Bill Text: IL SB1434 | 2017-2018 | 100th General Assembly | Enrolled


Bill Title: Creates the Rental Purchase Agreement Occupation and Use Tax Act. Provides that an occupation tax is imposed upon persons engaged in this State in the business of renting merchandise under a rental-purchase agreement in Illinois, at the rate of 6.25% of the gross receipts received from such business. Provides that a corresponding use tax is imposed upon the privilege of using merchandise rented under a rental-purchase agreement in Illinois at the rate of 6.25% of the gross receipts received from such business. Provides for the imposition and collection of both taxes by the Department of Revenue, and for the filing of returns and the payment of taxes imposed under this Act. Provides the Department of Revenue with rulemaking authority. Amends the Use Tax Act and the Retailers' Occupation Tax Act to make conforming changes. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Enrolled) 2017-05-31 - Passed Both Houses [SB1434 Detail]

Download: Illinois-2017-SB1434-Enrolled.html



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1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the Rental
5Purchase Agreement Occupation and Use Tax Act.
6 Section 5. Definitions. As used in this Act:
7 "Consumer" means an individual who leases personal
8property under a rental-purchase agreement.
9 "Department" means the Department of Revenue.
10 "Gross receipts" from the renting of tangible personal
11property or "rent" means the total rental price or leasing
12price. In the case of rental transactions in which the
13consideration is paid to the merchant on an installment basis,
14the amounts of such payments shall be included by the merchant
15in gross receipts or rent only as and when payments are
16received by the merchant. "Gross receipts" does not include
17receipts received by a merchant for delivery fees,
18reinstatement fees, processing fees, waiver fees or club
19program fees.
20 "Merchandise" means the personal property that is the
21subject of a rental-purchase agreement.
22 "Merchant" means a person who, in the ordinary course of
23business, regularly leases, offers to lease or arranges for the

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1leasing of merchandise under a rental-purchase agreement, and
2includes a person who is assigned an interest in a
3rental-purchase agreement.
4 "Person" means any natural individual, firm, partnership,
5association, joint stock company, joint adventure, public or
6private corporation, limited liability company, or a receiver,
7executor, trustee, conservator or other representative
8appointed by order of any court.
9 "Rental price" means the consideration for renting
10merchandise valued in money, whether received in money or
11otherwise, including cash credits, property and services, and
12shall be determined without any deduction on account of the
13cost of the property rented, the cost of materials used, labor
14or service cost, or any other expense whatsoever, but does not
15include charges that are added by a merchant on account of the
16merchant's tax liability under this Act or on account of the
17merchant's duty to collect, from the consumer, the tax that is
18imposed by Section 4 of this Act. The phrase "rental price"
19does not include compensation paid to a merchant by a consumer
20in consideration of the waiver by the merchant of any right of
21action or claim against the consumer for loss or damage to the
22merchandise rented and also does not include a separately
23stated charge for insurance or other separately stated charges
24that are not for the use of tangible personal property.
25 "Rental purchase agreement" means an agreement for the use
26of merchandise by a consumer for personal, family, or household

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1purposes for an initial period of 4 months or less that is
2automatically renewable with each payment after the initial
3period and that permits the consumer to become the owner of the
4merchandise.
5 "Renting" means any transfer of the possession or right to
6possession of merchandise to a user for a valuable
7consideration under a rental-purchase agreement.
8 Section 10. Rental Purchase Agreement Occupation Tax. A tax
9is imposed upon persons engaged in this State in the business
10of renting merchandise under a rental-purchase agreement in
11Illinois at the rate of 6.25% of the gross receipts received
12from the business. Every person engaged in this State in the
13business of renting merchandise shall apply to the Department
14(upon a form prescribed and furnished by the Department) for a
15certificate of registration under this Act. The certificate of
16registration which is issued by the Department to a retailer
17under the Retailers' Occupation Tax Act shall permit the
18merchant to engage in a business that is taxable under this
19Section without registering separately with the Department.
20 The Department shall have full power to administer and
21enforce this Section, to collect all taxes and penalties due
22hereunder, to dispose of taxes and penalties so collected in
23the manner hereinafter provided, and to determine all rights to
24credit memoranda, arising on account of the erroneous payment
25of tax or penalty hereunder. In the administration of, and

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1compliance with, this Section, the Department and persons who
2are subject to this Section shall have the same rights,
3remedies, privileges, immunities, powers and duties, and be
4subject to the same conditions, restrictions, limitations,
5penalties and definitions of terms, and employ the same modes
6of procedure, as are prescribed in Sections 1, 1a, 2, 2-10
7through 2-65 (in respect to all provisions therein other than
8the State rate of tax), 2a, 2b, 2c, 3 (except provisions
9relating to transaction returns), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f,
105g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12, and 13 of
11the Retailers' Occupation Tax Act and Section 3-7 of the
12Uniform Penalty and Interest Act as fully as if those
13provisions were set forth herein.
14 Section 15. Rental Purchase Agreement Use Tax. A tax is
15imposed upon the privilege of using, in this State, merchandise
16which is rented from a merchant. Such tax is at the rate of
176.25% of the rental price paid to the merchant under any rental
18purchase agreement.
19 The tax hereby imposed shall be collected from the consumer
20by a merchant maintaining a place of business in this State and
21remitted to the Department.
22 The tax hereby imposed and not paid to a merchant pursuant
23to the preceding paragraph of this Section shall be paid to the
24Department directly by any person using such merchandise within
25this State.

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1 Merchants shall collect the tax from consumers by adding
2the tax to the rental price of the merchandise, when rented for
3use, in the manner prescribed by the Department. The Department
4shall have the power to adopt and promulgate reasonable rules
5and regulations for the adding of such tax by merchants to
6rental prices by prescribing bracket systems for the purpose of
7enabling such merchants to add and collect, as far as
8practicable, the amount of such tax.
9 The tax imposed by this Section shall, when collected, be
10stated as a distinct item separate and apart from the rental
11price of the merchandise.
12 The Department shall have full power to administer and
13enforce this Section; to collect all taxes, penalties and
14interest due hereunder; to dispose of taxes, penalties and
15interest so collected in the manner hereinafter provided, and
16to determine all rights to credit memoranda or refunds arising
17on account of the erroneous payment of tax, penalty or interest
18hereunder. In the administration of, and compliance with, this
19Section, the Department and persons who are subject to this
20Section shall have the same rights, remedies, privileges,
21immunities, powers, and duties, and be subject to the same
22conditions, restrictions, limitations, penalties, and
23definitions of terms, and employ the same modes of procedure,
24as are prescribed in Sections 2, 3, 3-10 through 3-80, 4, 6, 7,
258, 9 (except provisions relating to transaction returns), 10,
2611, 12, 12a, 12b, 13, 14, 15, 19, 20, 21, and 22 of the Use Tax

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1Act, and are not inconsistent with this Section, as fully as if
2those provisions were set forth herein.
3 Section 20. Electronic filing and payment. Any return or
4document that is required to be filed under this Act shall be
5filed electronically, in the form and manner required by the
6Department.
7 Any payment required to be made under this Act shall be
8paid electronically, in the form and manner required by the
9Department.
10 The Department shall grant a waiver of the electronic
11filing or payment requirement under this Section for any
12taxpayer who petitions the Department and demonstrates undue
13hardship in complying with the electronic filing or payment
14requirement. The waiver shall be for a period not to exceed 2
15years, but may be renewed an unlimited number of times for
16periods not to exceed 2 years each.
17 Section 25. Deposit of taxes.
18 (a) Each month, from the net revenue realized for the
19preceding month, the Department shall pay an amount estimated
20by the Department to be required for refunds of the tax under
21this Act, which shall be deposited into the Rental Purchase
22Agreement Tax Refund Fund.
23 (b) Of the remainder of funds after the deposit under
24subsection (a) of this Section:

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1 (1) each month the Department shall pay into the State
2 and Local Sales Tax Reform Fund 20% of the net revenue
3 realized for the preceding month from the tax imposed under
4 this Act; and
5 (2) each month the Department shall pay into the
6 General Revenue Fund 80% of the net revenue realized for
7 the preceding month from the tax imposed under this Act.
8 Section 30. One-Time Transitional Use Tax Credit. Within 3
9months after the effective date of this Act, the merchant shall
10file an application (upon a form prescribed and furnished by
11the Department) to receive a one-time credit for the Use Tax
12paid on merchandise subject to tax under this Act purchased
13during the 6 months immediately prior to the effective date of
14this Act. The Department shall issue a credit equal to the
15total Use Tax paid in the 6 months immediately prior to the
16effective date of this Act. Upon the issuance of the credit,
17the merchant may apply the credit against the tax imposed under
18this Act.
19 Section 35. Applicability. This Act does not apply to
20tangible personal property which is required to be titled and
21registered by a State agency.
22 Section 40. Rulemaking. The Department may make such rules
23as it may deem necessary to implement the purposes of this Act.

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1 Section 45. The State Finance Act is amended by adding
2Sections 5.878 and 6z-102 as follows:
3 (30 ILCS 105/5.878 new)
4 Sec. 5.878. The Rental Purchase Agreement Tax Refund Fund.
5 (30 ILCS 105/6z-102 new)
6 Sec. 6z-102. The Rental Purchase Agreement Tax Refund Fund.
7 (a) The Rental Purchase Agreement Tax Refund Fund is hereby
8created as a special fund in the State treasury. Moneys in the
9Fund shall be used by the Department of Revenue to pay refunds
10of Rental Purchase Agreement Tax in the manner provided in
11Section 6 of the Retailers' Occupation Tax Act and Section 19
12of the Use Tax Act, as incorporated into Sections 10 and 15 of
13the Rental Purchase Agreement Tax Act.
14 (b) Moneys in the Rental Purchase Agreement Tax Refund Fund
15shall be expended exclusively for the purpose of paying refunds
16pursuant to this Section.
17 (c) The Director of Revenue shall order payment of refunds
18under this Section from the Rental Purchase Agreement Tax
19Refund Fund only to the extent that amounts collected pursuant
20to Sections 10 and 15 of the Rental Purchase Agreement
21Occupation and Use Tax Act have been deposited and retained in
22the Fund.
23 As soon as possible after the end of each fiscal year, the

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1Director of Revenue shall order transferred, and the State
2Treasurer and State Comptroller shall transfer from the Rental
3Purchase Agreement Tax Refund Fund to the General Revenue Fund,
4any surplus remaining as of the end of such fiscal year.
5This Section shall constitute an irrevocable and continuing
6appropriation from the Rental Purchase Agreement Tax Refund
7Fund for the purpose of paying refunds in accordance with the
8provisions of this Section.
9 Section 50. The Use Tax Act is amended by changing Section
103-5 as follows:
11 (35 ILCS 105/3-5)
12 Sec. 3-5. Exemptions. Use of the following tangible
13personal property is exempt from the tax imposed by this Act:
14 (1) Personal property purchased from a corporation,
15society, association, foundation, institution, or
16organization, other than a limited liability company, that is
17organized and operated as a not-for-profit service enterprise
18for the benefit of persons 65 years of age or older if the
19personal property was not purchased by the enterprise for the
20purpose of resale by the enterprise.
21 (2) Personal property purchased by a not-for-profit
22Illinois county fair association for use in conducting,
23operating, or promoting the county fair.
24 (3) Personal property purchased by a not-for-profit arts or

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1cultural organization that establishes, by proof required by
2the Department by rule, that it has received an exemption under
3Section 501(c)(3) of the Internal Revenue Code and that is
4organized and operated primarily for the presentation or
5support of arts or cultural programming, activities, or
6services. These organizations include, but are not limited to,
7music and dramatic arts organizations such as symphony
8orchestras and theatrical groups, arts and cultural service
9organizations, local arts councils, visual arts organizations,
10and media arts organizations. On and after the effective date
11of this amendatory Act of the 92nd General Assembly, however,
12an entity otherwise eligible for this exemption shall not make
13tax-free purchases unless it has an active identification
14number issued by the Department.
15 (4) Personal property purchased by a governmental body, by
16a corporation, society, association, foundation, or
17institution organized and operated exclusively for charitable,
18religious, or educational purposes, or by a not-for-profit
19corporation, society, association, foundation, institution, or
20organization that has no compensated officers or employees and
21that is organized and operated primarily for the recreation of
22persons 55 years of age or older. A limited liability company
23may qualify for the exemption under this paragraph only if the
24limited liability company is organized and operated
25exclusively for educational purposes. On and after July 1,
261987, however, no entity otherwise eligible for this exemption

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1shall make tax-free purchases unless it has an active exemption
2identification number issued by the Department.
3 (5) Until July 1, 2003, a passenger car that is a
4replacement vehicle to the extent that the purchase price of
5the car is subject to the Replacement Vehicle Tax.
6 (6) Until July 1, 2003 and beginning again on September 1,
72004 through August 30, 2014, graphic arts machinery and
8equipment, including repair and replacement parts, both new and
9used, and including that manufactured on special order,
10certified by the purchaser to be used primarily for graphic
11arts production, and including machinery and equipment
12purchased for lease. Equipment includes chemicals or chemicals
13acting as catalysts but only if the chemicals or chemicals
14acting as catalysts effect a direct and immediate change upon a
15graphic arts product.
16 (7) Farm chemicals.
17 (8) Legal tender, currency, medallions, or gold or silver
18coinage issued by the State of Illinois, the government of the
19United States of America, or the government of any foreign
20country, and bullion.
21 (9) Personal property purchased from a teacher-sponsored
22student organization affiliated with an elementary or
23secondary school located in Illinois.
24 (10) A motor vehicle that is used for automobile renting,
25as defined in the Automobile Renting Occupation and Use Tax
26Act.

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1 (11) Farm machinery and equipment, both new and used,
2including that manufactured on special order, certified by the
3purchaser to be used primarily for production agriculture or
4State or federal agricultural programs, including individual
5replacement parts for the machinery and equipment, including
6machinery and equipment purchased for lease, and including
7implements of husbandry defined in Section 1-130 of the
8Illinois Vehicle Code, farm machinery and agricultural
9chemical and fertilizer spreaders, and nurse wagons required to
10be registered under Section 3-809 of the Illinois Vehicle Code,
11but excluding other motor vehicles required to be registered
12under the Illinois Vehicle Code. Horticultural polyhouses or
13hoop houses used for propagating, growing, or overwintering
14plants shall be considered farm machinery and equipment under
15this item (11). Agricultural chemical tender tanks and dry
16boxes shall include units sold separately from a motor vehicle
17required to be licensed and units sold mounted on a motor
18vehicle required to be licensed if the selling price of the
19tender is separately stated.
20 Farm machinery and equipment shall include precision
21farming equipment that is installed or purchased to be
22installed on farm machinery and equipment including, but not
23limited to, tractors, harvesters, sprayers, planters, seeders,
24or spreaders. Precision farming equipment includes, but is not
25limited to, soil testing sensors, computers, monitors,
26software, global positioning and mapping systems, and other

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1such equipment.
2 Farm machinery and equipment also includes computers,
3sensors, software, and related equipment used primarily in the
4computer-assisted operation of production agriculture
5facilities, equipment, and activities such as, but not limited
6to, the collection, monitoring, and correlation of animal and
7crop data for the purpose of formulating animal diets and
8agricultural chemicals. This item (11) is exempt from the
9provisions of Section 3-90.
10 (12) Until June 30, 2013, fuel and petroleum products sold
11to or used by an air common carrier, certified by the carrier
12to be used for consumption, shipment, or storage in the conduct
13of its business as an air common carrier, for a flight destined
14for or returning from a location or locations outside the
15United States without regard to previous or subsequent domestic
16stopovers.
17 Beginning July 1, 2013, fuel and petroleum products sold to
18or used by an air carrier, certified by the carrier to be used
19for consumption, shipment, or storage in the conduct of its
20business as an air common carrier, for a flight that (i) is
21engaged in foreign trade or is engaged in trade between the
22United States and any of its possessions and (ii) transports at
23least one individual or package for hire from the city of
24origination to the city of final destination on the same
25aircraft, without regard to a change in the flight number of
26that aircraft.

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1 (13) Proceeds of mandatory service charges separately
2stated on customers' bills for the purchase and consumption of
3food and beverages purchased at retail from a retailer, to the
4extent that the proceeds of the service charge are in fact
5turned over as tips or as a substitute for tips to the
6employees who participate directly in preparing, serving,
7hosting or cleaning up the food or beverage function with
8respect to which the service charge is imposed.
9 (14) Until July 1, 2003, oil field exploration, drilling,
10and production equipment, including (i) rigs and parts of rigs,
11rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
12tubular goods, including casing and drill strings, (iii) pumps
13and pump-jack units, (iv) storage tanks and flow lines, (v) any
14individual replacement part for oil field exploration,
15drilling, and production equipment, and (vi) machinery and
16equipment purchased for lease; but excluding motor vehicles
17required to be registered under the Illinois Vehicle Code.
18 (15) Photoprocessing machinery and equipment, including
19repair and replacement parts, both new and used, including that
20manufactured on special order, certified by the purchaser to be
21used primarily for photoprocessing, and including
22photoprocessing machinery and equipment purchased for lease.
23 (16) Coal and aggregate exploration, mining, off-highway
24hauling, processing, maintenance, and reclamation equipment,
25including replacement parts and equipment, and including
26equipment purchased for lease, but excluding motor vehicles

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1required to be registered under the Illinois Vehicle Code. The
2changes made to this Section by Public Act 97-767 apply on and
3after July 1, 2003, but no claim for credit or refund is
4allowed on or after August 16, 2013 (the effective date of
5Public Act 98-456) for such taxes paid during the period
6beginning July 1, 2003 and ending on August 16, 2013 (the
7effective date of Public Act 98-456).
8 (17) Until July 1, 2003, distillation machinery and
9equipment, sold as a unit or kit, assembled or installed by the
10retailer, certified by the user to be used only for the
11production of ethyl alcohol that will be used for consumption
12as motor fuel or as a component of motor fuel for the personal
13use of the user, and not subject to sale or resale.
14 (18) Manufacturing and assembling machinery and equipment
15used primarily in the process of manufacturing or assembling
16tangible personal property for wholesale or retail sale or
17lease, whether that sale or lease is made directly by the
18manufacturer or by some other person, whether the materials
19used in the process are owned by the manufacturer or some other
20person, or whether that sale or lease is made apart from or as
21an incident to the seller's engaging in the service occupation
22of producing machines, tools, dies, jigs, patterns, gauges, or
23other similar items of no commercial value on special order for
24a particular purchaser. The exemption provided by this
25paragraph (18) does not include machinery and equipment used in
26(i) the generation of electricity for wholesale or retail sale;

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1(ii) the generation or treatment of natural or artificial gas
2for wholesale or retail sale that is delivered to customers
3through pipes, pipelines, or mains; or (iii) the treatment of
4water for wholesale or retail sale that is delivered to
5customers through pipes, pipelines, or mains. The provisions of
6Public Act 98-583 are declaratory of existing law as to the
7meaning and scope of this exemption.
8 (19) Personal property delivered to a purchaser or
9purchaser's donee inside Illinois when the purchase order for
10that personal property was received by a florist located
11outside Illinois who has a florist located inside Illinois
12deliver the personal property.
13 (20) Semen used for artificial insemination of livestock
14for direct agricultural production.
15 (21) Horses, or interests in horses, registered with and
16meeting the requirements of any of the Arabian Horse Club
17Registry of America, Appaloosa Horse Club, American Quarter
18Horse Association, United States Trotting Association, or
19Jockey Club, as appropriate, used for purposes of breeding or
20racing for prizes. This item (21) is exempt from the provisions
21of Section 3-90, and the exemption provided for under this item
22(21) applies for all periods beginning May 30, 1995, but no
23claim for credit or refund is allowed on or after January 1,
242008 for such taxes paid during the period beginning May 30,
252000 and ending on January 1, 2008.
26 (22) Computers and communications equipment utilized for

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1any hospital purpose and equipment used in the diagnosis,
2analysis, or treatment of hospital patients purchased by a
3lessor who leases the equipment, under a lease of one year or
4longer executed or in effect at the time the lessor would
5otherwise be subject to the tax imposed by this Act, to a
6hospital that has been issued an active tax exemption
7identification number by the Department under Section 1g of the
8Retailers' Occupation Tax Act. If the equipment is leased in a
9manner that does not qualify for this exemption or is used in
10any other non-exempt manner, the lessor shall be liable for the
11tax imposed under this Act or the Service Use Tax Act, as the
12case may be, based on the fair market value of the property at
13the time the non-qualifying use occurs. No lessor shall collect
14or attempt to collect an amount (however designated) that
15purports to reimburse that lessor for the tax imposed by this
16Act or the Service Use Tax Act, as the case may be, if the tax
17has not been paid by the lessor. If a lessor improperly
18collects any such amount from the lessee, the lessee shall have
19a legal right to claim a refund of that amount from the lessor.
20If, however, that amount is not refunded to the lessee for any
21reason, the lessor is liable to pay that amount to the
22Department.
23 (23) Personal property purchased by a lessor who leases the
24property, under a lease of one year or longer executed or in
25effect at the time the lessor would otherwise be subject to the
26tax imposed by this Act, to a governmental body that has been

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1issued an active sales tax exemption identification number by
2the Department under Section 1g of the Retailers' Occupation
3Tax Act. If the property is leased in a manner that does not
4qualify for this exemption or used in any other non-exempt
5manner, the lessor shall be liable for the tax imposed under
6this Act or the Service Use Tax Act, as the case may be, based
7on the fair market value of the property at the time the
8non-qualifying use occurs. No lessor shall collect or attempt
9to collect an amount (however designated) that purports to
10reimburse that lessor for the tax imposed by this Act or the
11Service Use Tax Act, as the case may be, if the tax has not been
12paid by the lessor. If a lessor improperly collects any such
13amount from the lessee, the lessee shall have a legal right to
14claim a refund of that amount from the lessor. If, however,
15that amount is not refunded to the lessee for any reason, the
16lessor is liable to pay that amount to the Department.
17 (24) Beginning with taxable years ending on or after
18December 31, 1995 and ending with taxable years ending on or
19before December 31, 2004, personal property that is donated for
20disaster relief to be used in a State or federally declared
21disaster area in Illinois or bordering Illinois by a
22manufacturer or retailer that is registered in this State to a
23corporation, society, association, foundation, or institution
24that has been issued a sales tax exemption identification
25number by the Department that assists victims of the disaster
26who reside within the declared disaster area.

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1 (25) Beginning with taxable years ending on or after
2December 31, 1995 and ending with taxable years ending on or
3before December 31, 2004, personal property that is used in the
4performance of infrastructure repairs in this State, including
5but not limited to municipal roads and streets, access roads,
6bridges, sidewalks, waste disposal systems, water and sewer
7line extensions, water distribution and purification
8facilities, storm water drainage and retention facilities, and
9sewage treatment facilities, resulting from a State or
10federally declared disaster in Illinois or bordering Illinois
11when such repairs are initiated on facilities located in the
12declared disaster area within 6 months after the disaster.
13 (26) Beginning July 1, 1999, game or game birds purchased
14at a "game breeding and hunting preserve area" as that term is
15used in the Wildlife Code. This paragraph is exempt from the
16provisions of Section 3-90.
17 (27) A motor vehicle, as that term is defined in Section
181-146 of the Illinois Vehicle Code, that is donated to a
19corporation, limited liability company, society, association,
20foundation, or institution that is determined by the Department
21to be organized and operated exclusively for educational
22purposes. For purposes of this exemption, "a corporation,
23limited liability company, society, association, foundation,
24or institution organized and operated exclusively for
25educational purposes" means all tax-supported public schools,
26private schools that offer systematic instruction in useful

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1branches of learning by methods common to public schools and
2that compare favorably in their scope and intensity with the
3course of study presented in tax-supported schools, and
4vocational or technical schools or institutes organized and
5operated exclusively to provide a course of study of not less
6than 6 weeks duration and designed to prepare individuals to
7follow a trade or to pursue a manual, technical, mechanical,
8industrial, business, or commercial occupation.
9 (28) Beginning January 1, 2000, personal property,
10including food, purchased through fundraising events for the
11benefit of a public or private elementary or secondary school,
12a group of those schools, or one or more school districts if
13the events are sponsored by an entity recognized by the school
14district that consists primarily of volunteers and includes
15parents and teachers of the school children. This paragraph
16does not apply to fundraising events (i) for the benefit of
17private home instruction or (ii) for which the fundraising
18entity purchases the personal property sold at the events from
19another individual or entity that sold the property for the
20purpose of resale by the fundraising entity and that profits
21from the sale to the fundraising entity. This paragraph is
22exempt from the provisions of Section 3-90.
23 (29) Beginning January 1, 2000 and through December 31,
242001, new or used automatic vending machines that prepare and
25serve hot food and beverages, including coffee, soup, and other
26items, and replacement parts for these machines. Beginning

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1January 1, 2002 and through June 30, 2003, machines and parts
2for machines used in commercial, coin-operated amusement and
3vending business if a use or occupation tax is paid on the
4gross receipts derived from the use of the commercial,
5coin-operated amusement and vending machines. This paragraph
6is exempt from the provisions of Section 3-90.
7 (30) Beginning January 1, 2001 and through June 30, 2016,
8food for human consumption that is to be consumed off the
9premises where it is sold (other than alcoholic beverages, soft
10drinks, and food that has been prepared for immediate
11consumption) and prescription and nonprescription medicines,
12drugs, medical appliances, and insulin, urine testing
13materials, syringes, and needles used by diabetics, for human
14use, when purchased for use by a person receiving medical
15assistance under Article V of the Illinois Public Aid Code who
16resides in a licensed long-term care facility, as defined in
17the Nursing Home Care Act, or in a licensed facility as defined
18in the ID/DD Community Care Act, the MC/DD Act, or the
19Specialized Mental Health Rehabilitation Act of 2013.
20 (31) Beginning on the effective date of this amendatory Act
21of the 92nd General Assembly, computers and communications
22equipment utilized for any hospital purpose and equipment used
23in the diagnosis, analysis, or treatment of hospital patients
24purchased by a lessor who leases the equipment, under a lease
25of one year or longer executed or in effect at the time the
26lessor would otherwise be subject to the tax imposed by this

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1Act, to a hospital that has been issued an active tax exemption
2identification number by the Department under Section 1g of the
3Retailers' Occupation Tax Act. If the equipment is leased in a
4manner that does not qualify for this exemption or is used in
5any other nonexempt manner, the lessor shall be liable for the
6tax imposed under this Act or the Service Use Tax Act, as the
7case may be, based on the fair market value of the property at
8the time the nonqualifying use occurs. No lessor shall collect
9or attempt to collect an amount (however designated) that
10purports to reimburse that lessor for the tax imposed by this
11Act or the Service Use Tax Act, as the case may be, if the tax
12has not been paid by the lessor. If a lessor improperly
13collects any such amount from the lessee, the lessee shall have
14a legal right to claim a refund of that amount from the lessor.
15If, however, that amount is not refunded to the lessee for any
16reason, the lessor is liable to pay that amount to the
17Department. This paragraph is exempt from the provisions of
18Section 3-90.
19 (32) Beginning on the effective date of this amendatory Act
20of the 92nd General Assembly, personal property purchased by a
21lessor who leases the property, under a lease of one year or
22longer executed or in effect at the time the lessor would
23otherwise be subject to the tax imposed by this Act, to a
24governmental body that has been issued an active sales tax
25exemption identification number by the Department under
26Section 1g of the Retailers' Occupation Tax Act. If the

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1property is leased in a manner that does not qualify for this
2exemption or used in any other nonexempt manner, the lessor
3shall be liable for the tax imposed under this Act or the
4Service Use Tax Act, as the case may be, based on the fair
5market value of the property at the time the nonqualifying use
6occurs. No lessor shall collect or attempt to collect an amount
7(however designated) that purports to reimburse that lessor for
8the tax imposed by this Act or the Service Use Tax Act, as the
9case may be, if the tax has not been paid by the lessor. If a
10lessor improperly collects any such amount from the lessee, the
11lessee shall have a legal right to claim a refund of that
12amount from the lessor. If, however, that amount is not
13refunded to the lessee for any reason, the lessor is liable to
14pay that amount to the Department. This paragraph is exempt
15from the provisions of Section 3-90.
16 (33) On and after July 1, 2003 and through June 30, 2004,
17the use in this State of motor vehicles of the second division
18with a gross vehicle weight in excess of 8,000 pounds and that
19are subject to the commercial distribution fee imposed under
20Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
211, 2004 and through June 30, 2005, the use in this State of
22motor vehicles of the second division: (i) with a gross vehicle
23weight rating in excess of 8,000 pounds; (ii) that are subject
24to the commercial distribution fee imposed under Section
253-815.1 of the Illinois Vehicle Code; and (iii) that are
26primarily used for commercial purposes. Through June 30, 2005,

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1this exemption applies to repair and replacement parts added
2after the initial purchase of such a motor vehicle if that
3motor vehicle is used in a manner that would qualify for the
4rolling stock exemption otherwise provided for in this Act. For
5purposes of this paragraph, the term "used for commercial
6purposes" means the transportation of persons or property in
7furtherance of any commercial or industrial enterprise,
8whether for-hire or not.
9 (34) Beginning January 1, 2008, tangible personal property
10used in the construction or maintenance of a community water
11supply, as defined under Section 3.145 of the Environmental
12Protection Act, that is operated by a not-for-profit
13corporation that holds a valid water supply permit issued under
14Title IV of the Environmental Protection Act. This paragraph is
15exempt from the provisions of Section 3-90.
16 (35) Beginning January 1, 2010, materials, parts,
17equipment, components, and furnishings incorporated into or
18upon an aircraft as part of the modification, refurbishment,
19completion, replacement, repair, or maintenance of the
20aircraft. This exemption includes consumable supplies used in
21the modification, refurbishment, completion, replacement,
22repair, and maintenance of aircraft, but excludes any
23materials, parts, equipment, components, and consumable
24supplies used in the modification, replacement, repair, and
25maintenance of aircraft engines or power plants, whether such
26engines or power plants are installed or uninstalled upon any

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1such aircraft. "Consumable supplies" include, but are not
2limited to, adhesive, tape, sandpaper, general purpose
3lubricants, cleaning solution, latex gloves, and protective
4films. This exemption applies only to the use of qualifying
5tangible personal property by persons who modify, refurbish,
6complete, repair, replace, or maintain aircraft and who (i)
7hold an Air Agency Certificate and are empowered to operate an
8approved repair station by the Federal Aviation
9Administration, (ii) have a Class IV Rating, and (iii) conduct
10operations in accordance with Part 145 of the Federal Aviation
11Regulations. The exemption does not include aircraft operated
12by a commercial air carrier providing scheduled passenger air
13service pursuant to authority issued under Part 121 or Part 129
14of the Federal Aviation Regulations. The changes made to this
15paragraph (35) by Public Act 98-534 are declarative of existing
16law.
17 (36) Tangible personal property purchased by a
18public-facilities corporation, as described in Section
1911-65-10 of the Illinois Municipal Code, for purposes of
20constructing or furnishing a municipal convention hall, but
21only if the legal title to the municipal convention hall is
22transferred to the municipality without any further
23consideration by or on behalf of the municipality at the time
24of the completion of the municipal convention hall or upon the
25retirement or redemption of any bonds or other debt instruments
26issued by the public-facilities corporation in connection with

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1the development of the municipal convention hall. This
2exemption includes existing public-facilities corporations as
3provided in Section 11-65-25 of the Illinois Municipal Code.
4This paragraph is exempt from the provisions of Section 3-90.
5 (37) Beginning January 1, 2017, menstrual pads, tampons,
6and menstrual cups.
7 (38) Merchandise that is subject to the Rental Purchase
8Agreement Occupation and Use Tax. The purchaser must certify
9that the item is purchased to be rented subject to a rental
10purchase agreement, as defined in the Rental Purchase Agreement
11Act, and provide proof of registration under the Rental
12Purchase Agreement Occupation and Use Tax Act. This paragraph
13is exempt from the provisions of Section 3-90.
14(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1598-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
161-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
177-29-15; 99-855, eff. 8-19-16.)
18 Section 55. The Retailers' Occupation Tax Act is amended by
19changing Section 2-5 as follows:
20 (35 ILCS 120/2-5)
21 Sec. 2-5. Exemptions. Gross receipts from proceeds from the
22sale of the following tangible personal property are exempt
23from the tax imposed by this Act:
24 (1) Farm chemicals.

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1 (2) Farm machinery and equipment, both new and used,
2including that manufactured on special order, certified by the
3purchaser to be used primarily for production agriculture or
4State or federal agricultural programs, including individual
5replacement parts for the machinery and equipment, including
6machinery and equipment purchased for lease, and including
7implements of husbandry defined in Section 1-130 of the
8Illinois Vehicle Code, farm machinery and agricultural
9chemical and fertilizer spreaders, and nurse wagons required to
10be registered under Section 3-809 of the Illinois Vehicle Code,
11but excluding other motor vehicles required to be registered
12under the Illinois Vehicle Code. Horticultural polyhouses or
13hoop houses used for propagating, growing, or overwintering
14plants shall be considered farm machinery and equipment under
15this item (2). Agricultural chemical tender tanks and dry boxes
16shall include units sold separately from a motor vehicle
17required to be licensed and units sold mounted on a motor
18vehicle required to be licensed, if the selling price of the
19tender is separately stated.
20 Farm machinery and equipment shall include precision
21farming equipment that is installed or purchased to be
22installed on farm machinery and equipment including, but not
23limited to, tractors, harvesters, sprayers, planters, seeders,
24or spreaders. Precision farming equipment includes, but is not
25limited to, soil testing sensors, computers, monitors,
26software, global positioning and mapping systems, and other

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1such equipment.
2 Farm machinery and equipment also includes computers,
3sensors, software, and related equipment used primarily in the
4computer-assisted operation of production agriculture
5facilities, equipment, and activities such as, but not limited
6to, the collection, monitoring, and correlation of animal and
7crop data for the purpose of formulating animal diets and
8agricultural chemicals. This item (2) is exempt from the
9provisions of Section 2-70.
10 (3) Until July 1, 2003, distillation machinery and
11equipment, sold as a unit or kit, assembled or installed by the
12retailer, certified by the user to be used only for the
13production of ethyl alcohol that will be used for consumption
14as motor fuel or as a component of motor fuel for the personal
15use of the user, and not subject to sale or resale.
16 (4) Until July 1, 2003 and beginning again September 1,
172004 through August 30, 2014, graphic arts machinery and
18equipment, including repair and replacement parts, both new and
19used, and including that manufactured on special order or
20purchased for lease, certified by the purchaser to be used
21primarily for graphic arts production. Equipment includes
22chemicals or chemicals acting as catalysts but only if the
23chemicals or chemicals acting as catalysts effect a direct and
24immediate change upon a graphic arts product.
25 (5) A motor vehicle that is used for automobile renting, as
26defined in the Automobile Renting Occupation and Use Tax Act.

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1This paragraph is exempt from the provisions of Section 2-70.
2 (6) Personal property sold by a teacher-sponsored student
3organization affiliated with an elementary or secondary school
4located in Illinois.
5 (7) Until July 1, 2003, proceeds of that portion of the
6selling price of a passenger car the sale of which is subject
7to the Replacement Vehicle Tax.
8 (8) Personal property sold to an Illinois county fair
9association for use in conducting, operating, or promoting the
10county fair.
11 (9) Personal property sold to a not-for-profit arts or
12cultural organization that establishes, by proof required by
13the Department by rule, that it has received an exemption under
14Section 501(c)(3) of the Internal Revenue Code and that is
15organized and operated primarily for the presentation or
16support of arts or cultural programming, activities, or
17services. These organizations include, but are not limited to,
18music and dramatic arts organizations such as symphony
19orchestras and theatrical groups, arts and cultural service
20organizations, local arts councils, visual arts organizations,
21and media arts organizations. On and after the effective date
22of this amendatory Act of the 92nd General Assembly, however,
23an entity otherwise eligible for this exemption shall not make
24tax-free purchases unless it has an active identification
25number issued by the Department.
26 (10) Personal property sold by a corporation, society,

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1association, foundation, institution, or organization, other
2than a limited liability company, that is organized and
3operated as a not-for-profit service enterprise for the benefit
4of persons 65 years of age or older if the personal property
5was not purchased by the enterprise for the purpose of resale
6by the enterprise.
7 (11) Personal property sold to a governmental body, to a
8corporation, society, association, foundation, or institution
9organized and operated exclusively for charitable, religious,
10or educational purposes, or to a not-for-profit corporation,
11society, association, foundation, institution, or organization
12that has no compensated officers or employees and that is
13organized and operated primarily for the recreation of persons
1455 years of age or older. A limited liability company may
15qualify for the exemption under this paragraph only if the
16limited liability company is organized and operated
17exclusively for educational purposes. On and after July 1,
181987, however, no entity otherwise eligible for this exemption
19shall make tax-free purchases unless it has an active
20identification number issued by the Department.
21 (12) Tangible personal property sold to interstate
22carriers for hire for use as rolling stock moving in interstate
23commerce or to lessors under leases of one year or longer
24executed or in effect at the time of purchase by interstate
25carriers for hire for use as rolling stock moving in interstate
26commerce and equipment operated by a telecommunications

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1provider, licensed as a common carrier by the Federal
2Communications Commission, which is permanently installed in
3or affixed to aircraft moving in interstate commerce.
4 (12-5) On and after July 1, 2003 and through June 30, 2004,
5motor vehicles of the second division with a gross vehicle
6weight in excess of 8,000 pounds that are subject to the
7commercial distribution fee imposed under Section 3-815.1 of
8the Illinois Vehicle Code. Beginning on July 1, 2004 and
9through June 30, 2005, the use in this State of motor vehicles
10of the second division: (i) with a gross vehicle weight rating
11in excess of 8,000 pounds; (ii) that are subject to the
12commercial distribution fee imposed under Section 3-815.1 of
13the Illinois Vehicle Code; and (iii) that are primarily used
14for commercial purposes. Through June 30, 2005, this exemption
15applies to repair and replacement parts added after the initial
16purchase of such a motor vehicle if that motor vehicle is used
17in a manner that would qualify for the rolling stock exemption
18otherwise provided for in this Act. For purposes of this
19paragraph, "used for commercial purposes" means the
20transportation of persons or property in furtherance of any
21commercial or industrial enterprise whether for-hire or not.
22 (13) Proceeds from sales to owners, lessors, or shippers of
23tangible personal property that is utilized by interstate
24carriers for hire for use as rolling stock moving in interstate
25commerce and equipment operated by a telecommunications
26provider, licensed as a common carrier by the Federal

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1Communications Commission, which is permanently installed in
2or affixed to aircraft moving in interstate commerce.
3 (14) Machinery and equipment that will be used by the
4purchaser, or a lessee of the purchaser, primarily in the
5process of manufacturing or assembling tangible personal
6property for wholesale or retail sale or lease, whether the
7sale or lease is made directly by the manufacturer or by some
8other person, whether the materials used in the process are
9owned by the manufacturer or some other person, or whether the
10sale or lease is made apart from or as an incident to the
11seller's engaging in the service occupation of producing
12machines, tools, dies, jigs, patterns, gauges, or other similar
13items of no commercial value on special order for a particular
14purchaser. The exemption provided by this paragraph (14) does
15not include machinery and equipment used in (i) the generation
16of electricity for wholesale or retail sale; (ii) the
17generation or treatment of natural or artificial gas for
18wholesale or retail sale that is delivered to customers through
19pipes, pipelines, or mains; or (iii) the treatment of water for
20wholesale or retail sale that is delivered to customers through
21pipes, pipelines, or mains. The provisions of Public Act 98-583
22are declaratory of existing law as to the meaning and scope of
23this exemption.
24 (15) Proceeds of mandatory service charges separately
25stated on customers' bills for purchase and consumption of food
26and beverages, to the extent that the proceeds of the service

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1charge are in fact turned over as tips or as a substitute for
2tips to the employees who participate directly in preparing,
3serving, hosting or cleaning up the food or beverage function
4with respect to which the service charge is imposed.
5 (16) Petroleum products sold to a purchaser if the seller
6is prohibited by federal law from charging tax to the
7purchaser.
8 (17) Tangible personal property sold to a common carrier by
9rail or motor that receives the physical possession of the
10property in Illinois and that transports the property, or
11shares with another common carrier in the transportation of the
12property, out of Illinois on a standard uniform bill of lading
13showing the seller of the property as the shipper or consignor
14of the property to a destination outside Illinois, for use
15outside Illinois.
16 (18) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20 (19) Until July 1 2003, oil field exploration, drilling,
21and production equipment, including (i) rigs and parts of rigs,
22rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
23tubular goods, including casing and drill strings, (iii) pumps
24and pump-jack units, (iv) storage tanks and flow lines, (v) any
25individual replacement part for oil field exploration,
26drilling, and production equipment, and (vi) machinery and

SB1434 Enrolled- 34 -LRB100 06488 HLH 16528 b
1equipment purchased for lease; but excluding motor vehicles
2required to be registered under the Illinois Vehicle Code.
3 (20) Photoprocessing machinery and equipment, including
4repair and replacement parts, both new and used, including that
5manufactured on special order, certified by the purchaser to be
6used primarily for photoprocessing, and including
7photoprocessing machinery and equipment purchased for lease.
8 (21) Coal and aggregate exploration, mining, off-highway
9hauling, processing, maintenance, and reclamation equipment,
10including replacement parts and equipment, and including
11equipment purchased for lease, but excluding motor vehicles
12required to be registered under the Illinois Vehicle Code. The
13changes made to this Section by Public Act 97-767 apply on and
14after July 1, 2003, but no claim for credit or refund is
15allowed on or after August 16, 2013 (the effective date of
16Public Act 98-456) for such taxes paid during the period
17beginning July 1, 2003 and ending on August 16, 2013 (the
18effective date of Public Act 98-456).
19 (22) Until June 30, 2013, fuel and petroleum products sold
20to or used by an air carrier, certified by the carrier to be
21used for consumption, shipment, or storage in the conduct of
22its business as an air common carrier, for a flight destined
23for or returning from a location or locations outside the
24United States without regard to previous or subsequent domestic
25stopovers.
26 Beginning July 1, 2013, fuel and petroleum products sold to

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1or used by an air carrier, certified by the carrier to be used
2for consumption, shipment, or storage in the conduct of its
3business as an air common carrier, for a flight that (i) is
4engaged in foreign trade or is engaged in trade between the
5United States and any of its possessions and (ii) transports at
6least one individual or package for hire from the city of
7origination to the city of final destination on the same
8aircraft, without regard to a change in the flight number of
9that aircraft.
10 (23) A transaction in which the purchase order is received
11by a florist who is located outside Illinois, but who has a
12florist located in Illinois deliver the property to the
13purchaser or the purchaser's donee in Illinois.
14 (24) Fuel consumed or used in the operation of ships,
15barges, or vessels that are used primarily in or for the
16transportation of property or the conveyance of persons for
17hire on rivers bordering on this State if the fuel is delivered
18by the seller to the purchaser's barge, ship, or vessel while
19it is afloat upon that bordering river.
20 (25) Except as provided in item (25-5) of this Section, a
21motor vehicle sold in this State to a nonresident even though
22the motor vehicle is delivered to the nonresident in this
23State, if the motor vehicle is not to be titled in this State,
24and if a drive-away permit is issued to the motor vehicle as
25provided in Section 3-603 of the Illinois Vehicle Code or if
26the nonresident purchaser has vehicle registration plates to

SB1434 Enrolled- 36 -LRB100 06488 HLH 16528 b
1transfer to the motor vehicle upon returning to his or her home
2state. The issuance of the drive-away permit or having the
3out-of-state registration plates to be transferred is prima
4facie evidence that the motor vehicle will not be titled in
5this State.
6 (25-5) The exemption under item (25) does not apply if the
7state in which the motor vehicle will be titled does not allow
8a reciprocal exemption for a motor vehicle sold and delivered
9in that state to an Illinois resident but titled in Illinois.
10The tax collected under this Act on the sale of a motor vehicle
11in this State to a resident of another state that does not
12allow a reciprocal exemption shall be imposed at a rate equal
13to the state's rate of tax on taxable property in the state in
14which the purchaser is a resident, except that the tax shall
15not exceed the tax that would otherwise be imposed under this
16Act. At the time of the sale, the purchaser shall execute a
17statement, signed under penalty of perjury, of his or her
18intent to title the vehicle in the state in which the purchaser
19is a resident within 30 days after the sale and of the fact of
20the payment to the State of Illinois of tax in an amount
21equivalent to the state's rate of tax on taxable property in
22his or her state of residence and shall submit the statement to
23the appropriate tax collection agency in his or her state of
24residence. In addition, the retailer must retain a signed copy
25of the statement in his or her records. Nothing in this item
26shall be construed to require the removal of the vehicle from

SB1434 Enrolled- 37 -LRB100 06488 HLH 16528 b
1this state following the filing of an intent to title the
2vehicle in the purchaser's state of residence if the purchaser
3titles the vehicle in his or her state of residence within 30
4days after the date of sale. The tax collected under this Act
5in accordance with this item (25-5) shall be proportionately
6distributed as if the tax were collected at the 6.25% general
7rate imposed under this Act.
8 (25-7) Beginning on July 1, 2007, no tax is imposed under
9this Act on the sale of an aircraft, as defined in Section 3 of
10the Illinois Aeronautics Act, if all of the following
11conditions are met:
12 (1) the aircraft leaves this State within 15 days after
13 the later of either the issuance of the final billing for
14 the sale of the aircraft, or the authorized approval for
15 return to service, completion of the maintenance record
16 entry, and completion of the test flight and ground test
17 for inspection, as required by 14 C.F.R. 91.407;
18 (2) the aircraft is not based or registered in this
19 State after the sale of the aircraft; and
20 (3) the seller retains in his or her books and records
21 and provides to the Department a signed and dated
22 certification from the purchaser, on a form prescribed by
23 the Department, certifying that the requirements of this
24 item (25-7) are met. The certificate must also include the
25 name and address of the purchaser, the address of the
26 location where the aircraft is to be titled or registered,

SB1434 Enrolled- 38 -LRB100 06488 HLH 16528 b
1 the address of the primary physical location of the
2 aircraft, and other information that the Department may
3 reasonably require.
4 For purposes of this item (25-7):
5 "Based in this State" means hangared, stored, or otherwise
6used, excluding post-sale customizations as defined in this
7Section, for 10 or more days in each 12-month period
8immediately following the date of the sale of the aircraft.
9 "Registered in this State" means an aircraft registered
10with the Department of Transportation, Aeronautics Division,
11or titled or registered with the Federal Aviation
12Administration to an address located in this State.
13 This paragraph (25-7) is exempt from the provisions of
14Section 2-70.
15 (26) Semen used for artificial insemination of livestock
16for direct agricultural production.
17 (27) Horses, or interests in horses, registered with and
18meeting the requirements of any of the Arabian Horse Club
19Registry of America, Appaloosa Horse Club, American Quarter
20Horse Association, United States Trotting Association, or
21Jockey Club, as appropriate, used for purposes of breeding or
22racing for prizes. This item (27) is exempt from the provisions
23of Section 2-70, and the exemption provided for under this item
24(27) applies for all periods beginning May 30, 1995, but no
25claim for credit or refund is allowed on or after January 1,
262008 (the effective date of Public Act 95-88) for such taxes

SB1434 Enrolled- 39 -LRB100 06488 HLH 16528 b
1paid during the period beginning May 30, 2000 and ending on
2January 1, 2008 (the effective date of Public Act 95-88).
3 (28) Computers and communications equipment utilized for
4any hospital purpose and equipment used in the diagnosis,
5analysis, or treatment of hospital patients sold to a lessor
6who leases the equipment, under a lease of one year or longer
7executed or in effect at the time of the purchase, to a
8hospital that has been issued an active tax exemption
9identification number by the Department under Section 1g of
10this Act.
11 (29) Personal property sold to a lessor who leases the
12property, under a lease of one year or longer executed or in
13effect at the time of the purchase, to a governmental body that
14has been issued an active tax exemption identification number
15by the Department under Section 1g of this Act.
16 (30) Beginning with taxable years ending on or after
17December 31, 1995 and ending with taxable years ending on or
18before December 31, 2004, personal property that is donated for
19disaster relief to be used in a State or federally declared
20disaster area in Illinois or bordering Illinois by a
21manufacturer or retailer that is registered in this State to a
22corporation, society, association, foundation, or institution
23that has been issued a sales tax exemption identification
24number by the Department that assists victims of the disaster
25who reside within the declared disaster area.
26 (31) Beginning with taxable years ending on or after

SB1434 Enrolled- 40 -LRB100 06488 HLH 16528 b
1December 31, 1995 and ending with taxable years ending on or
2before December 31, 2004, personal property that is used in the
3performance of infrastructure repairs in this State, including
4but not limited to municipal roads and streets, access roads,
5bridges, sidewalks, waste disposal systems, water and sewer
6line extensions, water distribution and purification
7facilities, storm water drainage and retention facilities, and
8sewage treatment facilities, resulting from a State or
9federally declared disaster in Illinois or bordering Illinois
10when such repairs are initiated on facilities located in the
11declared disaster area within 6 months after the disaster.
12 (32) Beginning July 1, 1999, game or game birds sold at a
13"game breeding and hunting preserve area" as that term is used
14in the Wildlife Code. This paragraph is exempt from the
15provisions of Section 2-70.
16 (33) A motor vehicle, as that term is defined in Section
171-146 of the Illinois Vehicle Code, that is donated to a
18corporation, limited liability company, society, association,
19foundation, or institution that is determined by the Department
20to be organized and operated exclusively for educational
21purposes. For purposes of this exemption, "a corporation,
22limited liability company, society, association, foundation,
23or institution organized and operated exclusively for
24educational purposes" means all tax-supported public schools,
25private schools that offer systematic instruction in useful
26branches of learning by methods common to public schools and

SB1434 Enrolled- 41 -LRB100 06488 HLH 16528 b
1that compare favorably in their scope and intensity with the
2course of study presented in tax-supported schools, and
3vocational or technical schools or institutes organized and
4operated exclusively to provide a course of study of not less
5than 6 weeks duration and designed to prepare individuals to
6follow a trade or to pursue a manual, technical, mechanical,
7industrial, business, or commercial occupation.
8 (34) Beginning January 1, 2000, personal property,
9including food, purchased through fundraising events for the
10benefit of a public or private elementary or secondary school,
11a group of those schools, or one or more school districts if
12the events are sponsored by an entity recognized by the school
13district that consists primarily of volunteers and includes
14parents and teachers of the school children. This paragraph
15does not apply to fundraising events (i) for the benefit of
16private home instruction or (ii) for which the fundraising
17entity purchases the personal property sold at the events from
18another individual or entity that sold the property for the
19purpose of resale by the fundraising entity and that profits
20from the sale to the fundraising entity. This paragraph is
21exempt from the provisions of Section 2-70.
22 (35) Beginning January 1, 2000 and through December 31,
232001, new or used automatic vending machines that prepare and
24serve hot food and beverages, including coffee, soup, and other
25items, and replacement parts for these machines. Beginning
26January 1, 2002 and through June 30, 2003, machines and parts

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1for machines used in commercial, coin-operated amusement and
2vending business if a use or occupation tax is paid on the
3gross receipts derived from the use of the commercial,
4coin-operated amusement and vending machines. This paragraph
5is exempt from the provisions of Section 2-70.
6 (35-5) Beginning August 23, 2001 and through June 30, 2016,
7food for human consumption that is to be consumed off the
8premises where it is sold (other than alcoholic beverages, soft
9drinks, and food that has been prepared for immediate
10consumption) and prescription and nonprescription medicines,
11drugs, medical appliances, and insulin, urine testing
12materials, syringes, and needles used by diabetics, for human
13use, when purchased for use by a person receiving medical
14assistance under Article V of the Illinois Public Aid Code who
15resides in a licensed long-term care facility, as defined in
16the Nursing Home Care Act, or a licensed facility as defined in
17the ID/DD Community Care Act, the MC/DD Act, or the Specialized
18Mental Health Rehabilitation Act of 2013.
19 (36) Beginning August 2, 2001, computers and
20communications equipment utilized for any hospital purpose and
21equipment used in the diagnosis, analysis, or treatment of
22hospital patients sold to a lessor who leases the equipment,
23under a lease of one year or longer executed or in effect at
24the time of the purchase, to a hospital that has been issued an
25active tax exemption identification number by the Department
26under Section 1g of this Act. This paragraph is exempt from the

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1provisions of Section 2-70.
2 (37) Beginning August 2, 2001, personal property sold to a
3lessor who leases the property, under a lease of one year or
4longer executed or in effect at the time of the purchase, to a
5governmental body that has been issued an active tax exemption
6identification number by the Department under Section 1g of
7this Act. This paragraph is exempt from the provisions of
8Section 2-70.
9 (38) Beginning on January 1, 2002 and through June 30,
102016, tangible personal property purchased from an Illinois
11retailer by a taxpayer engaged in centralized purchasing
12activities in Illinois who will, upon receipt of the property
13in Illinois, temporarily store the property in Illinois (i) for
14the purpose of subsequently transporting it outside this State
15for use or consumption thereafter solely outside this State or
16(ii) for the purpose of being processed, fabricated, or
17manufactured into, attached to, or incorporated into other
18tangible personal property to be transported outside this State
19and thereafter used or consumed solely outside this State. The
20Director of Revenue shall, pursuant to rules adopted in
21accordance with the Illinois Administrative Procedure Act,
22issue a permit to any taxpayer in good standing with the
23Department who is eligible for the exemption under this
24paragraph (38). The permit issued under this paragraph (38)
25shall authorize the holder, to the extent and in the manner
26specified in the rules adopted under this Act, to purchase

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1tangible personal property from a retailer exempt from the
2taxes imposed by this Act. Taxpayers shall maintain all
3necessary books and records to substantiate the use and
4consumption of all such tangible personal property outside of
5the State of Illinois.
6 (39) Beginning January 1, 2008, tangible personal property
7used in the construction or maintenance of a community water
8supply, as defined under Section 3.145 of the Environmental
9Protection Act, that is operated by a not-for-profit
10corporation that holds a valid water supply permit issued under
11Title IV of the Environmental Protection Act. This paragraph is
12exempt from the provisions of Section 2-70.
13 (40) Beginning January 1, 2010, materials, parts,
14equipment, components, and furnishings incorporated into or
15upon an aircraft as part of the modification, refurbishment,
16completion, replacement, repair, or maintenance of the
17aircraft. This exemption includes consumable supplies used in
18the modification, refurbishment, completion, replacement,
19repair, and maintenance of aircraft, but excludes any
20materials, parts, equipment, components, and consumable
21supplies used in the modification, replacement, repair, and
22maintenance of aircraft engines or power plants, whether such
23engines or power plants are installed or uninstalled upon any
24such aircraft. "Consumable supplies" include, but are not
25limited to, adhesive, tape, sandpaper, general purpose
26lubricants, cleaning solution, latex gloves, and protective

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1films. This exemption applies only to the sale of qualifying
2tangible personal property to persons who modify, refurbish,
3complete, replace, or maintain an aircraft and who (i) hold an
4Air Agency Certificate and are empowered to operate an approved
5repair station by the Federal Aviation Administration, (ii)
6have a Class IV Rating, and (iii) conduct operations in
7accordance with Part 145 of the Federal Aviation Regulations.
8The exemption does not include aircraft operated by a
9commercial air carrier providing scheduled passenger air
10service pursuant to authority issued under Part 121 or Part 129
11of the Federal Aviation Regulations. The changes made to this
12paragraph (40) by Public Act 98-534 are declarative of existing
13law.
14 (41) Tangible personal property sold to a
15public-facilities corporation, as described in Section
1611-65-10 of the Illinois Municipal Code, for purposes of
17constructing or furnishing a municipal convention hall, but
18only if the legal title to the municipal convention hall is
19transferred to the municipality without any further
20consideration by or on behalf of the municipality at the time
21of the completion of the municipal convention hall or upon the
22retirement or redemption of any bonds or other debt instruments
23issued by the public-facilities corporation in connection with
24the development of the municipal convention hall. This
25exemption includes existing public-facilities corporations as
26provided in Section 11-65-25 of the Illinois Municipal Code.

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1This paragraph is exempt from the provisions of Section 2-70.
2 (42) Beginning January 1, 2017, menstrual pads, tampons,
3and menstrual cups.
4 (43) Merchandise that is subject to the Rental Purchase
5Agreement Occupation and Use Tax. The purchaser must certify
6that the item is purchased to be rented subject to a rental
7purchase agreement, as defined in the Rental Purchase Agreement
8Act, and provide proof of registration under the Rental
9Purchase Agreement Occupation and Use Tax Act. This paragraph
10is exempt from the provisions of Section 2-70.
11(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1298-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
131-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
147-29-15; 99-855, eff. 8-19-16.)
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