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


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: (Engrossed) 2017-05-19 - Committee Deadline Extended-Rule 9(b) May 26, 2017 [SB1434 Detail]

Download: Illinois-2017-SB1434-Engrossed.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 such 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 such
18merchant to engage in a business which 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 through
72-65 (in respect to all provisions therein other than the State
8rate of tax), 2a, 2b, 2c, 3 (except provisions relating to
9transaction returns and quarter monthly payments), 4, 5, 5a,
105b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11,
1111a, 12 and 13 of the Retailers' Occupation Tax Act and Section
123-7 of the Uniform Penalty and Interest Act as fully as if
13those provisions 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 through 3-80, 4, 6, 7, 8, 9
25(except provisions relating to transaction returns and quarter
26monthly payments), 10, 11, 12, 12a, 12b, 13, 14, 15, 19, 20, 21

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1and 22 of the Use Tax Act, and are not inconsistent with this
2Section, as fully as if those provisions were set forth herein.
3 Section 16. Distribution of taxes. The proceeds from the
4tax imposed under this Act shall be distributed as follows: 20%
5shall be deposited into the State and Local Sales Tax Reform
6Fund and 80% shall be deposited into the General Revenue Fund.
7 Section 20. One-Time Transitional Use Tax Credit. The
8merchant may file for a one-time credit with the Department for
9the Use Tax paid during the 12 months immediately prior to the
10effective date of this Act. Within 18 months after effective
11date of this Act, the merchant must file an application (upon a
12form prescribed and furnished by the Department) to receive a
13credit for the Use Tax paid on merchandise subject to tax under
14this Act purchased during the 12 months immediately prior to
15the effective date. The Department shall issue a credit equal
16to the lesser of 50% of the tax paid by the merchant under this
17Act in the 12 months immediately following the effective date
18of this Act or the total Use Tax paid in the 12 months
19immediately prior to the effective date of this Act. Upon the
20issuance of the credit the merchant may apply the credit
21against the tax imposed under this Act.
22 Section 21. Exemptions. This Act does not apply to tangible
23personal property which is required to be titled and registered

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1by an agency of this State's government.
2 Section 25. Rulemaking. The Department may make such rules
3as it may deem necessary to implement the purposes of this Act.
4 Section 50. The Use Tax Act is amended by changing Section
53-5 as follows:
6 (35 ILCS 105/3-5)
7 Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9 (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16 (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19 (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after the effective date
7of this amendatory Act of the 92nd General Assembly, however,
8an entity otherwise eligible for this exemption shall not make
9tax-free purchases unless it has an active identification
10number issued by the Department.
11 (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active exemption
24identification number issued by the Department.
25 (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

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1the car is subject to the Replacement Vehicle Tax.
2 (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new and
5used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon a
11graphic arts product.
12 (7) Farm chemicals.
13 (8) Legal tender, currency, medallions, or gold or silver
14coinage issued by the State of Illinois, the government of the
15United States of America, or the government of any foreign
16country, and bullion.
17 (9) Personal property purchased from a teacher-sponsored
18student organization affiliated with an elementary or
19secondary school located in Illinois.
20 (10) A motor vehicle that is used for automobile renting,
21as defined in the Automobile Renting Occupation and Use Tax
22Act.
23 (11) Farm machinery and equipment, both new and used,
24including that manufactured on special order, certified by the
25purchaser to be used primarily for production agriculture or
26State or federal agricultural programs, including individual

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

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1facilities, equipment, and activities such as, but not limited
2to, the collection, monitoring, and correlation of animal and
3crop data for the purpose of formulating animal diets and
4agricultural chemicals. This item (11) is exempt from the
5provisions of Section 3-90.
6 (12) Until June 30, 2013, fuel and petroleum products sold
7to or used by an air common carrier, certified by the carrier
8to be used for consumption, shipment, or storage in the conduct
9of its business as an air common carrier, for a flight destined
10for or returning from a location or locations outside the
11United States without regard to previous or subsequent domestic
12stopovers.
13 Beginning July 1, 2013, fuel and petroleum products sold to
14or used by an air carrier, certified by the carrier to be used
15for consumption, shipment, or storage in the conduct of its
16business as an air common carrier, for a flight that (i) is
17engaged in foreign trade or is engaged in trade between the
18United States and any of its possessions and (ii) transports at
19least one individual or package for hire from the city of
20origination to the city of final destination on the same
21aircraft, without regard to a change in the flight number of
22that aircraft.
23 (13) Proceeds of mandatory service charges separately
24stated on customers' bills for the purchase and consumption of
25food and beverages purchased at retail from a retailer, to the
26extent that the proceeds of the service charge are in fact

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1turned over as tips or as a substitute for tips to the
2employees who participate directly in preparing, serving,
3hosting or cleaning up the food or beverage function with
4respect to which the service charge is imposed.
5 (14) Until July 1, 2003, oil field exploration, drilling,
6and production equipment, including (i) rigs and parts of rigs,
7rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
8tubular goods, including casing and drill strings, (iii) pumps
9and pump-jack units, (iv) storage tanks and flow lines, (v) any
10individual replacement part for oil field exploration,
11drilling, and production equipment, and (vi) machinery and
12equipment purchased for lease; but excluding motor vehicles
13required to be registered under the Illinois Vehicle Code.
14 (15) Photoprocessing machinery and equipment, including
15repair and replacement parts, both new and used, including that
16manufactured on special order, certified by the purchaser to be
17used primarily for photoprocessing, and including
18photoprocessing machinery and equipment purchased for lease.
19 (16) Coal and aggregate exploration, mining, off-highway
20hauling, processing, maintenance, and reclamation equipment,
21including replacement parts and equipment, and including
22equipment purchased for lease, but excluding motor vehicles
23required to be registered under the Illinois Vehicle Code. The
24changes made to this Section by Public Act 97-767 apply on and
25after July 1, 2003, but no claim for credit or refund is
26allowed on or after August 16, 2013 (the effective date of

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

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1customers through pipes, pipelines, or mains. The provisions of
2Public Act 98-583 are declaratory of existing law as to the
3meaning and scope of this exemption.
4 (19) Personal property delivered to a purchaser or
5purchaser's donee inside Illinois when the purchase order for
6that personal property was received by a florist located
7outside Illinois who has a florist located inside Illinois
8deliver the personal property.
9 (20) Semen used for artificial insemination of livestock
10for direct agricultural production.
11 (21) Horses, or interests in horses, registered with and
12meeting the requirements of any of the Arabian Horse Club
13Registry of America, Appaloosa Horse Club, American Quarter
14Horse Association, United States Trotting Association, or
15Jockey Club, as appropriate, used for purposes of breeding or
16racing for prizes. This item (21) is exempt from the provisions
17of Section 3-90, and the exemption provided for under this item
18(21) applies for all periods beginning May 30, 1995, but no
19claim for credit or refund is allowed on or after January 1,
202008 for such taxes paid during the period beginning May 30,
212000 and ending on January 1, 2008.
22 (22) Computers and communications equipment utilized for
23any hospital purpose and equipment used in the diagnosis,
24analysis, or treatment of hospital patients purchased by a
25lessor who leases the equipment, under a lease of one year or
26longer executed or in effect at the time the lessor would

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

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

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1but not limited to municipal roads and streets, access roads,
2bridges, sidewalks, waste disposal systems, water and sewer
3line extensions, water distribution and purification
4facilities, storm water drainage and retention facilities, and
5sewage treatment facilities, resulting from a State or
6federally declared disaster in Illinois or bordering Illinois
7when such repairs are initiated on facilities located in the
8declared disaster area within 6 months after the disaster.
9 (26) Beginning July 1, 1999, game or game birds purchased
10at a "game breeding and hunting preserve area" as that term is
11used in the Wildlife Code. This paragraph is exempt from the
12provisions of Section 3-90.
13 (27) A motor vehicle, as that term is defined in Section
141-146 of the Illinois Vehicle Code, that is donated to a
15corporation, limited liability company, society, association,
16foundation, or institution that is determined by the Department
17to be organized and operated exclusively for educational
18purposes. For purposes of this exemption, "a corporation,
19limited liability company, society, association, foundation,
20or institution organized and operated exclusively for
21educational purposes" means all tax-supported public schools,
22private schools that offer systematic instruction in useful
23branches of learning by methods common to public schools and
24that compare favorably in their scope and intensity with the
25course of study presented in tax-supported schools, and
26vocational or technical schools or institutes organized and

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1operated exclusively to provide a course of study of not less
2than 6 weeks duration and designed to prepare individuals to
3follow a trade or to pursue a manual, technical, mechanical,
4industrial, business, or commercial occupation.
5 (28) Beginning January 1, 2000, personal property,
6including food, purchased through fundraising events for the
7benefit of a public or private elementary or secondary school,
8a group of those schools, or one or more school districts if
9the events are sponsored by an entity recognized by the school
10district that consists primarily of volunteers and includes
11parents and teachers of the school children. This paragraph
12does not apply to fundraising events (i) for the benefit of
13private home instruction or (ii) for which the fundraising
14entity purchases the personal property sold at the events from
15another individual or entity that sold the property for the
16purpose of resale by the fundraising entity and that profits
17from the sale to the fundraising entity. This paragraph is
18exempt from the provisions of Section 3-90.
19 (29) Beginning January 1, 2000 and through December 31,
202001, new or used automatic vending machines that prepare and
21serve hot food and beverages, including coffee, soup, and other
22items, and replacement parts for these machines. Beginning
23January 1, 2002 and through June 30, 2003, machines and parts
24for machines used in commercial, coin-operated amusement and
25vending business if a use or occupation tax is paid on the
26gross receipts derived from the use of the commercial,

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1coin-operated amusement and vending machines. This paragraph
2is exempt from the provisions of Section 3-90.
3 (30) Beginning January 1, 2001 and through June 30, 2016,
4food for human consumption that is to be consumed off the
5premises where it is sold (other than alcoholic beverages, soft
6drinks, and food that has been prepared for immediate
7consumption) and prescription and nonprescription medicines,
8drugs, medical appliances, and insulin, urine testing
9materials, syringes, and needles used by diabetics, for human
10use, when purchased for use by a person receiving medical
11assistance under Article V of the Illinois Public Aid Code who
12resides in a licensed long-term care facility, as defined in
13the Nursing Home Care Act, or in a licensed facility as defined
14in the ID/DD Community Care Act, the MC/DD Act, or the
15Specialized Mental Health Rehabilitation Act of 2013.
16 (31) Beginning on the effective date of this amendatory Act
17of the 92nd General Assembly, computers and communications
18equipment utilized for any hospital purpose and equipment used
19in the diagnosis, analysis, or treatment of hospital patients
20purchased by a lessor who leases the equipment, under a lease
21of one year or longer executed or in effect at the time the
22lessor would otherwise be subject to the tax imposed by this
23Act, to a hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of the
25Retailers' Occupation Tax Act. If the equipment is leased in a
26manner that does not qualify for this exemption or is used in

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

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1market value of the property at the time the nonqualifying use
2occurs. No lessor shall collect or attempt to collect an amount
3(however designated) that purports to reimburse that lessor for
4the tax imposed by this Act or the Service Use Tax Act, as the
5case may be, if the tax has not been paid by the lessor. If a
6lessor improperly collects any such amount from the lessee, the
7lessee shall have a legal right to claim a refund of that
8amount from the lessor. If, however, that amount is not
9refunded to the lessee for any reason, the lessor is liable to
10pay that amount to the Department. This paragraph is exempt
11from the provisions of Section 3-90.
12 (33) On and after July 1, 2003 and through June 30, 2004,
13the use in this State of motor vehicles of the second division
14with a gross vehicle weight in excess of 8,000 pounds and that
15are subject to the commercial distribution fee imposed under
16Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
171, 2004 and through June 30, 2005, the use in this State of
18motor vehicles of the second division: (i) with a gross vehicle
19weight rating in excess of 8,000 pounds; (ii) that are subject
20to the commercial distribution fee imposed under Section
213-815.1 of the Illinois Vehicle Code; and (iii) that are
22primarily used for commercial purposes. Through June 30, 2005,
23this exemption applies to repair and replacement parts added
24after the initial purchase of such a motor vehicle if that
25motor vehicle is used in a manner that would qualify for the
26rolling stock exemption otherwise provided for in this Act. For

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1purposes of this paragraph, the term "used for commercial
2purposes" means the transportation of persons or property in
3furtherance of any commercial or industrial enterprise,
4whether for-hire or not.
5 (34) Beginning January 1, 2008, tangible personal property
6used in the construction or maintenance of a community water
7supply, as defined under Section 3.145 of the Environmental
8Protection Act, that is operated by a not-for-profit
9corporation that holds a valid water supply permit issued under
10Title IV of the Environmental Protection Act. This paragraph is
11exempt from the provisions of Section 3-90.
12 (35) Beginning January 1, 2010, materials, parts,
13equipment, components, and furnishings incorporated into or
14upon an aircraft as part of the modification, refurbishment,
15completion, replacement, repair, or maintenance of the
16aircraft. This exemption includes consumable supplies used in
17the modification, refurbishment, completion, replacement,
18repair, and maintenance of aircraft, but excludes any
19materials, parts, equipment, components, and consumable
20supplies used in the modification, replacement, repair, and
21maintenance of aircraft engines or power plants, whether such
22engines or power plants are installed or uninstalled upon any
23such aircraft. "Consumable supplies" include, but are not
24limited to, adhesive, tape, sandpaper, general purpose
25lubricants, cleaning solution, latex gloves, and protective
26films. This exemption applies only to the use of qualifying

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1tangible personal property by persons who modify, refurbish,
2complete, repair, replace, or maintain aircraft and who (i)
3hold an Air Agency Certificate and are empowered to operate an
4approved repair station by the Federal Aviation
5Administration, (ii) have a Class IV Rating, and (iii) conduct
6operations in accordance with Part 145 of the Federal Aviation
7Regulations. The exemption does not include aircraft operated
8by a commercial air carrier providing scheduled passenger air
9service pursuant to authority issued under Part 121 or Part 129
10of the Federal Aviation Regulations. The changes made to this
11paragraph (35) by Public Act 98-534 are declarative of existing
12law.
13 (36) Tangible personal property purchased by a
14public-facilities corporation, as described in Section
1511-65-10 of the Illinois Municipal Code, for purposes of
16constructing or furnishing a municipal convention hall, but
17only if the legal title to the municipal convention hall is
18transferred to the municipality without any further
19consideration by or on behalf of the municipality at the time
20of the completion of the municipal convention hall or upon the
21retirement or redemption of any bonds or other debt instruments
22issued by the public-facilities corporation in connection with
23the development of the municipal convention hall. This
24exemption includes existing public-facilities corporations as
25provided in Section 11-65-25 of the Illinois Municipal Code.
26This paragraph is exempt from the provisions of Section 3-90.

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1 (37) Beginning January 1, 2017, menstrual pads, tampons,
2and menstrual cups.
3 (38) Merchandise that is subject to the Rental Purchase
4Agreement Occupation and Use Tax. The purchaser must certify
5that the item is purchased to be rented subject to a rental
6purchase agreement, as defined in the Rental Purchase Agreement
7Act, and provide proof of registration under the Rental
8Purchase Agreement Occupation and Use Tax Act. This paragraph
9is exempt from the provisions of Section 3-90.
10(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
1198-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
121-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
137-29-15; 99-855, eff. 8-19-16.)
14 Section 55. The Retailers' Occupation Tax Act is amended by
15changing Section 2-5 as follows:
16 (35 ILCS 120/2-5)
17 Sec. 2-5. Exemptions. Gross receipts from proceeds from the
18sale of the following tangible personal property are exempt
19from the tax imposed by this Act:
20 (1) Farm chemicals.
21 (2) Farm machinery and equipment, both new and used,
22including that manufactured on special order, certified by the
23purchaser to be used primarily for production agriculture or
24State or federal agricultural programs, including individual

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

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1facilities, equipment, and activities such as, but not limited
2to, the collection, monitoring, and correlation of animal and
3crop data for the purpose of formulating animal diets and
4agricultural chemicals. This item (2) is exempt from the
5provisions of Section 2-70.
6 (3) Until July 1, 2003, distillation machinery and
7equipment, sold as a unit or kit, assembled or installed by the
8retailer, certified by the user to be used only for the
9production of ethyl alcohol that will be used for consumption
10as motor fuel or as a component of motor fuel for the personal
11use of the user, and not subject to sale or resale.
12 (4) Until July 1, 2003 and beginning again September 1,
132004 through August 30, 2014, graphic arts machinery and
14equipment, including repair and replacement parts, both new and
15used, and including that manufactured on special order or
16purchased for lease, certified by the purchaser to be used
17primarily for graphic arts production. Equipment includes
18chemicals or chemicals acting as catalysts but only if the
19chemicals or chemicals acting as catalysts effect a direct and
20immediate change upon a graphic arts product.
21 (5) A motor vehicle that is used for automobile renting, as
22defined in the Automobile Renting Occupation and Use Tax Act.
23This paragraph is exempt from the provisions of Section 2-70.
24 (6) Personal property sold by a teacher-sponsored student
25organization affiliated with an elementary or secondary school
26located in Illinois.

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1 (7) Until July 1, 2003, proceeds of that portion of the
2selling price of a passenger car the sale of which is subject
3to the Replacement Vehicle Tax.
4 (8) Personal property sold to an Illinois county fair
5association for use in conducting, operating, or promoting the
6county fair.
7 (9) Personal property sold to a not-for-profit arts or
8cultural organization that establishes, by proof required by
9the Department by rule, that it has received an exemption under
10Section 501(c)(3) of the Internal Revenue Code and that is
11organized and operated primarily for the presentation or
12support of arts or cultural programming, activities, or
13services. These organizations include, but are not limited to,
14music and dramatic arts organizations such as symphony
15orchestras and theatrical groups, arts and cultural service
16organizations, local arts councils, visual arts organizations,
17and media arts organizations. On and after the effective date
18of this amendatory Act of the 92nd General Assembly, however,
19an entity otherwise eligible for this exemption shall not make
20tax-free purchases unless it has an active identification
21number issued by the Department.
22 (10) Personal property sold by a corporation, society,
23association, foundation, institution, or organization, other
24than a limited liability company, that is organized and
25operated as a not-for-profit service enterprise for the benefit
26of persons 65 years of age or older if the personal property

SB1434 Engrossed- 28 -LRB100 06488 HLH 16528 b
1was not purchased by the enterprise for the purpose of resale
2by the enterprise.
3 (11) Personal property sold to a governmental body, to a
4corporation, society, association, foundation, or institution
5organized and operated exclusively for charitable, religious,
6or educational purposes, or to a not-for-profit corporation,
7society, association, foundation, institution, or organization
8that has no compensated officers or employees and that is
9organized and operated primarily for the recreation of persons
1055 years of age or older. A limited liability company may
11qualify for the exemption under this paragraph only if the
12limited liability company is organized and operated
13exclusively for educational purposes. On and after July 1,
141987, however, no entity otherwise eligible for this exemption
15shall make tax-free purchases unless it has an active
16identification number issued by the Department.
17 (12) Tangible personal property sold to interstate
18carriers for hire for use as rolling stock moving in interstate
19commerce or to lessors under leases of one year or longer
20executed or in effect at the time of purchase by interstate
21carriers for hire for use as rolling stock moving in interstate
22commerce and equipment operated by a telecommunications
23provider, licensed as a common carrier by the Federal
24Communications Commission, which is permanently installed in
25or affixed to aircraft moving in interstate commerce.
26 (12-5) On and after July 1, 2003 and through June 30, 2004,

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

SB1434 Engrossed- 30 -LRB100 06488 HLH 16528 b
1process of manufacturing or assembling tangible personal
2property for wholesale or retail sale or lease, whether the
3sale or lease is made directly by the manufacturer or by some
4other person, whether the materials used in the process are
5owned by the manufacturer or some other person, or whether the
6sale or lease is made apart from or as an incident to the
7seller's engaging in the service occupation of producing
8machines, tools, dies, jigs, patterns, gauges, or other similar
9items of no commercial value on special order for a particular
10purchaser. The exemption provided by this paragraph (14) does
11not include machinery and equipment used in (i) the generation
12of electricity for wholesale or retail sale; (ii) the
13generation or treatment of natural or artificial gas for
14wholesale or retail sale that is delivered to customers through
15pipes, pipelines, or mains; or (iii) the treatment of water for
16wholesale or retail sale that is delivered to customers through
17pipes, pipelines, or mains. The provisions of Public Act 98-583
18are declaratory of existing law as to the meaning and scope of
19this exemption.
20 (15) Proceeds of mandatory service charges separately
21stated on customers' bills for purchase and consumption of food
22and beverages, to the extent that the proceeds of the service
23charge are in fact turned over as tips or as a substitute for
24tips to the employees who participate directly in preparing,
25serving, hosting or cleaning up the food or beverage function
26with respect to which the service charge is imposed.

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1 (16) Petroleum products sold to a purchaser if the seller
2is prohibited by federal law from charging tax to the
3purchaser.
4 (17) Tangible personal property sold to a common carrier by
5rail or motor that receives the physical possession of the
6property in Illinois and that transports the property, or
7shares with another common carrier in the transportation of the
8property, out of Illinois on a standard uniform bill of lading
9showing the seller of the property as the shipper or consignor
10of the property to a destination outside Illinois, for use
11outside Illinois.
12 (18) Legal tender, currency, medallions, or gold or silver
13coinage issued by the State of Illinois, the government of the
14United States of America, or the government of any foreign
15country, and bullion.
16 (19) Until July 1 2003, oil field exploration, drilling,
17and production equipment, including (i) rigs and parts of rigs,
18rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
19tubular goods, including casing and drill strings, (iii) pumps
20and pump-jack units, (iv) storage tanks and flow lines, (v) any
21individual replacement part for oil field exploration,
22drilling, and production equipment, and (vi) machinery and
23equipment purchased for lease; but excluding motor vehicles
24required to be registered under the Illinois Vehicle Code.
25 (20) Photoprocessing machinery and equipment, including
26repair and replacement parts, both new and used, including that

SB1434 Engrossed- 32 -LRB100 06488 HLH 16528 b
1manufactured on special order, certified by the purchaser to be
2used primarily for photoprocessing, and including
3photoprocessing machinery and equipment purchased for lease.
4 (21) Coal and aggregate exploration, mining, off-highway
5hauling, processing, maintenance, and reclamation equipment,
6including replacement parts and equipment, and including
7equipment purchased for lease, but excluding motor vehicles
8required to be registered under the Illinois Vehicle Code. The
9changes made to this Section by Public Act 97-767 apply on and
10after July 1, 2003, but no claim for credit or refund is
11allowed on or after August 16, 2013 (the effective date of
12Public Act 98-456) for such taxes paid during the period
13beginning July 1, 2003 and ending on August 16, 2013 (the
14effective date of Public Act 98-456).
15 (22) Until June 30, 2013, fuel and petroleum products sold
16to or used by an air carrier, certified by the carrier to be
17used for consumption, shipment, or storage in the conduct of
18its business as an air common carrier, for a flight destined
19for or returning from a location or locations outside the
20United States without regard to previous or subsequent domestic
21stopovers.
22 Beginning July 1, 2013, fuel and petroleum products sold to
23or used by an air carrier, certified by the carrier to be used
24for consumption, shipment, or storage in the conduct of its
25business as an air common carrier, for a flight that (i) is
26engaged in foreign trade or is engaged in trade between the

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

SB1434 Engrossed- 34 -LRB100 06488 HLH 16528 b
1this State.
2 (25-5) The exemption under item (25) does not apply if the
3state in which the motor vehicle will be titled does not allow
4a reciprocal exemption for a motor vehicle sold and delivered
5in that state to an Illinois resident but titled in Illinois.
6The tax collected under this Act on the sale of a motor vehicle
7in this State to a resident of another state that does not
8allow a reciprocal exemption shall be imposed at a rate equal
9to the state's rate of tax on taxable property in the state in
10which the purchaser is a resident, except that the tax shall
11not exceed the tax that would otherwise be imposed under this
12Act. At the time of the sale, the purchaser shall execute a
13statement, signed under penalty of perjury, of his or her
14intent to title the vehicle in the state in which the purchaser
15is a resident within 30 days after the sale and of the fact of
16the payment to the State of Illinois of tax in an amount
17equivalent to the state's rate of tax on taxable property in
18his or her state of residence and shall submit the statement to
19the appropriate tax collection agency in his or her state of
20residence. In addition, the retailer must retain a signed copy
21of the statement in his or her records. Nothing in this item
22shall be construed to require the removal of the vehicle from
23this state following the filing of an intent to title the
24vehicle in the purchaser's state of residence if the purchaser
25titles the vehicle in his or her state of residence within 30
26days after the date of sale. The tax collected under this Act

SB1434 Engrossed- 35 -LRB100 06488 HLH 16528 b
1in accordance with this item (25-5) shall be proportionately
2distributed as if the tax were collected at the 6.25% general
3rate imposed under this Act.
4 (25-7) Beginning on July 1, 2007, no tax is imposed under
5this Act on the sale of an aircraft, as defined in Section 3 of
6the Illinois Aeronautics Act, if all of the following
7conditions are met:
8 (1) the aircraft leaves this State within 15 days after
9 the later of either the issuance of the final billing for
10 the sale of the aircraft, or the authorized approval for
11 return to service, completion of the maintenance record
12 entry, and completion of the test flight and ground test
13 for inspection, as required by 14 C.F.R. 91.407;
14 (2) the aircraft is not based or registered in this
15 State after the sale of the aircraft; and
16 (3) the seller retains in his or her books and records
17 and provides to the Department a signed and dated
18 certification from the purchaser, on a form prescribed by
19 the Department, certifying that the requirements of this
20 item (25-7) are met. The certificate must also include the
21 name and address of the purchaser, the address of the
22 location where the aircraft is to be titled or registered,
23 the address of the primary physical location of the
24 aircraft, and other information that the Department may
25 reasonably require.
26 For purposes of this item (25-7):

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1 "Based in this State" means hangared, stored, or otherwise
2used, excluding post-sale customizations as defined in this
3Section, for 10 or more days in each 12-month period
4immediately following the date of the sale of the aircraft.
5 "Registered in this State" means an aircraft registered
6with the Department of Transportation, Aeronautics Division,
7or titled or registered with the Federal Aviation
8Administration to an address located in this State.
9 This paragraph (25-7) is exempt from the provisions of
10Section 2-70.
11 (26) Semen used for artificial insemination of livestock
12for direct agricultural production.
13 (27) Horses, or interests in horses, registered with and
14meeting the requirements of any of the Arabian Horse Club
15Registry of America, Appaloosa Horse Club, American Quarter
16Horse Association, United States Trotting Association, or
17Jockey Club, as appropriate, used for purposes of breeding or
18racing for prizes. This item (27) is exempt from the provisions
19of Section 2-70, and the exemption provided for under this item
20(27) applies for all periods beginning May 30, 1995, but no
21claim for credit or refund is allowed on or after January 1,
222008 (the effective date of Public Act 95-88) for such taxes
23paid during the period beginning May 30, 2000 and ending on
24January 1, 2008 (the effective date of Public Act 95-88).
25 (28) Computers and communications equipment utilized for
26any hospital purpose and equipment used in the diagnosis,

SB1434 Engrossed- 37 -LRB100 06488 HLH 16528 b
1analysis, or treatment of hospital patients sold to a lessor
2who leases the equipment, under a lease of one year or longer
3executed or in effect at the time of the purchase, to a
4hospital that has been issued an active tax exemption
5identification number by the Department under Section 1g of
6this Act.
7 (29) Personal property sold to a lessor who leases the
8property, under a lease of one year or longer executed or in
9effect at the time of the purchase, to a governmental body that
10has been issued an active tax exemption identification number
11by the Department under Section 1g of this Act.
12 (30) Beginning with taxable years ending on or after
13December 31, 1995 and ending with taxable years ending on or
14before December 31, 2004, personal property that is donated for
15disaster relief to be used in a State or federally declared
16disaster area in Illinois or bordering Illinois by a
17manufacturer or retailer that is registered in this State to a
18corporation, society, association, foundation, or institution
19that has been issued a sales tax exemption identification
20number by the Department that assists victims of the disaster
21who reside within the declared disaster area.
22 (31) Beginning with taxable years ending on or after
23December 31, 1995 and ending with taxable years ending on or
24before December 31, 2004, personal property that is used in the
25performance of infrastructure repairs in this State, including
26but not limited to municipal roads and streets, access roads,

SB1434 Engrossed- 38 -LRB100 06488 HLH 16528 b
1bridges, sidewalks, waste disposal systems, water and sewer
2line extensions, water distribution and purification
3facilities, storm water drainage and retention facilities, and
4sewage treatment facilities, resulting from a State or
5federally declared disaster in Illinois or bordering Illinois
6when such repairs are initiated on facilities located in the
7declared disaster area within 6 months after the disaster.
8 (32) Beginning July 1, 1999, game or game birds sold at a
9"game breeding and hunting preserve area" as that term is used
10in the Wildlife Code. This paragraph is exempt from the
11provisions of Section 2-70.
12 (33) A motor vehicle, as that term is defined in Section
131-146 of the Illinois Vehicle Code, that is donated to a
14corporation, limited liability company, society, association,
15foundation, or institution that is determined by the Department
16to be organized and operated exclusively for educational
17purposes. For purposes of this exemption, "a corporation,
18limited liability company, society, association, foundation,
19or institution organized and operated exclusively for
20educational purposes" means all tax-supported public schools,
21private schools that offer systematic instruction in useful
22branches of learning by methods common to public schools and
23that compare favorably in their scope and intensity with the
24course of study presented in tax-supported schools, and
25vocational or technical schools or institutes organized and
26operated exclusively to provide a course of study of not less

SB1434 Engrossed- 39 -LRB100 06488 HLH 16528 b
1than 6 weeks duration and designed to prepare individuals to
2follow a trade or to pursue a manual, technical, mechanical,
3industrial, business, or commercial occupation.
4 (34) Beginning January 1, 2000, personal property,
5including food, purchased through fundraising events for the
6benefit of a public or private elementary or secondary school,
7a group of those schools, or one or more school districts if
8the events are sponsored by an entity recognized by the school
9district that consists primarily of volunteers and includes
10parents and teachers of the school children. This paragraph
11does not apply to fundraising events (i) for the benefit of
12private home instruction or (ii) for which the fundraising
13entity purchases the personal property sold at the events from
14another individual or entity that sold the property for the
15purpose of resale by the fundraising entity and that profits
16from the sale to the fundraising entity. This paragraph is
17exempt from the provisions of Section 2-70.
18 (35) Beginning January 1, 2000 and through December 31,
192001, new or used automatic vending machines that prepare and
20serve hot food and beverages, including coffee, soup, and other
21items, and replacement parts for these machines. Beginning
22January 1, 2002 and through June 30, 2003, machines and parts
23for machines used in commercial, coin-operated amusement and
24vending business if a use or occupation tax is paid on the
25gross receipts derived from the use of the commercial,
26coin-operated amusement and vending machines. This paragraph

SB1434 Engrossed- 40 -LRB100 06488 HLH 16528 b
1is exempt from the provisions of Section 2-70.
2 (35-5) Beginning August 23, 2001 and through June 30, 2016,
3food for human consumption that is to be consumed off the
4premises where it is sold (other than alcoholic beverages, soft
5drinks, and food that has been prepared for immediate
6consumption) and prescription and nonprescription medicines,
7drugs, medical appliances, and insulin, urine testing
8materials, syringes, and needles used by diabetics, for human
9use, when purchased for use by a person receiving medical
10assistance under Article V of the Illinois Public Aid Code who
11resides in a licensed long-term care facility, as defined in
12the Nursing Home Care Act, or a licensed facility as defined in
13the ID/DD Community Care Act, the MC/DD Act, or the Specialized
14Mental Health Rehabilitation Act of 2013.
15 (36) Beginning August 2, 2001, computers and
16communications equipment utilized for any hospital purpose and
17equipment used in the diagnosis, analysis, or treatment of
18hospital patients sold to a lessor who leases the equipment,
19under a lease of one year or longer executed or in effect at
20the time of the purchase, to a hospital that has been issued an
21active tax exemption identification number by the Department
22under Section 1g of this Act. This paragraph is exempt from the
23provisions of Section 2-70.
24 (37) Beginning August 2, 2001, personal property sold to a
25lessor who leases the property, under a lease of one year or
26longer executed or in effect at the time of the purchase, to a

SB1434 Engrossed- 41 -LRB100 06488 HLH 16528 b
1governmental body that has been issued an active tax exemption
2identification number by the Department under Section 1g of
3this Act. This paragraph is exempt from the provisions of
4Section 2-70.
5 (38) Beginning on January 1, 2002 and through June 30,
62016, tangible personal property purchased from an Illinois
7retailer by a taxpayer engaged in centralized purchasing
8activities in Illinois who will, upon receipt of the property
9in Illinois, temporarily store the property in Illinois (i) for
10the purpose of subsequently transporting it outside this State
11for use or consumption thereafter solely outside this State or
12(ii) for the purpose of being processed, fabricated, or
13manufactured into, attached to, or incorporated into other
14tangible personal property to be transported outside this State
15and thereafter used or consumed solely outside this State. The
16Director of Revenue shall, pursuant to rules adopted in
17accordance with the Illinois Administrative Procedure Act,
18issue a permit to any taxpayer in good standing with the
19Department who is eligible for the exemption under this
20paragraph (38). The permit issued under this paragraph (38)
21shall authorize the holder, to the extent and in the manner
22specified in the rules adopted under this Act, to purchase
23tangible personal property from a retailer exempt from the
24taxes imposed by this Act. Taxpayers shall maintain all
25necessary books and records to substantiate the use and
26consumption of all such tangible personal property outside of

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1the State of Illinois.
2 (39) Beginning January 1, 2008, tangible personal property
3used in the construction or maintenance of a community water
4supply, as defined under Section 3.145 of the Environmental
5Protection Act, that is operated by a not-for-profit
6corporation that holds a valid water supply permit issued under
7Title IV of the Environmental Protection Act. This paragraph is
8exempt from the provisions of Section 2-70.
9 (40) Beginning January 1, 2010, materials, parts,
10equipment, components, and furnishings incorporated into or
11upon an aircraft as part of the modification, refurbishment,
12completion, replacement, repair, or maintenance of the
13aircraft. This exemption includes consumable supplies used in
14the modification, refurbishment, completion, replacement,
15repair, and maintenance of aircraft, but excludes any
16materials, parts, equipment, components, and consumable
17supplies used in the modification, replacement, repair, and
18maintenance of aircraft engines or power plants, whether such
19engines or power plants are installed or uninstalled upon any
20such aircraft. "Consumable supplies" include, but are not
21limited to, adhesive, tape, sandpaper, general purpose
22lubricants, cleaning solution, latex gloves, and protective
23films. This exemption applies only to the sale of qualifying
24tangible personal property to persons who modify, refurbish,
25complete, replace, or maintain an aircraft and who (i) hold an
26Air Agency Certificate and are empowered to operate an approved

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1repair station by the Federal Aviation Administration, (ii)
2have a Class IV Rating, and (iii) conduct operations in
3accordance with Part 145 of the Federal Aviation Regulations.
4The exemption does not include aircraft operated by a
5commercial air carrier providing scheduled passenger air
6service pursuant to authority issued under Part 121 or Part 129
7of the Federal Aviation Regulations. The changes made to this
8paragraph (40) by Public Act 98-534 are declarative of existing
9law.
10 (41) Tangible personal property sold to a
11public-facilities corporation, as described in Section
1211-65-10 of the Illinois Municipal Code, for purposes of
13constructing or furnishing a municipal convention hall, but
14only if the legal title to the municipal convention hall is
15transferred to the municipality without any further
16consideration by or on behalf of the municipality at the time
17of the completion of the municipal convention hall or upon the
18retirement or redemption of any bonds or other debt instruments
19issued by the public-facilities corporation in connection with
20the development of the municipal convention hall. This
21exemption includes existing public-facilities corporations as
22provided in Section 11-65-25 of the Illinois Municipal Code.
23This paragraph is exempt from the provisions of Section 2-70.
24 (42) Beginning January 1, 2017, menstrual pads, tampons,
25and menstrual cups.
26 (43) Merchandise that is subject to the Rental Purchase

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1Agreement Occupation and Use Tax. The purchaser must certify
2that the item is purchased to be rented subject to a rental
3purchase agreement, as defined in the Rental Purchase Agreement
4Act, and provide proof of registration under the Rental
5Purchase Agreement Occupation and Use Tax Act. This paragraph
6is exempt from the provisions of Section 2-70.
7(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
898-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
91-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
107-29-15; 99-855, eff. 8-19-16.)
11 Section 99. Effective date. This Act takes effect January
121, 2018.
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