Bill Text: IL SB3401 | 2017-2018 | 100th General Assembly | Introduced

---

Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. 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, 2021 (currently, June 30, 2016). Effective immediately.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Failed) 2019-01-09 - Session Sine Die [SB3401 Detail]

Download: Illinois-2017-SB3401-Introduced.html

---

100TH GENERAL ASSEMBLY State of Illinois 2017 and 2018 SB3401 Introduced 2/16/2018, by Sen. Pamela J. Althoff 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, 2021 (currently, June 30, 2016). Effective immediately.
LRB100 16520 HLH 31652 b
FISCAL NOTE ACT MAY APPLY
A BILL FOR
SB3401 LRB100 16520 HLH 31652 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, lessors, 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 installed in or affixed to

SB3401 - 2 - LRB100 16520 HLH 31652 b
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 the
property, or shares with another common carrier in the

SB3401 - 3 - LRB100 16520 HLH 31652 b
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
resident, except that the tax shall not exceed the tax that

SB3401 - 4 - LRB100 16520 HLH 31652 b
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:
(A) the aircraft leaves this State within 15 days

SB3401 - 5 - LRB100 16520 HLH 31652 b
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
(B) the purchaser provides the Department with a

SB3401 - 6 - LRB100 16520 HLH 31652 b
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
this item (3) are met. The certificate must also

SB3401 - 7 - LRB100 16520 HLH 31652 b
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.
"Registered in this State" means an aircraft registered

SB3401 - 8 - LRB100 16520 HLH 31652 b
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 the first day of the first month to
occur on or after the effective date of this amendatory Act of
the 100th General Assembly and through June 30, 2021, 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,

SB3401 - 9 - LRB100 16520 HLH 31652 b
issue a permit to any taxpayer in good standing 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. 100-321, eff. 8-24-17.)
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

SB3401 - 10 - LRB100 16520 HLH 31652 b
outside this State and that is moved into this State for use as
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 the first day of the first month to
occur on or after the effective date of this amendatory Act of
the 100th General Assembly and through June 30, 2021, the use
of tangible personal property purchased from an Illinois

SB3401 - 11 - LRB100 16520 HLH 31652 b
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
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:

SB3401 - 12 - LRB100 16520 HLH 31652 b
(35 ILCS 115/3-5)
Sec. 3-5. Exemptions. The following tangible personal
property is exempt from the tax imposed by this Act:
(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 the effective date
of this amendatory Act of the 92nd General Assembly, however,
an entity otherwise eligible for this exemption shall not make

SB3401 - 13 - LRB100 16520 HLH 31652 b
tax-free purchases unless it has an active identification
number issued by the Department.
(4) 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.
(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

SB3401 - 14 - LRB100 16520 HLH 31652 b
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 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

SB3401 - 15 - LRB100 16520 HLH 31652 b
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals. 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
substitute for tips to the employees who participate directly

SB3401 - 16 - LRB100 16520 HLH 31652 b
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) 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

SB3401 - 17 - LRB100 16520 HLH 31652 b
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 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,

SB3401 - 18 - LRB100 16520 HLH 31652 b
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
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

SB3401 - 19 - LRB100 16520 HLH 31652 b
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 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,

SB3401 - 20 - LRB100 16520 HLH 31652 b
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
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

SB3401 - 21 - LRB100 16520 HLH 31652 b
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 the effective date of this amendatory Act
of the 92nd General Assembly, 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 the effective date of this amendatory Act
of the 92nd General Assembly, 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. This paragraph is exempt from
the provisions of Section 3-55.
(26) Beginning on January 1, 2002 and through June 30,

SB3401 - 22 - LRB100 16520 HLH 31652 b
2016, and beginning again on the first day of the first month
to occur on or after the effective date of this amendatory Act
of the 100th General Assembly and through June 30, 2021,
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 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

SB3401 - 23 - LRB100 16520 HLH 31652 b
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, 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, but excludes any

SB3401 - 24 - LRB100 16520 HLH 31652 b
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. 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 129
of the Federal Aviation Regulations. The changes made to this
paragraph (29) by Public Act 98-534 are declarative of existing
law.
(30) Beginning January 1, 2017, menstrual pads, tampons,
and menstrual cups.
(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
100-22, eff. 7-6-17.)

SB3401 - 25 - LRB100 16520 HLH 31652 b
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 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 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

SB3401 - 26 - LRB100 16520 HLH 31652 b
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. This item (2) is exempt
from the provisions of Section 2-70.
(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,

SB3401 - 27 - LRB100 16520 HLH 31652 b
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
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

SB3401 - 28 - LRB100 16520 HLH 31652 b
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) this amendatory Act of the 92nd General Assembly,
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 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) 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

SB3401 - 29 - LRB100 16520 HLH 31652 b
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
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

SB3401 - 30 - LRB100 16520 HLH 31652 b
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, lessors, 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 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

SB3401 - 31 - LRB100 16520 HLH 31652 b
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
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) Petroleum products sold to a purchaser if the
seller is prohibited by federal law from charging tax to
the purchaser.
(17) Tangible personal property sold to a common
carrier by rail or motor that receives the physical

SB3401 - 32 - LRB100 16520 HLH 31652 b
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
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.

SB3401 - 33 - LRB100 16520 HLH 31652 b
(21) 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
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

SB3401 - 34 - LRB100 16520 HLH 31652 b
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 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

SB3401 - 35 - LRB100 16520 HLH 31652 b
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
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

SB3401 - 36 - LRB100 16520 HLH 31652 b
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 C.F.R. 91.407;
(2) the aircraft is not based or registered in 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

SB3401 - 37 - LRB100 16520 HLH 31652 b
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
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

SB3401 - 38 - LRB100 16520 HLH 31652 b
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
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

SB3401 - 39 - LRB100 16520 HLH 31652 b
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 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,

SB3401 - 40 - LRB100 16520 HLH 31652 b
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,
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

SB3401 - 41 - LRB100 16520 HLH 31652 b
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,
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

SB3401 - 42 - LRB100 16520 HLH 31652 b
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
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 the first day of the first
month to occur on or after the effective date of this
amendatory Act of the 100th General Assembly and through
June 30, 2021, 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

SB3401 - 43 - LRB100 16520 HLH 31652 b
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 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.

SB3401 - 44 - LRB100 16520 HLH 31652 b
(40) Beginning January 1, 2010, 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, but 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. 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

SB3401 - 45 - LRB100 16520 HLH 31652 b
Federal Aviation Regulations. The changes made to this
paragraph (40) by Public Act 98-534 are declarative of
existing law.
(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.
(42) Beginning January 1, 2017, 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

SB3401 - 46 - LRB100 16520 HLH 31652 b
Act. This paragraph is exempt from the provisions of
Section 2-70.
(Source: P.A. 99-180, eff. 7-29-15; 99-855, eff. 8-19-16;
100-22, eff. 7-6-17; 100-321, eff. 8-24-17; 100-437, eff.
1-1-18; revised 9-26-17.)
Section 99. Effective date. This Act takes effect upon
becoming law.