Bill Text: IL SB1871 | 2017-2018 | 100th General Assembly | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the term "use as rolling stock moving in interstate commerce" means that a person claiming the exemption must: (1) use the vehicles or trailers to transport persons or property for hire; (2) hold, at the time of purchase, an appropriate credential that authorizes a motor carrier to engage in interstate commerce for-hire; and (3) if the person claiming the exemption is a subsidiary of another company, maintain separate books and records, including separate charts of accounts, and assure that all transactions between the transportation company and the parent are commercially reasonable arms-length transactions. Retains the current definition for aircraft and watercraft. Effective immediately.
Spectrum: Slight Partisan Bill (Republican 13-7)
Status: (Passed) 2017-08-24 - Public Act . . . . . . . . . 100-0321 [SB1871 Detail]
Download: Illinois-2017-SB1871-Engrossed.html
Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the term "use as rolling stock moving in interstate commerce" means that a person claiming the exemption must: (1) use the vehicles or trailers to transport persons or property for hire; (2) hold, at the time of purchase, an appropriate credential that authorizes a motor carrier to engage in interstate commerce for-hire; and (3) if the person claiming the exemption is a subsidiary of another company, maintain separate books and records, including separate charts of accounts, and assure that all transactions between the transportation company and the parent are commercially reasonable arms-length transactions. Retains the current definition for aircraft and watercraft. Effective immediately.
Spectrum: Slight Partisan Bill (Republican 13-7)
Status: (Passed) 2017-08-24 - Public Act . . . . . . . . . 100-0321 [SB1871 Detail]
Download: Illinois-2017-SB1871-Engrossed.html
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1 | AN ACT concerning revenue.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Use Tax Act is amended by changing Sections | ||||||
5 | 3-55, 3-61, and 10 as follows:
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6 | (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
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7 | Sec. 3-55. Multistate exemption. To prevent actual or | ||||||
8 | likely multistate taxation, the tax imposed by this
Act
does | ||||||
9 | not apply to the use of
tangible personal property in this | ||||||
10 | State under the following circumstances:
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11 | (a) The use, in this State, of tangible personal property | ||||||
12 | acquired
outside this State by a nonresident individual and | ||||||
13 | brought into this
State by the individual for his or her own | ||||||
14 | use while temporarily within
this State or while passing | ||||||
15 | through this State.
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16 | (b) (Blank). The use, in this State, of tangible personal
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17 | property by an
interstate carrier for hire as rolling stock | ||||||
18 | moving in interstate
commerce or by lessors under a lease of | ||||||
19 | one year or longer executed or
in effect at the time of | ||||||
20 | purchase of tangible personal property by
interstate carriers | ||||||
21 | for-hire for use as rolling stock moving in interstate
commerce | ||||||
22 | as long as so used by the interstate carriers for-hire, and | ||||||
23 | equipment
operated by a telecommunications provider, licensed |
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1 | as a common carrier by the
Federal Communications Commission, | ||||||
2 | which is permanently installed in or affixed
to aircraft moving | ||||||
3 | in interstate commerce.
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4 | (c) The use, in this State, by owners, lessors,
or
shippers
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5 | of tangible personal property that is utilized by interstate | ||||||
6 | carriers
for hire for use as rolling stock moving in interstate | ||||||
7 | commerce as
long as so used by the interstate carriers for | ||||||
8 | hire, and equipment
operated by a telecommunications provider, | ||||||
9 | licensed as a common carrier by the
Federal Communications | ||||||
10 | Commission, which is permanently installed in or affixed
to | ||||||
11 | aircraft moving in interstate commerce.
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12 | (d) The use, in this State, of tangible personal property | ||||||
13 | that is
acquired outside this State and caused to be brought | ||||||
14 | into this State by
a person who has already paid a tax in | ||||||
15 | another State in respect to the
sale, purchase, or use of that | ||||||
16 | property, to the extent of the amount of
the tax properly due | ||||||
17 | and paid in the other State.
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18 | (e) The temporary storage, in this State, of tangible | ||||||
19 | personal
property that is acquired outside this State and that, | ||||||
20 | after
being brought into this State and stored here | ||||||
21 | temporarily, is used
solely outside this State or is physically | ||||||
22 | attached to or incorporated
into other tangible personal | ||||||
23 | property that is used solely outside this
State, or is altered | ||||||
24 | by converting, fabricating, manufacturing, printing,
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25 | processing, or shaping, and, as altered, is used solely outside | ||||||
26 | this State.
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1 | (f) The temporary storage in this State of building | ||||||
2 | materials and
fixtures that are acquired either in this State | ||||||
3 | or outside this State
by an Illinois registered combination | ||||||
4 | retailer and construction contractor, and
that the purchaser | ||||||
5 | thereafter uses outside this State by incorporating that
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6 | property into real estate located outside this State.
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7 | (g) The use or purchase of tangible personal property by a | ||||||
8 | common carrier
by rail or motor that receives the physical | ||||||
9 | possession of the property in
Illinois, and
that transports the | ||||||
10 | property, or shares with another common carrier in the
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11 | transportation of the property, out of Illinois on a standard | ||||||
12 | uniform bill of
lading showing the seller of the property as | ||||||
13 | the shipper or consignor of the
property to a destination | ||||||
14 | outside Illinois, for use outside Illinois.
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15 | (h) Except as provided in subsection (h-1), the use, in | ||||||
16 | this State, of a motor vehicle that was sold in
this State to a | ||||||
17 | nonresident, even though the motor vehicle is
delivered to the | ||||||
18 | nonresident in this State, if the motor vehicle
is not to be | ||||||
19 | titled in this State, and if a
drive-away permit is issued to | ||||||
20 | the motor vehicle as
provided in Section 3-603 of the Illinois | ||||||
21 | Vehicle Code or if the
nonresident purchaser has vehicle | ||||||
22 | registration plates to transfer
to the motor vehicle upon | ||||||
23 | returning to his or her home state.
The issuance of the | ||||||
24 | drive-away permit or having the
out-of-state
registration | ||||||
25 | plates to be transferred shall be prima facie evidence
that the | ||||||
26 | motor vehicle will not be titled in this State.
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1 | (h-1) The exemption under subsection (h) does not apply if | ||||||
2 | the state in which the motor vehicle will be titled does not | ||||||
3 | allow a reciprocal exemption for the use in that state of a | ||||||
4 | motor vehicle sold and delivered in that state to an Illinois | ||||||
5 | resident but titled in Illinois. The tax collected under this | ||||||
6 | Act on the sale of a motor vehicle in this State to a resident | ||||||
7 | of another state that does not allow a reciprocal exemption | ||||||
8 | shall be imposed at a rate equal to the state's rate of tax on | ||||||
9 | taxable property in the state in which the purchaser is a | ||||||
10 | resident, except that the tax shall not exceed the tax that | ||||||
11 | would otherwise be imposed under this Act. At the time of the | ||||||
12 | sale, the purchaser shall execute a statement, signed under | ||||||
13 | penalty of perjury, of his or her intent to title the vehicle | ||||||
14 | in the state in which the purchaser is a resident within 30 | ||||||
15 | days after the sale and of the fact of the payment to the State | ||||||
16 | of Illinois of tax in an amount equivalent to the state's rate | ||||||
17 | of tax on taxable property in his or her state of residence and | ||||||
18 | shall submit the statement to the appropriate tax collection | ||||||
19 | agency in his or her state of residence. In addition, the | ||||||
20 | retailer must retain a signed copy of the statement in his or | ||||||
21 | her records. Nothing in this subsection shall be construed to | ||||||
22 | require the removal of the vehicle from this state following | ||||||
23 | the filing of an intent to title the vehicle in the purchaser's | ||||||
24 | state of residence if the purchaser titles the vehicle in his | ||||||
25 | or her state of residence within 30 days after the date of | ||||||
26 | sale. The tax collected under this Act in accordance with this |
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1 | subsection (h-1) shall be proportionately distributed as if the | ||||||
2 | tax were collected at the 6.25% general rate imposed under this | ||||||
3 | Act.
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4 | (h-2) The following exemptions apply with respect to | ||||||
5 | certain aircraft: | ||||||
6 | (1) Beginning on July 1, 2007, no tax is imposed under | ||||||
7 | this Act on the purchase of an aircraft, as defined in | ||||||
8 | Section 3 of the Illinois Aeronautics Act, if all of the | ||||||
9 | following conditions are met: | ||||||
10 | (A) the aircraft leaves this State within 15 days | ||||||
11 | after the later of either the issuance of the final | ||||||
12 | billing for the purchase of the aircraft or the | ||||||
13 | authorized approval for return to service, completion | ||||||
14 | of the maintenance record entry, and completion of the | ||||||
15 | test flight and ground test for inspection, as required | ||||||
16 | by 14 C.F.R. 91.407; | ||||||
17 | (B) the aircraft is not based or registered in this | ||||||
18 | State after the purchase of the aircraft; and | ||||||
19 | (C) the purchaser provides the Department with a | ||||||
20 | signed and dated certification, on a form prescribed by | ||||||
21 | the Department, certifying that the requirements of | ||||||
22 | this item (1) are met. The certificate must also | ||||||
23 | include the name and address of the purchaser, the | ||||||
24 | address of the location where the aircraft is to be | ||||||
25 | titled or registered, the address of the primary | ||||||
26 | physical location of the aircraft, and other |
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1 | information that the Department may reasonably | ||||||
2 | require. | ||||||
3 | (2) Beginning on July 1, 2007, no tax is imposed under | ||||||
4 | this Act on the use of an aircraft, as defined in Section 3 | ||||||
5 | of the Illinois Aeronautics Act, that is temporarily | ||||||
6 | located in this State for the purpose of a prepurchase | ||||||
7 | evaluation if all of the following conditions are met: | ||||||
8 | (A) the aircraft is not based or registered in this | ||||||
9 | State after the prepurchase evaluation; and | ||||||
10 | (B) the purchaser provides the Department with a | ||||||
11 | signed and dated certification, on a form prescribed by | ||||||
12 | the Department, certifying that the requirements of | ||||||
13 | this item (2) are met. The certificate must also | ||||||
14 | include the name and address of the purchaser, the | ||||||
15 | address of the location where the aircraft is to be | ||||||
16 | titled or registered, the address of the primary | ||||||
17 | physical location of the aircraft, and other | ||||||
18 | information that the Department may reasonably | ||||||
19 | require. | ||||||
20 | (3) Beginning on July 1, 2007, no tax is imposed under | ||||||
21 | this Act on the use of an aircraft, as defined in Section 3 | ||||||
22 | of the Illinois Aeronautics Act, that is temporarily | ||||||
23 | located in this State for the purpose of a post-sale | ||||||
24 | customization if all of the following conditions are met: | ||||||
25 | (A) the aircraft leaves this State within 15 days | ||||||
26 | after the authorized approval for return to service, |
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1 | completion of the maintenance record entry, and | ||||||
2 | completion of the test flight and ground test for | ||||||
3 | inspection, as required by 14 C.F.R. 91.407; | ||||||
4 | (B) the aircraft is not based or registered in this | ||||||
5 | State either before or after the post-sale | ||||||
6 | customization; and | ||||||
7 | (C) the purchaser provides the Department with a | ||||||
8 | signed and dated certification, on a form prescribed by | ||||||
9 | the Department, certifying that the requirements of | ||||||
10 | this item (3) are met. The certificate must also | ||||||
11 | include the name and address of the purchaser, the | ||||||
12 | address of the location where the aircraft is to be | ||||||
13 | titled or registered, the address of the primary | ||||||
14 | physical location of the aircraft, and other | ||||||
15 | information that the Department may reasonably | ||||||
16 | require. | ||||||
17 | If tax becomes due under this subsection (h-2) because of | ||||||
18 | the purchaser's use of the aircraft in this State, the | ||||||
19 | purchaser shall file a return with the Department and pay the | ||||||
20 | tax on the fair market value of the aircraft. This return and | ||||||
21 | payment of the tax must be made no later than 30 days after the | ||||||
22 | aircraft is used in a taxable manner in this State. The tax is | ||||||
23 | based on the fair market value of the aircraft on the date that | ||||||
24 | it is first used in a taxable manner in this State. | ||||||
25 | For purposes of this subsection (h-2): | ||||||
26 | "Based in this State" means hangared, stored, or otherwise |
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1 | used, excluding post-sale customizations as defined in this | ||||||
2 | Section, for 10 or more days in each 12-month period | ||||||
3 | immediately following the date of the sale of the aircraft. | ||||||
4 | "Post-sale customization" means any improvement, | ||||||
5 | maintenance, or repair that is performed on an aircraft | ||||||
6 | following a transfer of ownership of the aircraft. | ||||||
7 | "Prepurchase evaluation" means an examination of an | ||||||
8 | aircraft to provide a potential purchaser with information | ||||||
9 | relevant to the potential purchase. | ||||||
10 | "Registered in this State" means an aircraft registered | ||||||
11 | with the Department of Transportation, Aeronautics Division, | ||||||
12 | or titled or registered with the Federal Aviation | ||||||
13 | Administration to an address located in this State.
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14 | This subsection (h-2) is exempt from the provisions of | ||||||
15 | Section 3-90.
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16 | (i) Beginning July 1, 1999, the use, in this State, of fuel | ||||||
17 | acquired
outside this State and brought into this State in the | ||||||
18 | fuel supply
tanks of locomotives engaged in freight hauling and | ||||||
19 | passenger service for
interstate commerce. This subsection is | ||||||
20 | exempt from the provisions of Section
3-90.
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21 | (j) Beginning on January 1, 2002 and through June 30, 2016, | ||||||
22 | the use of tangible personal property
purchased from an | ||||||
23 | Illinois retailer by a taxpayer engaged in centralized
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24 | purchasing activities in Illinois who will, upon receipt of the | ||||||
25 | property in
Illinois, temporarily store the property in | ||||||
26 | Illinois (i) for the purpose of
subsequently transporting it |
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1 | outside this State for use or consumption
thereafter solely | ||||||
2 | outside this State or (ii) for the purpose of being
processed, | ||||||
3 | fabricated, or manufactured into, attached to, or incorporated | ||||||
4 | into
other tangible personal property to be transported outside | ||||||
5 | this State and
thereafter used or consumed solely outside this | ||||||
6 | State. The Director of Revenue
shall, pursuant to rules adopted | ||||||
7 | in accordance with the Illinois Administrative
Procedure Act, | ||||||
8 | issue a permit to any taxpayer in good standing with the
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9 | Department who is eligible for the exemption under this | ||||||
10 | subsection (j). The
permit issued under this subsection (j) | ||||||
11 | shall authorize the holder, to the
extent and in the manner | ||||||
12 | specified in the rules adopted under this Act, to
purchase | ||||||
13 | tangible personal property from a retailer exempt from the | ||||||
14 | taxes
imposed by this Act. Taxpayers shall maintain all | ||||||
15 | necessary books and records
to substantiate the use and | ||||||
16 | consumption of all such tangible personal property
outside of | ||||||
17 | the State of Illinois.
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18 | (Source: P.A. 97-73, eff. 6-30-11.)
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19 | (35 ILCS 105/3-61)
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20 | Sec. 3-61. Motor vehicles; trailers; use as rolling stock | ||||||
21 | definition. | ||||||
22 | (a) (Blank). Through
June 30, 2003, "use
as
rolling stock | ||||||
23 | moving
in
interstate commerce" in subsections (b) and (c) of | ||||||
24 | Section 3-55 means for motor
vehicles, as defined in Section | ||||||
25 | 1-146 of the Illinois Vehicle Code, and
trailers, as defined in |
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1 | Section 1-209 of the Illinois Vehicle Code, when on 15
or more | ||||||
2 | occasions in a 12-month period the motor vehicle and trailer | ||||||
3 | has
carried
persons or
property for hire in interstate | ||||||
4 | commerce, even just between points in Illinois,
if the motor | ||||||
5 | vehicle and trailer transports persons whose journeys or | ||||||
6 | property
whose shipments originate or terminate outside | ||||||
7 | Illinois. This definition
applies to all property purchased for | ||||||
8 | the purpose of being
attached to those motor vehicles or | ||||||
9 | trailers as a part thereof.
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10 | (b) (Blank). On and after July 1, 2003 and through June 30, | ||||||
11 | 2004, "use as rolling stock moving in interstate
commerce" in
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12 | paragraphs (b) and (c) of Section 3-55 occurs for motor | ||||||
13 | vehicles, as defined in
Section 1-146 of the Illinois Vehicle | ||||||
14 | Code, when during a 12-month period
the
rolling stock has | ||||||
15 | carried persons or property for hire in interstate commerce
for | ||||||
16 | 51% of
its total trips and transports persons whose journeys or | ||||||
17 | property whose
shipments
originate or terminate outside | ||||||
18 | Illinois. Trips that are only between points in
Illinois shall
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19 | not be counted as interstate trips when calculating whether the | ||||||
20 | tangible
personal property
qualifies for the exemption but such | ||||||
21 | trips shall be included in total trips
taken.
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22 | (c) This subsection (c) applies to motor vehicles, other | ||||||
23 | than limousines, purchased through June 30, 2017. For motor | ||||||
24 | vehicles, other than limousines, purchased on or after July 1, | ||||||
25 | 2017, subsection (d-5) applies. This subsection (c) applies to | ||||||
26 | limousines purchased before, on, or after July 1, 2017. "Use |
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1 | Beginning July 1, 2004, "use as rolling stock moving in | ||||||
2 | interstate commerce" in paragraph paragraphs (b) and (c) of | ||||||
3 | Section 3-55 occurs for motor vehicles, as defined in Section | ||||||
4 | 1-146 of the Illinois Vehicle Code, when during a 12-month | ||||||
5 | period the rolling stock has carried persons or property for | ||||||
6 | hire in interstate commerce for greater than 50% of its total | ||||||
7 | trips for that period or for greater than 50% of its total | ||||||
8 | miles for that period. The person claiming the exemption shall | ||||||
9 | make an election at the time of purchase to use either the | ||||||
10 | trips or mileage method. Persons who purchased motor vehicles | ||||||
11 | prior to July 1, 2004 shall make an election to use either the | ||||||
12 | trips or mileage method and document that election in their | ||||||
13 | books and records. If no election is made under this subsection | ||||||
14 | to use the trips or mileage method, the person shall be deemed | ||||||
15 | to have chosen the mileage method. | ||||||
16 | For purposes of determining qualifying trips or miles, | ||||||
17 | motor vehicles that carry persons or property for hire, even | ||||||
18 | just between points in Illinois, will be considered used for | ||||||
19 | hire in interstate commerce if the motor vehicle transports | ||||||
20 | persons whose journeys or property whose shipments originate or | ||||||
21 | terminate outside Illinois. The exemption for motor vehicles
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22 | used as rolling stock moving in interstate commerce may be
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23 | claimed only for the following vehicles: (i) motor vehicles | ||||||
24 | whose gross vehicle weight
rating exceeds 16,000 pounds; and | ||||||
25 | (ii) limousines, as defined in Section 1-139.1 of the Illinois | ||||||
26 | Vehicle Code. Through June 30, 2017, this This definition |
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1 | applies to all property purchased for the purpose of being | ||||||
2 | attached to those motor vehicles as a part thereof. On and | ||||||
3 | after July 1, 2017, this definition applies to property | ||||||
4 | purchased for the purpose of being attached to limousines as a | ||||||
5 | part thereof. | ||||||
6 | (d) For purchases made through June 30, 2017 Beginning July | ||||||
7 | 1, 2004 , "use as rolling stock moving in interstate commerce" | ||||||
8 | in paragraph paragraphs (b) and (c) of Section 3-55 occurs for | ||||||
9 | trailers, as defined in Section 1-209 of the Illinois Vehicle | ||||||
10 | Code, semitrailers as defined in Section 1-187 of the Illinois | ||||||
11 | Vehicle Code, and pole trailers as defined in Section 1-161 of | ||||||
12 | the Illinois Vehicle Code, when during a 12-month period the | ||||||
13 | rolling stock has carried persons or property for hire in | ||||||
14 | interstate commerce for greater than 50% of its total trips for | ||||||
15 | that period or for greater than 50% of its total miles for that | ||||||
16 | period. The person claiming the exemption for a trailer or | ||||||
17 | trailers that will not be dedicated to a motor vehicle or group | ||||||
18 | of motor vehicles shall make an election at the time of | ||||||
19 | purchase to use either the trips or mileage method. Persons who | ||||||
20 | purchased trailers prior to July 1, 2004 that are not dedicated | ||||||
21 | to a motor vehicle or group of motor vehicles shall make an | ||||||
22 | election to use either the trips or mileage method and document | ||||||
23 | that election in their books and records. If no election is | ||||||
24 | made under this subsection to use the trips or mileage method, | ||||||
25 | the person shall be deemed to have chosen the mileage method. | ||||||
26 | For purposes of determining qualifying trips or miles, |
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1 | trailers, semitrailers, or pole trailers that carry property | ||||||
2 | for hire, even just between points in Illinois, will be | ||||||
3 | considered used for hire in interstate commerce if the | ||||||
4 | trailers, semitrailers, or pole trailers transport property | ||||||
5 | whose shipments originate or terminate outside Illinois. This | ||||||
6 | definition applies to all property purchased for the purpose of | ||||||
7 | being attached to those trailers, semitrailers, or pole | ||||||
8 | trailers as a part thereof. In lieu of a person providing | ||||||
9 | documentation regarding the qualifying use of each individual | ||||||
10 | trailer, semitrailer, or pole trailer, that person may document | ||||||
11 | such qualifying use by providing documentation of the | ||||||
12 | following: | ||||||
13 | (1) If a trailer, semitrailer, or pole trailer is | ||||||
14 | dedicated to a motor vehicle that qualifies as rolling | ||||||
15 | stock moving in interstate commerce under subsection (c) of | ||||||
16 | this Section, then that trailer, semitrailer, or pole | ||||||
17 | trailer qualifies as rolling stock moving in interstate | ||||||
18 | commerce under this subsection. | ||||||
19 | (2) If a trailer, semitrailer, or pole trailer is | ||||||
20 | dedicated to a group of motor vehicles that all qualify as | ||||||
21 | rolling stock moving in interstate commerce under | ||||||
22 | subsection (c) of this Section, then that trailer, | ||||||
23 | semitrailer, or pole trailer qualifies as rolling stock | ||||||
24 | moving in interstate commerce under this subsection. | ||||||
25 | (3) If one or more trailers, semitrailers, or pole | ||||||
26 | trailers are dedicated to a group of motor vehicles and not |
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| |||||||
1 | all of those motor vehicles in that group qualify as | ||||||
2 | rolling stock moving in interstate commerce under | ||||||
3 | subsection (c) of this Section, then the percentage of | ||||||
4 | those trailers, semitrailers, or pole trailers that | ||||||
5 | qualifies as rolling stock moving in interstate commerce | ||||||
6 | under this subsection is equal to the percentage of those | ||||||
7 | motor vehicles in that group that qualify as rolling stock | ||||||
8 | moving in interstate commerce under subsection (c) of this | ||||||
9 | Section to which those trailers, semitrailers, or pole | ||||||
10 | trailers are dedicated. However, to determine the | ||||||
11 | qualification for the exemption provided under this item | ||||||
12 | (3), the mathematical application of the qualifying | ||||||
13 | percentage to one or more trailers, semitrailers, or pole | ||||||
14 | trailers under this subpart shall not be allowed as to any | ||||||
15 | fraction of a trailer, semitrailer, or pole trailer.
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16 | (d-5) For motor vehicles and trailers purchased on or after | ||||||
17 | July 1, 2017, "use as rolling stock moving in interstate | ||||||
18 | commerce" means that: | ||||||
19 | (1) the motor vehicle or trailer is used to transport | ||||||
20 | persons or property for hire; | ||||||
21 | (2) for purposes of the exemption under subsection (c) | ||||||
22 | of Section 3-55, the purchaser who is an owner, lessor, or | ||||||
23 | shipper claiming the exemption certifies that the motor | ||||||
24 | vehicle or trailer will be utilized, from the time of | ||||||
25 | purchase and continuing through the statute of limitations | ||||||
26 | for issuing a notice of tax liability under this Act, by an |
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1 | interstate carrier or carriers for hire who hold, and are | ||||||
2 | required by Federal Motor Carrier Safety Administration | ||||||
3 | regulations to hold, an active USDOT Number with the | ||||||
4 | Carrier Operation listed as "Interstate" and the Operation | ||||||
5 | Classification listed as "authorized for hire", "exempt | ||||||
6 | for hire", or both "authorized for hire" and "exempt for | ||||||
7 | hire"; except that this paragraph (2) does not apply to a | ||||||
8 | motor vehicle or trailer used at an airport to support the | ||||||
9 | operation of an aircraft moving in interstate commerce, as | ||||||
10 | long as (i) in the case of a motor vehicle, the motor | ||||||
11 | vehicle meets paragraphs (1) and (3) of this subsection | ||||||
12 | (d-5) or (ii) in the case of a trailer, the trailer meets | ||||||
13 | paragraph (1) of this subsection (d-5); and | ||||||
14 | (3) for motor vehicles, the gross vehicle weight rating | ||||||
15 | exceeds 16,000 pounds. | ||||||
16 | The definition of "use as rolling stock moving in | ||||||
17 | interstate commerce" in this subsection (d-5) applies to all | ||||||
18 | property purchased on or after July 1, 2017 for the purpose of | ||||||
19 | being attached to a motor vehicle or trailer as a part thereof, | ||||||
20 | regardless of whether the motor vehicle or trailer was | ||||||
21 | purchased before, on, or after July 1, 2017. | ||||||
22 | If an item ceases to meet requirements (1) through (3) | ||||||
23 | under this subsection (d-5), then the tax is imposed on the | ||||||
24 | selling price, allowing for a reasonable depreciation for the | ||||||
25 | period during which the item qualified for the exemption. | ||||||
26 | For purposes of this subsection (d-5): |
| |||||||
| |||||||
1 | "Motor vehicle" excludes limousines, but otherwise | ||||||
2 | means that term as defined in Section 1-146 of the Illinois | ||||||
3 | Vehicle Code. | ||||||
4 | "Trailer" means (i) "trailer", as defined in Section | ||||||
5 | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | ||||||
6 | defined in Section 1-187 of the Illinois Vehicle Code, and | ||||||
7 | (iii) "pole trailer", as defined in Section 1-161 of the | ||||||
8 | Illinois Vehicle Code. | ||||||
9 | (e) For aircraft and watercraft purchased on or after | ||||||
10 | January 1, 2014, "use as rolling stock moving in interstate | ||||||
11 | commerce" in paragraph paragraphs (b) and (c) of Section 3-55 | ||||||
12 | occurs when, during a 12-month period, the rolling stock has | ||||||
13 | carried persons or property for hire in interstate commerce for | ||||||
14 | greater than 50% of its total trips for that period or for | ||||||
15 | greater than 50% of its total miles for that period. The person | ||||||
16 | claiming the exemption shall make an election at the time of | ||||||
17 | purchase to use either the trips or mileage method and document | ||||||
18 | that election in their books and records. If no election is | ||||||
19 | made under this subsection to use the trips or mileage method, | ||||||
20 | the person shall be deemed to have chosen the mileage method. | ||||||
21 | For aircraft, flight hours may be used in lieu of recording | ||||||
22 | miles in determining whether the aircraft meets the mileage | ||||||
23 | test in this subsection. For watercraft, nautical miles or trip | ||||||
24 | hours may be used in lieu of recording miles in determining | ||||||
25 | whether the watercraft meets the mileage test in this | ||||||
26 | subsection. |
| |||||||
| |||||||
1 | Notwithstanding any other provision of law to the contrary, | ||||||
2 | property purchased on or after January 1, 2014 for the purpose | ||||||
3 | of being attached to aircraft or watercraft as a part thereof | ||||||
4 | qualifies as rolling stock moving in interstate commerce only | ||||||
5 | if the aircraft or watercraft to which it will be attached | ||||||
6 | qualifies as rolling stock moving in interstate commerce under | ||||||
7 | the test set forth in this subsection (e), regardless of when | ||||||
8 | the aircraft or watercraft was purchased. Persons who purchased | ||||||
9 | aircraft or watercraft prior to January 1, 2014 shall make an | ||||||
10 | election to use either the trips or mileage method and document | ||||||
11 | that election in their books and records for the purpose of | ||||||
12 | determining whether property purchased on or after January 1, | ||||||
13 | 2014 for the purpose of being attached to aircraft or | ||||||
14 | watercraft as a part thereof qualifies as rolling stock moving | ||||||
15 | in interstate commerce under this subsection (e). | ||||||
16 | (f) The election to use either the trips or mileage method | ||||||
17 | made under the provisions of subsections (c), (d), or (e) of | ||||||
18 | this Section will remain in effect for the duration of the | ||||||
19 | purchaser's ownership of that item. | ||||||
20 | (Source: P.A. 98-584, eff. 8-27-13.)
| ||||||
21 | (35 ILCS 105/10) (from Ch. 120, par. 439.10) | ||||||
22 | Sec. 10. Except as to motor vehicles, aircraft, watercraft, | ||||||
23 | and
trailers, and except as to cigarettes as defined in the | ||||||
24 | Cigarette Use Tax Act, when tangible personal
property is
| ||||||
25 | purchased from a retailer for use in this State by a purchaser
|
| |||||||
| |||||||
1 | who did not pay the tax imposed by this Act to the retailer, | ||||||
2 | and who does not
file returns with the Department as a retailer | ||||||
3 | under Section 9 of this
Act, such purchaser (by the last day of | ||||||
4 | the month following the calendar
month in which such purchaser | ||||||
5 | makes any payment upon the selling price of
such property) | ||||||
6 | shall, except as otherwise provided in this Section, file
a | ||||||
7 | return with the Department and pay the tax upon that portion of | ||||||
8 | the
selling price so paid by the purchaser during the preceding | ||||||
9 | calendar month.
When tangible personal property, including but | ||||||
10 | not limited to motor vehicles
and aircraft, is purchased by a | ||||||
11 | lessor, under a lease for
one year or longer, executed or in | ||||||
12 | effect at the time of purchase to an
interstate carrier for | ||||||
13 | hire, who did not pay the tax imposed by this Act to the
| ||||||
14 | retailer, such lessor (by the last day of the month following | ||||||
15 | the calendar
month in which such property reverts to the use of | ||||||
16 | such lessor) shall file
a return with the Department and pay | ||||||
17 | the tax upon the fair market value of
such property on the date | ||||||
18 | of such reversion.
However, in determining the fair market | ||||||
19 | value at the time of reversion, the
fair market value of such | ||||||
20 | property shall not exceed the original purchase price
of the | ||||||
21 | property that was paid by the lessor at the time of purchase.
| ||||||
22 | Such return shall be filed on
a form prescribed by the | ||||||
23 | Department and shall contain such information as
the Department | ||||||
24 | may reasonably require. Such return and payment from the
| ||||||
25 | purchaser shall be submitted to the Department sooner than the | ||||||
26 | last day of
the month after the month in which the purchase is |
| |||||||
| |||||||
1 | made to the extent that
that may be necessary in order to | ||||||
2 | secure the title to a motor vehicle or
the certificate of | ||||||
3 | registration for an aircraft. However, except as to motor
| ||||||
4 | vehicles and aircraft, and except as to cigarettes as defined | ||||||
5 | in the Cigarette Use Tax Act, if the
purchaser's annual use tax | ||||||
6 | liability does not exceed $600, the purchaser
may file the | ||||||
7 | return on an annual basis on or before April 15th of the year
| ||||||
8 | following the year use tax liability was incurred. Individual | ||||||
9 | purchasers with an annual use tax liability that does not | ||||||
10 | exceed $600 may, in lieu of the filing and payment requirements | ||||||
11 | in this Section, file and pay in compliance with Section 502.1 | ||||||
12 | of the Illinois Income Tax Act. | ||||||
13 | If cigarettes, as defined in the Cigarette Use Tax Act, are | ||||||
14 | purchased from a retailer for use in this State by a purchaser | ||||||
15 | who did not pay the tax imposed by this Act to the retailer, | ||||||
16 | and who does not file returns with the Department as a retailer | ||||||
17 | under Section 9 of this Act, such purchaser must, within 30 | ||||||
18 | days after acquiring the cigarettes, file a return with the | ||||||
19 | Department and pay the tax upon that portion of the selling | ||||||
20 | price so paid by the purchaser for the cigarettes. | ||||||
21 | In addition with respect to motor vehicles,
aircraft, | ||||||
22 | watercraft, and trailers, a purchaser of such tangible personal
| ||||||
23 | property for use in this
State, who purchases such tangible | ||||||
24 | personal property from an out-of-state
retailer, shall file | ||||||
25 | with the Department, upon a form to be prescribed and
supplied | ||||||
26 | by the Department, a return for each such item of tangible
|
| |||||||
| |||||||
1 | personal property purchased, except that if, in the same | ||||||
2 | transaction, (i) a
purchaser of motor vehicles,
aircraft, | ||||||
3 | watercraft, or trailers who is a retailer of motor vehicles,
| ||||||
4 | aircraft, watercraft, or trailers purchases more than one motor | ||||||
5 | vehicle,
aircraft, watercraft, or trailer for the purpose of | ||||||
6 | resale or (ii) a purchaser
of motor vehicles, aircraft, | ||||||
7 | watercraft, or trailers purchases more
than one motor vehicle, | ||||||
8 | aircraft, watercraft, or trailer for use as qualifying
rolling | ||||||
9 | stock as provided in Section 3-55 of this Act, then the | ||||||
10 | purchaser may
report the purchase of all motor vehicles, | ||||||
11 | aircraft, watercraft, or trailers
involved in that transaction | ||||||
12 | to the Department on a single return prescribed by
the | ||||||
13 | Department. Such return in the case of motor vehicles and
| ||||||
14 | aircraft must show the name and address of the seller, the | ||||||
15 | name, address of
purchaser, the amount of the selling price | ||||||
16 | including the amount allowed by
the retailer for traded in | ||||||
17 | property, if any; the amount allowed by the
retailer for the | ||||||
18 | traded-in tangible personal property, if any, to the
extent to | ||||||
19 | which Section 2 of this Act allows an exemption for the value | ||||||
20 | of
traded-in property; the balance payable after deducting such | ||||||
21 | trade-in
allowance from the total selling price; the amount of | ||||||
22 | tax due from the
purchaser with respect to such transaction; | ||||||
23 | the amount of tax collected
from the purchaser by the retailer | ||||||
24 | on such transaction (or satisfactory
evidence that such tax is | ||||||
25 | not due in that particular instance if that is
claimed to be | ||||||
26 | the fact); the place and date of the sale, a sufficient
|
| |||||||
| |||||||
1 | identification of the property sold, and such other information | ||||||
2 | as the
Department may reasonably require. | ||||||
3 | Such return shall be filed not later than 30 days after | ||||||
4 | such motor
vehicle or aircraft is brought into this State for | ||||||
5 | use. | ||||||
6 | For purposes of this Section, "watercraft" means a Class 2, | ||||||
7 | Class 3, or
Class 4 watercraft as defined in Section 3-2 of the | ||||||
8 | Boat Registration and
Safety Act, a personal watercraft, or any | ||||||
9 | boat equipped with an inboard
motor. | ||||||
10 | The return and tax remittance or proof of exemption from | ||||||
11 | the tax that is
imposed by this Act may be transmitted to the | ||||||
12 | Department by way of the
State agency with which, or State | ||||||
13 | officer with whom, the tangible personal
property must be | ||||||
14 | titled or registered (if titling or registration is
required) | ||||||
15 | if the Department and such agency or State officer determine | ||||||
16 | that
this procedure will expedite the processing of | ||||||
17 | applications for title or
registration. | ||||||
18 | With each such return, the purchaser shall remit the proper | ||||||
19 | amount of tax
due (or shall submit satisfactory evidence that | ||||||
20 | the sale is not taxable if
that is the case), to the Department | ||||||
21 | or its agents, whereupon the
Department shall issue, in the | ||||||
22 | purchaser's name, a tax receipt (or a
certificate of exemption | ||||||
23 | if the Department is satisfied that the particular
sale is tax | ||||||
24 | exempt) which such purchaser may submit to the agency with
| ||||||
25 | which, or State officer with whom, he must title or register | ||||||
26 | the tangible
personal property that is involved (if titling or |
| |||||||
| |||||||
1 | registration is required)
in support of such purchaser's | ||||||
2 | application for an Illinois certificate or
other evidence of | ||||||
3 | title or registration to such tangible personal property. | ||||||
4 | When a purchaser pays a tax imposed by this Act directly to | ||||||
5 | the Department,
the Department (upon request therefor from such | ||||||
6 | purchaser) shall issue an
appropriate receipt to such purchaser | ||||||
7 | showing that he has paid such tax to
the Department. Such | ||||||
8 | receipt shall be sufficient to relieve the purchaser
from | ||||||
9 | further liability for the tax to which such receipt may refer. | ||||||
10 | A user who is liable to pay use tax directly to the | ||||||
11 | Department only
occasionally and not on a frequently recurring | ||||||
12 | basis, and who is not
required to file returns with the | ||||||
13 | Department as a retailer under Section 9
of this Act, or under | ||||||
14 | the "Retailers' Occupation Tax Act", or as a
registrant with | ||||||
15 | the Department under the "Service Occupation Tax Act" or
the | ||||||
16 | "Service Use Tax Act", need not register with the Department.
| ||||||
17 | However, if such a user has a frequently recurring direct use | ||||||
18 | tax liability
to pay to the Department, such user shall be | ||||||
19 | required to register with the
Department on forms prescribed by | ||||||
20 | the Department and to obtain and display
a certificate of | ||||||
21 | registration from the Department. In that event, all of
the | ||||||
22 | provisions of Section 9 of this Act concerning the filing of | ||||||
23 | regular
monthly, quarterly or annual tax returns and all of the | ||||||
24 | provisions of
Section 2a of the "Retailers' Occupation Tax Act" | ||||||
25 | concerning the
requirements for registrants to post bond or | ||||||
26 | other security with the
Department, as the provisions of such |
| |||||||
| |||||||
1 | sections now exist or may hereafter
be amended, shall apply to | ||||||
2 | such users to the same extent as if such
provisions were | ||||||
3 | included herein. | ||||||
4 | (Source: P.A. 96-520, eff. 8-14-09; 96-1000, eff. 7-2-10; | ||||||
5 | 96-1388, eff. 7-29-10.)
| ||||||
6 | Section 10. The Service Use Tax Act is amended by changing | ||||||
7 | Sections 2 and 3-51 as follows:
| ||||||
8 | (35 ILCS 110/2) (from Ch. 120, par. 439.32)
| ||||||
9 | Sec. 2. Definitions. | ||||||
10 | "Use" means the exercise by any person of any right or | ||||||
11 | power
over tangible personal property incident to the ownership | ||||||
12 | of that
property, but does not include the sale or use for | ||||||
13 | demonstration by him
of that property in any form as tangible | ||||||
14 | personal property in the
regular course of business.
"Use" does | ||||||
15 | not mean the interim
use of
tangible personal property nor the | ||||||
16 | physical incorporation of tangible
personal property, as an | ||||||
17 | ingredient or constituent, into other tangible
personal | ||||||
18 | property, (a) which is sold in the regular course of business
| ||||||
19 | or (b) which the person incorporating such ingredient or | ||||||
20 | constituent
therein has undertaken at the time of such purchase | ||||||
21 | to cause to be
transported in interstate commerce to | ||||||
22 | destinations outside the State of
Illinois.
| ||||||
23 | "Purchased from a serviceman" means the acquisition of the | ||||||
24 | ownership
of, or title to, tangible personal property through a |
| |||||||
| |||||||
1 | sale of service.
| ||||||
2 | "Purchaser" means any person who, through a sale of | ||||||
3 | service, acquires
the ownership of, or title to, any tangible | ||||||
4 | personal property.
| ||||||
5 | "Cost price" means the consideration paid by the serviceman | ||||||
6 | for a
purchase valued in money, whether paid in money or | ||||||
7 | otherwise, including
cash, credits and services, and shall be | ||||||
8 | determined without any
deduction on account of the supplier's | ||||||
9 | cost of the property sold or on
account of any other expense | ||||||
10 | incurred by the supplier. When a serviceman
contracts out part | ||||||
11 | or all of the services required in his sale of service,
it | ||||||
12 | shall be presumed that the cost price to the serviceman of the | ||||||
13 | property
transferred to him or her by his or her subcontractor | ||||||
14 | is equal to 50% of
the subcontractor's charges to the | ||||||
15 | serviceman in the absence of proof of
the consideration paid by | ||||||
16 | the subcontractor for the purchase of such property.
| ||||||
17 | "Selling price" means the consideration for a sale valued | ||||||
18 | in money
whether received in money or otherwise, including | ||||||
19 | cash, credits and
service, and shall be determined without any | ||||||
20 | deduction on account of the
serviceman's cost of the property | ||||||
21 | sold, the cost of materials used,
labor or service cost or any | ||||||
22 | other expense whatsoever, but does not
include interest or | ||||||
23 | finance charges which appear as separate items on
the bill of | ||||||
24 | sale or sales contract nor charges that are added to prices
by | ||||||
25 | sellers on account of the seller's duty to collect, from the
| ||||||
26 | purchaser, the tax that is imposed by this Act.
|
| |||||||
| |||||||
1 | "Department" means the Department of Revenue.
| ||||||
2 | "Person" means any natural individual, firm, partnership,
| ||||||
3 | association, joint stock company, joint venture, public or | ||||||
4 | private
corporation, limited liability company, and any | ||||||
5 | receiver, executor, trustee,
guardian or other representative | ||||||
6 | appointed by order of any court.
| ||||||
7 | "Sale of service" means any transaction except:
| ||||||
8 | (1) a retail sale of tangible personal property taxable | ||||||
9 | under the
Retailers' Occupation Tax Act or under the Use | ||||||
10 | Tax Act.
| ||||||
11 | (2) a sale of tangible personal property for the | ||||||
12 | purpose of resale
made in compliance with Section 2c of the | ||||||
13 | Retailers' Occupation Tax Act.
| ||||||
14 | (3) except as hereinafter provided, a sale or transfer | ||||||
15 | of tangible
personal property as an incident to the | ||||||
16 | rendering of service for or by
any governmental body, or | ||||||
17 | for or by any corporation, society,
association, | ||||||
18 | foundation or institution organized and operated
| ||||||
19 | exclusively for charitable, religious or educational | ||||||
20 | purposes or any
not-for-profit corporation, society, | ||||||
21 | association, foundation,
institution or organization which | ||||||
22 | has no compensated officers or
employees and which is | ||||||
23 | organized and operated primarily for the
recreation of | ||||||
24 | persons 55 years of age or older. A limited liability | ||||||
25 | company
may qualify for the exemption under this paragraph | ||||||
26 | only if the limited
liability company is organized and |
| |||||||
| |||||||
1 | operated exclusively for educational
purposes.
| ||||||
2 | (4) (blank). a sale or transfer of tangible personal
| ||||||
3 | property as an incident to the
rendering of service for | ||||||
4 | interstate carriers for hire for use as rolling stock
| ||||||
5 | moving in interstate commerce or by lessors under a lease | ||||||
6 | of one year or
longer, executed or in effect at the time of | ||||||
7 | purchase of personal property, to
interstate carriers for | ||||||
8 | hire for use as rolling stock moving in interstate
commerce | ||||||
9 | so long as so used by such interstate carriers for hire, | ||||||
10 | and equipment
operated by a telecommunications provider, | ||||||
11 | licensed as a common carrier by the
Federal Communications | ||||||
12 | Commission, which is permanently installed in or affixed
to | ||||||
13 | aircraft moving in interstate commerce.
| ||||||
14 | (4a) a sale or transfer of tangible personal
property | ||||||
15 | as an incident
to the rendering of service for owners, | ||||||
16 | lessors, or shippers of tangible
personal property which is | ||||||
17 | utilized by interstate carriers for hire for
use as rolling | ||||||
18 | stock moving in interstate commerce so long as so used by
| ||||||
19 | interstate carriers for hire, and equipment operated by a
| ||||||
20 | telecommunications provider, licensed as a common carrier | ||||||
21 | by the Federal
Communications Commission, which is | ||||||
22 | permanently installed in or affixed to
aircraft moving in | ||||||
23 | interstate commerce.
| ||||||
24 | (4a-5) on and after July 1, 2003 and through June 30, | ||||||
25 | 2004, a sale or transfer of a motor vehicle
of
the
second | ||||||
26 | division with a gross vehicle weight in excess of 8,000 |
| |||||||
| |||||||
1 | pounds as an
incident to the rendering of service if that | ||||||
2 | motor
vehicle is subject
to the commercial distribution fee | ||||||
3 | imposed under Section 3-815.1 of the
Illinois Vehicle
Code. | ||||||
4 | Beginning on July 1, 2004 and through June 30, 2005, the | ||||||
5 | use in this State of motor vehicles of the second division: | ||||||
6 | (i) with a gross vehicle weight rating in excess of 8,000 | ||||||
7 | pounds; (ii) that are subject to the commercial | ||||||
8 | distribution fee imposed under Section 3-815.1 of the | ||||||
9 | Illinois Vehicle Code; and (iii) that are primarily used | ||||||
10 | for commercial purposes. Through June 30, 2005, this
| ||||||
11 | exemption applies to repair and replacement parts added | ||||||
12 | after the
initial
purchase of such a motor vehicle if that | ||||||
13 | motor vehicle is used in a manner that
would
qualify for | ||||||
14 | the rolling stock exemption otherwise provided for in this | ||||||
15 | Act. For purposes of this paragraph, "used for commercial | ||||||
16 | purposes" means the transportation of persons or property | ||||||
17 | in furtherance of any commercial or industrial enterprise | ||||||
18 | whether for-hire or not.
| ||||||
19 | (5) a sale or transfer of machinery and equipment used | ||||||
20 | primarily in the
process of the manufacturing or | ||||||
21 | assembling, either in an existing, an expanded
or a new | ||||||
22 | manufacturing facility, of tangible personal property for | ||||||
23 | wholesale or
retail sale or lease, whether such sale or | ||||||
24 | lease is made directly by the
manufacturer or by some other | ||||||
25 | person, whether the materials used in the process
are owned | ||||||
26 | by the manufacturer or some other person, or whether such |
| |||||||
| |||||||
1 | sale or
lease is made apart from or as an incident to the | ||||||
2 | seller's engaging in a
service occupation and the | ||||||
3 | applicable tax is a Service Use Tax or Service
Occupation | ||||||
4 | Tax, rather than Use Tax or Retailers' Occupation Tax. The | ||||||
5 | exemption provided by this paragraph (5) does not include | ||||||
6 | machinery and equipment used in (i) the generation of | ||||||
7 | electricity for wholesale or retail sale; (ii) the | ||||||
8 | generation or treatment of natural or artificial gas for | ||||||
9 | wholesale or retail sale that is delivered to customers | ||||||
10 | through pipes, pipelines, or mains; or (iii) the treatment | ||||||
11 | of water for wholesale or retail sale that is delivered to | ||||||
12 | customers through pipes, pipelines, or mains. The | ||||||
13 | provisions of this amendatory Act of the 98th General | ||||||
14 | Assembly are declaratory of existing law as to the meaning | ||||||
15 | and scope of this exemption.
| ||||||
16 | (5a) the repairing, reconditioning or remodeling, for | ||||||
17 | a
common carrier by rail, of tangible personal property | ||||||
18 | which belongs to such
carrier for hire, and as to which | ||||||
19 | such carrier receives the physical possession
of the | ||||||
20 | repaired, reconditioned or remodeled item of tangible | ||||||
21 | personal property
in Illinois, and which such carrier | ||||||
22 | transports, or shares with another common
carrier in the | ||||||
23 | transportation of such property, out of Illinois on a | ||||||
24 | standard
uniform bill of lading showing the person who | ||||||
25 | repaired, reconditioned or
remodeled the property to a | ||||||
26 | destination outside Illinois, for use outside
Illinois.
|
| |||||||
| |||||||
1 | (5b) a sale or transfer of tangible personal property | ||||||
2 | which is produced by
the seller thereof on special order in | ||||||
3 | such a way as to have made the
applicable tax the Service | ||||||
4 | Occupation Tax or the Service Use Tax, rather than
the | ||||||
5 | Retailers' Occupation Tax or the Use Tax, for an interstate | ||||||
6 | carrier by rail
which receives the physical possession of | ||||||
7 | such property in Illinois, and which
transports such | ||||||
8 | property, or shares with another common carrier in the
| ||||||
9 | transportation of such property, out of Illinois on a | ||||||
10 | standard uniform bill of
lading showing the seller of the | ||||||
11 | property as the shipper or consignor of such
property to a | ||||||
12 | destination outside Illinois, for use outside Illinois.
| ||||||
13 | (6) until July 1, 2003, a sale or transfer of | ||||||
14 | distillation machinery
and equipment, sold
as a unit or kit | ||||||
15 | and assembled or installed by the retailer, which
machinery | ||||||
16 | and equipment is certified by the user to be used only for | ||||||
17 | the
production of ethyl alcohol that will be used for | ||||||
18 | consumption as motor fuel
or as a component of motor fuel | ||||||
19 | for the personal use of such user and not
subject to sale | ||||||
20 | or resale.
| ||||||
21 | (7) at the election of any serviceman not required to | ||||||
22 | be
otherwise registered as a retailer under Section 2a of | ||||||
23 | the Retailers'
Occupation Tax Act, made for each fiscal | ||||||
24 | year sales
of service in which the aggregate annual cost | ||||||
25 | price of tangible
personal property transferred as an | ||||||
26 | incident to the sales of service is
less than 35%, or 75% |
| |||||||
| |||||||
1 | in the case of servicemen transferring prescription
drugs | ||||||
2 | or servicemen engaged in graphic arts production, of the | ||||||
3 | aggregate
annual total gross receipts from all sales of | ||||||
4 | service. The purchase of
such tangible personal property by | ||||||
5 | the serviceman shall be subject to tax
under the Retailers' | ||||||
6 | Occupation Tax Act and the Use Tax Act.
However, if a
| ||||||
7 | primary serviceman who has made the election described in | ||||||
8 | this paragraph
subcontracts service work to a secondary | ||||||
9 | serviceman who has also made the
election described in this | ||||||
10 | paragraph, the primary serviceman does not
incur a Use Tax | ||||||
11 | liability if the secondary serviceman (i) has paid or will | ||||||
12 | pay
Use
Tax on his or her cost price of any tangible | ||||||
13 | personal property transferred
to the primary serviceman | ||||||
14 | and (ii) certifies that fact in writing to the
primary
| ||||||
15 | serviceman.
| ||||||
16 | Tangible personal property transferred incident to the | ||||||
17 | completion of a
maintenance agreement is exempt from the tax | ||||||
18 | imposed pursuant to this Act.
| ||||||
19 | Exemption (5) also includes machinery and equipment used in | ||||||
20 | the general
maintenance or repair of such exempt machinery and | ||||||
21 | equipment or for in-house
manufacture of exempt machinery and | ||||||
22 | equipment. The machinery and equipment exemption does not | ||||||
23 | include machinery and equipment used in (i) the generation of | ||||||
24 | electricity for wholesale or retail sale; (ii) the generation | ||||||
25 | or treatment of natural or artificial gas for wholesale or | ||||||
26 | retail sale that is delivered to customers through pipes, |
| |||||||
| |||||||
1 | pipelines, or mains; or (iii) the treatment of water for | ||||||
2 | wholesale or retail sale that is delivered to customers through | ||||||
3 | pipes, pipelines, or mains. The provisions of this amendatory | ||||||
4 | Act of the 98th General Assembly are declaratory of existing | ||||||
5 | law as to the meaning and scope of this exemption. For the | ||||||
6 | purposes of exemption
(5), each of these terms shall have the | ||||||
7 | following meanings: (1) "manufacturing
process" shall mean the | ||||||
8 | production of any article of tangible personal
property, | ||||||
9 | whether such article is a finished product or an article for | ||||||
10 | use in
the process of manufacturing or assembling a different | ||||||
11 | article of tangible
personal property, by procedures commonly | ||||||
12 | regarded as manufacturing,
processing, fabricating, or | ||||||
13 | refining which changes some existing
material or materials into | ||||||
14 | a material with a different form, use or
name. In relation to a | ||||||
15 | recognized integrated business composed of a
series of | ||||||
16 | operations which collectively constitute manufacturing, or
| ||||||
17 | individually constitute manufacturing operations, the | ||||||
18 | manufacturing
process shall be deemed to commence with the | ||||||
19 | first operation or stage of
production in the series, and shall | ||||||
20 | not be deemed to end until the
completion of the final product | ||||||
21 | in the last operation or stage of
production in the series; and | ||||||
22 | further, for purposes of exemption (5),
photoprocessing is | ||||||
23 | deemed to be a manufacturing process of tangible
personal | ||||||
24 | property for wholesale or retail sale; (2) "assembling process" | ||||||
25 | shall
mean the production of any article of tangible personal | ||||||
26 | property, whether such
article is a finished product or an |
| |||||||
| |||||||
1 | article for use in the process of
manufacturing or assembling a | ||||||
2 | different article of tangible personal
property, by the | ||||||
3 | combination of existing materials in a manner commonly
regarded | ||||||
4 | as assembling which results in a material of a different form,
| ||||||
5 | use or name; (3) "machinery" shall mean major mechanical | ||||||
6 | machines or
major components of such machines contributing to a | ||||||
7 | manufacturing or
assembling process; and (4) "equipment" shall | ||||||
8 | include any independent
device or tool separate from any | ||||||
9 | machinery but essential to an
integrated manufacturing or | ||||||
10 | assembly process; including computers
used primarily in a | ||||||
11 | manufacturer's computer
assisted design, computer assisted | ||||||
12 | manufacturing (CAD/CAM) system;
or any subunit or assembly | ||||||
13 | comprising a component of any machinery or
auxiliary, adjunct | ||||||
14 | or attachment parts of machinery, such as tools, dies,
jigs, | ||||||
15 | fixtures, patterns and molds; or any parts which require | ||||||
16 | periodic
replacement in the course of normal operation; but | ||||||
17 | shall not include hand
tools.
Equipment includes chemicals or | ||||||
18 | chemicals acting as catalysts but only if the
chemicals or | ||||||
19 | chemicals acting as catalysts effect a direct and immediate | ||||||
20 | change
upon a
product being manufactured or assembled for | ||||||
21 | wholesale or retail sale or
lease.
The purchaser of such | ||||||
22 | machinery and equipment who has an active
resale registration | ||||||
23 | number shall furnish such number to the seller at the
time of | ||||||
24 | purchase. The user of such machinery and equipment and tools
| ||||||
25 | without an active resale registration number shall prepare a | ||||||
26 | certificate of
exemption for each transaction stating facts |
| |||||||
| |||||||
1 | establishing the exemption for
that transaction, which | ||||||
2 | certificate shall be available to the Department
for inspection | ||||||
3 | or audit. The Department shall prescribe the form of the
| ||||||
4 | certificate.
| ||||||
5 | Any informal rulings, opinions or letters issued by the | ||||||
6 | Department in
response to an inquiry or request for any opinion | ||||||
7 | from any person
regarding the coverage and applicability of | ||||||
8 | exemption (5) to specific
devices shall be published, | ||||||
9 | maintained as a public record, and made
available for public | ||||||
10 | inspection and copying. If the informal ruling,
opinion or | ||||||
11 | letter contains trade secrets or other confidential
| ||||||
12 | information, where possible the Department shall delete such | ||||||
13 | information
prior to publication. Whenever such informal | ||||||
14 | rulings, opinions, or
letters contain any policy of general | ||||||
15 | applicability, the Department
shall formulate and adopt such | ||||||
16 | policy as a rule in accordance with the
provisions of the | ||||||
17 | Illinois Administrative Procedure Act.
| ||||||
18 | On and after July 1, 1987, no entity otherwise eligible | ||||||
19 | under exemption
(3) of this Section shall make tax free | ||||||
20 | purchases unless it has an active
exemption identification | ||||||
21 | number issued by the Department.
| ||||||
22 | The purchase, employment and transfer of such tangible | ||||||
23 | personal
property as newsprint and ink for the primary purpose | ||||||
24 | of conveying news
(with or without other information) is not a | ||||||
25 | purchase, use or sale of
service or of tangible personal | ||||||
26 | property within the meaning of this Act.
|
| |||||||
| |||||||
1 | "Serviceman" means any person who is engaged in the | ||||||
2 | occupation of
making sales of service.
| ||||||
3 | "Sale at retail" means "sale at retail" as defined in the | ||||||
4 | Retailers'
Occupation Tax Act.
| ||||||
5 | "Supplier" means any person who makes sales of tangible | ||||||
6 | personal
property to servicemen for the purpose of resale as an | ||||||
7 | incident to a
sale of service.
| ||||||
8 | "Serviceman maintaining a place of business in this State", | ||||||
9 | or any
like term, means and includes any serviceman:
| ||||||
10 | 1. having or maintaining within this State, directly or | ||||||
11 | by a
subsidiary, an office, distribution house, sales | ||||||
12 | house, warehouse or
other place of business, or any agent | ||||||
13 | or other representative operating
within this State under | ||||||
14 | the authority of the serviceman or its
subsidiary, | ||||||
15 | irrespective of whether such place of business or agent or
| ||||||
16 | other representative is located here permanently or | ||||||
17 | temporarily, or
whether such serviceman or subsidiary is | ||||||
18 | licensed to do business in this
State; | ||||||
19 | 1.1. having a contract with a person located in this | ||||||
20 | State under which the person, for a commission or other | ||||||
21 | consideration based on the sale of service by the | ||||||
22 | serviceman, directly or indirectly refers potential | ||||||
23 | customers to the serviceman by providing to the potential | ||||||
24 | customers a promotional code or other mechanism that allows | ||||||
25 | the serviceman to track purchases referred by such persons. | ||||||
26 | Examples of mechanisms that allow the serviceman to track |
| |||||||
| |||||||
1 | purchases referred by such persons include but are not | ||||||
2 | limited to the use of a link on the person's Internet | ||||||
3 | website, promotional codes distributed through the | ||||||
4 | person's hand-delivered or mailed material, and | ||||||
5 | promotional codes distributed by the person through radio | ||||||
6 | or other broadcast media. The provisions of this paragraph | ||||||
7 | 1.1 shall apply only if the cumulative gross receipts from | ||||||
8 | sales of service by the serviceman to customers who are | ||||||
9 | referred to the serviceman by all persons in this State | ||||||
10 | under such contracts exceed $10,000 during the preceding 4 | ||||||
11 | quarterly periods ending on the last day of March, June, | ||||||
12 | September, and December; a serviceman meeting the | ||||||
13 | requirements of this paragraph 1.1 shall be presumed to be | ||||||
14 | maintaining a place of business in this State but may rebut | ||||||
15 | this presumption by submitting proof that the referrals or | ||||||
16 | other activities pursued within this State by such persons | ||||||
17 | were not sufficient to meet the nexus standards of the | ||||||
18 | United States Constitution during the preceding 4 | ||||||
19 | quarterly periods; | ||||||
20 | 1.2. beginning July 1, 2011, having a contract with a | ||||||
21 | person located in this State under which: | ||||||
22 | A. the serviceman sells the same or substantially | ||||||
23 | similar line of services as the person located in this | ||||||
24 | State and does so using an identical or substantially | ||||||
25 | similar name, trade name, or trademark as the person | ||||||
26 | located in this State; and |
| |||||||
| |||||||
1 | B. the serviceman provides a commission or other | ||||||
2 | consideration to the person located in this State based | ||||||
3 | upon the sale of services by the serviceman. | ||||||
4 | The provisions of this paragraph 1.2 shall apply only if | ||||||
5 | the cumulative gross receipts from sales of service by the | ||||||
6 | serviceman to customers in this State under all such | ||||||
7 | contracts exceed $10,000 during the preceding 4 quarterly | ||||||
8 | periods ending on the last day of March, June, September, | ||||||
9 | and December;
| ||||||
10 | 2. soliciting orders for tangible personal property by | ||||||
11 | means of a
telecommunication or television shopping system | ||||||
12 | (which utilizes toll free
numbers) which is intended by the | ||||||
13 | retailer to be broadcast by cable
television or other means | ||||||
14 | of broadcasting, to consumers located in this State;
| ||||||
15 | 3. pursuant to a contract with a broadcaster or | ||||||
16 | publisher located in this
State, soliciting orders for | ||||||
17 | tangible personal property by means of advertising
which is | ||||||
18 | disseminated primarily to consumers located in this State | ||||||
19 | and only
secondarily to bordering jurisdictions;
| ||||||
20 | 4. soliciting orders for tangible personal property by | ||||||
21 | mail if the
solicitations are substantial and recurring and | ||||||
22 | if the retailer benefits
from any banking, financing, debt | ||||||
23 | collection, telecommunication, or
marketing activities | ||||||
24 | occurring in this State or benefits from the location
in | ||||||
25 | this State of authorized installation, servicing, or | ||||||
26 | repair facilities;
|
| |||||||
| |||||||
1 | 5. being owned or controlled by the same interests | ||||||
2 | which own or
control any retailer engaging in business in | ||||||
3 | the same or similar line of
business in this State;
| ||||||
4 | 6. having a franchisee or licensee operating under its | ||||||
5 | trade name if
the franchisee or licensee is required to | ||||||
6 | collect the tax under this Section;
| ||||||
7 | 7. pursuant to a contract with a cable television | ||||||
8 | operator located in
this State, soliciting orders for | ||||||
9 | tangible personal property by means of
advertising which is | ||||||
10 | transmitted or distributed over a cable television
system | ||||||
11 | in this State; or
| ||||||
12 | 8. engaging in activities in Illinois, which | ||||||
13 | activities in the
state in which the supply business | ||||||
14 | engaging in such activities is located
would constitute | ||||||
15 | maintaining a place of business in that state.
| ||||||
16 | (Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
| ||||||
17 | (35 ILCS 110/3-51)
| ||||||
18 | Sec. 3-51. Motor vehicles; trailers; use as rolling stock | ||||||
19 | definition. | ||||||
20 | (a) (Blank). Through
June 30, 2003, "use
as
rolling stock | ||||||
21 | moving
in
interstate commerce" in subsection (b) of Section | ||||||
22 | 3-45 means for motor
vehicles, as defined in Section 1-46 of | ||||||
23 | the Illinois Vehicle Code, and
trailers, as defined in Section | ||||||
24 | 1-209 of the Illinois Vehicle Code, when on 15
or more
| ||||||
25 | occasions in a 12-month period the motor vehicle and trailer |
| |||||||
| |||||||
1 | has carried
persons
or property
for hire in interstate | ||||||
2 | commerce, even just between points in Illinois, if the
motor | ||||||
3 | vehicle and trailer transports persons whose journeys or | ||||||
4 | property
whose shipments originate or terminate outside | ||||||
5 | Illinois. This definition
applies to all property purchased for | ||||||
6 | the purpose of being attached to those
motor
vehicles or | ||||||
7 | trailers as a part thereof.
| ||||||
8 | (b) (Blank). On and after July 1, 2003 and through June 30, | ||||||
9 | 2004, "use as rolling stock moving in interstate
commerce" in
| ||||||
10 | paragraphs (4) and (4a) of the definition of "sale of service" | ||||||
11 | in Section 2
and subsection (b) of Section 3-45 occurs for | ||||||
12 | motor vehicles, as defined in
Section 1-146 of the Illinois | ||||||
13 | Vehicle Code, when
during a 12-month period the rolling stock | ||||||
14 | has carried persons or property for
hire in
interstate commerce | ||||||
15 | for 51% of its total trips and transports persons whose
| ||||||
16 | journeys or
property whose shipments originate or terminate | ||||||
17 | outside Illinois. Trips that
are only
between points in | ||||||
18 | Illinois shall not be counted as interstate trips when
| ||||||
19 | calculating whether
the tangible personal property qualifies | ||||||
20 | for the exemption but such trips shall
be included
in total | ||||||
21 | trips taken.
| ||||||
22 | (c) This subsection (c) applies to motor vehicles, other | ||||||
23 | than limousines, purchased through June 30, 2017. For motor | ||||||
24 | vehicles, other than limousines, purchased on or after July 1, | ||||||
25 | 2017, subsection (d-5) applies. This subsection (c) applies to | ||||||
26 | limousines purchased before, on, or after July 1, 2017. "Use |
| |||||||
| |||||||
1 | Beginning July 1, 2004, "use as rolling stock moving in | ||||||
2 | interstate commerce" in paragraph paragraphs (4) and (4a) of | ||||||
3 | the definition of "sale of service" in Section 2 and subsection | ||||||
4 | (b) of Section 3-45 occurs for motor vehicles, as defined in | ||||||
5 | Section 1-146 of the Illinois Vehicle Code, when during a | ||||||
6 | 12-month period the rolling stock has carried persons or | ||||||
7 | property for hire in interstate commerce for greater than 50% | ||||||
8 | of its total trips for that period or for greater than 50% of | ||||||
9 | its total miles for that period. The person claiming the | ||||||
10 | exemption shall make an election at the time of purchase to use | ||||||
11 | either the trips or mileage method. Persons who purchased motor | ||||||
12 | vehicles prior to July 1, 2004 shall make an election to use | ||||||
13 | either the trips or mileage method and document that election | ||||||
14 | in their books and records. If no election is made under this | ||||||
15 | subsection to use the trips or mileage method, the person shall | ||||||
16 | be deemed to have chosen the mileage method. | ||||||
17 | For purposes of determining qualifying trips or miles, | ||||||
18 | motor vehicles that carry persons or property for hire, even | ||||||
19 | just between points in Illinois, will be considered used for | ||||||
20 | hire in interstate commerce if the motor vehicle transports | ||||||
21 | persons whose journeys or property whose shipments originate or | ||||||
22 | terminate outside Illinois. The exemption for motor vehicles
| ||||||
23 | used as rolling stock moving in interstate commerce may be
| ||||||
24 | claimed only for the following vehicles: (i) motor vehicles | ||||||
25 | whose gross vehicle weight
rating exceeds 16,000 pounds; and | ||||||
26 | (ii) limousines, as defined in Section 1-139.1 of the Illinois |
| |||||||
| |||||||
1 | Vehicle Code. Through June 30, 2017, this This definition | ||||||
2 | applies to all property purchased for the purpose of being | ||||||
3 | attached to those motor vehicles as a part thereof. On and | ||||||
4 | after July 1, 2017, this definition applies to property | ||||||
5 | purchased for the purpose of being attached to limousines as a | ||||||
6 | part thereof. | ||||||
7 | (d) For purchases made through June 30, 2017 Beginning July | ||||||
8 | 1, 2004 , "use as rolling stock moving in interstate commerce" | ||||||
9 | in paragraph paragraphs (4) and (4a) of the definition of "sale | ||||||
10 | of service" in Section 2 and subsection (b) of Section 3-45 | ||||||
11 | occurs for trailers, as defined in Section 1-209 of the | ||||||
12 | Illinois Vehicle Code, semitrailers as defined in Section 1-187 | ||||||
13 | of the Illinois Vehicle Code, and pole trailers as defined in | ||||||
14 | Section 1-161 of the Illinois Vehicle Code, when during a | ||||||
15 | 12-month period the rolling stock has carried persons or | ||||||
16 | property for hire in interstate commerce for greater than 50% | ||||||
17 | of its total trips for that period or for greater than 50% of | ||||||
18 | its total miles for that period. The person claiming the | ||||||
19 | exemption for a trailer or trailers that will not be dedicated | ||||||
20 | to a motor vehicle or group of motor vehicles shall make an | ||||||
21 | election at the time of purchase to use either the trips or | ||||||
22 | mileage method. Persons who purchased trailers prior to July 1, | ||||||
23 | 2004 that are not dedicated to a motor vehicle or group of | ||||||
24 | motor vehicles shall make an election to use either the trips | ||||||
25 | or mileage method and document that election in their books and | ||||||
26 | records. If no election is made under this subsection to use |
| |||||||
| |||||||
1 | the trips or mileage method, the person shall be deemed to have | ||||||
2 | chosen the mileage method. | ||||||
3 | For purposes of determining qualifying trips or miles, | ||||||
4 | trailers, semitrailers, or pole trailers that carry property | ||||||
5 | for hire, even just between points in Illinois, will be | ||||||
6 | considered used for hire in interstate commerce if the | ||||||
7 | trailers, semitrailers, or pole trailers transport property | ||||||
8 | whose shipments originate or terminate outside Illinois. This | ||||||
9 | definition applies to all property purchased for the purpose of | ||||||
10 | being attached to those trailers, semitrailers, or pole | ||||||
11 | trailers as a part thereof. In lieu of a person providing | ||||||
12 | documentation regarding the qualifying use of each individual | ||||||
13 | trailer, semitrailer, or pole trailer, that person may document | ||||||
14 | such qualifying use by providing documentation of the | ||||||
15 | following: | ||||||
16 | (1) If a trailer, semitrailer, or pole trailer is | ||||||
17 | dedicated to a motor vehicle that qualifies as rolling | ||||||
18 | stock moving in interstate commerce under subsection (c) of | ||||||
19 | this Section, then that trailer, semitrailer, or pole | ||||||
20 | trailer qualifies as rolling stock moving in interstate | ||||||
21 | commerce under this subsection. | ||||||
22 | (2) If a trailer, semitrailer, or pole trailer is | ||||||
23 | dedicated to a group of motor vehicles that all qualify as | ||||||
24 | rolling stock moving in interstate commerce under | ||||||
25 | subsection (c) of this Section, then that trailer, | ||||||
26 | semitrailer, or pole trailer qualifies as rolling stock |
| |||||||
| |||||||
1 | moving in interstate commerce under this subsection. | ||||||
2 | (3) If one or more trailers, semitrailers, or pole | ||||||
3 | trailers are dedicated to a group of motor vehicles and not | ||||||
4 | all of those motor vehicles in that group qualify as | ||||||
5 | rolling stock moving in interstate commerce under | ||||||
6 | subsection (c) of this Section, then the percentage of | ||||||
7 | those trailers, semitrailers, or pole trailers that | ||||||
8 | qualifies as rolling stock moving in interstate commerce | ||||||
9 | under this subsection is equal to the percentage of those | ||||||
10 | motor vehicles in that group that qualify as rolling stock | ||||||
11 | moving in interstate commerce under subsection (c) of this | ||||||
12 | Section to which those trailers, semitrailers, or pole | ||||||
13 | trailers are dedicated. However, to determine the | ||||||
14 | qualification for the exemption provided under this item | ||||||
15 | (3), the mathematical application of the qualifying | ||||||
16 | percentage to one or more trailers, semitrailers, or pole | ||||||
17 | trailers under this subpart shall not be allowed as to any | ||||||
18 | fraction of a trailer, semitrailer, or pole trailer.
| ||||||
19 | (d-5) For motor vehicles and trailers purchased on or after | ||||||
20 | July 1, 2017, "use as rolling stock moving in interstate | ||||||
21 | commerce" means that: | ||||||
22 | (1) the motor vehicle or trailer is used to transport | ||||||
23 | persons or property for hire; | ||||||
24 | (2) for purposes of the exemption under paragraph (4a) | ||||||
25 | of the definition of "sale of service" in Section 2, the | ||||||
26 | purchaser who is an owner, lessor, or shipper claiming the |
| |||||||
| |||||||
1 | exemption certifies that the motor vehicle or trailer will | ||||||
2 | be utilized, from the time of purchase and continuing | ||||||
3 | through the statute of limitations for issuing a notice of | ||||||
4 | tax liability under this Act, by an interstate carrier or | ||||||
5 | carriers for hire who hold, and are required by Federal | ||||||
6 | Motor Carrier Safety Administration regulations to hold, | ||||||
7 | an active USDOT Number with the Carrier Operation listed as | ||||||
8 | "Interstate" and the Operation Classification listed as | ||||||
9 | "authorized for hire", "exempt for hire", or both | ||||||
10 | "authorized for hire" and "exempt for hire"; except that | ||||||
11 | this paragraph (2) does not apply to a motor vehicle or | ||||||
12 | trailer used at an airport to support the operation of an | ||||||
13 | aircraft moving in interstate commerce, as long as (i) in | ||||||
14 | the case of a motor vehicle, the motor vehicle meets | ||||||
15 | paragraphs (1) and (3) of this subsection (d-5) or (ii) in | ||||||
16 | the case of a trailer, the trailer meets paragraph (1) of | ||||||
17 | this subsection (d-5); and | ||||||
18 | (3) for motor vehicles, the gross vehicle weight rating | ||||||
19 | exceeds 16,000 pounds. | ||||||
20 | The definition of "use as rolling stock moving in | ||||||
21 | interstate commerce" in this subsection (d-5) applies to all | ||||||
22 | property purchased on or after July 1, 2017 for the purpose of | ||||||
23 | being attached to a motor vehicle or trailer as a part thereof, | ||||||
24 | regardless of whether the motor vehicle or trailer was | ||||||
25 | purchased before, on, or after July 1, 2017. | ||||||
26 | If an item ceases to meet requirements (1) through (3) |
| |||||||
| |||||||
1 | under this subsection (d-5), then the tax is imposed on the | ||||||
2 | selling price, allowing for a reasonable depreciation for the | ||||||
3 | period during which the item qualified for the exemption. | ||||||
4 | For purposes of this subsection (d-5): | ||||||
5 | "Motor vehicle" excludes limousines, but otherwise | ||||||
6 | means that term as defined in Section 1-146 of the Illinois | ||||||
7 | Vehicle Code. | ||||||
8 | "Trailer" means (i) "trailer", as defined in Section | ||||||
9 | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | ||||||
10 | defined in Section 1-187 of the Illinois Vehicle Code, and | ||||||
11 | (iii) "pole trailer", as defined in Section 1-161 of the | ||||||
12 | Illinois Vehicle Code. | ||||||
13 | (e) For aircraft and watercraft purchased on or after | ||||||
14 | January 1, 2014, "use as rolling stock moving in interstate | ||||||
15 | commerce" in (i) paragraph paragraphs (4) and (4a) of the | ||||||
16 | definition of "sale of service" in Section 2 and (ii) | ||||||
17 | subsection (b) of Section 3-45 occurs when, during a 12-month | ||||||
18 | period, the rolling stock has carried persons or property for | ||||||
19 | hire in interstate commerce for greater than 50% of its total | ||||||
20 | trips for that period or for greater than 50% of its total | ||||||
21 | miles for that period. The person claiming the exemption shall | ||||||
22 | make an election at the time of purchase to use either the | ||||||
23 | trips or mileage method and document that election in their | ||||||
24 | books and records. If no election is made under this subsection | ||||||
25 | to use the trips or mileage method, the person shall be deemed | ||||||
26 | to have chosen the mileage method. For aircraft, flight hours |
| |||||||
| |||||||
1 | may be used in lieu of recording miles in determining whether | ||||||
2 | the aircraft meets the mileage test in this subsection. For | ||||||
3 | watercraft, nautical miles or trip hours may be used in lieu of | ||||||
4 | recording miles in determining whether the watercraft meets the | ||||||
5 | mileage test in this subsection. | ||||||
6 | Notwithstanding any other provision of law to the contrary, | ||||||
7 | property purchased on or after January 1, 2014 for the purpose | ||||||
8 | of being attached to aircraft or watercraft as a part thereof | ||||||
9 | qualifies as rolling stock moving in interstate commerce only | ||||||
10 | if the aircraft or watercraft to which it will be attached | ||||||
11 | qualifies as rolling stock moving in interstate commerce under | ||||||
12 | the test set forth in this subsection (e), regardless of when | ||||||
13 | the aircraft or watercraft was purchased. Persons who purchased | ||||||
14 | aircraft or watercraft prior to January 1, 2014 shall make an | ||||||
15 | election to use either the trips or mileage method and document | ||||||
16 | that election in their books and records for the purpose of | ||||||
17 | determining whether property purchased on or after January 1, | ||||||
18 | 2014 for the purpose of being attached to aircraft or | ||||||
19 | watercraft as a part thereof qualifies as rolling stock moving | ||||||
20 | in interstate commerce under this subsection (e). | ||||||
21 | (f) The election to use either the trips or mileage method | ||||||
22 | made under the provisions of subsections (c), (d), or (e) of | ||||||
23 | this Section will remain in effect for the duration of the | ||||||
24 | purchaser's ownership of that item. | ||||||
25 | (Source: P.A. 98-584, eff. 8-27-13.)
|
| |||||||
| |||||||
1 | Section 15. The Service Occupation Tax Act is amended by | ||||||
2 | changing Sections 2 and 2d as follows:
| ||||||
3 | (35 ILCS 115/2) (from Ch. 120, par. 439.102)
| ||||||
4 | Sec. 2. "Transfer" means any transfer of the title to | ||||||
5 | property or of
the ownership of property whether or not the | ||||||
6 | transferor retains title as
security for the payment of amounts | ||||||
7 | due him from the transferee.
| ||||||
8 | "Cost Price" means the consideration paid by the serviceman | ||||||
9 | for a
purchase valued in money, whether paid in money or | ||||||
10 | otherwise, including
cash, credits and services, and shall be | ||||||
11 | determined without any deduction
on account of the supplier's | ||||||
12 | cost of the property sold or on account of any
other expense | ||||||
13 | incurred by the supplier. When a serviceman contracts out
part | ||||||
14 | or all of the services required in his sale of service, it | ||||||
15 | shall be
presumed that the cost price to the serviceman of the | ||||||
16 | property
transferred to him by his or her subcontractor is | ||||||
17 | equal to 50% of the
subcontractor's charges to the serviceman | ||||||
18 | in the absence of proof of the
consideration paid by the | ||||||
19 | subcontractor for the purchase of such
property.
| ||||||
20 | "Department" means the Department of Revenue.
| ||||||
21 | "Person" means any natural individual, firm, partnership, | ||||||
22 | association, joint
stock company, joint venture, public or | ||||||
23 | private corporation, limited liability
company, and any | ||||||
24 | receiver, executor, trustee, guardian or other representative
| ||||||
25 | appointed by order of any court.
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1 | "Sale of Service" means any transaction except:
| ||||||
2 | (a) A retail sale of tangible personal property taxable | ||||||
3 | under the Retailers'
Occupation Tax Act or under the Use Tax | ||||||
4 | Act.
| ||||||
5 | (b) A sale of tangible personal property for the purpose of | ||||||
6 | resale made in
compliance with Section 2c of the Retailers' | ||||||
7 | Occupation Tax Act.
| ||||||
8 | (c) Except as hereinafter provided, a sale or transfer of | ||||||
9 | tangible personal
property as an incident to the rendering of | ||||||
10 | service for or by any governmental
body or for or by any | ||||||
11 | corporation, society, association, foundation or
institution | ||||||
12 | organized and operated exclusively for charitable, religious | ||||||
13 | or
educational purposes or any not-for-profit corporation, | ||||||
14 | society, association,
foundation, institution or organization | ||||||
15 | which has no compensated officers or
employees and which is | ||||||
16 | organized and operated primarily for the recreation of
persons | ||||||
17 | 55 years of age or older. A limited liability company may | ||||||
18 | qualify for
the exemption under this paragraph only if the | ||||||
19 | limited liability company is
organized and operated | ||||||
20 | exclusively for educational purposes.
| ||||||
21 | (d) (Blank). A sale or transfer of tangible personal
| ||||||
22 | property
as an incident to the
rendering of service for | ||||||
23 | interstate carriers for hire for use as rolling stock
moving in | ||||||
24 | interstate commerce or lessors under leases of one year or | ||||||
25 | longer,
executed or in effect at the time of purchase, to | ||||||
26 | interstate carriers for hire
for use as rolling stock moving in |
| |||||||
| |||||||
1 | interstate commerce, and equipment operated
by a | ||||||
2 | telecommunications provider, licensed as a common
carrier by | ||||||
3 | the Federal Communications Commission, which is permanently
| ||||||
4 | installed in or affixed to aircraft moving in interstate | ||||||
5 | commerce.
| ||||||
6 | (d-1) A sale or transfer of tangible personal
property as | ||||||
7 | an incident to
the rendering of service for owners, lessors or | ||||||
8 | shippers of tangible personal
property which is utilized by | ||||||
9 | interstate carriers for hire for use as rolling
stock moving in | ||||||
10 | interstate commerce, and equipment operated
by a | ||||||
11 | telecommunications provider, licensed as a common carrier by | ||||||
12 | the
Federal Communications Commission, which is permanently | ||||||
13 | installed in or
affixed to aircraft moving in interstate | ||||||
14 | commerce.
| ||||||
15 | (d-1.1) On and after July 1, 2003 and through June 30, | ||||||
16 | 2004, a sale or transfer of a motor vehicle
of the
second | ||||||
17 | division with a gross vehicle weight in excess of 8,000 pounds | ||||||
18 | as an
incident to the rendering of service if that motor
| ||||||
19 | vehicle is subject
to the commercial distribution fee imposed | ||||||
20 | under Section 3-815.1 of the
Illinois Vehicle
Code. Beginning | ||||||
21 | on July 1, 2004 and through June 30, 2005, the use in this | ||||||
22 | State of motor vehicles of the second division: (i) with a | ||||||
23 | gross vehicle weight rating in excess of 8,000 pounds; (ii) | ||||||
24 | that are subject to the commercial distribution fee imposed | ||||||
25 | under Section 3-815.1 of the Illinois Vehicle Code; and (iii) | ||||||
26 | that are primarily used for commercial purposes. Through June |
| |||||||
| |||||||
1 | 30, 2005, this exemption applies to repair and replacement | ||||||
2 | parts added after the
initial
purchase of such a motor vehicle | ||||||
3 | if that motor vehicle is used in a manner that
would
qualify | ||||||
4 | for the rolling stock exemption otherwise provided for in this | ||||||
5 | Act. For purposes of this paragraph, "used for commercial | ||||||
6 | purposes" means the transportation of persons or property in | ||||||
7 | furtherance of any commercial or industrial enterprise whether | ||||||
8 | for-hire or not.
| ||||||
9 | (d-2) The repairing, reconditioning or remodeling, for a | ||||||
10 | common carrier by
rail, of tangible personal property which | ||||||
11 | belongs to such carrier for hire, and
as to which such carrier | ||||||
12 | receives the physical possession of the repaired,
| ||||||
13 | reconditioned or remodeled item of tangible personal property | ||||||
14 | in Illinois, and
which such carrier transports, or shares with | ||||||
15 | another common carrier in the
transportation of such property, | ||||||
16 | out of Illinois on a standard uniform bill of
lading showing | ||||||
17 | the person who repaired, reconditioned or remodeled the | ||||||
18 | property
as the shipper or consignor of such property to a | ||||||
19 | destination outside Illinois,
for use outside Illinois.
| ||||||
20 | (d-3) A sale or transfer of tangible personal property | ||||||
21 | which
is produced by the seller thereof on special order in | ||||||
22 | such a way as to have
made the applicable tax the Service | ||||||
23 | Occupation Tax or the Service Use Tax,
rather than the | ||||||
24 | Retailers' Occupation Tax or the Use Tax, for an interstate
| ||||||
25 | carrier by rail which receives the physical possession of such | ||||||
26 | property in
Illinois, and which transports such property, or |
| |||||||
| |||||||
1 | shares with another common
carrier in the transportation of | ||||||
2 | such property, out of Illinois on a standard
uniform bill of | ||||||
3 | lading showing the seller of the property as the shipper or
| ||||||
4 | consignor of such property to a destination outside Illinois, | ||||||
5 | for use outside
Illinois.
| ||||||
6 | (d-4) Until January 1, 1997, a sale, by a registered | ||||||
7 | serviceman paying tax
under this Act to the Department, of | ||||||
8 | special order printed materials delivered
outside Illinois and | ||||||
9 | which are not returned to this State, if delivery is made
by | ||||||
10 | the seller or agent of the seller, including an agent who | ||||||
11 | causes the product
to be delivered outside Illinois by a common | ||||||
12 | carrier or the U.S.
postal service.
| ||||||
13 | (e) A sale or transfer of machinery and equipment used | ||||||
14 | primarily in
the process of the manufacturing or assembling, | ||||||
15 | either in an existing, an
expanded or a new manufacturing | ||||||
16 | facility, of tangible personal property for
wholesale or retail | ||||||
17 | sale or lease, whether such sale or lease is made directly
by | ||||||
18 | the manufacturer or by some other person, whether the materials | ||||||
19 | used in the
process are owned by the manufacturer or some other | ||||||
20 | person, or whether such
sale or lease is made apart from or as | ||||||
21 | an incident to the seller's engaging in
a service occupation | ||||||
22 | and the applicable tax is a Service Occupation Tax or
Service | ||||||
23 | Use Tax, rather than Retailers' Occupation Tax or Use Tax. The | ||||||
24 | exemption provided by this paragraph (e) does not include | ||||||
25 | machinery and equipment used in (i) the generation of | ||||||
26 | electricity for wholesale or retail sale; (ii) the generation |
| |||||||
| |||||||
1 | or treatment of natural or artificial gas for wholesale or | ||||||
2 | retail sale that is delivered to customers through pipes, | ||||||
3 | pipelines, or mains; or (iii) the treatment of water for | ||||||
4 | wholesale or retail sale that is delivered to customers through | ||||||
5 | pipes, pipelines, or mains. The provisions of this amendatory | ||||||
6 | Act of the 98th General Assembly are declaratory of existing | ||||||
7 | law as to the meaning and scope of this exemption.
| ||||||
8 | (f) Until July 1, 2003, the sale or transfer of | ||||||
9 | distillation
machinery
and equipment, sold as a
unit or kit and | ||||||
10 | assembled or installed by the retailer, which machinery
and | ||||||
11 | equipment is certified by the user to be used only for the | ||||||
12 | production
of ethyl alcohol that will be used for consumption | ||||||
13 | as motor fuel or as a
component of motor fuel for the personal | ||||||
14 | use of such user and not subject
to sale or resale.
| ||||||
15 | (g) At the election of any serviceman not required to be | ||||||
16 | otherwise
registered as a retailer under Section 2a of the | ||||||
17 | Retailers' Occupation Tax Act,
made for each fiscal year sales | ||||||
18 | of service in which the aggregate annual cost
price of tangible | ||||||
19 | personal property transferred as an incident to the sales of
| ||||||
20 | service is less than 35% (75% in the case of servicemen | ||||||
21 | transferring
prescription drugs or servicemen engaged in | ||||||
22 | graphic arts production) of the
aggregate annual total gross | ||||||
23 | receipts from all sales of service. The purchase
of such | ||||||
24 | tangible personal property by the serviceman shall be subject | ||||||
25 | to tax
under the Retailers' Occupation Tax Act and the Use Tax | ||||||
26 | Act.
However, if a
primary serviceman who has made the election |
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| |||||||
1 | described in this paragraph
subcontracts service work to a | ||||||
2 | secondary serviceman who has also made the
election described | ||||||
3 | in this paragraph, the primary serviceman does not
incur a Use | ||||||
4 | Tax liability if the secondary serviceman (i) has paid or will | ||||||
5 | pay
Use
Tax on his or her cost price of any tangible personal | ||||||
6 | property transferred
to the primary serviceman and (ii) | ||||||
7 | certifies that fact in writing to the
primary serviceman.
| ||||||
8 | Tangible personal property transferred incident to the | ||||||
9 | completion of a
maintenance agreement is exempt from the tax | ||||||
10 | imposed pursuant to this Act.
| ||||||
11 | Exemption (e) also includes machinery and equipment used in | ||||||
12 | the
general maintenance or repair of such exempt machinery and | ||||||
13 | equipment or for
in-house manufacture of exempt machinery and | ||||||
14 | equipment.
The machinery and equipment exemption does not | ||||||
15 | include machinery and equipment used in (i) the generation of | ||||||
16 | electricity for wholesale or retail sale; (ii) the generation | ||||||
17 | or treatment of natural or artificial gas for wholesale or | ||||||
18 | retail sale that is delivered to customers through pipes, | ||||||
19 | pipelines, or mains; or (iii) the treatment of water for | ||||||
20 | wholesale or retail sale that is delivered to customers through | ||||||
21 | pipes, pipelines, or mains. The provisions of this amendatory | ||||||
22 | Act of the 98th General Assembly are declaratory of existing | ||||||
23 | law as to the meaning and scope of this exemption. For the | ||||||
24 | purposes of exemption (e), each of these terms shall have the | ||||||
25 | following
meanings: (1) "manufacturing process" shall mean the | ||||||
26 | production of any
article of tangible personal property, |
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| |||||||
1 | whether such article is a
finished product or an article for | ||||||
2 | use in the process of manufacturing
or assembling a different | ||||||
3 | article of tangible personal property, by
procedures commonly | ||||||
4 | regarded as manufacturing, processing, fabricating,
or | ||||||
5 | refining which changes some existing material or materials into | ||||||
6 | a
material with a different form, use or name. In relation to a
| ||||||
7 | recognized integrated business composed of a series of | ||||||
8 | operations which
collectively constitute manufacturing, or | ||||||
9 | individually constitute
manufacturing operations, the | ||||||
10 | manufacturing process shall be deemed to
commence with the | ||||||
11 | first operation or stage of production in the series,
and shall | ||||||
12 | not be deemed to end until the completion of the final product
| ||||||
13 | in the last operation or stage of production in the series; and | ||||||
14 | further for
purposes of exemption (e), photoprocessing is | ||||||
15 | deemed to be a manufacturing
process of tangible personal | ||||||
16 | property for wholesale or retail sale;
(2) "assembling process" | ||||||
17 | shall mean the production of any article of
tangible personal | ||||||
18 | property, whether such article is a finished product
or an | ||||||
19 | article for use in the process of manufacturing or assembling a
| ||||||
20 | different article of tangible personal property, by the | ||||||
21 | combination of
existing materials in a manner commonly regarded | ||||||
22 | as assembling which
results in a material of a different form, | ||||||
23 | use or name; (3) "machinery"
shall mean major mechanical | ||||||
24 | machines or major components of such machines
contributing to a | ||||||
25 | manufacturing or assembling process; and (4) "equipment"
shall | ||||||
26 | include any independent device or tool separate from any |
| |||||||
| |||||||
1 | machinery but
essential to an integrated manufacturing or | ||||||
2 | assembly process; including
computers used primarily in a | ||||||
3 | manufacturer's computer
assisted design, computer assisted | ||||||
4 | manufacturing (CAD/CAM) system; or any
subunit or assembly | ||||||
5 | comprising a component of any machinery or auxiliary,
adjunct | ||||||
6 | or attachment parts of machinery, such as tools, dies, jigs, | ||||||
7 | fixtures,
patterns and molds; or any parts which require | ||||||
8 | periodic replacement in the
course of normal operation; but | ||||||
9 | shall not include hand tools. Equipment
includes chemicals or | ||||||
10 | chemicals acting as catalysts but only if the chemicals
or | ||||||
11 | chemicals acting as catalysts effect a direct and immediate | ||||||
12 | change upon a
product being manufactured or assembled for | ||||||
13 | wholesale or retail sale or lease.
The purchaser of such | ||||||
14 | machinery and equipment
who has an active resale registration | ||||||
15 | number shall furnish such number to
the seller at the time of | ||||||
16 | purchase. The purchaser of such machinery and
equipment and | ||||||
17 | tools without an active resale registration number shall | ||||||
18 | furnish
to the seller a certificate of exemption for each | ||||||
19 | transaction stating facts
establishing the exemption for that | ||||||
20 | transaction, which certificate shall
be available to the | ||||||
21 | Department for inspection or audit.
| ||||||
22 | Except as provided in Section 2d of this Act, the rolling | ||||||
23 | stock exemption
applies to rolling
stock
used by an interstate
| ||||||
24 | carrier for hire, even just between points in Illinois, if such | ||||||
25 | rolling
stock transports, for hire, persons whose journeys or | ||||||
26 | property whose
shipments originate or terminate outside |
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| |||||||
1 | Illinois.
| ||||||
2 | Any informal rulings, opinions or letters issued by the | ||||||
3 | Department in
response to an inquiry or request for any opinion | ||||||
4 | from any person
regarding the coverage and applicability of | ||||||
5 | exemption (e) to specific
devices shall be published, | ||||||
6 | maintained as a public record, and made
available for public | ||||||
7 | inspection and copying. If the informal ruling,
opinion or | ||||||
8 | letter contains trade secrets or other confidential
| ||||||
9 | information, where possible the Department shall delete such | ||||||
10 | information
prior to publication. Whenever such informal | ||||||
11 | rulings, opinions, or
letters contain any policy of general | ||||||
12 | applicability, the Department
shall formulate and adopt such | ||||||
13 | policy as a rule in accordance with the
provisions of the | ||||||
14 | Illinois Administrative Procedure Act.
| ||||||
15 | On and after July 1, 1987, no entity otherwise eligible | ||||||
16 | under exemption
(c) of this Section shall make tax free | ||||||
17 | purchases unless it has an active
exemption identification | ||||||
18 | number issued by the Department.
| ||||||
19 | "Serviceman" means any person who is engaged in the | ||||||
20 | occupation of
making sales of service.
| ||||||
21 | "Sale at Retail" means "sale at retail" as defined in the | ||||||
22 | Retailers'
Occupation Tax Act.
| ||||||
23 | "Supplier" means any person who makes sales of tangible | ||||||
24 | personal
property to servicemen for the purpose of resale as an | ||||||
25 | incident to a
sale of service.
| ||||||
26 | (Source: P.A. 98-583, eff. 1-1-14.)
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| |||||||
1 | (35 ILCS 115/2d)
| ||||||
2 | Sec. 2d. Motor vehicles; trailers; use as rolling stock | ||||||
3 | definition. | ||||||
4 | (a) (Blank). Through June
30, 2003, "use as
rolling stock | ||||||
5 | moving in
interstate commerce" in subsections (d) and (d-1) of | ||||||
6 | the definition of "sale of
service" in Section 2 means for | ||||||
7 | motor vehicles, as defined in Section 1-146 of
the Illinois | ||||||
8 | Vehicle Code, and trailers, as defined in Section 1-209 of the
| ||||||
9 | Illinois Vehicle Code, when on 15 or more occasions in a | ||||||
10 | 12-month period the
motor vehicle and trailer has carried | ||||||
11 | persons or property for hire in
interstate commerce, even just | ||||||
12 | between points in Illinois, if the motor vehicle
and trailer | ||||||
13 | transports persons whose journeys or property whose shipments
| ||||||
14 | originate or terminate outside Illinois.
This definition | ||||||
15 | applies to all property purchased for the purpose of being
| ||||||
16 | attached to those motor vehicles or trailers as a part thereof.
| ||||||
17 | (b) (Blank). On and after July 1, 2003 and through June 30, | ||||||
18 | 2004, "use as rolling stock moving in interstate
commerce" in
| ||||||
19 | paragraphs (d) and (d-1) of the definition of "sale of service" | ||||||
20 | in
Section 2 occurs for motor vehicles, as defined in Section | ||||||
21 | 1-146 of the
Illinois Vehicle Code,
when during a 12-month | ||||||
22 | period the rolling stock has carried persons or property
for | ||||||
23 | hire
in interstate commerce for 51% of its total trips and | ||||||
24 | transports persons whose
journeys or
property whose shipments | ||||||
25 | originate or terminate outside Illinois. Trips that
are only
|
| |||||||
| |||||||
1 | between points in Illinois will not be counted as interstate | ||||||
2 | trips when
calculating whether
the tangible personal property | ||||||
3 | qualifies for the exemption but such trips will
be included
in | ||||||
4 | total trips taken.
| ||||||
5 | (c) This subsection (c) applies to motor vehicles, other | ||||||
6 | than limousines, purchased through June 30, 2017. For motor | ||||||
7 | vehicles, other than limousines, purchased on or after July 1, | ||||||
8 | 2017, subsection (d-5) applies. This subsection (c) applies to | ||||||
9 | limousines purchased before, on, or after July 1, 2017. "Use | ||||||
10 | Beginning July 1, 2004, "use as rolling stock moving in | ||||||
11 | interstate commerce" in paragraph paragraphs (d) and (d-1) of | ||||||
12 | the definition of "sale of service" in Section 2 occurs for | ||||||
13 | motor vehicles, as defined in Section 1-146 of the Illinois | ||||||
14 | Vehicle Code, when during a 12-month period the rolling stock | ||||||
15 | has carried persons or property for hire in interstate commerce | ||||||
16 | for greater than 50% of its total trips for that period or for | ||||||
17 | greater than 50% of its total miles for that period. The person | ||||||
18 | claiming the exemption shall make an election at the time of | ||||||
19 | purchase to use either the trips or mileage method. Persons who | ||||||
20 | purchased motor vehicles prior to July 1, 2004 shall make an | ||||||
21 | election to use either the trips or mileage method and document | ||||||
22 | that election in their books and records. If no election is | ||||||
23 | made under this subsection to use the trips or mileage method, | ||||||
24 | the person shall be deemed to have chosen the mileage method. | ||||||
25 | For purposes of determining qualifying trips or miles, | ||||||
26 | motor vehicles that carry persons or property for hire, even |
| |||||||
| |||||||
1 | just between points in Illinois, will be considered used for | ||||||
2 | hire in interstate commerce if the motor vehicle transports | ||||||
3 | persons whose journeys or property whose shipments originate or | ||||||
4 | terminate outside Illinois. The exemption for motor vehicles
| ||||||
5 | used as rolling stock moving in interstate commerce may be
| ||||||
6 | claimed only for the following vehicles: (i) motor vehicles | ||||||
7 | whose gross vehicle weight
rating exceeds 16,000 pounds; and | ||||||
8 | (ii) limousines, as defined in Section 1-139.1 of the Illinois | ||||||
9 | Vehicle Code. Through June 30, 2017, this This definition | ||||||
10 | applies to all property purchased for the purpose of being | ||||||
11 | attached to those motor vehicles as a part thereof. On and | ||||||
12 | after July 1, 2017, this definition applies to property | ||||||
13 | purchased for the purpose of being attached to limousines as a | ||||||
14 | part thereof. | ||||||
15 | (d) For purchases made through June 30, 2017 Beginning July | ||||||
16 | 1, 2004 , "use as rolling stock moving in interstate commerce" | ||||||
17 | in paragraph paragraphs (d) and (d-1) of the definition of | ||||||
18 | "sale of service" in Section 2 occurs for trailers, as defined | ||||||
19 | in Section 1-209 of the Illinois Vehicle Code, semitrailers as | ||||||
20 | defined in Section 1-187 of the Illinois Vehicle Code, and pole | ||||||
21 | trailers as defined in Section 1-161 of the Illinois Vehicle | ||||||
22 | Code, when during a 12-month period the rolling stock has | ||||||
23 | carried persons or property for hire in interstate commerce for | ||||||
24 | greater than 50% of its total trips for that period or for | ||||||
25 | greater than 50% of its total miles for that period. The person | ||||||
26 | claiming the exemption for a trailer or trailers that will not |
| |||||||
| |||||||
1 | be dedicated to a motor vehicle or group of motor vehicles | ||||||
2 | shall make an election at the time of purchase to use either | ||||||
3 | the trips or mileage method. Persons who purchased trailers | ||||||
4 | prior to July 1, 2004 that are not dedicated to a motor vehicle | ||||||
5 | or group of motor vehicles shall make an election to use either | ||||||
6 | the trips or mileage method and document that election in their | ||||||
7 | books and records. If no election is made under this subsection | ||||||
8 | to use the trips or mileage method, the person shall be deemed | ||||||
9 | to have chosen the mileage method. | ||||||
10 | For purposes of determining qualifying trips or miles, | ||||||
11 | trailers, semitrailers, or pole trailers that carry property | ||||||
12 | for hire, even just between points in Illinois, will be | ||||||
13 | considered used for hire in interstate commerce if the | ||||||
14 | trailers, semitrailers, or pole trailers transport property | ||||||
15 | whose shipments originate or terminate outside Illinois. This | ||||||
16 | definition applies to all property purchased for the purpose of | ||||||
17 | being attached to those trailers, semitrailers, or pole | ||||||
18 | trailers as a part thereof. In lieu of a person providing | ||||||
19 | documentation regarding the qualifying use of each individual | ||||||
20 | trailer, semitrailer, or pole trailer, that person may document | ||||||
21 | such qualifying use by providing documentation of the | ||||||
22 | following: | ||||||
23 | (1) If a trailer, semitrailer, or pole trailer is | ||||||
24 | dedicated to a motor vehicle that qualifies as rolling | ||||||
25 | stock moving in interstate commerce under subsection (c) of | ||||||
26 | this Section, then that trailer, semitrailer, or pole |
| |||||||
| |||||||
1 | trailer qualifies as rolling stock moving in interstate | ||||||
2 | commerce under this subsection. | ||||||
3 | (2) If a trailer, semitrailer, or pole trailer is | ||||||
4 | dedicated to a group of motor vehicles that all qualify as | ||||||
5 | rolling stock moving in interstate commerce under | ||||||
6 | subsection (c) of this Section, then that trailer, | ||||||
7 | semitrailer, or pole trailer qualifies as rolling stock | ||||||
8 | moving in interstate commerce under this subsection. | ||||||
9 | (3) If one or more trailers, semitrailers, or pole | ||||||
10 | trailers are dedicated to a group of motor vehicles and not | ||||||
11 | all of those motor vehicles in that group qualify as | ||||||
12 | rolling stock moving in interstate commerce under | ||||||
13 | subsection (c) of this Section, then the percentage of | ||||||
14 | those trailers, semitrailers, or pole trailers that | ||||||
15 | qualifies as rolling stock moving in interstate commerce | ||||||
16 | under this subsection is equal to the percentage of those | ||||||
17 | motor vehicles in that group that qualify as rolling stock | ||||||
18 | moving in interstate commerce under subsection (c) of this | ||||||
19 | Section to which those trailers, semitrailers, or pole | ||||||
20 | trailers are dedicated. However, to determine the | ||||||
21 | qualification for the exemption provided under this item | ||||||
22 | (3), the mathematical application of the qualifying | ||||||
23 | percentage to one or more trailers, semitrailers, or pole | ||||||
24 | trailers under this subpart shall not be allowed as to any | ||||||
25 | fraction of a trailer, semitrailer, or pole trailer.
| ||||||
26 | (d-5) For motor vehicles and trailers purchased on or after |
| |||||||
| |||||||
1 | July 1, 2017, "use as rolling stock moving in interstate | ||||||
2 | commerce" means that: | ||||||
3 | (1) the motor vehicle or trailer is used to transport | ||||||
4 | persons or property for hire; | ||||||
5 | (2) for purposes of the exemption under paragraph (d-1) | ||||||
6 | of the definition of "sale of service" in Section 2, the | ||||||
7 | purchaser who is an owner, lessor, or shipper claiming the | ||||||
8 | exemption certifies that the motor vehicle or trailer will | ||||||
9 | be utilized, from the time of purchase and continuing | ||||||
10 | through the statute of limitations for issuing a notice of | ||||||
11 | tax liability under this Act, by an interstate carrier or | ||||||
12 | carriers for hire who hold, and are required by Federal | ||||||
13 | Motor Carrier Safety Administration regulations to hold, | ||||||
14 | an active USDOT Number with the Carrier Operation listed as | ||||||
15 | "Interstate" and the Operation Classification listed as | ||||||
16 | "authorized for hire", "exempt for hire", or both | ||||||
17 | "authorized for hire" and "exempt for hire"; except that | ||||||
18 | this paragraph (2) does not apply to a motor vehicle or | ||||||
19 | trailer used at an airport to support the operation of an | ||||||
20 | aircraft moving in interstate commerce, as long as (i) in | ||||||
21 | the case of a motor vehicle, the motor vehicle meets | ||||||
22 | paragraphs (1) and (3) of this subsection (d-5) or (ii) in | ||||||
23 | the case of a trailer, the trailer meets paragraph (1) of | ||||||
24 | this subsection (d-5); and | ||||||
25 | (3) for motor vehicles, the gross vehicle weight rating | ||||||
26 | exceeds 16,000 pounds. |
| |||||||
| |||||||
1 | The definition of "use as rolling stock moving in | ||||||
2 | interstate commerce" in this subsection (d-5) applies to all | ||||||
3 | property purchased on or after July 1, 2017 for the purpose of | ||||||
4 | being attached to a motor vehicle or trailer as a part thereof, | ||||||
5 | regardless of whether the motor vehicle or trailer was | ||||||
6 | purchased before, on, or after July 1, 2017. | ||||||
7 | If an item ceases to meet requirements (1) through (3) | ||||||
8 | under this subsection (d-5), then the tax is imposed on the | ||||||
9 | selling price, allowing for a reasonable depreciation for the | ||||||
10 | period during which the item qualified for the exemption. | ||||||
11 | For purposes of this subsection (d-5): | ||||||
12 | "Motor vehicle" excludes limousines, but otherwise | ||||||
13 | means that term as defined in Section 1-146 of the Illinois | ||||||
14 | Vehicle Code. | ||||||
15 | "Trailer" means (i) "trailer", as defined in Section | ||||||
16 | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | ||||||
17 | defined in Section 1-187 of the Illinois Vehicle Code, and | ||||||
18 | (iii) "pole trailer", as defined in Section 1-161 of the | ||||||
19 | Illinois Vehicle Code. | ||||||
20 | (e) For aircraft and watercraft purchased on or after | ||||||
21 | January 1 2014, "use as rolling stock moving in interstate | ||||||
22 | commerce" in paragraph paragraphs (d) and (d-1) of the | ||||||
23 | definition of "sale of service" in Section 2 occurs when, | ||||||
24 | during a 12-month period, the rolling stock has carried persons | ||||||
25 | or property for hire in interstate commerce for greater than | ||||||
26 | 50% of its total trips for that period or for greater than 50% |
| |||||||
| |||||||
1 | of its total miles for that period. The person claiming the | ||||||
2 | exemption shall make an election at the time of purchase to use | ||||||
3 | either the trips or mileage method and document that election | ||||||
4 | in their books and records. If no election is made under this | ||||||
5 | subsection to use the trips or mileage method, the person shall | ||||||
6 | be deemed to have chosen the mileage method. For aircraft, | ||||||
7 | flight hours may be used in lieu of recording miles in | ||||||
8 | determining whether the aircraft meets the mileage test in this | ||||||
9 | subsection. For watercraft, nautical miles or trip hours may be | ||||||
10 | used in lieu of recording miles in determining whether the | ||||||
11 | watercraft meets the mileage test in this subsection. | ||||||
12 | Notwithstanding any other provision of law to the contrary, | ||||||
13 | property purchased on or after January 1, 2014 for the purpose | ||||||
14 | of being attached to aircraft or watercraft as a part thereof | ||||||
15 | qualifies as rolling stock moving in interstate commerce only | ||||||
16 | if the aircraft or watercraft to which it will be attached | ||||||
17 | qualifies as rolling stock moving in interstate commerce under | ||||||
18 | the test set forth in this subsection (e), regardless of when | ||||||
19 | the aircraft or watercraft was purchased. Persons who purchased | ||||||
20 | aircraft or watercraft prior to January 1, 2014 shall make an | ||||||
21 | election to use either the trips or mileage method and document | ||||||
22 | that election in their books and records for the purpose of | ||||||
23 | determining whether property purchased on or after January 1, | ||||||
24 | 2014 for the purpose of being attached to aircraft or | ||||||
25 | watercraft as a part thereof qualifies as rolling stock moving | ||||||
26 | in interstate commerce under this subsection (e). |
| |||||||
| |||||||
1 | (f) The election to use either the trips or mileage method | ||||||
2 | made under the provisions of subsections (c), (d), or (e) of | ||||||
3 | this Section will remain in effect for the duration of the | ||||||
4 | purchaser's ownership of that item. | ||||||
5 | (Source: P.A. 98-584, eff. 8-27-13.)
| ||||||
6 | Section 20. The Retailers' Occupation Tax Act is amended by | ||||||
7 | changing Sections 2-5 and 2-51 as follows:
| ||||||
8 | (35 ILCS 120/2-5)
| ||||||
9 | Sec. 2-5. Exemptions. Gross receipts from proceeds from the | ||||||
10 | sale of
the following tangible personal property are exempt | ||||||
11 | from the tax imposed
by this Act:
| ||||||
12 | (1) Farm chemicals.
| ||||||
13 | (2) Farm machinery and equipment, both new and used, | ||||||
14 | including that
manufactured on special order, certified by the | ||||||
15 | purchaser to be used
primarily for production agriculture or | ||||||
16 | State or federal agricultural
programs, including individual | ||||||
17 | replacement parts for the machinery and
equipment, including | ||||||
18 | machinery and equipment purchased for lease,
and including | ||||||
19 | implements of husbandry defined in Section 1-130 of
the | ||||||
20 | Illinois Vehicle Code, farm machinery and agricultural | ||||||
21 | chemical and
fertilizer spreaders, and nurse wagons required to | ||||||
22 | be registered
under Section 3-809 of the Illinois Vehicle Code,
| ||||||
23 | but
excluding other motor vehicles required to be registered | ||||||
24 | under the Illinois
Vehicle Code.
Horticultural polyhouses or |
| |||||||
| |||||||
1 | hoop houses used for propagating, growing, or
overwintering | ||||||
2 | plants shall be considered farm machinery and equipment under
| ||||||
3 | this item (2).
Agricultural chemical tender tanks and dry boxes | ||||||
4 | shall include units sold
separately from a motor vehicle | ||||||
5 | required to be licensed and units sold mounted
on a motor | ||||||
6 | vehicle required to be licensed, if the selling price of the | ||||||
7 | tender
is separately stated.
| ||||||
8 | Farm machinery and equipment shall include precision | ||||||
9 | farming equipment
that is
installed or purchased to be | ||||||
10 | installed on farm machinery and equipment
including, but not | ||||||
11 | limited to, tractors, harvesters, sprayers, planters,
seeders, | ||||||
12 | or spreaders.
Precision farming equipment includes, but is not | ||||||
13 | limited to,
soil testing sensors, computers, monitors, | ||||||
14 | software, global positioning
and mapping systems, and other | ||||||
15 | such equipment.
| ||||||
16 | Farm machinery and equipment also includes computers, | ||||||
17 | sensors, software, and
related equipment used primarily in the
| ||||||
18 | computer-assisted operation of production agriculture | ||||||
19 | facilities, equipment,
and activities such as, but
not limited | ||||||
20 | to,
the collection, monitoring, and correlation of
animal and | ||||||
21 | crop data for the purpose of
formulating animal diets and | ||||||
22 | agricultural chemicals. This item (2) is exempt
from the | ||||||
23 | provisions of
Section 2-70.
| ||||||
24 | (3) Until July 1, 2003, distillation machinery and | ||||||
25 | equipment, sold as a
unit or kit,
assembled or installed by the | ||||||
26 | retailer, certified by the user to be used
only for the |
| |||||||
| |||||||
1 | production of ethyl alcohol that will be used for consumption
| ||||||
2 | as motor fuel or as a component of motor fuel for the personal | ||||||
3 | use of the
user, and not subject to sale or resale.
| ||||||
4 | (4) Until July 1, 2003 and beginning again September 1, | ||||||
5 | 2004 through August 30, 2014, graphic arts machinery and | ||||||
6 | equipment, including
repair and
replacement parts, both new and | ||||||
7 | used, and including that manufactured on
special order or | ||||||
8 | purchased for lease, certified by the purchaser to be used
| ||||||
9 | primarily for graphic arts production.
Equipment includes | ||||||
10 | chemicals or
chemicals acting as catalysts but only if
the | ||||||
11 | chemicals or chemicals acting as catalysts effect a direct and | ||||||
12 | immediate
change upon a
graphic arts product.
| ||||||
13 | (5) A motor vehicle that is used for automobile renting, as | ||||||
14 | defined in the Automobile Renting Occupation and Use Tax Act. | ||||||
15 | This paragraph is exempt from
the provisions of Section 2-70.
| ||||||
16 | (6) Personal property sold by a teacher-sponsored student | ||||||
17 | organization
affiliated with an elementary or secondary school | ||||||
18 | located in Illinois.
| ||||||
19 | (7) Until July 1, 2003, proceeds of that portion of the | ||||||
20 | selling price of
a passenger car the
sale of which is subject | ||||||
21 | to the Replacement Vehicle Tax.
| ||||||
22 | (8) Personal property sold to an Illinois county fair | ||||||
23 | association for
use in conducting, operating, or promoting the | ||||||
24 | county fair.
| ||||||
25 | (9) Personal property sold to a not-for-profit arts
or | ||||||
26 | cultural organization that establishes, by proof required by |
| |||||||
| |||||||
1 | the Department
by
rule, that it has received an exemption under | ||||||
2 | Section 501(c)(3) of the
Internal Revenue Code and that is | ||||||
3 | organized and operated primarily for the
presentation
or | ||||||
4 | support of arts or cultural programming, activities, or | ||||||
5 | services. These
organizations include, but are not limited to, | ||||||
6 | music and dramatic arts
organizations such as symphony | ||||||
7 | orchestras and theatrical groups, arts and
cultural service | ||||||
8 | organizations, local arts councils, visual arts organizations,
| ||||||
9 | and media arts organizations.
On and after the effective date | ||||||
10 | of this amendatory Act of the 92nd General
Assembly, however, | ||||||
11 | an entity otherwise eligible for this exemption shall not
make | ||||||
12 | tax-free purchases unless it has an active identification | ||||||
13 | number issued by
the Department.
| ||||||
14 | (10) Personal property sold by a corporation, society, | ||||||
15 | association,
foundation, institution, or organization, other | ||||||
16 | than a limited liability
company, that is organized and | ||||||
17 | operated as a not-for-profit service enterprise
for the benefit | ||||||
18 | of persons 65 years of age or older if the personal property
| ||||||
19 | was not purchased by the enterprise for the purpose of resale | ||||||
20 | by the
enterprise.
| ||||||
21 | (11) Personal property sold to a governmental body, to a | ||||||
22 | corporation,
society, association, foundation, or institution | ||||||
23 | organized and operated
exclusively for charitable, religious, | ||||||
24 | or educational purposes, or to a
not-for-profit corporation, | ||||||
25 | society, association, foundation, institution,
or organization | ||||||
26 | that has no compensated officers or employees and that is
|
| |||||||
| |||||||
1 | organized and operated primarily for the recreation of persons | ||||||
2 | 55 years of
age or older. A limited liability company may | ||||||
3 | qualify for the exemption under
this paragraph only if the | ||||||
4 | limited liability company is organized and operated
| ||||||
5 | exclusively for educational purposes. On and after July 1, | ||||||
6 | 1987, however, no
entity otherwise eligible for this exemption | ||||||
7 | shall make tax-free purchases
unless it has an active | ||||||
8 | identification number issued by the Department.
| ||||||
9 | (12) (Blank). Tangible personal property sold to
| ||||||
10 | interstate carriers
for hire for use as
rolling stock moving in | ||||||
11 | interstate commerce or to lessors under leases of
one year or | ||||||
12 | longer executed or in effect at the time of purchase by
| ||||||
13 | interstate carriers for hire for use as rolling stock moving in | ||||||
14 | interstate
commerce and equipment operated by a | ||||||
15 | telecommunications provider, licensed as a
common carrier by | ||||||
16 | the Federal Communications Commission, which is permanently
| ||||||
17 | installed in or affixed to aircraft moving in interstate | ||||||
18 | commerce.
| ||||||
19 | (12-5) On and after July 1, 2003 and through June 30, 2004, | ||||||
20 | motor vehicles of the second division
with a gross vehicle | ||||||
21 | weight in excess of 8,000 pounds
that
are
subject to the | ||||||
22 | commercial distribution fee imposed under Section 3-815.1 of
| ||||||
23 | the Illinois
Vehicle Code. Beginning on July 1, 2004 and | ||||||
24 | through June 30, 2005, the use in this State of motor vehicles | ||||||
25 | of the second division: (i) with a gross vehicle weight rating | ||||||
26 | in excess of 8,000 pounds; (ii) that are subject to the |
| |||||||
| |||||||
1 | commercial distribution fee imposed under Section 3-815.1 of | ||||||
2 | the Illinois Vehicle Code; and (iii) that are primarily used | ||||||
3 | for commercial purposes. Through June 30, 2005, this
exemption | ||||||
4 | applies to repair and replacement parts added
after the
initial | ||||||
5 | purchase of such a motor vehicle if that motor vehicle is used | ||||||
6 | in a
manner that
would qualify for the rolling stock exemption | ||||||
7 | otherwise provided for in this
Act. For purposes of this | ||||||
8 | paragraph, "used for commercial purposes" means the | ||||||
9 | transportation of persons or property in furtherance of any | ||||||
10 | commercial or industrial enterprise whether for-hire or not.
| ||||||
11 | (13) Proceeds from sales to owners, lessors, or
shippers of
| ||||||
12 | tangible personal property that is utilized by interstate | ||||||
13 | carriers for
hire for use as rolling stock moving in interstate | ||||||
14 | commerce
and equipment operated by a telecommunications | ||||||
15 | provider, licensed as a
common carrier by the Federal | ||||||
16 | Communications Commission, which is
permanently installed in | ||||||
17 | or affixed to aircraft moving in interstate commerce.
| ||||||
18 | (14) Machinery and equipment that will be used by the | ||||||
19 | purchaser, or a
lessee of the purchaser, primarily in the | ||||||
20 | process of manufacturing or
assembling tangible personal | ||||||
21 | property for wholesale or retail sale or
lease, whether the | ||||||
22 | sale or lease is made directly by the manufacturer or by
some | ||||||
23 | other person, whether the materials used in the process are | ||||||
24 | owned by
the manufacturer or some other person, or whether the | ||||||
25 | sale or lease is made
apart from or as an incident to the | ||||||
26 | seller's engaging in the service
occupation of producing |
| |||||||
| |||||||
1 | machines, tools, dies, jigs, patterns, gauges, or
other similar | ||||||
2 | items of no commercial value on special order for a particular
| ||||||
3 | purchaser. The exemption provided by this paragraph (14) does | ||||||
4 | not include machinery and equipment used in (i) the generation | ||||||
5 | of electricity for wholesale or retail sale; (ii) the | ||||||
6 | generation or treatment of natural or artificial gas for | ||||||
7 | wholesale or retail sale that is delivered to customers through | ||||||
8 | pipes, pipelines, or mains; or (iii) the treatment of water for | ||||||
9 | wholesale or retail sale that is delivered to customers through | ||||||
10 | pipes, pipelines, or mains. The provisions of Public Act 98-583 | ||||||
11 | are declaratory of existing law as to the meaning and scope of | ||||||
12 | this exemption.
| ||||||
13 | (15) Proceeds of mandatory service charges separately | ||||||
14 | stated on
customers' bills for purchase and consumption of food | ||||||
15 | and beverages, to the
extent that the proceeds of the service | ||||||
16 | charge are in fact turned over as
tips or as a substitute for | ||||||
17 | tips to the employees who participate directly
in preparing, | ||||||
18 | serving, hosting or cleaning up the food or beverage function
| ||||||
19 | with respect to which the service charge is imposed.
| ||||||
20 | (16) Petroleum products sold to a purchaser if the seller
| ||||||
21 | is prohibited by federal law from charging tax to the | ||||||
22 | purchaser.
| ||||||
23 | (17) Tangible personal property sold to a common carrier by | ||||||
24 | rail or
motor that
receives the physical possession of the | ||||||
25 | property in Illinois and that
transports the property, or | ||||||
26 | shares with another common carrier in the
transportation of the |
| |||||||
| |||||||
1 | property, out of Illinois on a standard uniform bill
of lading | ||||||
2 | showing the seller of the property as the shipper or consignor | ||||||
3 | of
the property to a destination outside Illinois, for use | ||||||
4 | outside Illinois.
| ||||||
5 | (18) Legal tender, currency, medallions, or gold or silver | ||||||
6 | coinage
issued by the State of Illinois, the government of the | ||||||
7 | United States of
America, or the government of any foreign | ||||||
8 | country, and bullion.
| ||||||
9 | (19) Until July 1 2003, oil field exploration, drilling, | ||||||
10 | and production
equipment, including
(i) rigs and parts of rigs, | ||||||
11 | rotary rigs, cable tool
rigs, and workover rigs, (ii) pipe and | ||||||
12 | tubular goods, including casing and
drill strings, (iii) pumps | ||||||
13 | and pump-jack units, (iv) storage tanks and flow
lines, (v) any | ||||||
14 | individual replacement part for oil field exploration,
| ||||||
15 | drilling, and production equipment, and (vi) machinery and | ||||||
16 | equipment purchased
for lease; but
excluding motor vehicles | ||||||
17 | required to be registered under the Illinois
Vehicle Code.
| ||||||
18 | (20) Photoprocessing machinery and equipment, including | ||||||
19 | repair and
replacement parts, both new and used, including that | ||||||
20 | manufactured on
special order, certified by the purchaser to be | ||||||
21 | used primarily for
photoprocessing, and including | ||||||
22 | photoprocessing machinery and equipment
purchased for lease.
| ||||||
23 | (21) Coal and aggregate exploration, mining, off-highway | ||||||
24 | hauling,
processing,
maintenance, and reclamation equipment, | ||||||
25 | including
replacement parts and equipment, and including
| ||||||
26 | equipment purchased for lease, but excluding motor vehicles |
| |||||||
| |||||||
1 | required to be
registered under the Illinois Vehicle Code. The | ||||||
2 | changes made to this Section by Public Act 97-767 apply on and | ||||||
3 | after July 1, 2003, but no claim for credit or refund is | ||||||
4 | allowed on or after August 16, 2013 (the effective date of | ||||||
5 | Public Act 98-456)
for such taxes paid during the period | ||||||
6 | beginning July 1, 2003 and ending on August 16, 2013 (the | ||||||
7 | effective date of Public Act 98-456).
| ||||||
8 | (22) Until June 30, 2013, fuel and petroleum products sold | ||||||
9 | to or used by an air carrier,
certified by the carrier to be | ||||||
10 | used for consumption, shipment, or storage
in the conduct of | ||||||
11 | its business as an air common carrier, for a flight
destined | ||||||
12 | for or returning from a location or locations
outside the | ||||||
13 | United States without regard to previous or subsequent domestic
| ||||||
14 | stopovers.
| ||||||
15 | Beginning July 1, 2013, fuel and petroleum products sold to | ||||||
16 | or used by an air carrier, certified by the carrier to be used | ||||||
17 | for consumption, shipment, or storage in the conduct of its | ||||||
18 | business as an air common carrier, for a flight that (i) is | ||||||
19 | engaged in foreign trade or is engaged in trade between the | ||||||
20 | United States and any of its possessions and (ii) transports at | ||||||
21 | least one individual or package for hire from the city of | ||||||
22 | origination to the city of final destination on the same | ||||||
23 | aircraft, without regard to a change in the flight number of | ||||||
24 | that aircraft. | ||||||
25 | (23) A transaction in which the purchase order is received | ||||||
26 | by a florist
who is located outside Illinois, but who has a |
| |||||||
| |||||||
1 | florist located in Illinois
deliver the property to the | ||||||
2 | purchaser or the purchaser's donee in Illinois.
| ||||||
3 | (24) Fuel consumed or used in the operation of ships, | ||||||
4 | barges, or vessels
that are used primarily in or for the | ||||||
5 | transportation of property or the
conveyance of persons for | ||||||
6 | hire on rivers bordering on this State if the
fuel is delivered | ||||||
7 | by the seller to the purchaser's barge, ship, or vessel
while | ||||||
8 | it is afloat upon that bordering river.
| ||||||
9 | (25) Except as provided in item (25-5) of this Section, a
| ||||||
10 | motor vehicle sold in this State to a nonresident even though | ||||||
11 | the
motor vehicle is delivered to the nonresident in this | ||||||
12 | State, if the motor
vehicle is not to be titled in this State, | ||||||
13 | and if a drive-away permit
is issued to the motor vehicle as | ||||||
14 | provided in Section 3-603 of the Illinois
Vehicle Code or if | ||||||
15 | the nonresident purchaser has vehicle registration
plates to | ||||||
16 | transfer to the motor vehicle upon returning to his or her home
| ||||||
17 | state. The issuance of the drive-away permit or having
the
| ||||||
18 | out-of-state registration plates to be transferred is prima | ||||||
19 | facie evidence
that the motor vehicle will not be titled in | ||||||
20 | this State.
| ||||||
21 | (25-5) The exemption under item (25) does not apply if the | ||||||
22 | state in which the motor vehicle will be titled does not allow | ||||||
23 | a reciprocal exemption for a motor vehicle sold and delivered | ||||||
24 | in that state to an Illinois resident but titled in Illinois. | ||||||
25 | The tax collected under this Act on the sale of a motor vehicle | ||||||
26 | in this State to a resident of another state that does not |
| |||||||
| |||||||
1 | allow a reciprocal exemption shall be imposed at a rate equal | ||||||
2 | to the state's rate of tax on taxable property in the state in | ||||||
3 | which the purchaser is a resident, except that the tax shall | ||||||
4 | not exceed the tax that would otherwise be imposed under this | ||||||
5 | Act. At the time of the sale, the purchaser shall execute a | ||||||
6 | statement, signed under penalty of perjury, of his or her | ||||||
7 | intent to title the vehicle in the state in which the purchaser | ||||||
8 | is a resident within 30 days after the sale and of the fact of | ||||||
9 | the payment to the State of Illinois of tax in an amount | ||||||
10 | equivalent to the state's rate of tax on taxable property in | ||||||
11 | his or her state of residence and shall submit the statement to | ||||||
12 | the appropriate tax collection agency in his or her state of | ||||||
13 | residence. In addition, the retailer must retain a signed copy | ||||||
14 | of the statement in his or her records. Nothing in this item | ||||||
15 | shall be construed to require the removal of the vehicle from | ||||||
16 | this state following the filing of an intent to title the | ||||||
17 | vehicle in the purchaser's state of residence if the purchaser | ||||||
18 | titles the vehicle in his or her state of residence within 30 | ||||||
19 | days after the date of sale. The tax collected under this Act | ||||||
20 | in accordance with this item (25-5) shall be proportionately | ||||||
21 | distributed as if the tax were collected at the 6.25% general | ||||||
22 | rate imposed under this Act.
| ||||||
23 | (25-7) Beginning on July 1, 2007, no tax is imposed under | ||||||
24 | this Act on the sale of an aircraft, as defined in Section 3 of | ||||||
25 | the Illinois Aeronautics Act, if all of the following | ||||||
26 | conditions are met: |
| |||||||
| |||||||
1 | (1) the aircraft leaves this State within 15 days after | ||||||
2 | the later of either the issuance of the final billing for | ||||||
3 | the sale of the aircraft, or the authorized approval for | ||||||
4 | return to service, completion of the maintenance record | ||||||
5 | entry, and completion of the test flight and ground test | ||||||
6 | for inspection, as required by 14 C.F.R. 91.407; | ||||||
7 | (2) the aircraft is not based or registered in this | ||||||
8 | State after the sale of the aircraft; and | ||||||
9 | (3) the seller retains in his or her books and records | ||||||
10 | and provides to the Department a signed and dated | ||||||
11 | certification from the purchaser, on a form prescribed by | ||||||
12 | the Department, certifying that the requirements of this | ||||||
13 | item (25-7) are met. The certificate must also include the | ||||||
14 | name and address of the purchaser, the address of the | ||||||
15 | location where the aircraft is to be titled or registered, | ||||||
16 | the address of the primary physical location of the | ||||||
17 | aircraft, and other information that the Department may | ||||||
18 | reasonably require. | ||||||
19 | For purposes of this item (25-7): | ||||||
20 | "Based in this State" means hangared, stored, or otherwise | ||||||
21 | used, excluding post-sale customizations as defined in this | ||||||
22 | Section, for 10 or more days in each 12-month period | ||||||
23 | immediately following the date of the sale of the aircraft. | ||||||
24 | "Registered in this State" means an aircraft registered | ||||||
25 | with the Department of Transportation, Aeronautics Division, | ||||||
26 | or titled or registered with the Federal Aviation |
| |||||||
| |||||||
1 | Administration to an address located in this State. | ||||||
2 | This paragraph (25-7) is exempt from the provisions
of
| ||||||
3 | Section 2-70.
| ||||||
4 | (26) Semen used for artificial insemination of livestock | ||||||
5 | for direct
agricultural production.
| ||||||
6 | (27) Horses, or interests in horses, registered with and | ||||||
7 | meeting the
requirements of any of the
Arabian Horse Club | ||||||
8 | Registry of America, Appaloosa Horse Club, American Quarter
| ||||||
9 | Horse Association, United States
Trotting Association, or | ||||||
10 | Jockey Club, as appropriate, used for
purposes of breeding or | ||||||
11 | racing for prizes. This item (27) is exempt from the provisions | ||||||
12 | of Section 2-70, and the exemption provided for under this item | ||||||
13 | (27) applies for all periods beginning May 30, 1995, but no | ||||||
14 | claim for credit or refund is allowed on or after January 1, | ||||||
15 | 2008 (the effective date of Public Act 95-88)
for such taxes | ||||||
16 | paid during the period beginning May 30, 2000 and ending on | ||||||
17 | January 1, 2008 (the effective date of Public Act 95-88).
| ||||||
18 | (28) Computers and communications equipment utilized for | ||||||
19 | any
hospital
purpose
and equipment used in the diagnosis,
| ||||||
20 | analysis, or treatment of hospital patients sold to a lessor | ||||||
21 | who leases the
equipment, under a lease of one year or longer | ||||||
22 | executed or in effect at the
time of the purchase, to a
| ||||||
23 | hospital
that has been issued an active tax exemption | ||||||
24 | identification number by the
Department under Section 1g of | ||||||
25 | this Act.
| ||||||
26 | (29) Personal property sold to a lessor who leases the
|
| |||||||
| |||||||
1 | property, under a
lease of one year or longer executed or in | ||||||
2 | effect at the time of the purchase,
to a governmental body
that | ||||||
3 | has been issued an active tax exemption identification number | ||||||
4 | by the
Department under Section 1g of this Act.
| ||||||
5 | (30) Beginning with taxable years ending on or after | ||||||
6 | December
31, 1995
and
ending with taxable years ending on or | ||||||
7 | before December 31, 2004,
personal property that is
donated for | ||||||
8 | disaster relief to be used in a State or federally declared
| ||||||
9 | disaster area in Illinois or bordering Illinois by a | ||||||
10 | manufacturer or retailer
that is registered in this State to a | ||||||
11 | corporation, society, association,
foundation, or institution | ||||||
12 | that has been issued a sales tax exemption
identification | ||||||
13 | number by the Department that assists victims of the disaster
| ||||||
14 | who reside within the declared disaster area.
| ||||||
15 | (31) Beginning with taxable years ending on or after | ||||||
16 | December
31, 1995 and
ending with taxable years ending on or | ||||||
17 | before December 31, 2004, personal
property that is used in the | ||||||
18 | performance of infrastructure repairs in this
State, including | ||||||
19 | but not limited to municipal roads and streets, access roads,
| ||||||
20 | bridges, sidewalks, waste disposal systems, water and sewer | ||||||
21 | line extensions,
water distribution and purification | ||||||
22 | facilities, storm water drainage and
retention facilities, and | ||||||
23 | sewage treatment facilities, resulting from a State
or | ||||||
24 | federally declared disaster in Illinois or bordering Illinois | ||||||
25 | when such
repairs are initiated on facilities located in the | ||||||
26 | declared disaster area
within 6 months after the disaster.
|
| |||||||
| |||||||
1 | (32) Beginning July 1, 1999, game or game birds sold at a | ||||||
2 | "game breeding
and
hunting preserve area" as that term is used
| ||||||
3 | in the
Wildlife Code. This paragraph is exempt from the | ||||||
4 | provisions
of
Section 2-70.
| ||||||
5 | (33) A motor vehicle, as that term is defined in Section | ||||||
6 | 1-146
of the
Illinois Vehicle Code, that is donated to a | ||||||
7 | corporation, limited liability
company, society, association, | ||||||
8 | foundation, or institution that is determined by
the Department | ||||||
9 | to be organized and operated exclusively for educational
| ||||||
10 | purposes. For purposes of this exemption, "a corporation, | ||||||
11 | limited liability
company, society, association, foundation, | ||||||
12 | or institution organized and
operated
exclusively for | ||||||
13 | educational purposes" means all tax-supported public schools,
| ||||||
14 | private schools that offer systematic instruction in useful | ||||||
15 | branches of
learning by methods common to public schools and | ||||||
16 | that compare favorably in
their scope and intensity with the | ||||||
17 | course of study presented in tax-supported
schools, and | ||||||
18 | vocational or technical schools or institutes organized and
| ||||||
19 | operated exclusively to provide a course of study of not less | ||||||
20 | than 6 weeks
duration and designed to prepare individuals to | ||||||
21 | follow a trade or to pursue a
manual, technical, mechanical, | ||||||
22 | industrial, business, or commercial
occupation.
| ||||||
23 | (34) Beginning January 1, 2000, personal property, | ||||||
24 | including food, purchased
through fundraising events for the | ||||||
25 | benefit of a public or private elementary or
secondary school, | ||||||
26 | a group of those schools, or one or more school districts if
|
| |||||||
| |||||||
1 | the events are sponsored by an entity recognized by the school | ||||||
2 | district that
consists primarily of volunteers and includes | ||||||
3 | parents and teachers of the
school children. This paragraph | ||||||
4 | does not apply to fundraising events (i) for
the benefit of | ||||||
5 | private home instruction or (ii) for which the fundraising
| ||||||
6 | entity purchases the personal property sold at the events from | ||||||
7 | another
individual or entity that sold the property for the | ||||||
8 | purpose of resale by the
fundraising entity and that profits | ||||||
9 | from the sale to the fundraising entity.
This paragraph is | ||||||
10 | exempt from the provisions of Section 2-70.
| ||||||
11 | (35) Beginning January 1, 2000 and through December 31, | ||||||
12 | 2001, new or used
automatic vending machines that prepare and | ||||||
13 | serve hot food and beverages,
including coffee, soup, and other | ||||||
14 | items, and replacement parts for these
machines. Beginning | ||||||
15 | January 1, 2002 and through June 30, 2003, machines
and parts | ||||||
16 | for machines used in
commercial, coin-operated amusement and | ||||||
17 | vending business if a use or occupation
tax is paid on the | ||||||
18 | gross receipts derived from the use of the commercial,
| ||||||
19 | coin-operated amusement and vending machines. This paragraph | ||||||
20 | is exempt from
the provisions of Section 2-70.
| ||||||
21 | (35-5) Beginning August 23, 2001 and through June 30, 2016, | ||||||
22 | food for human consumption that is to be consumed off
the | ||||||
23 | premises where it is sold (other than alcoholic beverages, soft | ||||||
24 | drinks,
and food that has been prepared for immediate | ||||||
25 | consumption) and prescription
and nonprescription medicines, | ||||||
26 | drugs, medical appliances, and insulin, urine
testing |
| |||||||
| |||||||
1 | materials, syringes, and needles used by diabetics, for human | ||||||
2 | use, when
purchased for use by a person receiving medical | ||||||
3 | assistance under Article V of
the Illinois Public Aid Code who | ||||||
4 | resides in a licensed long-term care facility,
as defined in | ||||||
5 | the Nursing Home Care Act, or a licensed facility as defined in | ||||||
6 | the ID/DD Community Care Act, the MC/DD Act, or the Specialized | ||||||
7 | Mental Health Rehabilitation Act of 2013.
| ||||||
8 | (36) Beginning August 2, 2001, computers and | ||||||
9 | communications equipment
utilized for any hospital purpose and | ||||||
10 | equipment used in the diagnosis,
analysis, or treatment of | ||||||
11 | hospital patients sold to a lessor who leases the
equipment, | ||||||
12 | under a lease of one year or longer executed or in effect at | ||||||
13 | the
time of the purchase, to a hospital that has been issued an | ||||||
14 | active tax
exemption identification number by the Department | ||||||
15 | under Section 1g of this Act.
This paragraph is exempt from the | ||||||
16 | provisions of Section 2-70.
| ||||||
17 | (37) Beginning August 2, 2001, personal property sold to a | ||||||
18 | lessor who
leases the property, under a lease of one year or | ||||||
19 | longer executed or in effect
at the time of the purchase, to a | ||||||
20 | governmental body that has been issued an
active tax exemption | ||||||
21 | identification number by the Department under Section 1g
of | ||||||
22 | this Act. This paragraph is exempt from the provisions of | ||||||
23 | Section 2-70.
| ||||||
24 | (38) Beginning on January 1, 2002 and through June 30, | ||||||
25 | 2016, tangible personal property purchased
from an Illinois | ||||||
26 | retailer by a taxpayer engaged in centralized purchasing
|
| |||||||
| |||||||
1 | activities in Illinois who will, upon receipt of the property | ||||||
2 | in Illinois,
temporarily store the property in Illinois (i) for | ||||||
3 | the purpose of subsequently
transporting it outside this State | ||||||
4 | for use or consumption thereafter solely
outside this State or | ||||||
5 | (ii) for the purpose of being processed, fabricated, or
| ||||||
6 | manufactured into, attached to, or incorporated into other | ||||||
7 | tangible personal
property to be transported outside this State | ||||||
8 | and thereafter used or consumed
solely outside this State. The | ||||||
9 | Director of Revenue shall, pursuant to rules
adopted in | ||||||
10 | accordance with the Illinois Administrative Procedure Act, | ||||||
11 | issue a
permit to any taxpayer in good standing with the | ||||||
12 | Department who is eligible for
the exemption under this | ||||||
13 | paragraph (38). The permit issued under
this paragraph (38) | ||||||
14 | shall authorize the holder, to the extent and
in the manner | ||||||
15 | specified in the rules adopted under this Act, to purchase
| ||||||
16 | tangible personal property from a retailer exempt from the | ||||||
17 | taxes imposed by
this Act. Taxpayers shall maintain all | ||||||
18 | necessary books and records to
substantiate the use and | ||||||
19 | consumption of all such tangible personal property
outside of | ||||||
20 | the State of Illinois.
| ||||||
21 | (39) Beginning January 1, 2008, tangible personal property | ||||||
22 | used in the construction or maintenance of a community water | ||||||
23 | supply, as defined under Section 3.145 of the Environmental | ||||||
24 | Protection Act, that is operated by a not-for-profit | ||||||
25 | corporation that holds a valid water supply permit issued under | ||||||
26 | Title IV of the Environmental Protection Act. This paragraph is |
| |||||||
| |||||||
1 | exempt from the provisions of Section 2-70.
| ||||||
2 | (40) Beginning January 1, 2010, materials, parts, | ||||||
3 | equipment, components, and furnishings incorporated into or | ||||||
4 | upon an aircraft as part of the modification, refurbishment, | ||||||
5 | completion, replacement, repair, or maintenance of the | ||||||
6 | aircraft. This exemption includes consumable supplies used in | ||||||
7 | the modification, refurbishment, completion, replacement, | ||||||
8 | repair, and maintenance of aircraft, but excludes any | ||||||
9 | materials, parts, equipment, components, and consumable | ||||||
10 | supplies used in the modification, replacement, repair, and | ||||||
11 | maintenance of aircraft engines or power plants, whether such | ||||||
12 | engines or power plants are installed or uninstalled upon any | ||||||
13 | such aircraft. "Consumable supplies" include, but are not | ||||||
14 | limited to, adhesive, tape, sandpaper, general purpose | ||||||
15 | lubricants, cleaning solution, latex gloves, and protective | ||||||
16 | films. This exemption applies only to the sale of qualifying | ||||||
17 | tangible personal property to persons who modify, refurbish, | ||||||
18 | complete, replace, or maintain an aircraft and who (i) hold an | ||||||
19 | Air Agency Certificate and are empowered to operate an approved | ||||||
20 | repair station by the Federal Aviation Administration, (ii) | ||||||
21 | have a Class IV Rating, and (iii) conduct operations in | ||||||
22 | accordance with Part 145 of the Federal Aviation Regulations. | ||||||
23 | The exemption does not include aircraft operated by a | ||||||
24 | commercial air carrier providing scheduled passenger air | ||||||
25 | service pursuant to authority issued under Part 121 or Part 129 | ||||||
26 | of the Federal Aviation Regulations. The changes made to this |
| |||||||
| |||||||
1 | paragraph (40) by Public Act 98-534 are declarative of existing | ||||||
2 | law. | ||||||
3 | (41) Tangible personal property sold to a | ||||||
4 | public-facilities corporation, as described in Section | ||||||
5 | 11-65-10 of the Illinois Municipal Code, for purposes of | ||||||
6 | constructing or furnishing a municipal convention hall, but | ||||||
7 | only if the legal title to the municipal convention hall is | ||||||
8 | transferred to the municipality without any further | ||||||
9 | consideration by or on behalf of the municipality at the time | ||||||
10 | of the completion of the municipal convention hall or upon the | ||||||
11 | retirement or redemption of any bonds or other debt instruments | ||||||
12 | issued by the public-facilities corporation in connection with | ||||||
13 | the development of the municipal convention hall. This | ||||||
14 | exemption includes existing public-facilities corporations as | ||||||
15 | provided in Section 11-65-25 of the Illinois Municipal Code. | ||||||
16 | This paragraph is exempt from the provisions of Section 2-70. | ||||||
17 | (42) Beginning January 1, 2017, menstrual pads, tampons, | ||||||
18 | and menstrual cups. | ||||||
19 | (Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13; | ||||||
20 | 98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff. | ||||||
21 | 1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff. | ||||||
22 | 7-29-15; 99-855, eff. 8-19-16.)
| ||||||
23 | (35 ILCS 120/2-51)
| ||||||
24 | Sec. 2-51. Motor vehicles; trailers; use as rolling stock | ||||||
25 | definition. |
| |||||||
| |||||||
1 | (a) (Blank). Through
June 30, 2003, "use
as
rolling stock | ||||||
2 | moving
in
interstate commerce" in
paragraphs (12) and (13) of | ||||||
3 | Section 2-5 means for motor vehicles, as defined in
Section | ||||||
4 | 1-146 of the Illinois Vehicle Code, and trailers, as defined in | ||||||
5 | Section
1-209 of the Illinois Vehicle Code, when on 15 or more | ||||||
6 | occasions in a
12-month period the motor vehicle and trailer | ||||||
7 | has carried persons or property
for
hire in
interstate | ||||||
8 | commerce, even just between points in Illinois, if the motor | ||||||
9 | vehicle
and trailer transports persons whose journeys or | ||||||
10 | property whose shipments
originate or terminate outside | ||||||
11 | Illinois. This
definition applies to all
property purchased for | ||||||
12 | the purpose of being attached to those motor vehicles or
| ||||||
13 | trailers as a part thereof.
| ||||||
14 | (b) (Blank). On and after July 1, 2003 and through June 30, | ||||||
15 | 2004, "use as rolling stock moving in interstate
commerce" in
| ||||||
16 | paragraphs (12) and (13) of Section 2-5 occurs for motor | ||||||
17 | vehicles, as defined
in Section 1-146 of the Illinois Vehicle | ||||||
18 | Code, when during a 12-month
period the
rolling stock has | ||||||
19 | carried persons or property for hire in interstate commerce
for | ||||||
20 | 51% of
its total trips and transports persons whose journeys or | ||||||
21 | property whose
shipments
originate or terminate outside | ||||||
22 | Illinois. Trips that are only between points in
Illinois shall
| ||||||
23 | not be counted as interstate trips when calculating whether the | ||||||
24 | tangible
personal property
qualifies for the exemption but such | ||||||
25 | trips shall be included in total trips
taken.
| ||||||
26 | (c) This subsection (c) applies to motor vehicles, other |
| |||||||
| |||||||
1 | than limousines, purchased through June 30, 2017. For motor | ||||||
2 | vehicles, other than limousines, purchased on or after July 1, | ||||||
3 | 2017, subsection (d-5) applies. This subsection (c) applies to | ||||||
4 | limousines purchased before, on, or after July 1, 2017. "Use | ||||||
5 | Beginning July 1, 2004, "use as rolling stock moving in | ||||||
6 | interstate commerce" in paragraph paragraphs (12) and (13) of | ||||||
7 | Section 2-5 occurs for motor vehicles, as defined in Section | ||||||
8 | 1-146 of the Illinois Vehicle Code, when during a 12-month | ||||||
9 | period the rolling stock has carried persons or property for | ||||||
10 | hire in interstate commerce for greater than 50% of its total | ||||||
11 | trips for that period or for greater than 50% of its total | ||||||
12 | miles for that period. The person claiming the exemption shall | ||||||
13 | make an election at the time of purchase to use either the | ||||||
14 | trips or mileage method. Persons who purchased motor vehicles | ||||||
15 | prior to July 1, 2004 shall make an election to use either the | ||||||
16 | trips or mileage method and document that election in their | ||||||
17 | books and records. If no election is made under this subsection | ||||||
18 | to use the trips or mileage method, the person shall be deemed | ||||||
19 | to have chosen the mileage method. | ||||||
20 | For purposes of determining qualifying trips or miles, | ||||||
21 | motor vehicles that carry persons or property for hire, even | ||||||
22 | just between points in Illinois, will be considered used for | ||||||
23 | hire in interstate commerce if the motor vehicle transports | ||||||
24 | persons whose journeys or property whose shipments originate or | ||||||
25 | terminate outside Illinois. The exemption for motor vehicles
| ||||||
26 | used as rolling stock moving in interstate commerce may be
|
| |||||||
| |||||||
1 | claimed only for the following vehicles: (i) motor vehicles | ||||||
2 | whose gross vehicle weight
rating exceeds 16,000 pounds; and | ||||||
3 | (ii) limousines, as defined in Section 1-139.1 of the Illinois | ||||||
4 | Vehicle Code. Through June 30, 2017, this This definition | ||||||
5 | applies to all property purchased for the purpose of being | ||||||
6 | attached to those motor vehicles as a part thereof. On and | ||||||
7 | after July 1, 2017, this definition applies to property | ||||||
8 | purchased for the purpose of being attached to limousines as a | ||||||
9 | part thereof. | ||||||
10 | (d) For purchases made through June 30, 2017 Beginning July | ||||||
11 | 1, 2004 , "use as rolling stock moving in interstate commerce" | ||||||
12 | in paragraph paragraphs (12) and (13) of Section 2-5 occurs for | ||||||
13 | trailers, as defined in Section 1-209 of the Illinois Vehicle | ||||||
14 | Code, semitrailers as defined in Section 1-187 of the Illinois | ||||||
15 | Vehicle Code, and pole trailers as defined in Section 1-161 of | ||||||
16 | the Illinois Vehicle Code, when during a 12-month period the | ||||||
17 | rolling stock has carried persons or property for hire in | ||||||
18 | interstate commerce for greater than 50% of its total trips for | ||||||
19 | that period or for greater than 50% of its total miles for that | ||||||
20 | period. The person claiming the exemption for a trailer or | ||||||
21 | trailers that will not be dedicated to a motor vehicle or group | ||||||
22 | of motor vehicles shall make an election at the time of | ||||||
23 | purchase to use either the trips or mileage method. Persons who | ||||||
24 | purchased trailers prior to July 1, 2004 that are not dedicated | ||||||
25 | to a motor vehicle or group of motor vehicles shall make an | ||||||
26 | election to use either the trips or mileage method and document |
| |||||||
| |||||||
1 | that election in their books and records. If no election is | ||||||
2 | made under this subsection to use the trips or mileage method, | ||||||
3 | the person shall be deemed to have chosen the mileage method. | ||||||
4 | For purposes of determining qualifying trips or miles, | ||||||
5 | trailers, semitrailers, or pole trailers that carry property | ||||||
6 | for hire, even just between points in Illinois, will be | ||||||
7 | considered used for hire in interstate commerce if the | ||||||
8 | trailers, semitrailers, or pole trailers transport property | ||||||
9 | whose shipments originate or terminate outside Illinois. This | ||||||
10 | definition applies to all property purchased for the purpose of | ||||||
11 | being attached to those trailers, semitrailers, or pole | ||||||
12 | trailers as a part thereof. In lieu of a person providing | ||||||
13 | documentation regarding the qualifying use of each individual | ||||||
14 | trailer, semitrailer, or pole trailer, that person may document | ||||||
15 | such qualifying use by providing documentation of the | ||||||
16 | following: | ||||||
17 | (1) If a trailer, semitrailer, or pole trailer is | ||||||
18 | dedicated to a motor vehicle that qualifies as rolling | ||||||
19 | stock moving in interstate commerce under subsection (c) of | ||||||
20 | this Section, then that trailer, semitrailer, or pole | ||||||
21 | trailer qualifies as rolling stock moving in interstate | ||||||
22 | commerce under this subsection. | ||||||
23 | (2) If a trailer, semitrailer, or pole trailer is | ||||||
24 | dedicated to a group of motor vehicles that all qualify as | ||||||
25 | rolling stock moving in interstate commerce under | ||||||
26 | subsection (c) of this Section, then that trailer, |
| |||||||
| |||||||
1 | semitrailer, or pole trailer qualifies as rolling stock | ||||||
2 | moving in interstate commerce under this subsection. | ||||||
3 | (3) If one or more trailers, semitrailers, or pole | ||||||
4 | trailers are dedicated to a group of motor vehicles and not | ||||||
5 | all of those motor vehicles in that group qualify as | ||||||
6 | rolling stock moving in interstate commerce under | ||||||
7 | subsection (c) of this Section, then the percentage of | ||||||
8 | those trailers, semitrailers, or pole trailers that | ||||||
9 | qualifies as rolling stock moving in interstate commerce | ||||||
10 | under this subsection is equal to the percentage of those | ||||||
11 | motor vehicles in that group that qualify as rolling stock | ||||||
12 | moving in interstate commerce under subsection (c) of this | ||||||
13 | Section to which those trailers, semitrailers, or pole | ||||||
14 | trailers are dedicated. However, to determine the | ||||||
15 | qualification for the exemption provided under this item | ||||||
16 | (3), the mathematical application of the qualifying | ||||||
17 | percentage to one or more trailers, semitrailers, or pole | ||||||
18 | trailers under this subpart shall not be allowed as to any | ||||||
19 | fraction of a trailer, semitrailer, or pole trailer.
| ||||||
20 | (d-5) For motor vehicles and trailers purchased on or after | ||||||
21 | July 1, 2017, "use as rolling stock moving in interstate | ||||||
22 | commerce" means that: | ||||||
23 | (1) the motor vehicle or trailer is used to transport | ||||||
24 | persons or property for hire; | ||||||
25 | (2) for purposes of the exemption under paragraph (13) | ||||||
26 | of Section 2-5, the purchaser who is an owner, lessor, or |
| |||||||
| |||||||
1 | shipper claiming the exemption certifies that the motor | ||||||
2 | vehicle or trailer will be utilized, from the time of | ||||||
3 | purchase and continuing through the statute of limitations | ||||||
4 | for issuing a notice of tax liability under this Act, by an | ||||||
5 | interstate carrier or carriers for hire who hold, and are | ||||||
6 | required by Federal Motor Carrier Safety Administration | ||||||
7 | regulations to hold, an active USDOT Number with the | ||||||
8 | Carrier Operation listed as "Interstate" and the Operation | ||||||
9 | Classification listed as "authorized for hire", "exempt | ||||||
10 | for hire", or both "authorized for hire" and "exempt for | ||||||
11 | hire"; except that this paragraph (2) does not apply to a | ||||||
12 | motor vehicle or trailer used at an airport to support the | ||||||
13 | operation of an aircraft moving in interstate commerce, as | ||||||
14 | long as (i) in the case of a motor vehicle, the motor | ||||||
15 | vehicle meets paragraphs (1) and (3) of this subsection | ||||||
16 | (d-5) or (ii) in the case of a trailer, the trailer meets | ||||||
17 | paragraph (1) of this subsection (d-5); and | ||||||
18 | (3) for motor vehicles, the gross vehicle weight rating | ||||||
19 | exceeds 16,000 pounds. | ||||||
20 | The definition of "use as rolling stock moving in | ||||||
21 | interstate commerce" in this subsection (d-5) applies to all | ||||||
22 | property purchased on or after July 1, 2017 for the purpose of | ||||||
23 | being attached to a motor vehicle or trailer as a part thereof, | ||||||
24 | regardless of whether the motor vehicle or trailer was | ||||||
25 | purchased before, on, or after July 1, 2017. | ||||||
26 | If an item ceases to meet requirements (1) through (3) |
| |||||||
| |||||||
1 | under this subsection (d-5), then the tax is imposed on the | ||||||
2 | selling price, allowing for a reasonable depreciation for the | ||||||
3 | period during which the item qualified for the exemption. | ||||||
4 | For purposes of this subsection (d-5): | ||||||
5 | "Motor vehicle" excludes limousines, but otherwise | ||||||
6 | means that term as defined in Section 1-146 of the Illinois | ||||||
7 | Vehicle Code. | ||||||
8 | "Trailer" means (i) "trailer", as defined in Section | ||||||
9 | 1-209 of the Illinois Vehicle Code, (ii) "semitrailer", as | ||||||
10 | defined in Section 1-187 of the Illinois Vehicle Code, and | ||||||
11 | (iii) "pole trailer", as defined in Section 1-161 of the | ||||||
12 | Illinois Vehicle Code. | ||||||
13 | (e) For aircraft and watercraft purchased on or after | ||||||
14 | January 1, 2014, "use as rolling stock moving in interstate | ||||||
15 | commerce" in paragraph paragraphs (12) and (13) of Section 2-5 | ||||||
16 | occurs when, during a 12-month period, the rolling stock has | ||||||
17 | carried persons or property for hire in interstate commerce for | ||||||
18 | greater than 50% of its total trips for that period or for | ||||||
19 | greater than 50% of its total miles for that period. The person | ||||||
20 | claiming the exemption shall make an election at the time of | ||||||
21 | purchase to use either the trips or mileage method and document | ||||||
22 | that election in their books and records. If no election is | ||||||
23 | made under this subsection to use the trips or mileage method, | ||||||
24 | the person shall be deemed to have chosen the mileage method. | ||||||
25 | For aircraft, flight hours may be used in lieu of recording | ||||||
26 | miles in determining whether the aircraft meets the mileage |
| |||||||
| |||||||
1 | test in this subsection. For watercraft, nautical miles or trip | ||||||
2 | hours may be used in lieu of recording miles in determining | ||||||
3 | whether the watercraft meets the mileage test in this | ||||||
4 | subsection. | ||||||
5 | Notwithstanding any other provision of law to the contrary, | ||||||
6 | property purchased on or after January 1, 2014 for the purpose | ||||||
7 | of being attached to aircraft or watercraft as a part thereof | ||||||
8 | qualifies as rolling stock moving in interstate commerce only | ||||||
9 | if the aircraft or watercraft to which it will be attached | ||||||
10 | qualifies as rolling stock moving in interstate commerce under | ||||||
11 | the test set forth in this subsection (e), regardless of when | ||||||
12 | the aircraft or watercraft was purchased. Persons who purchased | ||||||
13 | aircraft or watercraft prior to January 1, 2014 shall make an | ||||||
14 | election to use either the trips or mileage method and document | ||||||
15 | that election in their books and records for the purpose of | ||||||
16 | determining whether property purchased on or after January 1, | ||||||
17 | 2014 for the purpose of being attached to aircraft or | ||||||
18 | watercraft as a part thereof qualifies as rolling stock moving | ||||||
19 | in interstate commerce under this subsection (e). | ||||||
20 | (f) The election to use either the trips or mileage method | ||||||
21 | made under the provisions of subsections (c), (d), or (e) of | ||||||
22 | this Section will remain in effect for the duration of the | ||||||
23 | purchaser's ownership of that item. | ||||||
24 | (Source: P.A. 98-584, eff. 8-27-13.)
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25 | Section 99. Effective date. This Act takes effect July 1, | ||||||
26 | 2017.
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