stated.

25 Farm machinery and equipment shall include precision

26 farming equipment that is installed or purchased to be

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1 installed on farm machinery and equipment including, but not

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

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

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

5 software, global positioning and mapping systems, and other

6 such equipment.

7 Farm machinery and equipment also includes computers,

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

9 computer-assisted operation of production agriculture

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

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

12 crop data for the purpose of formulating animal diets and

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

14 provisions of Section 3-75.

15 Repair and replacement parts transferred as part of a

16 goodwill repair of exempt farm machinery and equipment shall

17 also be exempt from the tax imposed by this Act. For purposes

18 of this item (7), "goodwill repair" means a repair made by a

19 seller for no charge that a seller is not obligated to make.

20 (8) Until June 30, 2013, fuel and petroleum products sold

21 to or used by an air common carrier, certified by the carrier

22 to be used for consumption, shipment, or storage in the conduct

23 of its business as an air common carrier, for a flight destined

24 for or returning from a location or locations outside the

25 United States without regard to previous or subsequent domestic

26 stopovers.

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

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

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

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

5 engaged in foreign trade or is engaged in trade between the

6 United States and any of its possessions and (ii) transports at

7 least one individual or package for hire from the city of

8 origination to the city of final destination on the same

9 aircraft, without regard to a change in the flight number of

10 that aircraft.

11 (9) Proceeds of mandatory service charges separately

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

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

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

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

16 substitute for tips to the employees who participate directly

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

18 beverage function with respect to which the service charge is

19 imposed.

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

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

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

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

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

25 individual replacement part for oil field exploration,

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

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1 equipment purchased for lease; but excluding motor vehicles

2 required to be registered under the Illinois Vehicle Code.

3 (11) Proceeds from the sale of photoprocessing machinery

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

5 and used, including that manufactured on special order,

6 certified by the purchaser to be used primarily for

7 photoprocessing, and including photoprocessing machinery and

8 equipment purchased for lease.

9 (12) Coal and aggregate exploration, mining, off-highway

10 hauling, processing, maintenance, and reclamation equipment,

11 including replacement parts and equipment, and including

12 equipment purchased for lease, but excluding motor vehicles

13 required to be registered under the Illinois Vehicle Code. The

14 changes made to this Section by Public Act 97-767 apply on and

15 after July 1, 2003, but no claim for credit or refund is

16 allowed on or after August 16, 2013 (the effective date of

17 Public Act 98-456) for such taxes paid during the period

18 beginning July 1, 2003 and ending on August 16, 2013 (the

19 effective date of Public Act 98-456).

20 (13) Semen used for artificial insemination of livestock

21 for direct agricultural production.

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

23 meeting the requirements of any of the Arabian Horse Club

24 Registry of America, Appaloosa Horse Club, American Quarter

25 Horse Association, United States Trotting Association, or

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

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

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

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

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

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

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

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

8 General Assembly.

9 (15) Computers and communications equipment utilized for

10 any hospital purpose and equipment used in the diagnosis,

11 analysis, or treatment of hospital patients purchased by a

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

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

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

15 hospital that has been issued an active tax exemption

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

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

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

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

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

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

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

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

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

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

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

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

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

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

4 liable to pay that amount to the Department.

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

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

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

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

9 issued an active tax exemption identification number by the

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

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

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

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

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

15 fair market value of the property at the time the

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

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

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

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

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

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

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

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

24 liable to pay that amount to the Department.

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

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

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

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

3 disaster area in Illinois or bordering Illinois by a

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

5 corporation, society, association, foundation, or institution

6 that has been issued a sales tax exemption identification

7 number by the Department that assists victims of the disaster

8 who reside within the declared disaster area.

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

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

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

12 performance of infrastructure repairs in this State, including

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

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

15 line extensions, water distribution and purification

16 facilities, storm water drainage and retention facilities, and

17 sewage treatment facilities, resulting from a State or

18 federally declared disaster in Illinois or bordering Illinois

19 when such repairs are initiated on facilities located in the

20 declared disaster area within 6 months after the disaster.

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

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

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

24 provisions of Section 3-75.

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

26 1-146 of the Illinois Vehicle Code, that is donated to a

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1 corporation, limited liability company, society, association,

2 foundation, or institution that is determined by the Department

3 to be organized and operated exclusively for educational

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

5 limited liability company, society, association, foundation,

6 or institution organized and operated exclusively for

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

8 private schools that offer systematic instruction in useful

9 branches of learning by methods common to public schools and

10 that compare favorably in their scope and intensity with the

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

12 vocational or technical schools or institutes organized and

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

14 than 6 weeks duration and designed to prepare individuals to

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

16 industrial, business, or commercial occupation.

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

18 including food, purchased through fundraising events for the

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

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

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

22 district that consists primarily of volunteers and includes

23 parents and teachers of the school children. This paragraph

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

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

26 entity purchases the personal property sold at the events from

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1 another individual or entity that sold the property for the

2 purpose of resale by the fundraising entity and that profits

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

4 exempt from the provisions of Section 3-75.

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

6 2001, new or used automatic vending machines that prepare and

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

8 items, and replacement parts for these machines. Beginning

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

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

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

12 gross receipts derived from the use of the commercial,

13 coin-operated amusement and vending machines. This paragraph

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

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

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

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

18 drinks, and food that has been prepared for immediate

19 consumption) and prescription and nonprescription medicines,

20 drugs, medical appliances, and insulin, urine testing

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

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

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

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

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

26 in the ID/DD Community Care Act, the MC/DD Act, or the

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1 Specialized Mental Health Rehabilitation Act of 2013.

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

3 of the 92nd General Assembly, computers and communications

4 equipment utilized for any hospital purpose and equipment used

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

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

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

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

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

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

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

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

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

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

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

16 the nonqualifying use occurs. No lessor shall collect or

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

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

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

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

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

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

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

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

25 exempt from the provisions of Section 3-75.

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

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

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

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

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

5 governmental body that has been issued an active tax exemption

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

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

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

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

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

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

12 the nonqualifying use occurs. No lessor shall collect or

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

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

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

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

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

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

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

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

21 exempt from the provisions of Section 3-75.

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

23 used in the construction or maintenance of a community water

24 supply, as defined under Section 3.145 of the Environmental

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

26 corporation that holds a valid water supply permit issued under

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

2 exempt from the provisions of Section 3-75.

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

4 equipment, components, and furnishings incorporated into or

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

6 completion, replacement, repair, or maintenance of the

7 aircraft. This exemption includes consumable supplies used in

8 the modification, refurbishment, completion, replacement,

9 repair, and maintenance of aircraft, but excludes any

10 materials, parts, equipment, components, and consumable

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

12 maintenance of aircraft engines or power plants, whether such

13 engines or power plants are installed or uninstalled upon any

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

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

16 lubricants, cleaning solution, latex gloves, and protective

17 films. This exemption applies only to the use of qualifying

18 tangible personal property transferred incident to the

19 modification, refurbishment, completion, replacement, repair,

20 or maintenance of aircraft by persons who (i) hold an Air

21 Agency Certificate and are empowered to operate an approved

22 repair station by the Federal Aviation Administration, (ii)

23 have a Class IV Rating, and (iii) conduct operations in

24 accordance with Part 145 of the Federal Aviation Regulations.

25 The exemption does not include aircraft operated by a

26 commercial air carrier providing scheduled passenger air

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

2 of the Federal Aviation Regulations. The changes made to this

3 paragraph (27) by Public Act 98-534 are declarative of existing

4 law.

5 (28) Tangible personal property purchased by a

6 public-facilities corporation, as described in Section

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

8 constructing or furnishing a municipal convention hall, but

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

10 transferred to the municipality without any further

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

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

13 retirement or redemption of any bonds or other debt instruments

14 issued by the public-facilities corporation in connection with

15 the development of the municipal convention hall. This

16 exemption includes existing public-facilities corporations as

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

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

19 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

20 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.

21 7-16-14; 99-180, eff. 7-29-15.)

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

23 changing Section 3-5 as follows:

24 (35 ILCS 115/3-5)

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

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

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

4 association, foundation, institution, or organization, other

5 than a limited liability company, that is organized and

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

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

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

9 by the enterprise.

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

11 Illinois county fair association for use in conducting,

12 operating, or promoting the county fair.

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

14 or cultural organization that establishes, by proof required by

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

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

17 organized and operated primarily for the presentation or

18 support of arts or cultural programming, activities, or

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

20 music and dramatic arts organizations such as symphony

21 orchestras and theatrical groups, arts and cultural service

22 organizations, local arts councils, visual arts organizations,

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

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

25 an entity otherwise eligible for this exemption shall not make

26 tax-free purchases unless it has an active identification

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1 number issued by the Department.

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

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

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

5 country, and bullion.

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

7 2004 through August 30, 2014, graphic arts machinery and

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

9 used, and including that manufactured on special order or

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

11 primarily for graphic arts production. Equipment includes

12 chemicals or chemicals acting as catalysts but only if the

13 chemicals or chemicals acting as catalysts effect a direct and

14 immediate change upon a graphic arts product.

15 (6) Personal property sold by a teacher-sponsored student

16 organization affiliated with an elementary or secondary school

17 located in Illinois.

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

19 including that manufactured on special order, certified by the

20 purchaser to be used primarily for production agriculture or

21 State or federal agricultural programs, including individual

22 replacement parts for the machinery and equipment, including

23 machinery and equipment purchased for lease, and including

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

25 Illinois Vehicle Code, farm machinery and agricultural

26 chemical and fertilizer spreaders, and nurse wagons required to

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

2 but excluding other motor vehicles required to be registered

3 under the Illinois Vehicle Code. Horticultural polyhouses or

4 hoop houses used for propagating, growing, or overwintering

5 plants shall be considered farm machinery and equipment under

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

7 shall include units sold separately from a motor vehicle

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

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

10 tender is separately stated.

11 Farm machinery and equipment shall include precision

12 farming equipment that is installed or purchased to be

13 installed on farm machinery and equipment including, but not

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

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

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

17 software, global positioning and mapping systems, and other

18 such equipment.

19 Farm machinery and equipment also includes computers,

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

21 computer-assisted operation of production agriculture

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

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

24 crop data for the purpose of formulating animal diets and

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

26 provisions of Section 3-55.

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1 Repair and replacement parts transferred as part of a

2 goodwill repair of exempt farm machinery and equipment shall

3 also be exempt from the tax imposed by this Act. For purposes

4 of this item (7), "goodwill repair" means a repair made by a

5 seller for no charge that a seller is not obligated to make.

6 (8) Until June 30, 2013, fuel and petroleum products sold

7 to or used by an air common carrier, certified by the carrier

8 to be used for consumption, shipment, or storage in the conduct

9 of its business as an air common carrier, for a flight destined

10 for or returning from a location or locations outside the

11 United States without regard to previous or subsequent domestic

12 stopovers.

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

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

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

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

17 engaged in foreign trade or is engaged in trade between the

18 United States and any of its possessions and (ii) transports at

19 least one individual or package for hire from the city of

20 origination to the city of final destination on the same

21 aircraft, without regard to a change in the flight number of

22 that aircraft.

23 (9) Proceeds of mandatory service charges separately

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

25 food and beverages, to the extent that the proceeds of the

26 service charge are in fact turned over as tips or as a

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1 substitute for tips to the employees who participate directly

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

3 beverage function with respect to which the service charge is

4 imposed.

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

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

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

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

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

10 individual replacement part for oil field exploration,

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

12 equipment purchased for lease; but excluding motor vehicles

13 required to be registered under the Illinois Vehicle Code.

14 (11) Photoprocessing machinery and equipment, including

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

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

17 used primarily for photoprocessing, and including

18 photoprocessing machinery and equipment purchased for lease.

19 (12) Coal and aggregate exploration, mining, off-highway

20 hauling, processing, maintenance, and reclamation equipment,

21 including replacement parts and equipment, and including

22 equipment purchased for lease, but excluding motor vehicles

23 required to be registered under the Illinois Vehicle Code. The

24 changes made to this Section by Public Act 97-767 apply on and

25 after July 1, 2003, but no claim for credit or refund is

26 allowed on or after August 16, 2013 (the effective date of

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1 Public Act 98-456) for such taxes paid during the period

2 beginning July 1, 2003 and ending on August 16, 2013 (the

3 effective date of Public Act 98-456).

4 (13) Beginning January 1, 1992 and through June 30, 2016,

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

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

7 drinks and food that has been prepared for immediate

8 consumption) and prescription and non-prescription medicines,

9 drugs, medical appliances, and insulin, urine testing

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

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

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

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

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

15 in the ID/DD Community Care Act, the MC/DD Act, or the

16 Specialized Mental Health Rehabilitation Act of 2013.

17 (14) Semen used for artificial insemination of livestock

18 for direct agricultural production.

19 (15) Horses, or interests in horses, registered with and

20 meeting the requirements of any of the Arabian Horse Club

21 Registry of America, Appaloosa Horse Club, American Quarter

22 Horse Association, United States Trotting Association, or

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

24 racing for prizes. This item (15) is exempt from the provisions

25 of Section 3-55, and the exemption provided for under this item

26 (15) applies for all periods beginning May 30, 1995, but no

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

2 2008 (the effective date of Public Act 95-88) for such taxes

3 paid during the period beginning May 30, 2000 and ending on

4 January 1, 2008 (the effective date of Public Act 95-88).

5 (16) Computers and communications equipment utilized for

6 any hospital purpose and equipment used in the diagnosis,

7 analysis, or treatment of hospital patients sold to a lessor

8 who leases the equipment, under a lease of one year or longer

9 executed or in effect at the time of the purchase, to a

10 hospital that has been issued an active tax exemption

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

12 Retailers' Occupation Tax Act.

13 (17) Personal property sold to a lessor who leases the

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

15 effect at the time of the purchase, to a governmental body that

16 has been issued an active tax exemption identification number

17 by the Department under Section 1g of the Retailers' Occupation

18 Tax Act.

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

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

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

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

23 disaster area in Illinois or bordering Illinois by a

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

25 corporation, society, association, foundation, or institution

26 that has been issued a sales tax exemption identification

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1 number by the Department that assists victims of the disaster

2 who reside within the declared disaster area.

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

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

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

6 performance of infrastructure repairs in this State, including

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

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

9 line extensions, water distribution and purification

10 facilities, storm water drainage and retention facilities, and

11 sewage treatment facilities, resulting from a State or

12 federally declared disaster in Illinois or bordering Illinois

13 when such repairs are initiated on facilities located in the

14 declared disaster area within 6 months after the disaster.

15 (20) Beginning July 1, 1999, game or game birds sold at a

16 "game breeding and hunting preserve area" as that term is used

17 in the Wildlife Code. This paragraph is exempt from the

18 provisions of Section 3-55.

19 (21) A motor vehicle, as that term is defined in Section

20 1-146 of the Illinois Vehicle Code, that is donated to a

21 corporation, limited liability company, society, association,

22 foundation, or institution that is determined by the Department

23 to be organized and operated exclusively for educational

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

25 limited liability company, society, association, foundation,

26 or institution organized and operated exclusively for

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

2 private schools that offer systematic instruction in useful

3 branches of learning by methods common to public schools and

4 that compare favorably in their scope and intensity with the

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

6 vocational or technical schools or institutes organized and

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

8 than 6 weeks duration and designed to prepare individuals to

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

10 industrial, business, or commercial occupation.

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

12 including food, purchased through fundraising events for the

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

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

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

16 district that consists primarily of volunteers and includes

17 parents and teachers of the school children. This paragraph

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

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

20 entity purchases the personal property sold at the events from

21 another individual or entity that sold the property for the

22 purpose of resale by the fundraising entity and that profits

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

24 exempt from the provisions of Section 3-55.

25 (23) Beginning January 1, 2000 and through December 31,

26 2001, new or used automatic vending machines that prepare and

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

2 items, and replacement parts for these machines. Beginning

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

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

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

6 gross receipts derived from the use of the commercial,

7 coin-operated amusement and vending machines. This paragraph

8 is exempt from the provisions of Section 3-55.

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

10 of the 92nd General Assembly, computers and communications

11 equipment utilized for any hospital purpose and equipment used

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

13 sold to a lessor who leases the equipment, under a lease of one

14 year or longer executed or in effect at the time of the

15 purchase, to a hospital that has been issued an active tax

16 exemption identification number by the Department under

17 Section 1g of the Retailers' Occupation Tax Act. This paragraph

18 is exempt from the provisions of Section 3-55.

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

20 of the 92nd General Assembly, personal property sold to a

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

22 longer executed or in effect at the time of the purchase, to a

23 governmental body that has been issued an active tax exemption

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

25 Retailers' Occupation Tax Act. This paragraph is exempt from

26 the provisions of Section 3-55.

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1 (26) Beginning on January 1, 2002 and through June 30,

2 2016, tangible personal property purchased from an Illinois

3 retailer by a taxpayer engaged in centralized purchasing

4 activities in Illinois who will, upon receipt of the property

5 in Illinois, temporarily store the property in Illinois (i) for

6 the purpose of subsequently transporting it outside this State

7 for use or consumption thereafter solely outside this State or

8 (ii) for the purpose of being processed, fabricated, or

9 manufactured into, attached to, or incorporated into other

10 tangible personal property to be transported outside this State

11 and thereafter used or consumed solely outside this State. The

12 Director of Revenue shall, pursuant to rules adopted in

13 accordance with the Illinois Administrative Procedure Act,

14 issue a permit to any taxpayer in good standing with the

15 Department who is eligible for the exemption under this

16 paragraph (26). The permit issued under this paragraph (26)

17 shall authorize the holder, to the extent and in the manner

18 specified in the rules adopted under this Act, to purchase

19 tangible personal property from a retailer exempt from the

20 taxes imposed by this Act. Taxpayers shall maintain all

21 necessary books and records to substantiate the use and

22 consumption of all such tangible personal property outside of

23 the State of Illinois.

24 (27) Beginning January 1, 2008, tangible personal property

25 used in the construction or maintenance of a community water

26 supply, as defined under Section 3.145 of the Environmental

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

2 corporation that holds a valid water supply permit issued under

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

4 exempt from the provisions of Section 3-55.

5 (28) Tangible personal property sold to a

6 public-facilities corporation, as described in Section

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

8 constructing or furnishing a municipal convention hall, but

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

10 transferred to the municipality without any further

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

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

13 retirement or redemption of any bonds or other debt instruments

14 issued by the public-facilities corporation in connection with

15 the development of the municipal convention hall. This

16 exemption includes existing public-facilities corporations as

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

18 This paragraph is exempt from the provisions of Section 3-55.

19 (29) Beginning January 1, 2010, materials, parts,

20 equipment, components, and furnishings incorporated into or

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

22 completion, replacement, repair, or maintenance of the

23 aircraft. This exemption includes consumable supplies used in

24 the modification, refurbishment, completion, replacement,

25 repair, and maintenance of aircraft, but excludes any

26 materials, parts, equipment, components, and consumable

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

2 maintenance of aircraft engines or power plants, whether such

3 engines or power plants are installed or uninstalled upon any

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

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

6 lubricants, cleaning solution, latex gloves, and protective

7 films. This exemption applies only to the transfer of

8 qualifying tangible personal property incident to the

9 modification, refurbishment, completion, replacement, repair,

10 or maintenance of an aircraft by persons who (i) hold an Air

11 Agency Certificate and are empowered to operate an approved

12 repair station by the Federal Aviation Administration, (ii)

13 have a Class IV Rating, and (iii) conduct operations in

14 accordance with Part 145 of the Federal Aviation Regulations.

15 The exemption does not include aircraft operated by a

16 commercial air carrier providing scheduled passenger air

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

18 of the Federal Aviation Regulations. The changes made to this

19 paragraph (29) by Public Act 98-534 are declarative of existing

20 law.

21 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

22 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.

23 7-16-14; 99-180, eff. 7-29-15.)

24 Section 20. The Retailers' Occupation Tax Act is amended by

25 changing Section 2-5 as follows:

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1 (35 ILCS 120/2-5)

2 Sec. 2-5. Exemptions. Gross receipts from proceeds from the

3 sale of the following tangible personal property are exempt

4 from the tax imposed by this Act:

5 (1) Farm chemicals.

6 (2) Farm machinery and equipment, both new and used,

7 including that manufactured on special order, certified by the

8 purchaser to be used primarily for production agriculture or

9 State or federal agricultural programs, including individual

10 replacement parts for the machinery and equipment, including

11 machinery and equipment purchased for lease, and including

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

13 Illinois Vehicle Code, farm machinery and agricultural

14 chemical and fertilizer spreaders, and nurse wagons required to

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

16 but excluding other motor vehicles required to be registered

17 under the Illinois Vehicle Code. Horticultural polyhouses or

18 hoop houses used for propagating, growing, or overwintering

19 plants shall be considered farm machinery and equipment under

20 this item (2). Agricultural chemical tender tanks and dry boxes

21 shall include units sold separately from a motor vehicle

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

23 vehicle required to be licensed, if the selling price of the

24 tender is separately stated.

25 Farm machinery and equipment shall include precision

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1 farming equipment that is installed or purchased to be

2 installed on farm machinery and equipment including, but not

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

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

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

6 software, global positioning and mapping systems, and other

7 such equipment.

8 Farm machinery and equipment also includes computers,

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

10 computer-assisted operation of production agriculture

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

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

13 crop data for the purpose of formulating animal diets and

14 agricultural chemicals. This item (2) is exempt from the

15 provisions of Section 2-70.

16 Repair and replacement parts transferred as part of a

17 goodwill repair of exempt farm machinery and equipment shall

18 also be exempt from the tax imposed by this Act. For purposes

19 of this item (2), "goodwill repair" means a repair made by a

20 seller for no charge that a seller is not obligated to make.

21 (3) Until July 1, 2003, distillation machinery and

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

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

24 production of ethyl alcohol that will be used for consumption

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

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

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1 (4) Until July 1, 2003 and beginning again September 1,

2 2004 through August 30, 2014, graphic arts machinery and

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

4 used, and including that manufactured on special order or

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

6 primarily for graphic arts production. Equipment includes

7 chemicals or chemicals acting as catalysts but only if the

8 chemicals or chemicals acting as catalysts effect a direct and

9 immediate change upon a graphic arts product.

10 (5) A motor vehicle that is used for automobile renting, as

11 defined in the Automobile Renting Occupation and Use Tax Act.

12 This paragraph is exempt from the provisions of Section 2-70.

13 (6) Personal property sold by a teacher-sponsored student

14 organization affiliated with an elementary or secondary school

15 located in Illinois.

16 (7) Until July 1, 2003, proceeds of that portion of the

17 selling price of a passenger car the sale of which is subject

18 to the Replacement Vehicle Tax.

19 (8) Personal property sold to an Illinois county fair

20 association for use in conducting, operating, or promoting the

21 county fair.

22 (9) Personal property sold to a not-for-profit arts or

23 cultural organization that establishes, by proof required by

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

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

26 organized and operated primarily for the presentation or

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1 support of arts or cultural programming, activities, or

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

3 music and dramatic arts organizations such as symphony

4 orchestras and theatrical groups, arts and cultural service

5 organizations, local arts councils, visual arts organizations,

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

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

8 an entity otherwise eligible for this exemption shall not make

9 tax-free purchases unless it has an active identification

10 number issued by the Department.

11 (10) Personal property sold by a corporation, society,

12 association, foundation, institution, or organization, other

13 than a limited liability company, that is organized and

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

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

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

17 by the enterprise.

18 (11) Personal property sold to a governmental body, to a

19 corporation, society, association, foundation, or institution

20 organized and operated exclusively for charitable, religious,

21 or educational purposes, or to a not-for-profit corporation,

22 society, association, foundation, institution, or organization

23 that has no compensated officers or employees and that is

24 organized and operated primarily for the recreation of persons

25 55 years of age or older. A limited liability company may

26 qualify for the exemption under this paragraph only if the

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1 limited liability company is organized and operated

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

3 1987, however, no entity otherwise eligible for this exemption

4 shall make tax-free purchases unless it has an active

5 identification number issued by the Department.

6 (12) Tangible personal property sold to interstate

7 carriers for hire for use as rolling stock moving in interstate

8 commerce or to lessors under leases of one year or longer

9 executed or in effect at the time of purchase by interstate

10 carriers for hire for use as rolling stock moving in interstate

11 commerce and equipment operated by a telecommunications

12 provider, licensed as a common carrier by the Federal

13 Communications Commission, which is permanently installed in

14 or affixed to aircraft moving in interstate commerce.

15 (12-5) On and after July 1, 2003 and through June 30, 2004,

16 motor vehicles of the second division with a gross vehicle

17 weight in excess of 8,000 pounds that are subject to the

18 commercial distribution fee imposed under Section 3-815.1 of

19 the Illinois Vehicle Code. Beginning on July 1, 2004 and

20 through June 30, 2005, the use in this State of motor vehicles

21 of the second division: (i) with a gross vehicle weight rating

22 in excess of 8,000 pounds; (ii) that are subject to the

23 commercial distribution fee imposed under Section 3-815.1 of

24 the Illinois Vehicle Code; and (iii) that are primarily used

25 for commercial purposes. Through June 30, 2005, this exemption

26 applies to repair and replacement parts added after the initial

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1 purchase of such a motor vehicle if that motor vehicle is used

2 in a manner that would qualify for the rolling stock exemption

3 otherwise provided for in this Act. For purposes of this

4 paragraph, "used for commercial purposes" means the

5 transportation of persons or property in furtherance of any

6 commercial or industrial enterprise whether for-hire or not.

7 (13) Proceeds from sales to owners, lessors, or shippers of

8 tangible personal property that is utilized by interstate

9 carriers for hire for use as rolling stock moving in interstate

10 commerce and equipment operated by a telecommunications

11 provider, licensed as a common carrier by the Federal

12 Communications Commission, which is permanently installed in

13 or affixed to aircraft moving in interstate commerce.

14 (14) Machinery and equipment that will be used by the

15 purchaser, or a lessee of the purchaser, primarily in the

16 process of manufacturing or assembling tangible personal

17 property for wholesale or retail sale or lease, whether the

18 sale or lease is made directly by the manufacturer or by some

19 other person, whether the materials used in the process are

20 owned by the manufacturer or some other person, or whether the

21 sale or lease is made apart from or as an incident to the

22 seller's engaging in the service occupation of producing

23 machines, tools, dies, jigs, patterns, gauges, or other similar

24 items of no commercial value on special order for a particular

25 purchaser. The exemption provided by this paragraph (14) does

26 not include machinery and equipment used in (i) the generation

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1 of electricity for wholesale or retail sale; (ii) the

2 generation or treatment of natural or artificial gas for

3 wholesale or retail sale that is delivered to customers through

4 pipes, pipelines, or mains; or (iii) the treatment of water for

5 wholesale or retail sale that is delivered to customers through

6 pipes, pipelines, or mains. The provisions of Public Act 98-583

7 are declaratory of existing law as to the meaning and scope of

8 this exemption.

9 (15) Proceeds of mandatory service charges separately

10 stated on customers' bills for purchase and consumption of food

11 and beverages, to the extent that the proceeds of the service

12 charge are in fact turned over as tips or as a substitute for

13 tips to the employees who participate directly in preparing,

14 serving, hosting or cleaning up the food or beverage function

15 with respect to which the service charge is imposed.

16 (16) Petroleum products sold to a purchaser if the seller

17 is prohibited by federal law from charging tax to the

18 purchaser.

19 (17) Tangible personal property sold to a common carrier by

20 rail or motor that receives the physical possession of the

21 property in Illinois and that transports the property, or

22 shares with another common carrier in the transportation of the

23 property, out of Illinois on a standard uniform bill of lading

24 showing the seller of the property as the shipper or consignor

25 of the property to a destination outside Illinois, for use

26 outside Illinois.

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1 (18) Legal tender, currency, medallions, or gold or silver

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

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

4 country, and bullion.

5 (19) Until July 1 2003, oil field exploration, drilling,

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

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

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

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

10 individual replacement part for oil field exploration,

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

12 equipment purchased for lease; but excluding motor vehicles

13 required to be registered under the Illinois Vehicle Code.

14 (20) Photoprocessing machinery and equipment, including

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

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

17 used primarily for photoprocessing, and including

18 photoprocessing machinery and equipment purchased for lease.

19 (21) Coal and aggregate exploration, mining, off-highway

20 hauling, processing, maintenance, and reclamation equipment,

21 including replacement parts and equipment, and including

22 equipment purchased for lease, but excluding motor vehicles

23 required to be registered under the Illinois Vehicle Code. The

24 changes made to this Section by Public Act 97-767 apply on and

25 after July 1, 2003, but no claim for credit or refund is

26 allowed on or after August 16, 2013 (the effective date of

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1 Public Act 98-456) for such taxes paid during the period

2 beginning July 1, 2003 and ending on August 16, 2013 (the

3 effective date of Public Act 98-456).

4 (22) Until June 30, 2013, fuel and petroleum products sold

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

6 used for consumption, shipment, or storage in the conduct of

7 its business as an air common carrier, for a flight destined

8 for or returning from a location or locations outside the

9 United States without regard to previous or subsequent domestic

10 stopovers.

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

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

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

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

15 engaged in foreign trade or is engaged in trade between the

16 United States and any of its possessions and (ii) transports at

17 least one individual or package for hire from the city of

18 origination to the city of final destination on the same

19 aircraft, without regard to a change in the flight number of

20 that aircraft.

21 (23) A transaction in which the purchase order is received

22 by a florist who is located outside Illinois, but who has a

23 florist located in Illinois deliver the property to the

24 purchaser or the purchaser's donee in Illinois.

25 (24) Fuel consumed or used in the operation of ships,

26 barges, or vessels that are used primarily in or for the

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1 transportation of property or the conveyance of persons for

2 hire on rivers bordering on this State if the fuel is delivered

3 by the seller to the purchaser's barge, ship, or vessel while

4 it is afloat upon that bordering river.

5 (25) Except as provided in item (25-5) of this Section, a

6 motor vehicle sold in this State to a nonresident even though

7 the motor vehicle is delivered to the nonresident in this

8 State, if the motor vehicle is not to be titled in this State,

9 and if a drive-away permit is issued to the motor vehicle as

10 provided in Section 3-603 of the Illinois Vehicle Code or if

11 the nonresident purchaser has vehicle registration plates to

12 transfer to the motor vehicle upon returning to his or her home

13 state. The issuance of the drive-away permit or having the

14 out-of-state registration plates to be transferred is prima

15 facie evidence that the motor vehicle will not be titled in

16 this State.

17 (25-5) The exemption under item (25) does not apply if the

18 state in which the motor vehicle will be titled does not allow

19 a reciprocal exemption for a motor vehicle sold and delivered

20 in that state to an Illinois resident but titled in Illinois.

21 The tax collected under this Act on the sale of a motor vehicle

22 in this State to a resident of another state that does not

23 allow a reciprocal exemption shall be imposed at a rate equal

24 to the state's rate of tax on taxable property in the state in

25 which the purchaser is a resident, except that the tax shall

26 not exceed the tax that would otherwise be imposed under this

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1 Act. At the time of the sale, the purchaser shall execute a

2 statement, signed under penalty of perjury, of his or her

3 intent to title the vehicle in the state in which the purchaser

4 is a resident within 30 days after the sale and of the fact of

5 the payment to the State of Illinois of tax in an amount

6 equivalent to the state's rate of tax on taxable property in

7 his or her state of residence and shall submit the statement to

8 the appropriate tax collection agency in his or her state of

9 residence. In addition, the retailer must retain a signed copy

10 of the statement in his or her records. Nothing in this item

11 shall be construed to require the removal of the vehicle from

12 this state following the filing of an intent to title the

13 vehicle in the purchaser's state of residence if the purchaser

14 titles the vehicle in his or her state of residence within 30

15 days after the date of sale. The tax collected under this Act

16 in accordance with this item (25-5) shall be proportionately

17 distributed as if the tax were collected at the 6.25% general

18 rate imposed under this Act.

19 (25-7) Beginning on July 1, 2007, no tax is imposed under

20 this Act on the sale of an aircraft, as defined in Section 3 of

21 the Illinois Aeronautics Act, if all of the following

22 conditions are met:

23 (1) the aircraft leaves this State within 15 days after

24 the later of either the issuance of the final billing for

25 the sale of the aircraft, or the authorized approval for

26 return to service, completion of the maintenance record

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1 entry, and completion of the test flight and ground test

2 for inspection, as required by 14 C.F.R. 91.407;

3 (2) the aircraft is not based or registered in this

4 State after the sale of the aircraft; and

5 (3) the seller retains in his or her books and records

6 and provides to the Department a signed and dated

7 certification from the purchaser, on a form prescribed by

8 the Department, certifying that the requirements of this

9 item (25-7) are met. The certificate must also include the

10 name and address of the purchaser, the address of the

11 location where the aircraft is to be titled or registered,

12 the address of the primary physical location of the

13 aircraft, and other information that the Department may

14 reasonably require.

15 For purposes of this item (25-7):

16 "Based in this State" means hangared, stored, or otherwise

17 used, excluding post-sale customizations as defined in this

18 Section, for 10 or more days in each 12-month period

19 immediately following the date of the sale of the aircraft.

20 "Registered in this State" means an aircraft registered

21 with the Department of Transportation, Aeronautics Division,

22 or titled or registered with the Federal Aviation

23 Administration to an address located in this State.

24 This paragraph (25-7) is exempt from the provisions of

25 Section 2-70.

26 (26) Semen used for artificial insemination of livestock

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1 for direct agricultural production.

2 (27) Horses, or interests in horses, registered with and

3 meeting the requirements of any of the Arabian Horse Club

4 Registry of America, Appaloosa Horse Club, American Quarter

5 Horse Association, United States Trotting Association, or

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

7 racing for prizes. This item (27) is exempt from the provisions

8 of Section 2-70, and the exemption provided for under this item

9 (27) applies for all periods beginning May 30, 1995, but no

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

11 2008 (the effective date of Public Act 95-88) for such taxes

12 paid during the period beginning May 30, 2000 and ending on

13 January 1, 2008 (the effective date of Public Act 95-88).

14 (28) Computers and communications equipment utilized for

15 any hospital purpose and equipment used in the diagnosis,

16 analysis, or treatment of hospital patients sold to a lessor

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

18 executed or in effect at the time of the purchase, to a

19 hospital that has been issued an active tax exemption

20 identification number by the Department under Section 1g of

21 this Act.

22 (29) Personal property sold to a lessor who leases the

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

24 effect at the time of the purchase, to a governmental body that

25 has been issued an active tax exemption identification number

26 by the Department under Section 1g of this Act.

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1 (30) Beginning with taxable years ending on or after

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

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

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

5 disaster area in Illinois or bordering Illinois by a

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

7 corporation, society, association, foundation, or institution

8 that has been issued a sales tax exemption identification

9 number by the Department that assists victims of the disaster

10 who reside within the declared disaster area.

11 (31) Beginning with taxable years ending on or after

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

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

14 performance of infrastructure repairs in this State, including

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

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

17 line extensions, water distribution and purification

18 facilities, storm water drainage and retention facilities, and

19 sewage treatment facilities, resulting from a State or

20 federally declared disaster in Illinois or bordering Illinois

21 when such repairs are initiated on facilities located in the

22 declared disaster area within 6 months after the disaster.

23 (32) Beginning July 1, 1999, game or game birds sold at a

24 "game breeding and hunting preserve area" as that term is used

25 in the Wildlife Code. This paragraph is exempt from the

26 provisions of Section 2-70.

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1 (33) A motor vehicle, as that term is defined in Section

2 1-146 of the Illinois Vehicle Code, that is donated to a

3 corporation, limited liability company, society, association,

4 foundation, or institution that is determined by the Department

5 to be organized and operated exclusively for educational

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

7 limited liability company, society, association, foundation,

8 or institution organized and operated exclusively for

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

10 private schools that offer systematic instruction in useful

11 branches of learning by methods common to public schools and

12 that compare favorably in their scope and intensity with the

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

14 vocational or technical schools or institutes organized and

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

16 than 6 weeks duration and designed to prepare individuals to

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

18 industrial, business, or commercial occupation.

19 (34) Beginning January 1, 2000, personal property,

20 including food, purchased through fundraising events for the

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

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

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

24 district that consists primarily of volunteers and includes

25 parents and teachers of the school children. This paragraph

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

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

2 entity purchases the personal property sold at the events from

3 another individual or entity that sold the property for the

4 purpose of resale by the fundraising entity and that profits

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

6 exempt from the provisions of Section 2-70.

7 (35) Beginning January 1, 2000 and through December 31,

8 2001, new or used automatic vending machines that prepare and

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

10 items, and replacement parts for these machines. Beginning

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

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

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

14 gross receipts derived from the use of the commercial,

15 coin-operated amusement and vending machines. This paragraph

16 is exempt from the provisions of Section 2-70.

17 (35-5) Beginning August 23, 2001 and through June 30, 2016,

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

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

20 drinks, and food that has been prepared for immediate

21 consumption) and prescription and nonprescription medicines,

22 drugs, medical appliances, and insulin, urine testing

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

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

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

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

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

2 the ID/DD Community Care Act, the MC/DD Act, or the Specialized

3 Mental Health Rehabilitation Act of 2013.

4 (36) Beginning August 2, 2001, computers and

5 communications equipment utilized for any hospital purpose and

6 equipment used in the diagnosis, analysis, or treatment of

7 hospital patients sold to a lessor who leases the equipment,

8 under a lease of one year or longer executed or in effect at

9 the time of the purchase, to a hospital that has been issued an

10 active tax exemption identification number by the Department

11 under Section 1g of this Act. This paragraph is exempt from the

12 provisions of Section 2-70.

13 (37) Beginning August 2, 2001, personal property sold to a

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

15 longer executed or in effect at the time of the purchase, to a

16 governmental body that has been issued an active tax exemption

17 identification number by the Department under Section 1g of

18 this Act. This paragraph is exempt from the provisions of

19 Section 2-70.

20 (38) Beginning on January 1, 2002 and through June 30,

21 2016, tangible personal property purchased from an Illinois

22 retailer by a taxpayer engaged in centralized purchasing

23 activities in Illinois who will, upon receipt of the property

24 in Illinois, temporarily store the property in Illinois (i) for

25 the purpose of subsequently transporting it outside this State

26 for use or consumption thereafter solely outside this State or

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1 (ii) for the purpose of being processed, fabricated, or

2 manufactured into, attached to, or incorporated into other

3 tangible personal property to be transported outside this State

4 and thereafter used or consumed solely outside this State. The

5 Director of Revenue shall, pursuant to rules adopted in

6 accordance with the Illinois Administrative Procedure Act,

7 issue a permit to any taxpayer in good standing with the

8 Department who is eligible for the exemption under this

9 paragraph (38). The permit issued under this paragraph (38)

10 shall authorize the holder, to the extent and in the manner

11 specified in the rules adopted under this Act, to purchase

12 tangible personal property from a retailer exempt from the

13 taxes imposed by this Act. Taxpayers shall maintain all

14 necessary books and records to substantiate the use and

15 consumption of all such tangible personal property outside of

16 the State of Illinois.

17 (39) Beginning January 1, 2008, tangible personal property

18 used in the construction or maintenance of a community water

19 supply, as defined under Section 3.145 of the Environmental

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

21 corporation that holds a valid water supply permit issued under

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

23 exempt from the provisions of Section 2-70.

24 (40) Beginning January 1, 2010, materials, parts,

25 equipment, components, and furnishings incorporated into or

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

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1 completion, replacement, repair, or maintenance of the

2 aircraft. This exemption includes consumable supplies used in

3 the modification, refurbishment, completion, replacement,

4 repair, and maintenance of aircraft, but excludes any

5 materials, parts, equipment, components, and consumable

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

7 maintenance of aircraft engines or power plants, whether such

8 engines or power plants are installed or uninstalled upon any

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

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

11 lubricants, cleaning solution, latex gloves, and protective

12 films. This exemption applies only to the sale of qualifying

13 tangible personal property to persons who modify, refurbish,

14 complete, replace, or maintain an aircraft and who (i) hold an

15 Air Agency Certificate and are empowered to operate an approved

16 repair station by the Federal Aviation Administration, (ii)

17 have a Class IV Rating, and (iii) conduct operations in

18 accordance with Part 145 of the Federal Aviation Regulations.

19 The exemption does not include aircraft operated by a

20 commercial air carrier providing scheduled passenger air

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

22 of the Federal Aviation Regulations. The changes made to this

23 paragraph (40) by Public Act 98-534 are declarative of existing

24 law.

25 (41) Tangible personal property sold to a

26 public-facilities corporation, as described in Section

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1 11-65-10 of the Illinois Municipal Code, for purposes of

2 constructing or furnishing a municipal convention hall, but

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

4 transferred to the municipality without any further

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

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

7 retirement or redemption of any bonds or other debt instruments

8 issued by the public-facilities corporation in connection with

9 the development of the municipal convention hall. This

10 exemption includes existing public-facilities corporations as

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

12 This paragraph is exempt from the provisions of Section 2-70.

13 (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;

14 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.

15 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.

16 7-29-15.)