Bill Text: IL SB2389 | 2025-2026 | 104th General Assembly | Introduced

---

Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Reinstates the exemption for the use or sale of tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois. Provides that the exemption sunsets on June 30, 2030 (currently, June 30, 2016). Effective immediately.

Sponsorship: Partisan Bill (Republican 1)

Status: (Introduced - Dead) 2025-02-07 - Referred to Assignments [SB2389 Detail]

Download: Illinois-2025-SB2389-Introduced.html

---

104TH GENERAL ASSEMBLY State of Illinois 2025 and 2026 SB2389 Introduced 2/7/2025, by Sen. Chris Balkema SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-55 from Ch. 120, par. 439.3-55
35 ILCS 110/3-45 from Ch. 120, par. 439.33-45
35 ILCS 115/3-5
35 ILCS 120/2-5
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Reinstates the exemption for the use or sale of tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois. Provides that the exemption sunsets on June 30, 2030 (currently, June 30, 2016). Effective immediately.
LRB104 10643 HLH 20720 b
A BILL FOR
SB2389 LRB104 10643 HLH 20720 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing Section
3-55 as follows:
(35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
Sec. 3-55. Multistate exemption. To prevent actual or
likely multistate taxation, the tax imposed by this Act does
not apply to the use of tangible personal property in this
State under the following circumstances:
(a) The use, in this State, of tangible personal property
acquired outside this State by a nonresident individual and
brought into this State by the individual for his or her own
use while temporarily within this State or while passing
through this State.
(b) (Blank).
(c) The use, in this State, by owners or lessors, lessees,
or shippers of tangible personal property that is utilized by
interstate carriers for hire for use as rolling stock moving
in interstate commerce as long as so used by the interstate
carriers for hire, and equipment operated by a
telecommunications provider, licensed as a common carrier by
the Federal Communications Commission, which is permanently

SB2389 - 2 - LRB104 10643 HLH 20720 b
installed in or affixed to aircraft moving in interstate
commerce.
(d) The use, in this State, of tangible personal property
that is acquired outside this State and caused to be brought
into this State by a person who has already paid a tax in
another State in respect to the sale, purchase, or use of that
property, to the extent of the amount of the tax properly due
and paid in the other State.
(e) The temporary storage, in this State, of tangible
personal property that is acquired outside this State and
that, after being brought into this State and stored here
temporarily, is used solely outside this State or is
physically attached to or incorporated into other tangible
personal property that is used solely outside this State, or
is altered by converting, fabricating, manufacturing,
printing, processing, or shaping, and, as altered, is used
solely outside this State.
(f) The temporary storage in this State of building
materials and fixtures that are acquired either in this State
or outside this State by an Illinois registered combination
retailer and construction contractor, and that the purchaser
thereafter uses outside this State by incorporating that
property into real estate located outside this State.
(g) The use or purchase of tangible personal property by a
common carrier by rail or motor that receives the physical
possession of the property in Illinois, and that transports

SB2389 - 3 - LRB104 10643 HLH 20720 b
the property, or shares with another common carrier in the
transportation of the property, out of Illinois on a standard
uniform bill of lading showing the seller of the property as
the shipper or consignor of the property to a destination
outside Illinois, for use outside Illinois.
(h) Except as provided in subsection (h-1), the use, in
this State, of a motor vehicle that was sold in this State to a
nonresident, even though the motor vehicle is delivered to the
nonresident in this State, if the motor vehicle is not to be
titled in this State, and if a drive-away permit is issued to
the motor vehicle as provided in Section 3-603 of the Illinois
Vehicle Code or if the nonresident purchaser has vehicle
registration plates to transfer to the motor vehicle upon
returning to his or her home state. The issuance of the
drive-away permit or having the out-of-state registration
plates to be transferred shall be prima facie evidence that
the motor vehicle will not be titled in this State.
(h-1) The exemption under subsection (h) does not apply if
the state in which the motor vehicle will be titled does not
allow a reciprocal exemption for the use in that state of a
motor vehicle sold and delivered in that state to an Illinois
resident but titled in Illinois. The tax collected under this
Act on the sale of a motor vehicle in this State to a resident
of another state that does not allow a reciprocal exemption
shall be imposed at a rate equal to the state's rate of tax on
taxable property in the state in which the purchaser is a

SB2389 - 4 - LRB104 10643 HLH 20720 b
resident, except that the tax shall not exceed the tax that
would otherwise be imposed under this Act. At the time of the
sale, the purchaser shall execute a statement, signed under
penalty of perjury, of his or her intent to title the vehicle
in the state in which the purchaser is a resident within 30
days after the sale and of the fact of the payment to the State
of Illinois of tax in an amount equivalent to the state's rate
of tax on taxable property in his or her state of residence and
shall submit the statement to the appropriate tax collection
agency in his or her state of residence. In addition, the
retailer must retain a signed copy of the statement in his or
her records. Nothing in this subsection shall be construed to
require the removal of the vehicle from this state following
the filing of an intent to title the vehicle in the purchaser's
state of residence if the purchaser titles the vehicle in his
or her state of residence within 30 days after the date of
sale. The tax collected under this Act in accordance with this
subsection (h-1) shall be proportionately distributed as if
the tax were collected at the 6.25% general rate imposed under
this Act.
(h-2) The following exemptions apply with respect to
certain aircraft:
(1) Beginning on July 1, 2007, no tax is imposed under
this Act on the purchase of an aircraft, as defined in
Section 3 of the Illinois Aeronautics Act, if all of the
following conditions are met:

SB2389 - 5 - LRB104 10643 HLH 20720 b
(A) the aircraft leaves this State within 15 days
after the later of either the issuance of the final
billing for the purchase of the aircraft or the
authorized approval for return to service, completion
of the maintenance record entry, and completion of the
test flight and ground test for inspection, as
required by 14 C.F.R. 91.407;
(B) the aircraft is not based or registered in
this State after the purchase of the aircraft; and
(C) the purchaser provides the Department with a
signed and dated certification, on a form prescribed
by the Department, certifying that the requirements of
this item (1) are met. The certificate must also
include the name and address of the purchaser, the
address of the location where the aircraft is to be
titled or registered, the address of the primary
physical location of the aircraft, and other
information that the Department may reasonably
require.
(2) Beginning on July 1, 2007, no tax is imposed under
this Act on the use of an aircraft, as defined in Section 3
of the Illinois Aeronautics Act, that is temporarily
located in this State for the purpose of a prepurchase
evaluation if all of the following conditions are met:
(A) the aircraft is not based or registered in
this State after the prepurchase evaluation; and

SB2389 - 6 - LRB104 10643 HLH 20720 b
(B) the purchaser provides the Department with a
signed and dated certification, on a form prescribed
by the Department, certifying that the requirements of
this item (2) are met. The certificate must also
include the name and address of the purchaser, the
address of the location where the aircraft is to be
titled or registered, the address of the primary
physical location of the aircraft, and other
information that the Department may reasonably
require.
(3) Beginning on July 1, 2007, no tax is imposed under
this Act on the use of an aircraft, as defined in Section 3
of the Illinois Aeronautics Act, that is temporarily
located in this State for the purpose of a post-sale
customization if all of the following conditions are met:
(A) the aircraft leaves this State within 15 days
after the authorized approval for return to service,
completion of the maintenance record entry, and
completion of the test flight and ground test for
inspection, as required by 14 C.F.R. 91.407;
(B) the aircraft is not based or registered in
this State either before or after the post-sale
customization; and
(C) the purchaser provides the Department with a
signed and dated certification, on a form prescribed
by the Department, certifying that the requirements of

SB2389 - 7 - LRB104 10643 HLH 20720 b
this item (3) are met. The certificate must also
include the name and address of the purchaser, the
address of the location where the aircraft is to be
titled or registered, the address of the primary
physical location of the aircraft, and other
information that the Department may reasonably
require.
If tax becomes due under this subsection (h-2) because of
the purchaser's use of the aircraft in this State, the
purchaser shall file a return with the Department and pay the
tax on the fair market value of the aircraft. This return and
payment of the tax must be made no later than 30 days after the
aircraft is used in a taxable manner in this State. The tax is
based on the fair market value of the aircraft on the date that
it is first used in a taxable manner in this State.
For purposes of this subsection (h-2):
"Based in this State" means hangared, stored, or otherwise
used, excluding post-sale customizations as defined in this
Section, for 10 or more days in each 12-month period
immediately following the date of the sale of the aircraft.
"Post-sale customization" means any improvement,
maintenance, or repair that is performed on an aircraft
following a transfer of ownership of the aircraft.
"Prepurchase evaluation" means an examination of an
aircraft to provide a potential purchaser with information
relevant to the potential purchase.

SB2389 - 8 - LRB104 10643 HLH 20720 b
"Registered in this State" means an aircraft registered
with the Department of Transportation, Aeronautics Division,
or titled or registered with the Federal Aviation
Administration to an address located in this State.
This subsection (h-2) is exempt from the provisions of
Section 3-90.
(i) Beginning July 1, 1999, the use, in this State, of fuel
acquired outside this State and brought into this State in the
fuel supply tanks of locomotives engaged in freight hauling
and passenger service for interstate commerce. This subsection
is exempt from the provisions of Section 3-90.
(j) Beginning on January 1, 2002 and through June 30,
2016, and beginning again on July 1, 2025 and through June 30,
2030, the use of tangible personal property purchased from an
Illinois retailer by a taxpayer engaged in centralized
purchasing activities in Illinois who will, upon receipt of
the property in Illinois, temporarily store the property in
Illinois (i) for the purpose of subsequently transporting it
outside this State for use or consumption thereafter solely
outside this State or (ii) for the purpose of being processed,
fabricated, or manufactured into, attached to, or incorporated
into other tangible personal property to be transported
outside this State and thereafter used or consumed solely
outside this State. The Director of Revenue shall, pursuant to
rules adopted in accordance with the Illinois Administrative
Procedure Act, issue a permit to any taxpayer in good standing

SB2389 - 9 - LRB104 10643 HLH 20720 b
with the Department who is eligible for the exemption under
this subsection (j). The permit issued under this subsection
(j) shall authorize the holder, to the extent and in the manner
specified in the rules adopted under this Act, to purchase
tangible personal property from a retailer exempt from the
taxes imposed by this Act. Taxpayers shall maintain all
necessary books and records to substantiate the use and
consumption of all such tangible personal property outside of
the State of Illinois.
(Source: P.A. 103-592, eff. 1-1-25.)
Section 10. The Service Use Tax Act is amended by changing
Section 3-45 as follows:
(35 ILCS 110/3-45) (from Ch. 120, par. 439.33-45)
Sec. 3-45. Multistate exemption. To prevent actual or
likely multistate taxation, the tax imposed by this Act does
not apply to the use of tangible personal property in this
State under the following circumstances:
(a) The use, in this State, of property acquired outside
this State by a nonresident individual and brought into this
State by the individual for his or her own use while
temporarily within this State or while passing through this
State.
(b) The use, in this State, of property that is acquired
outside this State and that is moved into this State for use as

SB2389 - 10 - LRB104 10643 HLH 20720 b
rolling stock moving in interstate commerce.
(c) The use, in this State, of property that is acquired
outside this State and caused to be brought into this State by
a person who has already paid a tax in another state in respect
to the sale, purchase, or use of that property, to the extent
of the amount of the tax properly due and paid in the other
state.
(d) The temporary storage, in this State, of property that
is acquired outside this State and that after being brought
into this State and stored here temporarily, is used solely
outside this State or is physically attached to or
incorporated into other property that is used solely outside
this State, or is altered by converting, fabricating,
manufacturing, printing, processing, or shaping, and, as
altered, is used solely outside this State.
(e) Beginning July 1, 1999, the use, in this State, of fuel
acquired outside this State and brought into this State in the
fuel supply tanks of locomotives engaged in freight hauling
and passenger service for interstate commerce. This subsection
is exempt from the provisions of Section 3-75.
(f) Beginning on January 1, 2002 and through June 30,
2016, and beginning again on July 1, 2025 and through June 30,
2030, the use of tangible personal property purchased from an
Illinois retailer by a taxpayer engaged in centralized
purchasing activities in Illinois who will, upon receipt of
the property in Illinois, temporarily store the property in

SB2389 - 11 - LRB104 10643 HLH 20720 b
Illinois (i) for the purpose of subsequently transporting it
outside this State for use or consumption thereafter solely
outside this State or (ii) for the purpose of being processed,
fabricated, or manufactured into, attached to, or incorporated
into other tangible personal property to be transported
outside this State and thereafter used or consumed solely
outside this State. The Director of Revenue shall, pursuant to
rules adopted in accordance with the Illinois Administrative
Procedure Act, issue a permit to any taxpayer in good standing
with the Department who is eligible for the exemption under
this subsection (f). The permit issued under this subsection
(f) shall authorize the holder, to the extent and in the manner
specified in the rules adopted under this Act, to purchase
tangible personal property from a retailer exempt from the
taxes imposed by this Act. Taxpayers shall maintain all
necessary books and records to substantiate the use and
consumption of all such tangible personal property outside of
the State of Illinois.
(Source: P.A. 97-73, eff. 6-30-11.)
Section 15. The Service Occupation Tax Act is amended by
changing Section 3-5 as follows:
(35 ILCS 115/3-5)
Sec. 3-5. Exemptions. The following tangible personal
property is exempt from the tax imposed by this Act:

SB2389 - 12 - LRB104 10643 HLH 20720 b
(1) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the
benefit of persons 65 years of age or older if the personal
property was not purchased by the enterprise for the purpose
of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by any not-for-profit arts
or cultural organization that establishes, by proof required
by the Department by rule, that it has received an exemption
under Section 501(c)(3) of the Internal Revenue Code and that
is organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after July 1, 2001 (the
effective date of Public Act 92-35), however, an entity
otherwise eligible for this exemption shall not make tax-free
purchases unless it has an active identification number issued
by the Department.
(4) Legal tender, currency, medallions, or gold or silver

SB2389 - 13 - LRB104 10643 HLH 20720 b
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(5) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new
and used, and including that manufactured on special order or
purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a graphic arts product. Beginning on
July 1, 2017, graphic arts machinery and equipment is included
in the manufacturing and assembling machinery and equipment
exemption under Section 2 of this Act.
(6) Personal property sold by a teacher-sponsored student
organization affiliated with an elementary or secondary school
located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural

SB2389 - 14 - LRB104 10643 HLH 20720 b
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery and
equipment under this item (7). Agricultural chemical tender
tanks and dry boxes shall include units sold separately from a
motor vehicle required to be licensed and units sold mounted
on a motor vehicle required to be licensed if the selling price
of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment, including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,
software, global positioning and mapping systems, and other
such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals.

SB2389 - 15 - LRB104 10643 HLH 20720 b
Beginning on January 1, 2024, farm machinery and equipment
also includes electrical power generation equipment used
primarily for production agriculture.
This item (7) is exempt from the provisions of Section
3-55.
(8) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common carrier, certified by the carrier
to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a flight
destined for or returning from a location or locations outside
the United States without regard to previous or subsequent
domestic stopovers.
Beginning July 1, 2013, fuel and petroleum products sold
to or used by an air carrier, certified by the carrier to be
used for consumption, shipment, or storage in the conduct of
its business as an air common carrier, for a flight that (i) is
engaged in foreign trade or is engaged in trade between the
United States and any of its possessions and (ii) transports
at least one individual or package for hire from the city of
origination to the city of final destination on the same
aircraft, without regard to a change in the flight number of
that aircraft.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a

SB2389 - 16 - LRB104 10643 HLH 20720 b
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(10) Until July 1, 2003, oil field exploration, drilling,
and production equipment, including (i) rigs and parts of
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
pipe and tubular goods, including casing and drill strings,
(iii) pumps and pump-jack units, (iv) storage tanks and flow
lines, (v) any individual replacement part for oil field
exploration, drilling, and production equipment, and (vi)
machinery and equipment purchased for lease; but excluding
motor vehicles required to be registered under the Illinois
Vehicle Code.
(11) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the purchaser
to be used primarily for photoprocessing, and including
photoprocessing machinery and equipment purchased for lease.
(12) Until July 1, 2028, coal and aggregate exploration,
mining, off-highway hauling, processing, maintenance, and
reclamation equipment, including replacement parts and
equipment, and including equipment purchased for lease, but
excluding motor vehicles required to be registered under the
Illinois Vehicle Code. The changes made to this Section by
Public Act 97-767 apply on and after July 1, 2003, but no claim

SB2389 - 17 - LRB104 10643 HLH 20720 b
for credit or refund is allowed on or after August 16, 2013
(the effective date of Public Act 98-456) for such taxes paid
during the period beginning July 1, 2003 and ending on August
16, 2013 (the effective date of Public Act 98-456).
(13) Beginning January 1, 1992 and through June 30, 2016,
food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages,
soft drinks and food that has been prepared for immediate
consumption) and prescription and non-prescription medicines,
drugs, medical appliances, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, when purchased for use by a person receiving medical
assistance under Article V of the Illinois Public Aid Code who
resides in a licensed long-term care facility, as defined in
the Nursing Home Care Act, or in a licensed facility as defined
in the ID/DD Community Care Act, the MC/DD Act, or the
Specialized Mental Health Rehabilitation Act of 2013.
(14) Semen used for artificial insemination of livestock
for direct agricultural production.
(15) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (15) is exempt from the
provisions of Section 3-55, and the exemption provided for

SB2389 - 18 - LRB104 10643 HLH 20720 b
under this item (15) applies for all periods beginning May 30,
1995, but no claim for credit or refund is allowed on or after
January 1, 2008 (the effective date of Public Act 95-88) for
such taxes paid during the period beginning May 30, 2000 and
ending on January 1, 2008 (the effective date of Public Act
95-88).
(16) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act.
(17) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time of the purchase, to a governmental body that
has been issued an active tax exemption identification number
by the Department under Section 1g of the Retailers'
Occupation Tax Act.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally declared
disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to a

SB2389 - 19 - LRB104 10643 HLH 20720 b
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(19) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including, but not limited to, municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities located
in the declared disaster area within 6 months after the
disaster.
(20) Beginning July 1, 1999, game or game birds sold at a
"game breeding and hunting preserve area" as that term is used
in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-55.
(21) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the
Department to be organized and operated exclusively for

SB2389 - 20 - LRB104 10643 HLH 20720 b
educational purposes. For purposes of this exemption, "a
corporation, limited liability company, society, association,
foundation, or institution organized and operated exclusively
for educational purposes" means all tax-supported public
schools, private schools that offer systematic instruction in
useful branches of learning by methods common to public
schools and that compare favorably in their scope and
intensity with the course of study presented in tax-supported
schools, and vocational or technical schools or institutes
organized and operated exclusively to provide a course of
study of not less than 6 weeks duration and designed to prepare
individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.
(22) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary school,
a group of those schools, or one or more school districts if
the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that profits

SB2389 - 21 - LRB104 10643 HLH 20720 b
from the sale to the fundraising entity. This paragraph is
exempt from the provisions of Section 3-55.
(23) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and
other items, and replacement parts for these machines.
Beginning January 1, 2002 and through June 30, 2003, machines
and parts for machines used in commercial, coin-operated
amusement and vending business if a use or occupation tax is
paid on the gross receipts derived from the use of the
commercial, coin-operated amusement and vending machines. This
paragraph is exempt from the provisions of Section 3-55.
(24) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), computers and communications equipment
utilized for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients sold to
a lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. This paragraph is exempt
from the provisions of Section 3-55.
(25) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), personal property sold to a lessor who
leases the property, under a lease of one year or longer
executed or in effect at the time of the purchase, to a

SB2389 - 22 - LRB104 10643 HLH 20720 b
governmental body that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. This paragraph is exempt
from the provisions of Section 3-55.
(26) Beginning on January 1, 2002 and through June 30,
2016, and beginning again on June 30, 2025 and through June 30,
2030, tangible personal property purchased from an Illinois
retailer by a taxpayer engaged in centralized purchasing
activities in Illinois who will, upon receipt of the property
in Illinois, temporarily store the property in Illinois (i)
for the purpose of subsequently transporting it outside this
State for use or consumption thereafter solely outside this
State or (ii) for the purpose of being processed, fabricated,
or manufactured into, attached to, or incorporated into other
tangible personal property to be transported outside this
State and thereafter used or consumed solely outside this
State. The Director of Revenue shall, pursuant to rules
adopted in accordance with the Illinois Administrative
Procedure Act, issue a permit to any taxpayer in good standing
with the Department who is eligible for the exemption under
this paragraph (26). The permit issued under this paragraph
(26) shall authorize the holder, to the extent and in the
manner specified in the rules adopted under this Act, to
purchase tangible personal property from a retailer exempt
from the taxes imposed by this Act. Taxpayers shall maintain
all necessary books and records to substantiate the use and

SB2389 - 23 - LRB104 10643 HLH 20720 b
consumption of all such tangible personal property outside of
the State of Illinois.
(27) Beginning January 1, 2008, tangible personal property
used in the construction or maintenance of a community water
supply, as defined under Section 3.145 of the Environmental
Protection Act, that is operated by a not-for-profit
corporation that holds a valid water supply permit issued
under Title IV of the Environmental Protection Act. This
paragraph is exempt from the provisions of Section 3-55.
(28) Tangible personal property sold to a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall, but
only if the legal title to the municipal convention hall is
transferred to the municipality without any further
consideration by or on behalf of the municipality at the time
of the completion of the municipal convention hall or upon the
retirement or redemption of any bonds or other debt
instruments issued by the public-facilities corporation in
connection with the development of the municipal convention
hall. This exemption includes existing public-facilities
corporations as provided in Section 11-65-25 of the Illinois
Municipal Code. This paragraph is exempt from the provisions
of Section 3-55.
(29) Beginning January 1, 2010 and continuing through
December 31, 2029, materials, parts, equipment, components,

SB2389 - 24 - LRB104 10643 HLH 20720 b
and furnishings incorporated into or upon an aircraft as part
of the modification, refurbishment, completion, replacement,
repair, or maintenance of the aircraft. This exemption
includes consumable supplies used in the modification,
refurbishment, completion, replacement, repair, and
maintenance of aircraft. However, until January 1, 2024, this
exemption excludes any materials, parts, equipment,
components, and consumable supplies used in the modification,
replacement, repair, and maintenance of aircraft engines or
power plants, whether such engines or power plants are
installed or uninstalled upon any such aircraft. "Consumable
supplies" include, but are not limited to, adhesive, tape,
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films.
Beginning January 1, 2010 and continuing through December
31, 2023, this exemption applies only to the transfer of
qualifying tangible personal property incident to the
modification, refurbishment, completion, replacement, repair,
or maintenance of an aircraft by persons who (i) hold an Air
Agency Certificate and are empowered to operate an approved
repair station by the Federal Aviation Administration, (ii)
have a Class IV Rating, and (iii) conduct operations in
accordance with Part 145 of the Federal Aviation Regulations.
The exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part

SB2389 - 25 - LRB104 10643 HLH 20720 b
129 of the Federal Aviation Regulations. From January 1, 2024
through December 31, 2029, this exemption applies only to the
transfer of qualifying tangible personal property incident to:
(A) the modification, refurbishment, completion, repair,
replacement, or maintenance of an aircraft by persons who (i)
hold an Air Agency Certificate and are empowered to operate an
approved repair station by the Federal Aviation
Administration, (ii) have a Class IV Rating, and (iii) conduct
operations in accordance with Part 145 of the Federal Aviation
Regulations; and (B) the modification, replacement, repair,
and maintenance of aircraft engines or power plants without
regard to whether or not those persons meet the qualifications
of item (A).
The changes made to this paragraph (29) by Public Act
98-534 are declarative of existing law. It is the intent of the
General Assembly that the exemption under this paragraph (29)
applies continuously from January 1, 2010 through December 31,
2024; however, no claim for credit or refund is allowed for
taxes paid as a result of the disallowance of this exemption on
or after January 1, 2015 and prior to February 5, 2020 (the
effective date of Public Act 101-629).
(30) Beginning January 1, 2017 and through December 31,
2026, menstrual pads, tampons, and menstrual cups.
(31) Tangible personal property transferred to a purchaser
who is exempt from tax by operation of federal law. This
paragraph is exempt from the provisions of Section 3-55.

SB2389 - 26 - LRB104 10643 HLH 20720 b
(32) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or subcontractor
of the owner, operator, or tenant. Data centers that would
have qualified for a certificate of exemption prior to January
1, 2020 had Public Act 101-31 been in effect, may apply for and
obtain an exemption for subsequent purchases of computer
equipment or enabling software purchased or leased to upgrade,
supplement, or replace computer equipment or enabling software
purchased or leased in the original investment that would have
qualified.
The Department of Commerce and Economic Opportunity shall
grant a certificate of exemption under this item (32) to
qualified data centers as defined by Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois.
For the purposes of this item (32):
"Data center" means a building or a series of
buildings rehabilitated or constructed to house working
servers in one physical location or multiple sites within
the State of Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and

SB2389 - 27 - LRB104 10643 HLH 20720 b
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. The term "qualified tangible personal
property" also includes building materials physically
incorporated into the qualifying data center. To document
the exemption allowed under this Section, the retailer
must obtain from the purchaser a copy of the certificate
of eligibility issued by the Department of Commerce and
Economic Opportunity.
This item (32) is exempt from the provisions of Section

SB2389 - 28 - LRB104 10643 HLH 20720 b
3-55.
(33) Beginning July 1, 2022, breast pumps, breast pump
collection and storage supplies, and breast pump kits. This
item (33) is exempt from the provisions of Section 3-55. As
used in this item (33):
"Breast pump" means an electrically controlled or
manually controlled pump device designed or marketed to be
used to express milk from a human breast during lactation,
including the pump device and any battery, AC adapter, or
other power supply unit that is used to power the pump
device and is packaged and sold with the pump device at the
time of sale.
"Breast pump collection and storage supplies" means
items of tangible personal property designed or marketed
to be used in conjunction with a breast pump to collect
milk expressed from a human breast and to store collected
milk until it is ready for consumption.
"Breast pump collection and storage supplies"
includes, but is not limited to: breast shields and breast
shield connectors; breast pump tubes and tubing adapters;
breast pump valves and membranes; backflow protectors and
backflow protector adaptors; bottles and bottle caps
specific to the operation of the breast pump; and breast
milk storage bags.
"Breast pump collection and storage supplies" does not
include: (1) bottles and bottle caps not specific to the

SB2389 - 29 - LRB104 10643 HLH 20720 b
operation of the breast pump; (2) breast pump travel bags
and other similar carrying accessories, including ice
packs, labels, and other similar products; (3) breast pump
cleaning supplies; (4) nursing bras, bra pads, breast
shells, and other similar products; and (5) creams,
ointments, and other similar products that relieve
breastfeeding-related symptoms or conditions of the
breasts or nipples, unless sold as part of a breast pump
kit that is pre-packaged by the breast pump manufacturer
or distributor.
"Breast pump kit" means a kit that: (1) contains no
more than a breast pump, breast pump collection and
storage supplies, a rechargeable battery for operating the
breast pump, a breastmilk cooler, bottle stands, ice
packs, and a breast pump carrying case; and (2) is
pre-packaged as a breast pump kit by the breast pump
manufacturer or distributor.
(34) Tangible personal property sold by or on behalf of
the State Treasurer pursuant to the Revised Uniform Unclaimed
Property Act. This item (34) is exempt from the provisions of
Section 3-55.
(35) Beginning on January 1, 2024, tangible personal
property purchased by an active duty member of the armed
forces of the United States who presents valid military
identification and purchases the property using a form of
payment where the federal government is the payor. The member

SB2389 - 30 - LRB104 10643 HLH 20720 b
of the armed forces must complete, at the point of sale, a form
prescribed by the Department of Revenue documenting that the
transaction is eligible for the exemption under this
paragraph. Retailers must keep the form as documentation of
the exemption in their records for a period of not less than 6
years. "Armed forces of the United States" means the United
States Army, Navy, Air Force, Space Force, Marine Corps, or
Coast Guard. This paragraph is exempt from the provisions of
Section 3-55.
(36) Beginning July 1, 2024, home-delivered meals provided
to Medicare or Medicaid recipients when payment is made by an
intermediary, such as a Medicare Administrative Contractor, a
Managed Care Organization, or a Medicare Advantage
Organization, pursuant to a government contract. This
paragraph (36) (35) is exempt from the provisions of Section
3-55.
(37) (36) Beginning on January 1, 2026, as further defined
in Section 3-10, food prepared for immediate consumption and
transferred incident to a sale of service subject to this Act
or the Service Use Tax Act by an entity licensed under the
Hospital Licensing Act, the Nursing Home Care Act, the
Assisted Living and Shared Housing Act, the ID/DD Community
Care Act, the MC/DD Act, the Specialized Mental Health
Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
an entity that holds a permit issued pursuant to the Life Care
Facilities Act. This item (37) (36) is exempt from the

SB2389 - 31 - LRB104 10643 HLH 20720 b
provisions of Section 3-55.
(38) (37) Beginning on January 1, 2026, as further defined
in Section 3-10, food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, candy, and food that has been
prepared for immediate consumption). This item (38) (37) is
exempt from the provisions of Section 3-55.
(39) (36) The lease of the following tangible personal
property:
(1) computer software transferred subject to a license
that meets the following requirements:
(A) it is evidenced by a written agreement signed
by the licensor and the customer;
(i) an electronic agreement in which the
customer accepts the license by means of an
electronic signature that is verifiable and can be
authenticated and is attached to or made part of
the license will comply with this requirement;
(ii) a license agreement in which the customer
electronically accepts the terms by clicking "I
agree" does not comply with this requirement;
(B) it restricts the customer's duplication and
use of the software;
(C) it prohibits the customer from licensing,
sublicensing, or transferring the software to a third

SB2389 - 32 - LRB104 10643 HLH 20720 b
party (except to a related party) without the
permission and continued control of the licensor;
(D) the licensor has a policy of providing another
copy at minimal or no charge if the customer loses or
damages the software, or of permitting the licensee to
make and keep an archival copy, and such policy is
either stated in the license agreement, supported by
the licensor's books and records, or supported by a
notarized statement made under penalties of perjury by
the licensor; and
(E) the customer must destroy or return all copies
of the software to the licensor at the end of the
license period; this provision is deemed to be met, in
the case of a perpetual license, without being set
forth in the license agreement; and
(2) property that is subject to a tax on lease
receipts imposed by a home rule unit of local government
if the ordinance imposing that tax was adopted prior to
January 1, 2023.
(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
75-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995,

SB2389 - 33 - LRB104 10643 HLH 20720 b
eff. 8-9-24; revised 11-26-24.)
Section 20. The Retailers' Occupation Tax Act is amended
by changing Section 2-5 as follows:
(35 ILCS 120/2-5)
Sec. 2-5. Exemptions. Gross receipts from proceeds from
the sale, which, on and after January 1, 2025, includes the
lease, of the following tangible personal property are exempt
from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production
agriculture or State or federal agricultural programs,
including individual replacement parts for the machinery
and equipment, including machinery and equipment purchased
for lease, and including implements of husbandry defined
in Section 1-130 of the Illinois Vehicle Code, farm
machinery and agricultural chemical and fertilizer
spreaders, and nurse wagons required to be registered
under Section 3-809 of the Illinois Vehicle Code, but
excluding other motor vehicles required to be registered
under the Illinois Vehicle Code. Horticultural polyhouses
or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery

SB2389 - 34 - LRB104 10643 HLH 20720 b
and equipment under this item (2). Agricultural chemical
tender tanks and dry boxes shall include units sold
separately from a motor vehicle required to be licensed
and units sold mounted on a motor vehicle required to be
licensed, if the selling price of the tender is separately
stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but
not limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment
includes, but is not limited to, soil testing sensors,
computers, monitors, software, global positioning and
mapping systems, and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals.
Beginning on January 1, 2024, farm machinery and
equipment also includes electrical power generation
equipment used primarily for production agriculture.
This item (2) is exempt from the provisions of Section
2-70.

SB2389 - 35 - LRB104 10643 HLH 20720 b
(3) Until July 1, 2003, distillation machinery and
equipment, sold as a unit or kit, assembled or installed
by the retailer, certified by the user to be used only for
the production of ethyl alcohol that will be used for
consumption as motor fuel or as a component of motor fuel
for the personal use of the user, and not subject to sale
or resale.
(4) Until July 1, 2003 and beginning again September
1, 2004 through August 30, 2014, graphic arts machinery
and equipment, including repair and replacement parts,
both new and used, and including that manufactured on
special order or purchased for lease, certified by the
purchaser to be used primarily for graphic arts
production. Equipment includes chemicals or chemicals
acting as catalysts but only if the chemicals or chemicals
acting as catalysts effect a direct and immediate change
upon a graphic arts product. Beginning on July 1, 2017,
graphic arts machinery and equipment is included in the
manufacturing and assembling machinery and equipment
exemption under paragraph (14).
(5) A motor vehicle that is used for automobile
renting, as defined in the Automobile Renting Occupation
and Use Tax Act. This paragraph is exempt from the
provisions of Section 2-70.
(6) Personal property sold by a teacher-sponsored
student organization affiliated with an elementary or

SB2389 - 36 - LRB104 10643 HLH 20720 b
secondary school located in Illinois.
(7) Until July 1, 2003, proceeds of that portion of
the selling price of a passenger car the sale of which is
subject to the Replacement Vehicle Tax.
(8) Personal property sold to an Illinois county fair
association for use in conducting, operating, or promoting
the county fair.
(9) Personal property sold to a not-for-profit arts or
cultural organization that establishes, by proof required
by the Department by rule, that it has received an
exemption under Section 501(c)(3) of the Internal Revenue
Code and that is organized and operated primarily for the
presentation or support of arts or cultural programming,
activities, or services. These organizations include, but
are not limited to, music and dramatic arts organizations
such as symphony orchestras and theatrical groups, arts
and cultural service organizations, local arts councils,
visual arts organizations, and media arts organizations.
On and after July 1, 2001 (the effective date of Public Act
92-35), however, an entity otherwise eligible for this
exemption shall not make tax-free purchases unless it has
an active identification number issued by the Department.
(10) Personal property sold by a corporation, society,
association, foundation, institution, or organization,
other than a limited liability company, that is organized
and operated as a not-for-profit service enterprise for

SB2389 - 37 - LRB104 10643 HLH 20720 b
the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for
the purpose of resale by the enterprise.
(11) Except as otherwise provided in this Section,
personal property sold to a governmental body, to a
corporation, society, association, foundation, or
institution organized and operated exclusively for
charitable, religious, or educational purposes, or to a
not-for-profit corporation, society, association,
foundation, institution, or organization that has no
compensated officers or employees and that is organized
and operated primarily for the recreation of persons 55
years of age or older. A limited liability company may
qualify for the exemption under this paragraph only if the
limited liability company is organized and operated
exclusively for educational purposes. On and after July 1,
1987, however, no entity otherwise eligible for this
exemption shall make tax-free purchases unless it has an
active identification number issued by the Department.
(12) (Blank).
(12-5) On and after July 1, 2003 and through June 30,
2004, motor vehicles of the second division with a gross
vehicle weight in excess of 8,000 pounds that are subject
to the commercial distribution fee imposed under Section
3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
2004 and through June 30, 2005, the use in this State of

SB2389 - 38 - LRB104 10643 HLH 20720 b
motor vehicles of the second division: (i) with a gross
vehicle weight rating in excess of 8,000 pounds; (ii) that
are subject to the commercial distribution fee imposed
under Section 3-815.1 of the Illinois Vehicle Code; and
(iii) that are primarily used for commercial purposes.
Through June 30, 2005, this exemption applies to repair
and replacement parts added after the initial purchase of
such a motor vehicle if that motor vehicle is used in a
manner that would qualify for the rolling stock exemption
otherwise provided for in this Act. For purposes of this
paragraph, "used for commercial purposes" means the
transportation of persons or property in furtherance of
any commercial or industrial enterprise whether for-hire
or not.
(13) Proceeds from sales to owners or lessors,
lessees, or shippers of tangible personal property that is
utilized by interstate carriers for hire for use as
rolling stock moving in interstate commerce and equipment
operated by a telecommunications provider, licensed as a
common carrier by the Federal Communications Commission,
which is permanently installed in or affixed to aircraft
moving in interstate commerce.
(14) Machinery and equipment that will be used by the
purchaser, or a lessee of the purchaser, primarily in the
process of manufacturing or assembling tangible personal
property for wholesale or retail sale or lease, whether

SB2389 - 39 - LRB104 10643 HLH 20720 b
the sale or lease is made directly by the manufacturer or
by some other person, whether the materials used in the
process are owned by the manufacturer or some other
person, or whether the sale or lease is made apart from or
as an incident to the seller's engaging in the service
occupation of producing machines, tools, dies, jigs,
patterns, gauges, or other similar items of no commercial
value on special order for a particular purchaser. The
exemption provided by this paragraph (14) does not include
machinery and equipment used in (i) the generation of
electricity for wholesale or retail sale; (ii) the
generation or treatment of natural or artificial gas for
wholesale or retail sale that is delivered to customers
through pipes, pipelines, or mains; or (iii) the treatment
of water for wholesale or retail sale that is delivered to
customers through pipes, pipelines, or mains. The
provisions of Public Act 98-583 are declaratory of
existing law as to the meaning and scope of this
exemption. Beginning on July 1, 2017, the exemption
provided by this paragraph (14) includes, but is not
limited to, graphic arts machinery and equipment, as
defined in paragraph (4) of this Section.
(15) Proceeds of mandatory service charges separately
stated on customers' bills for purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a

SB2389 - 40 - LRB104 10643 HLH 20720 b
substitute for tips to the employees who participate
directly in preparing, serving, hosting or cleaning up the
food or beverage function with respect to which the
service charge is imposed.
(16) Tangible personal property sold to a purchaser if
the purchaser is exempt from use tax by operation of
federal law. This paragraph is exempt from the provisions
of Section 2-70.
(17) Tangible personal property sold to a common
carrier by rail or motor that receives the physical
possession of the property in Illinois and that transports
the property, or shares with another common carrier in the
transportation of the property, out of Illinois on a
standard uniform bill of lading showing the seller of the
property as the shipper or consignor of the property to a
destination outside Illinois, for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the
government of any foreign country, and bullion.
(19) Until July 1, 2003, oil field exploration,
drilling, and production equipment, including (i) rigs and
parts of rigs, rotary rigs, cable tool rigs, and workover
rigs, (ii) pipe and tubular goods, including casing and
drill strings, (iii) pumps and pump-jack units, (iv)
storage tanks and flow lines, (v) any individual

SB2389 - 41 - LRB104 10643 HLH 20720 b
replacement part for oil field exploration, drilling, and
production equipment, and (vi) machinery and equipment
purchased for lease; but excluding motor vehicles required
to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment,
including repair and replacement parts, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for photoprocessing,
and including photoprocessing machinery and equipment
purchased for lease.
(21) Until July 1, 2028, coal and aggregate
exploration, mining, off-highway hauling, processing,
maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required
to be registered under the Illinois Vehicle Code. The
changes made to this Section by Public Act 97-767 apply on
and after July 1, 2003, but no claim for credit or refund
is allowed on or after August 16, 2013 (the effective date
of Public Act 98-456) for such taxes paid during the
period beginning July 1, 2003 and ending on August 16,
2013 (the effective date of Public Act 98-456).
(22) Until June 30, 2013, fuel and petroleum products
sold to or used by an air carrier, certified by the carrier
to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a

SB2389 - 42 - LRB104 10643 HLH 20720 b
flight destined for or returning from a location or
locations outside the United States without regard to
previous or subsequent domestic stopovers.
Beginning July 1, 2013, fuel and petroleum products
sold to or used by an air carrier, certified by the carrier
to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a
flight that (i) is engaged in foreign trade or is engaged
in trade between the United States and any of its
possessions and (ii) transports at least one individual or
package for hire from the city of origination to the city
of final destination on the same aircraft, without regard
to a change in the flight number of that aircraft.
(23) A transaction in which the purchase order is
received by a florist who is located outside Illinois, but
who has a florist located in Illinois deliver the property
to the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships,
barges, or vessels that are used primarily in or for the
transportation of property or the conveyance of persons
for hire on rivers bordering on this State if the fuel is
delivered by the seller to the purchaser's barge, ship, or
vessel while it is afloat upon that bordering river.
(25) Except as provided in item (25-5) of this
Section, a motor vehicle sold in this State to a
nonresident even though the motor vehicle is delivered to

SB2389 - 43 - LRB104 10643 HLH 20720 b
the nonresident in this State, if the motor vehicle is not
to be titled in this State, and if a drive-away permit is
issued to the motor vehicle as provided in Section 3-603
of the Illinois Vehicle Code or if the nonresident
purchaser has vehicle registration plates to transfer to
the motor vehicle upon returning to his or her home state.
The issuance of the drive-away permit or having the
out-of-state registration plates to be transferred is
prima facie evidence that the motor vehicle will not be
titled in this State.
(25-5) The exemption under item (25) does not apply if
the state in which the motor vehicle will be titled does
not allow a reciprocal exemption for a motor vehicle sold
and delivered in that state to an Illinois resident but
titled in Illinois. The tax collected under this Act on
the sale of a motor vehicle in this State to a resident of
another state that does not allow a reciprocal exemption
shall be imposed at a rate equal to the state's rate of tax
on taxable property in the state in which the purchaser is
a resident, except that the tax shall not exceed the tax
that would otherwise be imposed under this Act. At the
time of the sale, the purchaser shall execute a statement,
signed under penalty of perjury, of his or her intent to
title the vehicle in the state in which the purchaser is a
resident within 30 days after the sale and of the fact of
the payment to the State of Illinois of tax in an amount

SB2389 - 44 - LRB104 10643 HLH 20720 b
equivalent to the state's rate of tax on taxable property
in his or her state of residence and shall submit the
statement to the appropriate tax collection agency in his
or her state of residence. In addition, the retailer must
retain a signed copy of the statement in his or her
records. Nothing in this item shall be construed to
require the removal of the vehicle from this state
following the filing of an intent to title the vehicle in
the purchaser's state of residence if the purchaser titles
the vehicle in his or her state of residence within 30 days
after the date of sale. The tax collected under this Act in
accordance with this item (25-5) shall be proportionately
distributed as if the tax were collected at the 6.25%
general rate imposed under this Act.
(25-7) Beginning on July 1, 2007, no tax is imposed
under this Act on the sale of an aircraft, as defined in
Section 3 of the Illinois Aeronautics Act, if all of the
following conditions are met:
(1) the aircraft leaves this State within 15 days
after the later of either the issuance of the final
billing for the sale of the aircraft, or the
authorized approval for return to service, completion
of the maintenance record entry, and completion of the
test flight and ground test for inspection, as
required by 14 CFR 91.407;
(2) the aircraft is not based or registered in

SB2389 - 45 - LRB104 10643 HLH 20720 b
this State after the sale of the aircraft; and
(3) the seller retains in his or her books and
records and provides to the Department a signed and
dated certification from the purchaser, on a form
prescribed by the Department, certifying that the
requirements of this item (25-7) are met. The
certificate must also include the name and address of
the purchaser, the address of the location where the
aircraft is to be titled or registered, the address of
the primary physical location of the aircraft, and
other information that the Department may reasonably
require.
For purposes of this item (25-7):
"Based in this State" means hangared, stored, or
otherwise used, excluding post-sale customizations as
defined in this Section, for 10 or more days in each
12-month period immediately following the date of the sale
of the aircraft.
"Registered in this State" means an aircraft
registered with the Department of Transportation,
Aeronautics Division, or titled or registered with the
Federal Aviation Administration to an address located in
this State.
This paragraph (25-7) is exempt from the provisions of
Section 2-70.
(26) Semen used for artificial insemination of

SB2389 - 46 - LRB104 10643 HLH 20720 b
livestock for direct agricultural production.
(27) Horses, or interests in horses, registered with
and meeting the requirements of any of the Arabian Horse
Club Registry of America, Appaloosa Horse Club, American
Quarter Horse Association, United States Trotting
Association, or Jockey Club, as appropriate, used for
purposes of breeding or racing for prizes. This item (27)
is exempt from the provisions of Section 2-70, and the
exemption provided for under this item (27) applies for
all periods beginning May 30, 1995, but no claim for
credit or refund is allowed on or after January 1, 2008
(the effective date of Public Act 95-88) for such taxes
paid during the period beginning May 30, 2000 and ending
on January 1, 2008 (the effective date of Public Act
95-88).
(28) Computers and communications equipment utilized
for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients
sold to a lessor who leases the equipment, under a lease of
one year or longer executed or in effect at the time of the
purchase, to a hospital that has been issued an active tax
exemption identification number by the Department under
Section 1g of this Act.
(29) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or
in effect at the time of the purchase, to a governmental

SB2389 - 47 - LRB104 10643 HLH 20720 b
body that has been issued an active tax exemption
identification number by the Department under Section 1g
of this Act.
(30) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on
or before December 31, 2004, personal property that is
donated for disaster relief to be used in a State or
federally declared disaster area in Illinois or bordering
Illinois by a manufacturer or retailer that is registered
in this State to a corporation, society, association,
foundation, or institution that has been issued a sales
tax exemption identification number by the Department that
assists victims of the disaster who reside within the
declared disaster area.
(31) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on
or before December 31, 2004, personal property that is
used in the performance of infrastructure repairs in this
State, including, but not limited to, municipal roads and
streets, access roads, bridges, sidewalks, waste disposal
systems, water and sewer line extensions, water
distribution and purification facilities, storm water
drainage and retention facilities, and sewage treatment
facilities, resulting from a State or federally declared
disaster in Illinois or bordering Illinois when such
repairs are initiated on facilities located in the

SB2389 - 48 - LRB104 10643 HLH 20720 b
declared disaster area within 6 months after the disaster.
(32) Beginning July 1, 1999, game or game birds sold
at a "game breeding and hunting preserve area" as that
term is used in the Wildlife Code. This paragraph is
exempt from the provisions of Section 2-70.
(33) A motor vehicle, as that term is defined in
Section 1-146 of the Illinois Vehicle Code, that is
donated to a corporation, limited liability company,
society, association, foundation, or institution that is
determined by the Department to be organized and operated
exclusively for educational purposes. For purposes of this
exemption, "a corporation, limited liability company,
society, association, foundation, or institution organized
and operated exclusively for educational purposes" means
all tax-supported public schools, private schools that
offer systematic instruction in useful branches of
learning by methods common to public schools and that
compare favorably in their scope and intensity with the
course of study presented in tax-supported schools, and
vocational or technical schools or institutes organized
and operated exclusively to provide a course of study of
not less than 6 weeks duration and designed to prepare
individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.
(34) Beginning January 1, 2000, personal property,

SB2389 - 49 - LRB104 10643 HLH 20720 b
including food, purchased through fundraising events for
the benefit of a public or private elementary or secondary
school, a group of those schools, or one or more school
districts if the events are sponsored by an entity
recognized by the school district that consists primarily
of volunteers and includes parents and teachers of the
school children. This paragraph does not apply to
fundraising events (i) for the benefit of private home
instruction or (ii) for which the fundraising entity
purchases the personal property sold at the events from
another individual or entity that sold the property for
the purpose of resale by the fundraising entity and that
profits from the sale to the fundraising entity. This
paragraph is exempt from the provisions of Section 2-70.
(35) Beginning January 1, 2000 and through December
31, 2001, new or used automatic vending machines that
prepare and serve hot food and beverages, including
coffee, soup, and other items, and replacement parts for
these machines. Beginning January 1, 2002 and through June
30, 2003, machines and parts for machines used in
commercial, coin-operated amusement and vending business
if a use or occupation tax is paid on the gross receipts
derived from the use of the commercial, coin-operated
amusement and vending machines. This paragraph is exempt
from the provisions of Section 2-70.
(35-5) Beginning August 23, 2001 and through June 30,

SB2389 - 50 - LRB104 10643 HLH 20720 b
2016, food for human consumption that is to be consumed
off the premises where it is sold (other than alcoholic
beverages, soft drinks, and food that has been prepared
for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances, and
insulin, urine testing materials, syringes, and needles
used by diabetics, for human use, when purchased for use
by a person receiving medical assistance under Article V
of the Illinois Public Aid Code who resides in a licensed
long-term care facility, as defined in the Nursing Home
Care Act, or a licensed facility as defined in the ID/DD
Community Care Act, the MC/DD Act, or the Specialized
Mental Health Rehabilitation Act of 2013.
(36) Beginning August 2, 2001, computers and
communications equipment utilized for any hospital purpose
and equipment used in the diagnosis, analysis, or
treatment of hospital patients sold to a lessor who leases
the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g
of this Act. This paragraph is exempt from the provisions
of Section 2-70.
(37) Beginning August 2, 2001, personal property sold
to a lessor who leases the property, under a lease of one
year or longer executed or in effect at the time of the

SB2389 - 51 - LRB104 10643 HLH 20720 b
purchase, to a governmental body that has been issued an
active tax exemption identification number by the
Department under Section 1g of this Act. This paragraph is
exempt from the provisions of Section 2-70.
(38) Beginning on January 1, 2002 and through June 30,
2016, and beginning again on July 1, 2025 and through June
30, 2030, tangible personal property purchased from an
Illinois retailer by a taxpayer engaged in centralized
purchasing activities in Illinois who will, upon receipt
of the property in Illinois, temporarily store the
property in Illinois (i) for the purpose of subsequently
transporting it outside this State for use or consumption
thereafter solely outside this State or (ii) for the
purpose of being processed, fabricated, or manufactured
into, attached to, or incorporated into other tangible
personal property to be transported outside this State and
thereafter used or consumed solely outside this State. The
Director of Revenue shall, pursuant to rules adopted in
accordance with the Illinois Administrative Procedure Act,
issue a permit to any taxpayer in good standing with the
Department who is eligible for the exemption under this
paragraph (38). The permit issued under this paragraph
(38) shall authorize the holder, to the extent and in the
manner specified in the rules adopted under this Act, to
purchase tangible personal property from a retailer exempt
from the taxes imposed by this Act. Taxpayers shall

SB2389 - 52 - LRB104 10643 HLH 20720 b
maintain all necessary books and records to substantiate
the use and consumption of all such tangible personal
property outside of the State of Illinois.
(39) Beginning January 1, 2008, tangible personal
property used in the construction or maintenance of a
community water supply, as defined under Section 3.145 of
the Environmental Protection Act, that is operated by a
not-for-profit corporation that holds a valid water supply
permit issued under Title IV of the Environmental
Protection Act. This paragraph is exempt from the
provisions of Section 2-70.
(40) Beginning January 1, 2010 and continuing through
December 31, 2029, materials, parts, equipment,
components, and furnishings incorporated into or upon an
aircraft as part of the modification, refurbishment,
completion, replacement, repair, or maintenance of the
aircraft. This exemption includes consumable supplies used
in the modification, refurbishment, completion,
replacement, repair, and maintenance of aircraft. However,
until January 1, 2024, this exemption excludes any
materials, parts, equipment, components, and consumable
supplies used in the modification, replacement, repair,
and maintenance of aircraft engines or power plants,
whether such engines or power plants are installed or
uninstalled upon any such aircraft. "Consumable supplies"
include, but are not limited to, adhesive, tape,

SB2389 - 53 - LRB104 10643 HLH 20720 b
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films.
Beginning January 1, 2010 and continuing through
December 31, 2023, this exemption applies only to the sale
of qualifying tangible personal property to persons who
modify, refurbish, complete, replace, or maintain an
aircraft and who (i) hold an Air Agency Certificate and
are empowered to operate an approved repair station by the
Federal Aviation Administration, (ii) have a Class IV
Rating, and (iii) conduct operations in accordance with
Part 145 of the Federal Aviation Regulations. The
exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or
Part 129 of the Federal Aviation Regulations. From January
1, 2024 through December 31, 2029, this exemption applies
only to the sale of qualifying tangible personal property
to: (A) persons who modify, refurbish, complete, repair,
replace, or maintain aircraft and who (i) hold an Air
Agency Certificate and are empowered to operate an
approved repair station by the Federal Aviation
Administration, (ii) have a Class IV Rating, and (iii)
conduct operations in accordance with Part 145 of the
Federal Aviation Regulations; and (B) persons who engage
in the modification, replacement, repair, and maintenance
of aircraft engines or power plants without regard to

SB2389 - 54 - LRB104 10643 HLH 20720 b
whether or not those persons meet the qualifications of
item (A).
The changes made to this paragraph (40) by Public Act
98-534 are declarative of existing law. It is the intent
of the General Assembly that the exemption under this
paragraph (40) applies continuously from January 1, 2010
through December 31, 2024; however, no claim for credit or
refund is allowed for taxes paid as a result of the
disallowance of this exemption on or after January 1, 2015
and prior to February 5, 2020 (the effective date of
Public Act 101-629).
(41) Tangible personal property sold to a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall,
but only if the legal title to the municipal convention
hall is transferred to the municipality without any
further consideration by or on behalf of the municipality
at the time of the completion of the municipal convention
hall or upon the retirement or redemption of any bonds or
other debt instruments issued by the public-facilities
corporation in connection with the development of the
municipal convention hall. This exemption includes
existing public-facilities corporations as provided in
Section 11-65-25 of the Illinois Municipal Code. This
paragraph is exempt from the provisions of Section 2-70.

SB2389 - 55 - LRB104 10643 HLH 20720 b
(42) Beginning January 1, 2017 and through December
31, 2026, menstrual pads, tampons, and menstrual cups.
(43) Merchandise that is subject to the Rental
Purchase Agreement Occupation and Use Tax. The purchaser
must certify that the item is purchased to be rented
subject to a rental-purchase agreement, as defined in the
Rental-Purchase Agreement Act, and provide proof of
registration under the Rental Purchase Agreement
Occupation and Use Tax Act. This paragraph is exempt from
the provisions of Section 2-70.
(44) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or
subcontractor of the owner, operator, or tenant. Data
centers that would have qualified for a certificate of
exemption prior to January 1, 2020 had Public Act 101-31
been in effect, may apply for and obtain an exemption for
subsequent purchases of computer equipment or enabling
software purchased or leased to upgrade, supplement, or
replace computer equipment or enabling software purchased
or leased in the original investment that would have
qualified.
The Department of Commerce and Economic Opportunity

SB2389 - 56 - LRB104 10643 HLH 20720 b
shall grant a certificate of exemption under this item
(44) to qualified data centers as defined by Section
605-1025 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of
Illinois.
For the purposes of this item (44):
"Data center" means a building or a series of
buildings rehabilitated or constructed to house
working servers in one physical location or multiple
sites within the State of Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks;
cabinets; telecommunications cabling infrastructure;
raised floor systems; peripheral components or
systems; software; mechanical, electrical, or plumbing
systems; battery systems; cooling systems and towers;
temperature control systems; other cabling; and other
data center infrastructure equipment and systems
necessary to operate qualified tangible personal
property, including fixtures; and component parts of
any of the foregoing, including installation,
maintenance, repair, refurbishment, and replacement of

SB2389 - 57 - LRB104 10643 HLH 20720 b
qualified tangible personal property to generate,
transform, transmit, distribute, or manage electricity
necessary to operate qualified tangible personal
property; and all other tangible personal property
that is essential to the operations of a computer data
center. The term "qualified tangible personal
property" also includes building materials physically
incorporated into the qualifying data center. To
document the exemption allowed under this Section, the
retailer must obtain from the purchaser a copy of the
certificate of eligibility issued by the Department of
Commerce and Economic Opportunity.
This item (44) is exempt from the provisions of
Section 2-70.
(45) Beginning January 1, 2020 and through December
31, 2020, sales of tangible personal property made by a
marketplace seller over a marketplace for which tax is due
under this Act but for which use tax has been collected and
remitted to the Department by a marketplace facilitator
under Section 2d of the Use Tax Act are exempt from tax
under this Act. A marketplace seller claiming this
exemption shall maintain books and records demonstrating
that the use tax on such sales has been collected and
remitted by a marketplace facilitator. Marketplace sellers
that have properly remitted tax under this Act on such
sales may file a claim for credit as provided in Section 6

SB2389 - 58 - LRB104 10643 HLH 20720 b
of this Act. No claim is allowed, however, for such taxes
for which a credit or refund has been issued to the
marketplace facilitator under the Use Tax Act, or for
which the marketplace facilitator has filed a claim for
credit or refund under the Use Tax Act.
(46) Beginning July 1, 2022, breast pumps, breast pump
collection and storage supplies, and breast pump kits.
This item (46) is exempt from the provisions of Section
2-70. As used in this item (46):
"Breast pump" means an electrically controlled or
manually controlled pump device designed or marketed to be
used to express milk from a human breast during lactation,
including the pump device and any battery, AC adapter, or
other power supply unit that is used to power the pump
device and is packaged and sold with the pump device at the
time of sale.
"Breast pump collection and storage supplies" means
items of tangible personal property designed or marketed
to be used in conjunction with a breast pump to collect
milk expressed from a human breast and to store collected
milk until it is ready for consumption.
"Breast pump collection and storage supplies"
includes, but is not limited to: breast shields and breast
shield connectors; breast pump tubes and tubing adapters;
breast pump valves and membranes; backflow protectors and
backflow protector adaptors; bottles and bottle caps

SB2389 - 59 - LRB104 10643 HLH 20720 b
specific to the operation of the breast pump; and breast
milk storage bags.
"Breast pump collection and storage supplies" does not
include: (1) bottles and bottle caps not specific to the
operation of the breast pump; (2) breast pump travel bags
and other similar carrying accessories, including ice
packs, labels, and other similar products; (3) breast pump
cleaning supplies; (4) nursing bras, bra pads, breast
shells, and other similar products; and (5) creams,
ointments, and other similar products that relieve
breastfeeding-related symptoms or conditions of the
breasts or nipples, unless sold as part of a breast pump
kit that is pre-packaged by the breast pump manufacturer
or distributor.
"Breast pump kit" means a kit that: (1) contains no
more than a breast pump, breast pump collection and
storage supplies, a rechargeable battery for operating the
breast pump, a breastmilk cooler, bottle stands, ice
packs, and a breast pump carrying case; and (2) is
pre-packaged as a breast pump kit by the breast pump
manufacturer or distributor.
(47) Tangible personal property sold by or on behalf
of the State Treasurer pursuant to the Revised Uniform
Unclaimed Property Act. This item (47) is exempt from the
provisions of Section 2-70.
(48) Beginning on January 1, 2024, tangible personal

SB2389 - 60 - LRB104 10643 HLH 20720 b
property purchased by an active duty member of the armed
forces of the United States who presents valid military
identification and purchases the property using a form of
payment where the federal government is the payor. The
member of the armed forces must complete, at the point of
sale, a form prescribed by the Department of Revenue
documenting that the transaction is eligible for the
exemption under this paragraph. Retailers must keep the
form as documentation of the exemption in their records
for a period of not less than 6 years. "Armed forces of the
United States" means the United States Army, Navy, Air
Force, Space Force, Marine Corps, or Coast Guard. This
paragraph is exempt from the provisions of Section 2-70.
(49) Beginning July 1, 2024, home-delivered meals
provided to Medicare or Medicaid recipients when payment
is made by an intermediary, such as a Medicare
Administrative Contractor, a Managed Care Organization, or
a Medicare Advantage Organization, pursuant to a
government contract. This paragraph (49) is exempt from
the provisions of Section 2-70.
(50) (49) Beginning on January 1, 2026, as further
defined in Section 2-10, food for human consumption that
is to be consumed off the premises where it is sold (other
than alcoholic beverages, food consisting of or infused
with adult use cannabis, soft drinks, candy, and food that
has been prepared for immediate consumption). This item

SB2389 - 61 - LRB104 10643 HLH 20720 b
(50) (49) is exempt from the provisions of Section 2-70.
(51) (49) Gross receipts from the lease of the
following tangible personal property:
(1) computer software transferred subject to a
license that meets the following requirements:
(A) it is evidenced by a written agreement
signed by the licensor and the customer;
(i) an electronic agreement in which the
customer accepts the license by means of an
electronic signature that is verifiable and
can be authenticated and is attached to or
made part of the license will comply with this
requirement;
(ii) a license agreement in which the
customer electronically accepts the terms by
clicking "I agree" does not comply with this
requirement;
(B) it restricts the customer's duplication
and use of the software;
(C) it prohibits the customer from licensing,
sublicensing, or transferring the software to a
third party (except to a related party) without
the permission and continued control of the
licensor;
(D) the licensor has a policy of providing
another copy at minimal or no charge if the

SB2389 - 62 - LRB104 10643 HLH 20720 b
customer loses or damages the software, or of
permitting the licensee to make and keep an
archival copy, and such policy is either stated in
the license agreement, supported by the licensor's
books and records, or supported by a notarized
statement made under penalties of perjury by the
licensor; and
(E) the customer must destroy or return all
copies of the software to the licensor at the end
of the license period; this provision is deemed to
be met, in the case of a perpetual license,
without being set forth in the license agreement;
and
(2) property that is subject to a tax on lease
receipts imposed by a home rule unit of local
government if the ordinance imposing that tax was
adopted prior to January 1, 2023.
(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
5-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
5-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; 103-592,
eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff. 7-1-24;
103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995, eff.
8-9-24; revised 11-26-24.)

SB2389 - 63 - LRB104 10643 HLH 20720 b
Section 99. Effective date. This Act takes effect upon
becoming law.