Bill Text: IL SB1565 | 2017-2018 | 100th General Assembly | Introduced


Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, on or after July 1, 2017 and on or before December 31, 2018, the taxes imposed under the Acts apply to 90% of the proceeds of sales of gasohol and 80% of the proceeds of sales of mid-range ethanol blends. Amends the Illinois Renewable Fuels Development Program Act. Provides that grants may be awarded for the following programs: a next generation renewable fuels program, a majority blended ethanol and blender pump infrastructure program, and a research and development program for sustainable corn production and corn-based renewable fuel production. Sets forth the maximum aggregate amount of grants that may be awarded under each program. Effective immediately.

Spectrum: Bipartisan Bill

Status: (Introduced) 2017-04-10 - Added as Chief Co-Sponsor Sen. Scott M. Bennett [SB1565 Detail]

Download: Illinois-2017-SB1565-Introduced.html


100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB1565

Introduced 2/9/2017, by Sen. Bill Cunningham

SYNOPSIS AS INTRODUCED:
20 ILCS 689/15
20 ILCS 689/20
35 ILCS 105/3-10
35 ILCS 105/3-40 from Ch. 120, par. 439.3-40
35 ILCS 105/3-44
35 ILCS 105/3-44.3 new
35 ILCS 110/3-10 from Ch. 120, par. 439.33-10
35 ILCS 115/3-10 from Ch. 120, par. 439.103-10
35 ILCS 120/2-10

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, on or after July 1, 2017 and on or before December 31, 2018, the taxes imposed under the Acts apply to 90% of the proceeds of sales of gasohol and 80% of the proceeds of sales of mid-range ethanol blends. Amends the Illinois Renewable Fuels Development Program Act. Provides that grants may be awarded for the following programs: a next generation renewable fuels program, a majority blended ethanol and blender pump infrastructure program, and a research and development program for sustainable corn production and corn-based renewable fuel production. Sets forth the maximum aggregate amount of grants that may be awarded under each program. Effective immediately.
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FISCAL NOTE ACT MAY APPLY

A BILL FOR

SB1565LRB100 06181 HLH 16215 b
1 AN ACT concerning revenue.
2 Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4 Section 5. The Illinois Renewable Fuels Development
5Program Act is amended by changing Sections 15 and 20 as
6follows:
7 (20 ILCS 689/15)
8 Sec. 15. Illinois Renewable Fuels Development Program.
9 (a) The Department must develop and administer the Illinois
10Renewable Fuels Development Program to assist in the
11construction, modification, alteration, or retrofitting of
12renewable fuel plants in Illinois. The recipient of a grant
13under this Section must:
14 (1) be constructing, modifying, altering, or
15 retrofitting a plant in the State of Illinois;
16 (2) be constructing, modifying, altering, or
17 retrofitting a plant that has annual production capacity of
18 no less than 5,000,000 gallons of renewable fuel per year;
19 and
20 (3) enter into a project labor agreement, whenever
21 practicable, as prescribed by Section 25 of this Act.
22 (b) Grant applications must be made on forms provided by
23and in accordance with procedures established by the

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1Department.
2 (c) The Department must give preference to applicants that
3use Illinois agricultural products in the production of
4renewable fuel at the plant for which the grant is being
5requested.
6(Source: P.A. 96-140, eff. 1-1-10.)
7 (20 ILCS 689/20)
8 Sec. 20. Grants. Subject to appropriation, the Director is
9authorized to award grants to eligible applicants for the
10following programs.
11 (1) Next generation ethanol/renewable fuels. Eligible
12 next generation ethanol/renewable fuel projects include
13 those renewable fuel facilities installing new
14 technologies to reduce water and energy usage as well as
15 technologies to reduce greenhouse gas emissions. Projects
16 that will result in more efficient processes, new
17 co-products, fuels and chemicals are also eligible for
18 funding. The annual aggregate amount of grants awarded
19 under this item (1) for next generation ethanol/renewable
20 fuel projects shall not exceed: $2,000,000 in Fiscal Year
21 2018, $1,000,000 in Fiscal Year 2019.
22 (2) Majority blended ethanol and blender pump
23 infrastructure program. The Department shall establish a
24 grant program to provide funds for the installation of
25 majority blended ethanol and blender pump fueling

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1 facilities. The annual aggregate amount of grants awarded
2 under this item (2) shall not exceed: $2,000,000 in Fiscal
3 Year 2018, $1,000,000 in Fiscal Year 2019.
4 (3) Research and development program for sustainable
5 corn production and corn-based renewable fuel production.
6 The Department shall establish a grant program to provide
7 funds for research and development projects to reduce the
8 carbon footprint of corn based renewable fuels through new
9 co-products, new process technologies, and new fuels. The
10 Department shall also establish a grant program to fund
11 research on increasing the sustainability of corn
12 production through better nitrogen utilization, new best
13 management practices for improved soil health, water
14 conservation, and reduced environmental concerns. Eligible
15 projects include those that will increase corn
16 productivity with lower inputs and less risk. The annual
17 aggregate amount of grants awarded under this item (3)
18 shall not exceed: $2,000,000 in Fiscal Year 2018,
19 $1,000,000 in Fiscal Year 2019.
20The annual aggregate amount of grants awarded shall not exceed
21$20,000,000, except that this amount does not include amounts,
22up to $4,000,000 per grant, that may be awarded to each
23eligible applicant who installs advanced technologies for
24water usage, carbon footprint reduction, and other blending
25improvements designed to optimize processes at the applicant's
26renewable fuels facility.

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1(Source: P.A. 96-173, eff. 8-10-09.)
2 Section 10. The Use Tax Act is amended by changing Sections
33-10, 3-40, and 3-44 and by adding Section 3-44.3 as follows:
4 (35 ILCS 105/3-10)
5 Sec. 3-10. Rate of tax. Unless otherwise provided in this
6Section, the tax imposed by this Act is at the rate of 6.25% of
7either the selling price or the fair market value, if any, of
8the tangible personal property. In all cases where property
9functionally used or consumed is the same as the property that
10was purchased at retail, then the tax is imposed on the selling
11price of the property. In all cases where property functionally
12used or consumed is a by-product or waste product that has been
13refined, manufactured, or produced from property purchased at
14retail, then the tax is imposed on the lower of the fair market
15value, if any, of the specific property so used in this State
16or on the selling price of the property purchased at retail.
17For purposes of this Section "fair market value" means the
18price at which property would change hands between a willing
19buyer and a willing seller, neither being under any compulsion
20to buy or sell and both having reasonable knowledge of the
21relevant facts. The fair market value shall be established by
22Illinois sales by the taxpayer of the same property as that
23functionally used or consumed, or if there are no such sales by
24the taxpayer, then comparable sales or purchases of property of

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1like kind and character in Illinois.
2 Beginning on July 1, 2000 and through December 31, 2000,
3with respect to motor fuel, as defined in Section 1.1 of the
4Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
5the Use Tax Act, the tax is imposed at the rate of 1.25%.
6 Beginning on August 6, 2010 through August 15, 2010, with
7respect to sales tax holiday items as defined in Section 3-6 of
8this Act, the tax is imposed at the rate of 1.25%.
9 With respect to gasohol, the tax imposed by this Act
10applies to (i) 70% of the proceeds of sales made on or after
11January 1, 1990, and before July 1, 2003, (ii) 80% of the
12proceeds of sales made on or after July 1, 2003 and on or
13before June 30, 2017, (iii) 90% of the proceeds of sales made
14on or after July 1, 2017 and on or before December 31, 2018,
15and (iv) (iii) 100% of the proceeds of sales made thereafter.
16If, at any time, however, the tax under this Act on sales of
17gasohol is imposed at the rate of 1.25%, then the tax imposed
18by this Act applies to 100% of the proceeds of sales of gasohol
19made during that time.
20 With respect to mid-range ethanol blends, the tax imposed
21by this Act applies to (i) 80% of the proceeds of sales made on
22or after July 1, 2017 and on or before December 31, 2018 and
23(ii) 100% of the proceeds of sales made thereafter. If, at any
24time, however, the tax under this Act on sales of mid-range
25ethanol blends is imposed at the rate of 1.25%, then the tax
26imposed by this Act applies to 100% of the proceeds of sales of

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1mid-range ethanol blends made during that time.
2 With respect to majority blended ethanol fuel, the tax
3imposed by this Act does not apply to the proceeds of sales
4made on or after July 1, 2003 and on or before December 31,
52018 but applies to 100% of the proceeds of sales made
6thereafter.
7 With respect to biodiesel blends with no less than 1% and
8no more than 10% biodiesel, the tax imposed by this Act applies
9to (i) 80% of the proceeds of sales made on or after July 1,
102003 and on or before December 31, 2018 and (ii) 100% of the
11proceeds of sales made thereafter. If, at any time, however,
12the tax under this Act on sales of biodiesel blends with no
13less than 1% and no more than 10% biodiesel is imposed at the
14rate of 1.25%, then the tax imposed by this Act applies to 100%
15of the proceeds of sales of biodiesel blends with no less than
161% and no more than 10% biodiesel made during that time.
17 With respect to 100% biodiesel and biodiesel blends with
18more than 10% but no more than 99% biodiesel, the tax imposed
19by this Act does not apply to the proceeds of sales made on or
20after July 1, 2003 and on or before December 31, 2018 but
21applies to 100% of the proceeds of sales made thereafter.
22 With respect to food for human consumption that is to be
23consumed off the premises where it is sold (other than
24alcoholic beverages, soft drinks, and food that has been
25prepared for immediate consumption) and prescription and
26nonprescription medicines, drugs, medical appliances, products

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1classified as Class III medical devices by the United States
2Food and Drug Administration that are used for cancer treatment
3pursuant to a prescription, as well as any accessories and
4components related to those devices, modifications to a motor
5vehicle for the purpose of rendering it usable by a person with
6a disability, and insulin, urine testing materials, syringes,
7and needles used by diabetics, for human use, the tax is
8imposed at the rate of 1%. For the purposes of this Section,
9until September 1, 2009: the term "soft drinks" means any
10complete, finished, ready-to-use, non-alcoholic drink, whether
11carbonated or not, including but not limited to soda water,
12cola, fruit juice, vegetable juice, carbonated water, and all
13other preparations commonly known as soft drinks of whatever
14kind or description that are contained in any closed or sealed
15bottle, can, carton, or container, regardless of size; but
16"soft drinks" does not include coffee, tea, non-carbonated
17water, infant formula, milk or milk products as defined in the
18Grade A Pasteurized Milk and Milk Products Act, or drinks
19containing 50% or more natural fruit or vegetable juice.
20 Notwithstanding any other provisions of this Act,
21beginning September 1, 2009, "soft drinks" means non-alcoholic
22beverages that contain natural or artificial sweeteners. "Soft
23drinks" do not include beverages that contain milk or milk
24products, soy, rice or similar milk substitutes, or greater
25than 50% of vegetable or fruit juice by volume.
26 Until August 1, 2009, and notwithstanding any other

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1provisions of this Act, "food for human consumption that is to
2be consumed off the premises where it is sold" includes all
3food sold through a vending machine, except soft drinks and
4food products that are dispensed hot from a vending machine,
5regardless of the location of the vending machine. Beginning
6August 1, 2009, and notwithstanding any other provisions of
7this Act, "food for human consumption that is to be consumed
8off the premises where it is sold" includes all food sold
9through a vending machine, except soft drinks, candy, and food
10products that are dispensed hot from a vending machine,
11regardless of the location of the vending machine.
12 Notwithstanding any other provisions of this Act,
13beginning September 1, 2009, "food for human consumption that
14is to be consumed off the premises where it is sold" does not
15include candy. For purposes of this Section, "candy" means a
16preparation of sugar, honey, or other natural or artificial
17sweeteners in combination with chocolate, fruits, nuts or other
18ingredients or flavorings in the form of bars, drops, or
19pieces. "Candy" does not include any preparation that contains
20flour or requires refrigeration.
21 Notwithstanding any other provisions of this Act,
22beginning September 1, 2009, "nonprescription medicines and
23drugs" does not include grooming and hygiene products. For
24purposes of this Section, "grooming and hygiene products"
25includes, but is not limited to, soaps and cleaning solutions,
26shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

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1lotions and screens, unless those products are available by
2prescription only, regardless of whether the products meet the
3definition of "over-the-counter-drugs". For the purposes of
4this paragraph, "over-the-counter-drug" means a drug for human
5use that contains a label that identifies the product as a drug
6as required by 21 C.F.R. 201.66. The "over-the-counter-drug"
7label includes:
8 (A) A "Drug Facts" panel; or
9 (B) A statement of the "active ingredient(s)" with a
10 list of those ingredients contained in the compound,
11 substance or preparation.
12 Beginning on the effective date of this amendatory Act of
13the 98th General Assembly, "prescription and nonprescription
14medicines and drugs" includes medical cannabis purchased from a
15registered dispensing organization under the Compassionate Use
16of Medical Cannabis Pilot Program Act.
17 If the property that is purchased at retail from a retailer
18is acquired outside Illinois and used outside Illinois before
19being brought to Illinois for use here and is taxable under
20this Act, the "selling price" on which the tax is computed
21shall be reduced by an amount that represents a reasonable
22allowance for depreciation for the period of prior out-of-state
23use.
24(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
2599-858, eff. 8-19-16.)

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1 (35 ILCS 105/3-40) (from Ch. 120, par. 439.3-40)
2 Sec. 3-40. Gasohol. As used in this Act, "gasohol" means
3motor fuel that is a denatured ethanol and gasoline blend of
4denatured ethanol and gasoline that contains (i) no more than
51.25% water by weight and (ii) the maximum proportion of
6ethanol authorized by the United States Environmental
7Protection Agency under Section 211 of the Clean Air Act. The
8blend must contain 90% gasoline and 10% denatured ethanol. A
9maximum of one percent error factor in the amount of denatured
10ethanol used in the blend is allowable to compensate for
11blending equipment variations. Any person who knowingly sells
12or represents as gasohol any fuel that does not qualify as
13gasohol under this Act is guilty of a business offense and
14shall be fined not more than $100 for each day that the sale or
15representation takes place after notification from the
16Department of Agriculture that the fuel in question does not
17qualify as gasohol.
18(Source: P.A. 93-724, eff. 7-13-04.)
19 (35 ILCS 105/3-44)
20 Sec. 3-44. Majority blended ethanol fuel. "Majority
21blended ethanol fuel" means motor fuel that (i) contains not
22less than 51% and no more than 83% by volume ethanol, as
23specified in ASTM Standard DS798-11 and (ii) is capable of
24being used in the operation of flexible fuel vehicles. 70% and
25no more than 90% denatured ethanol and no less than 10% and no

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1more than 30% gasoline.
2(Source: P.A. 93-17, eff. 6-11-03.)
3 (35 ILCS 105/3-44.3 new)
4 Sec. 3-44.3. Mid-range ethanol blend. "Mid-range ethanol
5blend" means a blend of gasoline and denatured ethanol that
6contains not less than 20% but less than 51% denatured ethanol.
7 Section 15. The Service Use Tax Act is amended by changing
8Section 3-10 as follows:
9 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
10 Sec. 3-10. Rate of tax. Unless otherwise provided in this
11Section, the tax imposed by this Act is at the rate of 6.25% of
12the selling price of tangible personal property transferred as
13an incident to the sale of service, but, for the purpose of
14computing this tax, in no event shall the selling price be less
15than the cost price of the property to the serviceman.
16 Beginning on July 1, 2000 and through December 31, 2000,
17with respect to motor fuel, as defined in Section 1.1 of the
18Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
19the Use Tax Act, the tax is imposed at the rate of 1.25%.
20 With respect to gasohol, as defined in the Use Tax Act, the
21tax imposed by this Act applies to (i) 70% of the selling price
22of property transferred as an incident to the sale of service
23on or after January 1, 1990, and before July 1, 2003, (ii) 80%

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1of the selling price of property transferred as an incident to
2the sale of service on or after July 1, 2003 and on or before
3June 30, 2017, (iii) 90% of the selling price of property
4transferred as an incident to the sale of service on or after
5July 1, 2017, and on or before December 31, 2018, and (iv)
6(iii) 100% of the selling price thereafter. If, at any time,
7however, the tax under this Act on sales of gasohol, as defined
8in the Use Tax Act, is imposed at the rate of 1.25%, then the
9tax imposed by this Act applies to 100% of the proceeds of
10sales of gasohol made during that time.
11 With respect to mid-range ethanol blends, as defined in the
12Use Tax Act, the tax imposed by this Act applies to (i) 80% of
13the selling price of property transferred as an incident to the
14sale of service on or after July 1, 2017 and on or before
15December 31, 2018 and (ii) 100% of the selling price
16thereafter. If, at any time, however, the tax under this Act on
17sales of mid-range ethanol blends is imposed at the rate of
181.25%, then the tax imposed by this Act applies to 100% of the
19proceeds of sales of mid-range ethanol blends made during that
20time.
21 With respect to majority blended ethanol fuel, as defined
22in the Use Tax Act, the tax imposed by this Act does not apply
23to the selling price of property transferred as an incident to
24the sale of service on or after July 1, 2003 and on or before
25December 31, 2018 but applies to 100% of the selling price
26thereafter.

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1 With respect to biodiesel blends, as defined in the Use Tax
2Act, with no less than 1% and no more than 10% biodiesel, the
3tax imposed by this Act applies to (i) 80% of the selling price
4of property transferred as an incident to the sale of service
5on or after July 1, 2003 and on or before December 31, 2018 and
6(ii) 100% of the proceeds of the selling price thereafter. If,
7at any time, however, the tax under this Act on sales of
8biodiesel blends, as defined in the Use Tax Act, with no less
9than 1% and no more than 10% biodiesel is imposed at the rate
10of 1.25%, then the tax imposed by this Act applies to 100% of
11the proceeds of sales of biodiesel blends with no less than 1%
12and no more than 10% biodiesel made during that time.
13 With respect to 100% biodiesel, as defined in the Use Tax
14Act, and biodiesel blends, as defined in the Use Tax Act, with
15more than 10% but no more than 99% biodiesel, the tax imposed
16by this Act does not apply to the proceeds of the selling price
17of property transferred as an incident to the sale of service
18on or after July 1, 2003 and on or before December 31, 2018 but
19applies to 100% of the selling price thereafter.
20 At the election of any registered serviceman made for each
21fiscal year, sales of service in which the aggregate annual
22cost price of tangible personal property transferred as an
23incident to the sales of service is less than 35%, or 75% in
24the case of servicemen transferring prescription drugs or
25servicemen engaged in graphic arts production, of the aggregate
26annual total gross receipts from all sales of service, the tax

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1imposed by this Act shall be based on the serviceman's cost
2price of the tangible personal property transferred as an
3incident to the sale of those services.
4 The tax shall be imposed at the rate of 1% on food prepared
5for immediate consumption and transferred incident to a sale of
6service subject to this Act or the Service Occupation Tax Act
7by an entity licensed under the Hospital Licensing Act, the
8Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
9Act, the Specialized Mental Health Rehabilitation Act of 2013,
10or the Child Care Act of 1969. The tax shall also be imposed at
11the rate of 1% on food for human consumption that is to be
12consumed off the premises where it is sold (other than
13alcoholic beverages, soft drinks, and food that has been
14prepared for immediate consumption and is not otherwise
15included in this paragraph) and prescription and
16nonprescription medicines, drugs, medical appliances, products
17classified as Class III medical devices by the United States
18Food and Drug Administration that are used for cancer treatment
19pursuant to a prescription, as well as any accessories and
20components related to those devices, modifications to a motor
21vehicle for the purpose of rendering it usable by a person with
22a disability, and insulin, urine testing materials, syringes,
23and needles used by diabetics, for human use. For the purposes
24of this Section, until September 1, 2009: the term "soft
25drinks" means any complete, finished, ready-to-use,
26non-alcoholic drink, whether carbonated or not, including but

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1not limited to soda water, cola, fruit juice, vegetable juice,
2carbonated water, and all other preparations commonly known as
3soft drinks of whatever kind or description that are contained
4in any closed or sealed bottle, can, carton, or container,
5regardless of size; but "soft drinks" does not include coffee,
6tea, non-carbonated water, infant formula, milk or milk
7products as defined in the Grade A Pasteurized Milk and Milk
8Products Act, or drinks containing 50% or more natural fruit or
9vegetable juice.
10 Notwithstanding any other provisions of this Act,
11beginning September 1, 2009, "soft drinks" means non-alcoholic
12beverages that contain natural or artificial sweeteners. "Soft
13drinks" do not include beverages that contain milk or milk
14products, soy, rice or similar milk substitutes, or greater
15than 50% of vegetable or fruit juice by volume.
16 Until August 1, 2009, and notwithstanding any other
17provisions of this Act, "food for human consumption that is to
18be consumed off the premises where it is sold" includes all
19food sold through a vending machine, except soft drinks and
20food products that are dispensed hot from a vending machine,
21regardless of the location of the vending machine. Beginning
22August 1, 2009, and notwithstanding any other provisions of
23this Act, "food for human consumption that is to be consumed
24off the premises where it is sold" includes all food sold
25through a vending machine, except soft drinks, candy, and food
26products that are dispensed hot from a vending machine,

SB1565- 16 -LRB100 06181 HLH 16215 b
1regardless of the location of the vending machine.
2 Notwithstanding any other provisions of this Act,
3beginning September 1, 2009, "food for human consumption that
4is to be consumed off the premises where it is sold" does not
5include candy. For purposes of this Section, "candy" means a
6preparation of sugar, honey, or other natural or artificial
7sweeteners in combination with chocolate, fruits, nuts or other
8ingredients or flavorings in the form of bars, drops, or
9pieces. "Candy" does not include any preparation that contains
10flour or requires refrigeration.
11 Notwithstanding any other provisions of this Act,
12beginning September 1, 2009, "nonprescription medicines and
13drugs" does not include grooming and hygiene products. For
14purposes of this Section, "grooming and hygiene products"
15includes, but is not limited to, soaps and cleaning solutions,
16shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
17lotions and screens, unless those products are available by
18prescription only, regardless of whether the products meet the
19definition of "over-the-counter-drugs". For the purposes of
20this paragraph, "over-the-counter-drug" means a drug for human
21use that contains a label that identifies the product as a drug
22as required by 21 C.F.R. 201.66. The "over-the-counter-drug"
23label includes:
24 (A) A "Drug Facts" panel; or
25 (B) A statement of the "active ingredient(s)" with a
26 list of those ingredients contained in the compound,

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1 substance or preparation.
2 Beginning on January 1, 2014 (the effective date of Public
3Act 98-122), "prescription and nonprescription medicines and
4drugs" includes medical cannabis purchased from a registered
5dispensing organization under the Compassionate Use of Medical
6Cannabis Pilot Program Act.
7 If the property that is acquired from a serviceman is
8acquired outside Illinois and used outside Illinois before
9being brought to Illinois for use here and is taxable under
10this Act, the "selling price" on which the tax is computed
11shall be reduced by an amount that represents a reasonable
12allowance for depreciation for the period of prior out-of-state
13use.
14(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
1598-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
167-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)
17 Section 20. The Service Occupation Tax Act is amended by
18changing Section 3-10 as follows:
19 (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
20 Sec. 3-10. Rate of tax. Unless otherwise provided in this
21Section, the tax imposed by this Act is at the rate of 6.25% of
22the "selling price", as defined in Section 2 of the Service Use
23Tax Act, of the tangible personal property. For the purpose of
24computing this tax, in no event shall the "selling price" be

SB1565- 18 -LRB100 06181 HLH 16215 b
1less than the cost price to the serviceman of the tangible
2personal property transferred. The selling price of each item
3of tangible personal property transferred as an incident of a
4sale of service may be shown as a distinct and separate item on
5the serviceman's billing to the service customer. If the
6selling price is not so shown, the selling price of the
7tangible personal property is deemed to be 50% of the
8serviceman's entire billing to the service customer. When,
9however, a serviceman contracts to design, develop, and produce
10special order machinery or equipment, the tax imposed by this
11Act shall be based on the serviceman's cost price of the
12tangible personal property transferred incident to the
13completion of the contract.
14 Beginning on July 1, 2000 and through December 31, 2000,
15with respect to motor fuel, as defined in Section 1.1 of the
16Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
17the Use Tax Act, the tax is imposed at the rate of 1.25%.
18 With respect to gasohol, as defined in the Use Tax Act, the
19tax imposed by this Act shall apply to (i) 70% of the cost
20price of property transferred as an incident to the sale of
21service on or after January 1, 1990, and before July 1, 2003,
22(ii) 80% of the selling price of property transferred as an
23incident to the sale of service on or after July 1, 2003 and on
24or before June 30, 2017, (iii) 90% of the selling price of
25property transferred as an incident to the sale of service on
26or after July 1, 2017, and on or before December 31, 2018, and

SB1565- 19 -LRB100 06181 HLH 16215 b
1(iv) (iii) 100% of the cost price thereafter. If, at any time,
2however, the tax under this Act on sales of gasohol, as defined
3in the Use Tax Act, is imposed at the rate of 1.25%, then the
4tax imposed by this Act applies to 100% of the proceeds of
5sales of gasohol made during that time.
6 With respect to mid-range ethanol blends, as defined in the
7Use Tax Act, the tax imposed by this Act applies to (i) 80% of
8the selling price of property transferred as an incident to the
9sale of service on or after July 1, 2017 and on or before
10December 31, 2018 and (ii) 100% of the selling price
11thereafter. If, at any time, however, the tax under this Act on
12sales of mid-range ethanol blends is imposed at the rate of
131.25%, then the tax imposed by this Act applies to 100% of the
14proceeds of sales of mid-range ethanol blends made during that
15time.
16 With respect to majority blended ethanol fuel, as defined
17in the Use Tax Act, the tax imposed by this Act does not apply
18to the selling price of property transferred as an incident to
19the sale of service on or after July 1, 2003 and on or before
20December 31, 2018 but applies to 100% of the selling price
21thereafter.
22 With respect to biodiesel blends, as defined in the Use Tax
23Act, with no less than 1% and no more than 10% biodiesel, the
24tax imposed by this Act applies to (i) 80% of the selling price
25of property transferred as an incident to the sale of service
26on or after July 1, 2003 and on or before December 31, 2018 and

SB1565- 20 -LRB100 06181 HLH 16215 b
1(ii) 100% of the proceeds of the selling price thereafter. If,
2at any time, however, the tax under this Act on sales of
3biodiesel blends, as defined in the Use Tax Act, with no less
4than 1% and no more than 10% biodiesel is imposed at the rate
5of 1.25%, then the tax imposed by this Act applies to 100% of
6the proceeds of sales of biodiesel blends with no less than 1%
7and no more than 10% biodiesel made during that time.
8 With respect to 100% biodiesel, as defined in the Use Tax
9Act, and biodiesel blends, as defined in the Use Tax Act, with
10more than 10% but no more than 99% biodiesel material, the tax
11imposed by this Act does not apply to the proceeds of the
12selling price of property transferred as an incident to the
13sale of service on or after July 1, 2003 and on or before
14December 31, 2018 but applies to 100% of the selling price
15thereafter.
16 At the election of any registered serviceman made for each
17fiscal year, sales of service in which the aggregate annual
18cost price of tangible personal property transferred as an
19incident to the sales of service is less than 35%, or 75% in
20the case of servicemen transferring prescription drugs or
21servicemen engaged in graphic arts production, of the aggregate
22annual total gross receipts from all sales of service, the tax
23imposed by this Act shall be based on the serviceman's cost
24price of the tangible personal property transferred incident to
25the sale of those services.
26 The tax shall be imposed at the rate of 1% on food prepared

SB1565- 21 -LRB100 06181 HLH 16215 b
1for immediate consumption and transferred incident to a sale of
2service subject to this Act or the Service Occupation Tax Act
3by an entity licensed under the Hospital Licensing Act, the
4Nursing Home Care Act, the ID/DD Community Care Act, the MC/DD
5Act, the Specialized Mental Health Rehabilitation Act of 2013,
6or the Child Care Act of 1969. The tax shall also be imposed at
7the rate of 1% on food for human consumption that is to be
8consumed off the premises where it is sold (other than
9alcoholic beverages, soft drinks, and food that has been
10prepared for immediate consumption and is not otherwise
11included in this paragraph) and prescription and
12nonprescription medicines, drugs, medical appliances, products
13classified as Class III medical devices by the United States
14Food and Drug Administration that are used for cancer treatment
15pursuant to a prescription, as well as any accessories and
16components related to those devices, modifications to a motor
17vehicle for the purpose of rendering it usable by a person with
18a disability, and insulin, urine testing materials, syringes,
19and needles used by diabetics, for human use. For the purposes
20of this Section, until September 1, 2009: the term "soft
21drinks" means any complete, finished, ready-to-use,
22non-alcoholic drink, whether carbonated or not, including but
23not limited to soda water, cola, fruit juice, vegetable juice,
24carbonated water, and all other preparations commonly known as
25soft drinks of whatever kind or description that are contained
26in any closed or sealed can, carton, or container, regardless

SB1565- 22 -LRB100 06181 HLH 16215 b
1of size; but "soft drinks" does not include coffee, tea,
2non-carbonated water, infant formula, milk or milk products as
3defined in the Grade A Pasteurized Milk and Milk Products Act,
4or drinks containing 50% or more natural fruit or vegetable
5juice.
6 Notwithstanding any other provisions of this Act,
7beginning September 1, 2009, "soft drinks" means non-alcoholic
8beverages that contain natural or artificial sweeteners. "Soft
9drinks" do not include beverages that contain milk or milk
10products, soy, rice or similar milk substitutes, or greater
11than 50% of vegetable or fruit juice by volume.
12 Until August 1, 2009, and notwithstanding any other
13provisions of this Act, "food for human consumption that is to
14be consumed off the premises where it is sold" includes all
15food sold through a vending machine, except soft drinks and
16food products that are dispensed hot from a vending machine,
17regardless of the location of the vending machine. Beginning
18August 1, 2009, and notwithstanding any other provisions of
19this Act, "food for human consumption that is to be consumed
20off the premises where it is sold" includes all food sold
21through a vending machine, except soft drinks, candy, and food
22products that are dispensed hot from a vending machine,
23regardless of the location of the vending machine.
24 Notwithstanding any other provisions of this Act,
25beginning September 1, 2009, "food for human consumption that
26is to be consumed off the premises where it is sold" does not

SB1565- 23 -LRB100 06181 HLH 16215 b
1include candy. For purposes of this Section, "candy" means a
2preparation of sugar, honey, or other natural or artificial
3sweeteners in combination with chocolate, fruits, nuts or other
4ingredients or flavorings in the form of bars, drops, or
5pieces. "Candy" does not include any preparation that contains
6flour or requires refrigeration.
7 Notwithstanding any other provisions of this Act,
8beginning September 1, 2009, "nonprescription medicines and
9drugs" does not include grooming and hygiene products. For
10purposes of this Section, "grooming and hygiene products"
11includes, but is not limited to, soaps and cleaning solutions,
12shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
13lotions and screens, unless those products are available by
14prescription only, regardless of whether the products meet the
15definition of "over-the-counter-drugs". For the purposes of
16this paragraph, "over-the-counter-drug" means a drug for human
17use that contains a label that identifies the product as a drug
18as required by 21 C.F.R. 201.66. The "over-the-counter-drug"
19label includes:
20 (A) A "Drug Facts" panel; or
21 (B) A statement of the "active ingredient(s)" with a
22 list of those ingredients contained in the compound,
23 substance or preparation.
24 Beginning on January 1, 2014 (the effective date of Public
25Act 98-122), "prescription and nonprescription medicines and
26drugs" includes medical cannabis purchased from a registered

SB1565- 24 -LRB100 06181 HLH 16215 b
1dispensing organization under the Compassionate Use of Medical
2Cannabis Pilot Program Act.
3(Source: P.A. 98-104, eff. 7-22-13; 98-122, eff. 1-1-14;
498-756, eff. 7-16-14; 99-143, eff. 7-27-15; 99-180, eff.
57-29-15; 99-642, eff. 7-28-16; 99-858, eff. 8-19-16.)
6 Section 25. The Retailers' Occupation Tax Act is amended by
7changing Section 2-10 as follows:
8 (35 ILCS 120/2-10)
9 Sec. 2-10. Rate of tax. Unless otherwise provided in this
10Section, the tax imposed by this Act is at the rate of 6.25% of
11gross receipts from sales of tangible personal property made in
12the course of business.
13 Beginning on July 1, 2000 and through December 31, 2000,
14with respect to motor fuel, as defined in Section 1.1 of the
15Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
16the Use Tax Act, the tax is imposed at the rate of 1.25%.
17 Beginning on August 6, 2010 through August 15, 2010, with
18respect to sales tax holiday items as defined in Section 2-8 of
19this Act, the tax is imposed at the rate of 1.25%.
20 Within 14 days after the effective date of this amendatory
21Act of the 91st General Assembly, each retailer of motor fuel
22and gasohol shall cause the following notice to be posted in a
23prominently visible place on each retail dispensing device that
24is used to dispense motor fuel or gasohol in the State of

SB1565- 25 -LRB100 06181 HLH 16215 b
1Illinois: "As of July 1, 2000, the State of Illinois has
2eliminated the State's share of sales tax on motor fuel and
3gasohol through December 31, 2000. The price on this pump
4should reflect the elimination of the tax." The notice shall be
5printed in bold print on a sign that is no smaller than 4
6inches by 8 inches. The sign shall be clearly visible to
7customers. Any retailer who fails to post or maintain a
8required sign through December 31, 2000 is guilty of a petty
9offense for which the fine shall be $500 per day per each
10retail premises where a violation occurs.
11 With respect to gasohol, as defined in the Use Tax Act, the
12tax imposed by this Act applies to (i) 70% of the proceeds of
13sales made on or after January 1, 1990, and before July 1,
142003, (ii) 80% of the proceeds of sales made on or after July
151, 2003 and on or before June 30, 2017, (iii) 90% of the
16proceeds of sales made on or after July 1, 2017 and on or
17before December 31, 2018, and (iv) (iii) 100% of the proceeds
18of sales made thereafter. If, at any time, however, the tax
19under this Act on sales of gasohol, as defined in the Use Tax
20Act, is imposed at the rate of 1.25%, then the tax imposed by
21this Act applies to 100% of the proceeds of sales of gasohol
22made during that time.
23 With respect to mid-range ethanol blends, as defined in the
24Use Tax Act, the tax imposed by this Act applies to (i) 80% of
25the proceeds of sales made on or after July 1, 2017 and on or
26before December 31, 2018 and (ii) 100% of the proceeds of sales

SB1565- 26 -LRB100 06181 HLH 16215 b
1made thereafter. If, at any time, however, the tax under this
2Act on sales of mid-range ethanol blends is imposed at the rate
3of 1.25%, then the tax imposed by this Act applies to 100% of
4the proceeds of sales of mid-range ethanol blends made during
5that time.
6 With respect to majority blended ethanol fuel, as defined
7in the Use Tax Act, the tax imposed by this Act does not apply
8to the proceeds of sales made on or after July 1, 2003 and on or
9before December 31, 2018 but applies to 100% of the proceeds of
10sales made thereafter.
11 With respect to biodiesel blends, as defined in the Use Tax
12Act, with no less than 1% and no more than 10% biodiesel, the
13tax imposed by this Act applies to (i) 80% of the proceeds of
14sales made on or after July 1, 2003 and on or before December
1531, 2018 and (ii) 100% of the proceeds of sales made
16thereafter. If, at any time, however, the tax under this Act on
17sales of biodiesel blends, as defined in the Use Tax Act, with
18no less than 1% and no more than 10% biodiesel is imposed at
19the rate of 1.25%, then the tax imposed by this Act applies to
20100% of the proceeds of sales of biodiesel blends with no less
21than 1% and no more than 10% biodiesel made during that time.
22 With respect to 100% biodiesel, as defined in the Use Tax
23Act, and biodiesel blends, as defined in the Use Tax Act, with
24more than 10% but no more than 99% biodiesel, the tax imposed
25by this Act does not apply to the proceeds of sales made on or
26after July 1, 2003 and on or before December 31, 2018 but

SB1565- 27 -LRB100 06181 HLH 16215 b
1applies to 100% of the proceeds of sales made thereafter.
2 With respect to food for human consumption that is to be
3consumed off the premises where it is sold (other than
4alcoholic beverages, soft drinks, and food that has been
5prepared for immediate consumption) and prescription and
6nonprescription medicines, drugs, medical appliances, products
7classified as Class III medical devices by the United States
8Food and Drug Administration that are used for cancer treatment
9pursuant to a prescription, as well as any accessories and
10components related to those devices, modifications to a motor
11vehicle for the purpose of rendering it usable by a person with
12a disability, and insulin, urine testing materials, syringes,
13and needles used by diabetics, for human use, the tax is
14imposed at the rate of 1%. For the purposes of this Section,
15until September 1, 2009: the term "soft drinks" means any
16complete, finished, ready-to-use, non-alcoholic drink, whether
17carbonated or not, including but not limited to soda water,
18cola, fruit juice, vegetable juice, carbonated water, and all
19other preparations commonly known as soft drinks of whatever
20kind or description that are contained in any closed or sealed
21bottle, can, carton, or container, regardless of size; but
22"soft drinks" does not include coffee, tea, non-carbonated
23water, infant formula, milk or milk products as defined in the
24Grade A Pasteurized Milk and Milk Products Act, or drinks
25containing 50% or more natural fruit or vegetable juice.
26 Notwithstanding any other provisions of this Act,

SB1565- 28 -LRB100 06181 HLH 16215 b
1beginning September 1, 2009, "soft drinks" means non-alcoholic
2beverages that contain natural or artificial sweeteners. "Soft
3drinks" do not include beverages that contain milk or milk
4products, soy, rice or similar milk substitutes, or greater
5than 50% of vegetable or fruit juice by volume.
6 Until August 1, 2009, and notwithstanding any other
7provisions of this Act, "food for human consumption that is to
8be consumed off the premises where it is sold" includes all
9food sold through a vending machine, except soft drinks and
10food products that are dispensed hot from a vending machine,
11regardless of the location of the vending machine. Beginning
12August 1, 2009, and notwithstanding any other provisions of
13this Act, "food for human consumption that is to be consumed
14off the premises where it is sold" includes all food sold
15through a vending machine, except soft drinks, candy, and food
16products that are dispensed hot from a vending machine,
17regardless of the location of the vending machine.
18 Notwithstanding any other provisions of this Act,
19beginning September 1, 2009, "food for human consumption that
20is to be consumed off the premises where it is sold" does not
21include candy. For purposes of this Section, "candy" means a
22preparation of sugar, honey, or other natural or artificial
23sweeteners in combination with chocolate, fruits, nuts or other
24ingredients or flavorings in the form of bars, drops, or
25pieces. "Candy" does not include any preparation that contains
26flour or requires refrigeration.

SB1565- 29 -LRB100 06181 HLH 16215 b
1 Notwithstanding any other provisions of this Act,
2beginning September 1, 2009, "nonprescription medicines and
3drugs" does not include grooming and hygiene products. For
4purposes of this Section, "grooming and hygiene products"
5includes, but is not limited to, soaps and cleaning solutions,
6shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
7lotions and screens, unless those products are available by
8prescription only, regardless of whether the products meet the
9definition of "over-the-counter-drugs". For the purposes of
10this paragraph, "over-the-counter-drug" means a drug for human
11use that contains a label that identifies the product as a drug
12as required by 21 C.F.R. 201.66. The "over-the-counter-drug"
13label includes:
14 (A) A "Drug Facts" panel; or
15 (B) A statement of the "active ingredient(s)" with a
16 list of those ingredients contained in the compound,
17 substance or preparation.
18 Beginning on the effective date of this amendatory Act of
19the 98th General Assembly, "prescription and nonprescription
20medicines and drugs" includes medical cannabis purchased from a
21registered dispensing organization under the Compassionate Use
22of Medical Cannabis Pilot Program Act.
23(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
2499-858, eff. 8-19-16.)
25 Section 99. Effective date. This Act takes effect upon
26becoming law.
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