Illinois-2023-HB4227-Introduced

103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB4227

Introduced , by Rep. Amy L. Grant

SYNOPSIS AS INTRODUCED:

`35 ILCS 105/3-5`
`35 ILCS 110/3-5`
`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. Provides that certain supplies purchased by a day care center are exempt from the taxes imposed under those Acts. Effective immediately.

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A BILL FOR

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1 AN ACT concerning revenue.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Use Tax Act is amended by changing Section

5 3-5 as follows:

6 (35 ILCS 105/3-5)

7 Sec. 3-5. Exemptions. Use of the following tangible

8 personal property is exempt from the tax imposed by this Act:

9 (1) Personal property purchased from a corporation,

10 society, association, foundation, institution, or

11 organization, other than a limited liability company, that is

12 organized and operated as a not-for-profit service enterprise

13 for the benefit of persons 65 years of age or older if the

14 personal property was not purchased by the enterprise for the

15 purpose of resale by the enterprise.

16 (2) Personal property purchased by a not-for-profit

17 Illinois county fair association for use in conducting,

18 operating, or promoting the county fair.

19 (3) Personal property purchased by a not-for-profit arts

20 or cultural organization that establishes, by proof required

21 by the Department by rule, that it has received an exemption

22 under Section 501(c)(3) of the Internal Revenue Code and that

23 is organized and operated primarily for the presentation or

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1 support of arts or cultural programming, activities, or

2 services. These organizations include, but are not limited to,

3 music and dramatic arts organizations such as symphony

4 orchestras and theatrical groups, arts and cultural service

5 organizations, local arts councils, visual arts organizations,

6 and media arts organizations. On and after July 1, 2001 (the

7 effective date of Public Act 92-35), however, an entity

8 otherwise eligible for this exemption shall not make tax-free

9 purchases unless it has an active identification number issued

10 by the Department.

11 (4) Personal property purchased by a governmental body, by

12 a corporation, society, association, foundation, or

13 institution organized and operated exclusively for charitable,

14 religious, or educational purposes, or by a not-for-profit

15 corporation, society, association, foundation, institution, or

16 organization that has no compensated officers or employees and

17 that is organized and operated primarily for the recreation of

18 persons 55 years of age or older. A limited liability company

19 may qualify for the exemption under this paragraph only if the

20 limited liability company is organized and operated

21 exclusively for educational purposes. On and after July 1,

22 1987, however, no entity otherwise eligible for this exemption

23 shall make tax-free purchases unless it has an active

24 exemption identification number issued by the Department.

25 (5) Until July 1, 2003, a passenger car that is a

26 replacement vehicle to the extent that the purchase price of

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1 the car is subject to the Replacement Vehicle Tax.

2 (6) Until July 1, 2003 and beginning again on September 1,

3 2004 through August 30, 2014, graphic arts machinery and

4 equipment, including repair and replacement parts, both new

5 and used, and including that manufactured on special order,

6 certified by the purchaser to be used primarily for graphic

7 arts production, and including machinery and equipment

8 purchased for lease. Equipment includes chemicals or chemicals

9 acting as catalysts but only if the chemicals or chemicals

10 acting as catalysts effect a direct and immediate change upon

11 a graphic arts product. Beginning on July 1, 2017, graphic

12 arts machinery and equipment is included in the manufacturing

13 and assembling machinery and equipment exemption under

14 paragraph (18).

15 (7) Farm chemicals.

16 (8) Legal tender, currency, medallions, or gold or silver

17 coinage issued by the State of Illinois, the government of the

18 United States of America, or the government of any foreign

19 country, and bullion.

20 (9) Personal property purchased from a teacher-sponsored

21 student organization affiliated with an elementary or

22 secondary school located in Illinois.

23 (10) A motor vehicle that is used for automobile renting,

24 as defined in the Automobile Renting Occupation and Use Tax

25 Act.

26 (11) Farm machinery and equipment, both new and used,

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1 including that manufactured on special order, certified by the

2 purchaser to be used primarily for production agriculture or

3 State or federal agricultural programs, including individual

4 replacement parts for the machinery and equipment, including

5 machinery and equipment purchased for lease, and including

6 implements of husbandry defined in Section 1-130 of the

7 Illinois Vehicle Code, farm machinery and agricultural

8 chemical and fertilizer spreaders, and nurse wagons required

9 to be registered under Section 3-809 of the Illinois Vehicle

10 Code, but excluding other motor vehicles required to be

11 registered under the Illinois Vehicle Code. Horticultural

12 polyhouses or hoop houses used for propagating, growing, or

13 overwintering plants shall be considered farm machinery and

14 equipment under this item (11). Agricultural chemical tender

15 tanks and dry boxes shall include units sold separately from a

16 motor vehicle required to be licensed and units sold mounted

17 on a motor vehicle required to be licensed if the selling price

18 of the tender is separately stated.

19 Farm machinery and equipment shall include precision

20 farming equipment that is installed or purchased to be

21 installed on farm machinery and equipment including, but not

22 limited to, tractors, harvesters, sprayers, planters, seeders,

23 or spreaders. Precision farming equipment includes, but is not

24 limited to, soil testing sensors, computers, monitors,

25 software, global positioning and mapping systems, and other

26 such equipment.

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1 Farm machinery and equipment also includes computers,

2 sensors, software, and related equipment used primarily in the

3 computer-assisted operation of production agriculture

4 facilities, equipment, and activities such as, but not limited

5 to, the collection, monitoring, and correlation of animal and

6 crop data for the purpose of formulating animal diets and

7 agricultural chemicals. This item (11) is exempt from the

8 provisions of Section 3-90.

9 (12) Until June 30, 2013, fuel and petroleum products sold

10 to or used by an air common carrier, certified by the carrier

11 to be used for consumption, shipment, or storage in the

12 conduct of its business as an air common carrier, for a flight

13 destined for or returning from a location or locations outside

14 the United States without regard to previous or subsequent

15 domestic stopovers.

16 Beginning July 1, 2013, fuel and petroleum products sold

17 to or used by an air carrier, certified by the carrier to be

18 used for consumption, shipment, or storage in the conduct of

19 its business as an air common carrier, for a flight that (i) is

20 engaged in foreign trade or is engaged in trade between the

21 United States and any of its possessions and (ii) transports

22 at least one individual or package for hire from the city of

23 origination to the city of final destination on the same

24 aircraft, without regard to a change in the flight number of

25 that aircraft.

26 (13) Proceeds of mandatory service charges separately

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1 stated on customers' bills for the purchase and consumption of

2 food and beverages purchased at retail from a retailer, to the

3 extent that the proceeds of the service charge are in fact

4 turned over as tips or as a substitute for tips to the

5 employees who participate directly in preparing, serving,

6 hosting or cleaning up the food or beverage function with

7 respect to which the service charge is imposed.

8 (14) Until July 1, 2003, oil field exploration, drilling,

9 and production equipment, including (i) rigs and parts of

10 rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)

11 pipe and tubular goods, including casing and drill strings,

12 (iii) pumps and pump-jack units, (iv) storage tanks and flow

13 lines, (v) any individual replacement part for oil field

14 exploration, drilling, and production equipment, and (vi)

15 machinery and equipment purchased for lease; but excluding

16 motor vehicles required to be registered under the Illinois

17 Vehicle Code.

18 (15) Photoprocessing machinery and equipment, including

19 repair and replacement parts, both new and used, including

20 that manufactured on special order, certified by the purchaser

21 to be used primarily for photoprocessing, and including

22 photoprocessing machinery and equipment purchased for lease.

23 (16) Until July 1, 2028, coal and aggregate exploration,

24 mining, off-highway hauling, processing, maintenance, and

25 reclamation equipment, including replacement parts and

26 equipment, and including equipment purchased for lease, but

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1 excluding motor vehicles required to be registered under the

2 Illinois Vehicle Code. The changes made to this Section by

3 Public Act 97-767 apply on and after July 1, 2003, but no claim

4 for credit or refund is allowed on or after August 16, 2013

5 (the effective date of Public Act 98-456) for such taxes paid

6 during the period beginning July 1, 2003 and ending on August

7 16, 2013 (the effective date of Public Act 98-456).

8 (17) Until July 1, 2003, distillation machinery and

9 equipment, sold as a unit or kit, assembled or installed by the

10 retailer, certified by the user to be used only for the

11 production of ethyl alcohol that will be used for consumption

12 as motor fuel or as a component of motor fuel for the personal

13 use of the user, and not subject to sale or resale.

14 (18) Manufacturing and assembling machinery and equipment

15 used primarily in the process of manufacturing or assembling

16 tangible personal property for wholesale or retail sale or

17 lease, whether that sale or lease is made directly by the

18 manufacturer or by some other person, whether the materials

19 used in the process are owned by the manufacturer or some other

20 person, or whether that sale or lease is made apart from or as

21 an incident to the seller's engaging in the service occupation

22 of producing machines, tools, dies, jigs, patterns, gauges, or

23 other similar items of no commercial value on special order

24 for a particular purchaser. The exemption provided by this

25 paragraph (18) includes production related tangible personal

26 property, as defined in Section 3-50, purchased on or after

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1 July 1, 2019. The exemption provided by this paragraph (18)

2 does not include machinery and equipment used in (i) the

3 generation of electricity for wholesale or retail sale; (ii)

4 the generation or treatment of natural or artificial gas for

5 wholesale or retail sale that is delivered to customers

6 through pipes, pipelines, or mains; or (iii) the treatment of

7 water for wholesale or retail sale that is delivered to

8 customers through pipes, pipelines, or mains. The provisions

9 of Public Act 98-583 are declaratory of existing law as to the

10 meaning and scope of this exemption. Beginning on July 1,

11 2017, the exemption provided by this paragraph (18) includes,

12 but is not limited to, graphic arts machinery and equipment,

13 as defined in paragraph (6) of this Section.

14 (19) Personal property delivered to a purchaser or

15 purchaser's donee inside Illinois when the purchase order for

16 that personal property was received by a florist located

17 outside Illinois who has a florist located inside Illinois

18 deliver the personal property.

19 (20) Semen used for artificial insemination of livestock

20 for direct agricultural production.

21 (21) Horses, or interests in horses, registered with and

22 meeting the requirements of any of the Arabian Horse Club

23 Registry of America, Appaloosa Horse Club, American Quarter

24 Horse Association, United States Trotting Association, or

25 Jockey Club, as appropriate, used for purposes of breeding or

26 racing for prizes. This item (21) is exempt from the

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1 provisions of Section 3-90, and the exemption provided for

2 under this item (21) applies for all periods beginning May 30,

3 1995, but no claim for credit or refund is allowed on or after

4 January 1, 2008 for such taxes paid during the period

5 beginning May 30, 2000 and ending on January 1, 2008.

6 (22) Computers and communications equipment utilized for

7 any hospital purpose and equipment used in the diagnosis,

8 analysis, or treatment of hospital patients purchased by a

9 lessor who leases the equipment, under a lease of one year or

10 longer executed or in effect at the time the lessor would

11 otherwise be subject to the tax imposed by this Act, to a

12 hospital that has been issued an active tax exemption

13 identification number by the Department under Section 1g of

14 the Retailers' Occupation Tax Act. If the equipment is leased

15 in a manner that does not qualify for this exemption or is used

16 in any other non-exempt manner, the lessor shall be liable for

17 the tax imposed under this Act or the Service Use Tax Act, as

18 the case may be, based on the fair market value of the property

19 at the time the non-qualifying use occurs. No lessor shall

20 collect or attempt to collect an amount (however designated)

21 that purports to reimburse that lessor for the tax imposed by

22 this Act or the Service Use Tax Act, as the case may be, if the

23 tax has not been paid by the lessor. If a lessor improperly

24 collects any such amount from the lessee, the lessee shall

25 have a legal right to claim a refund of that amount from the

26 lessor. If, however, that amount is not refunded to the lessee

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1 for any reason, the lessor is liable to pay that amount to the

2 Department.

3 (23) Personal property purchased by a lessor who leases

4 the property, under a lease of one year or longer executed or

5 in effect at the time the lessor would otherwise be subject to

6 the tax imposed by this Act, to a governmental body that has

7 been issued an active sales tax exemption identification

8 number by the Department under Section 1g of the Retailers'

9 Occupation Tax Act. If the property is leased in a manner that

10 does not qualify for this exemption or used in any other

11 non-exempt manner, the lessor shall be liable for the tax

12 imposed under this Act or the Service Use Tax Act, as the case

13 may be, based on the fair market value of the property at the

14 time the non-qualifying use occurs. No lessor shall collect or

15 attempt to collect an amount (however designated) that

16 purports to reimburse that lessor for the tax imposed by this

17 Act or the Service Use Tax Act, as the case may be, if the tax

18 has not been paid by the lessor. If a lessor improperly

19 collects any such amount from the lessee, the lessee shall

20 have a legal right to claim a refund of that amount from the

21 lessor. If, however, that amount is not refunded to the lessee

22 for any reason, the lessor is liable to pay that amount to the

23 Department.

24 (24) Beginning with taxable years ending on or after

25 December 31, 1995 and ending with taxable years ending on or

26 before December 31, 2004, personal property that is donated

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1 for disaster relief to be used in a State or federally declared

2 disaster area in Illinois or bordering Illinois by a

3 manufacturer or retailer that is registered in this State to a

4 corporation, society, association, foundation, or institution

5 that has been issued a sales tax exemption identification

6 number by the Department that assists victims of the disaster

7 who reside within the declared disaster area.

8 (25) Beginning with taxable years ending on or after

9 December 31, 1995 and ending with taxable years ending on or

10 before December 31, 2004, personal property that is used in

11 the performance of infrastructure repairs in this State,

12 including but not limited to municipal roads and streets,

13 access roads, bridges, sidewalks, waste disposal systems,

14 water and sewer line extensions, water distribution and

15 purification facilities, storm water drainage and retention

16 facilities, and sewage treatment facilities, resulting from a

17 State or federally declared disaster in Illinois or bordering

18 Illinois when such repairs are initiated on facilities located

19 in the declared disaster area within 6 months after the

20 disaster.

21 (26) Beginning July 1, 1999, game or game birds purchased

22 at a "game breeding and hunting preserve area" as that term is

23 used in the Wildlife Code. This paragraph is exempt from the

24 provisions of Section 3-90.

25 (27) A motor vehicle, as that term is defined in Section

26 1-146 of the Illinois Vehicle Code, that is donated to a

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1 corporation, limited liability company, society, association,

2 foundation, or institution that is determined by the

3 Department to be organized and operated exclusively for

4 educational purposes. For purposes of this exemption, "a

5 corporation, limited liability company, society, association,

6 foundation, or institution organized and operated exclusively

7 for educational purposes" means all tax-supported public

8 schools, private schools that offer systematic instruction in

9 useful branches of learning by methods common to public

10 schools and that compare favorably in their scope and

11 intensity with the course of study presented in tax-supported

12 schools, and vocational or technical schools or institutes

13 organized and operated exclusively to provide a course of

14 study of not less than 6 weeks duration and designed to prepare

15 individuals to follow a trade or to pursue a manual,

16 technical, mechanical, industrial, business, or commercial

17 occupation.

18 (28) Beginning January 1, 2000, personal property,

19 including food, purchased through fundraising events for the

20 benefit of a public or private elementary or secondary school,

21 a group of those schools, or one or more school districts if

22 the events are sponsored by an entity recognized by the school

23 district that consists primarily of volunteers and includes

24 parents and teachers of the school children. This paragraph

25 does not apply to fundraising events (i) for the benefit of

26 private home instruction or (ii) for which the fundraising

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1 entity purchases the personal property sold at the events from

2 another individual or entity that sold the property for the

3 purpose of resale by the fundraising entity and that profits

4 from the sale to the fundraising entity. This paragraph is

5 exempt from the provisions of Section 3-90.

6 (29) Beginning January 1, 2000 and through December 31,

7 2001, new or used automatic vending machines that prepare and

8 serve hot food and beverages, including coffee, soup, and

9 other items, and replacement parts for these machines.

10 Beginning January 1, 2002 and through June 30, 2003, machines

11 and parts for machines used in commercial, coin-operated

12 amusement and vending business if a use or occupation tax is

13 paid on the gross receipts derived from the use of the

14 commercial, coin-operated amusement and vending machines. This

15 paragraph is exempt from the provisions of Section 3-90.

16 (30) Beginning January 1, 2001 and through June 30, 2016,

17 food for human consumption that is to be consumed off the

18 premises where it is sold (other than alcoholic beverages,

19 soft drinks, and food that has been prepared for immediate

20 consumption) and prescription and nonprescription medicines,

21 drugs, medical appliances, and insulin, urine testing

22 materials, syringes, and needles used by diabetics, for human

23 use, when purchased for use by a person receiving medical

24 assistance under Article V of the Illinois Public Aid Code who

25 resides in a licensed long-term care facility, as defined in

26 the Nursing Home Care Act, or in a licensed facility as defined

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1 in the ID/DD Community Care Act, the MC/DD Act, or the

2 Specialized Mental Health Rehabilitation Act of 2013.

3 (31) Beginning on August 2, 2001 (the effective date of

4 Public Act 92-227), computers and communications equipment

5 utilized for any hospital purpose and equipment used in the

6 diagnosis, analysis, or treatment of hospital patients

7 purchased by a lessor who leases the equipment, under a lease

8 of one year or longer executed or in effect at the time the

9 lessor would otherwise be subject to the tax imposed by this

10 Act, to a hospital that has been issued an active tax exemption

11 identification number by the Department under Section 1g of

12 the Retailers' Occupation Tax Act. If the equipment is leased

13 in a manner that does not qualify for this exemption or is used

14 in any other nonexempt manner, the lessor shall be liable for

15 the tax imposed under this Act or the Service Use Tax Act, as

16 the case may be, based on the fair market value of the property

17 at the time the nonqualifying use occurs. No lessor shall

18 collect or attempt to collect an amount (however designated)

19 that purports to reimburse that lessor for the tax imposed by

20 this Act or the Service Use Tax Act, as the case may be, if the

21 tax has not been paid by the lessor. If a lessor improperly

22 collects any such amount from the lessee, the lessee shall

23 have a legal right to claim a refund of that amount from the

24 lessor. If, however, that amount is not refunded to the lessee

25 for any reason, the lessor is liable to pay that amount to the

26 Department. This paragraph is exempt from the provisions of

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1 Section 3-90.

2 (32) Beginning on August 2, 2001 (the effective date of

3 Public Act 92-227), personal property purchased by a lessor

4 who leases the property, under a lease of one year or longer

5 executed or in effect at the time the lessor would otherwise be

6 subject to the tax imposed by this Act, to a governmental body

7 that has been issued an active sales tax exemption

8 identification number by the Department under Section 1g of

9 the Retailers' Occupation Tax Act. If the property is leased

10 in a manner that does not qualify for this exemption or used in

11 any other nonexempt manner, the lessor shall be liable for the

12 tax imposed under this Act or the Service Use Tax Act, as the

13 case may be, based on the fair market value of the property at

14 the time the nonqualifying use occurs. No lessor shall collect

15 or attempt to collect an amount (however designated) that

16 purports to reimburse that lessor for the tax imposed by this

17 Act or the Service Use Tax Act, as the case may be, if the tax

18 has not been paid by the lessor. If a lessor improperly

19 collects any such amount from the lessee, the lessee shall

20 have a legal right to claim a refund of that amount from the

21 lessor. If, however, that amount is not refunded to the lessee

22 for any reason, the lessor is liable to pay that amount to the

23 Department. This paragraph is exempt from the provisions of

24 Section 3-90.

25 (33) On and after July 1, 2003 and through June 30, 2004,

26 the use in this State of motor vehicles of the second division

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1 with a gross vehicle weight in excess of 8,000 pounds and that

2 are subject to the commercial distribution fee imposed under

3 Section 3-815.1 of the Illinois Vehicle Code. Beginning on

4 July 1, 2004 and through June 30, 2005, the use in this State

5 of motor vehicles of the second division: (i) with a gross

6 vehicle weight rating in excess of 8,000 pounds; (ii) that are

7 subject to the commercial distribution fee imposed under

8 Section 3-815.1 of the Illinois Vehicle Code; and (iii) that

9 are primarily used for commercial purposes. Through June 30,

10 2005, this exemption applies to repair and replacement parts

11 added after the initial purchase of such a motor vehicle if

12 that motor vehicle is used in a manner that would qualify for

13 the rolling stock exemption otherwise provided for in this

14 Act. For purposes of this paragraph, the term "used for

15 commercial purposes" means the transportation of persons or

16 property in furtherance of any commercial or industrial

17 enterprise, whether for-hire or not.

18 (34) Beginning January 1, 2008, tangible personal property

19 used in the construction or maintenance of a community water

20 supply, as defined under Section 3.145 of the Environmental

21 Protection Act, that is operated by a not-for-profit

22 corporation that holds a valid water supply permit issued

23 under Title IV of the Environmental Protection Act. This

24 paragraph is exempt from the provisions of Section 3-90.

25 (35) Beginning January 1, 2010 and continuing through

26 December 31, 2024, materials, parts, equipment, components,

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1 and furnishings incorporated into or upon an aircraft as part

2 of the modification, refurbishment, completion, replacement,

3 repair, or maintenance of the aircraft. This exemption

4 includes consumable supplies used in the modification,

5 refurbishment, completion, replacement, repair, and

6 maintenance of aircraft, but excludes any materials, parts,

7 equipment, components, and consumable supplies used in the

8 modification, replacement, repair, and maintenance of aircraft

9 engines or power plants, whether such engines or power plants

10 are installed or uninstalled upon any such aircraft.

11 "Consumable supplies" include, but are not limited to,

12 adhesive, tape, sandpaper, general purpose lubricants,

13 cleaning solution, latex gloves, and protective films. This

14 exemption applies only to the use of qualifying tangible

15 personal property by persons who modify, refurbish, complete,

16 repair, replace, or maintain aircraft and who (i) hold an Air

17 Agency Certificate and are empowered to operate an approved

18 repair station by the Federal Aviation Administration, (ii)

19 have a Class IV Rating, and (iii) conduct operations in

20 accordance with Part 145 of the Federal Aviation Regulations.

21 The exemption does not include aircraft operated by a

22 commercial air carrier providing scheduled passenger air

23 service pursuant to authority issued under Part 121 or Part

24 129 of the Federal Aviation Regulations. The changes made to

25 this paragraph (35) by Public Act 98-534 are declarative of

26 existing law. It is the intent of the General Assembly that the

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1 exemption under this paragraph (35) applies continuously from

2 January 1, 2010 through December 31, 2024; however, no claim

3 for credit or refund is allowed for taxes paid as a result of

4 the disallowance of this exemption on or after January 1, 2015

5 and prior to February 5, 2020 (the effective date of Public Act

6 101-629) ~~this amendatory Act of the 101st General Assembly~~.

7 (36) Tangible personal property purchased by a

8 public-facilities corporation, as described in Section

9 11-65-10 of the Illinois Municipal Code, for purposes of

10 constructing or furnishing a municipal convention hall, but

11 only if the legal title to the municipal convention hall is

12 transferred to the municipality without any further

13 consideration by or on behalf of the municipality at the time

14 of the completion of the municipal convention hall or upon the

15 retirement or redemption of any bonds or other debt

16 instruments issued by the public-facilities corporation in

17 connection with the development of the municipal convention

18 hall. This exemption includes existing public-facilities

19 corporations as provided in Section 11-65-25 of the Illinois

20 Municipal Code. This paragraph is exempt from the provisions

21 of Section 3-90.

22 (37) Beginning January 1, 2017 and through December 31,

23 2026, menstrual pads, tampons, and menstrual cups.

24 (38) Merchandise that is subject to the Rental Purchase

25 Agreement Occupation and Use Tax. The purchaser must certify

26 that the item is purchased to be rented subject to a rental

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1 purchase agreement, as defined in the Rental Purchase

2 Agreement Act, and provide proof of registration under the

3 Rental Purchase Agreement Occupation and Use Tax Act. This

4 paragraph is exempt from the provisions of Section 3-90.

5 (39) Tangible personal property purchased by a purchaser

6 who is exempt from the tax imposed by this Act by operation of

7 federal law. This paragraph is exempt from the provisions of

8 Section 3-90.

9 (40) Qualified tangible personal property used in the

10 construction or operation of a data center that has been

11 granted a certificate of exemption by the Department of

12 Commerce and Economic Opportunity, whether that tangible

13 personal property is purchased by the owner, operator, or

14 tenant of the data center or by a contractor or subcontractor

15 of the owner, operator, or tenant. Data centers that would

16 have qualified for a certificate of exemption prior to January

17 1, 2020 had Public Act 101-31 been in effect may apply for and

18 obtain an exemption for subsequent purchases of computer

19 equipment or enabling software purchased or leased to upgrade,

20 supplement, or replace computer equipment or enabling software

21 purchased or leased in the original investment that would have

22 qualified.

23 The Department of Commerce and Economic Opportunity shall

24 grant a certificate of exemption under this item (40) to

25 qualified data centers as defined by Section 605-1025 of the

26 Department of Commerce and Economic Opportunity Law of the

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1 Civil Administrative Code of Illinois.

2 For the purposes of this item (40):

3 "Data center" means a building or a series of

4 buildings rehabilitated or constructed to house working

5 servers in one physical location or multiple sites within

6 the State of Illinois.

7 "Qualified tangible personal property" means:

8 electrical systems and equipment; climate control and

9 chilling equipment and systems; mechanical systems and

10 equipment; monitoring and secure systems; emergency

11 generators; hardware; computers; servers; data storage

12 devices; network connectivity equipment; racks; cabinets;

13 telecommunications cabling infrastructure; raised floor

14 systems; peripheral components or systems; software;

15 mechanical, electrical, or plumbing systems; battery

16 systems; cooling systems and towers; temperature control

17 systems; other cabling; and other data center

18 infrastructure equipment and systems necessary to operate

19 qualified tangible personal property, including fixtures;

20 and component parts of any of the foregoing, including

21 installation, maintenance, repair, refurbishment, and

22 replacement of qualified tangible personal property to

23 generate, transform, transmit, distribute, or manage

24 electricity necessary to operate qualified tangible

25 personal property; and all other tangible personal

26 property that is essential to the operations of a computer

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1 data center. The term "qualified tangible personal

2 property" also includes building materials physically

3 incorporated in to the qualifying data center. To document

4 the exemption allowed under this Section, the retailer

5 must obtain from the purchaser a copy of the certificate

6 of eligibility issued by the Department of Commerce and

7 Economic Opportunity.

8 This item (40) is exempt from the provisions of Section

9 3-90.

10 (41) Beginning July 1, 2022, breast pumps, breast pump

11 collection and storage supplies, and breast pump kits. This

12 item (41) is exempt from the provisions of Section 3-90. As

13 used in this item (41):

14 "Breast pump" means an electrically controlled or

15 manually controlled pump device designed or marketed to be

16 used to express milk from a human breast during lactation,

17 including the pump device and any battery, AC adapter, or

18 other power supply unit that is used to power the pump

19 device and is packaged and sold with the pump device at the

20 time of sale.

21 "Breast pump collection and storage supplies" means

22 items of tangible personal property designed or marketed

23 to be used in conjunction with a breast pump to collect

24 milk expressed from a human breast and to store collected

25 milk until it is ready for consumption.

26 "Breast pump collection and storage supplies"

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1 includes, but is not limited to: breast shields and breast

2 shield connectors; breast pump tubes and tubing adapters;

3 breast pump valves and membranes; backflow protectors and

4 backflow protector adaptors; bottles and bottle caps

5 specific to the operation of the breast pump; and breast

6 milk storage bags.

7 "Breast pump collection and storage supplies" does not

8 include: (1) bottles and bottle caps not specific to the

9 operation of the breast pump; (2) breast pump travel bags

10 and other similar carrying accessories, including ice

11 packs, labels, and other similar products; (3) breast pump

12 cleaning supplies; (4) nursing bras, bra pads, breast

13 shells, and other similar products; and (5) creams,

14 ointments, and other similar products that relieve

15 breastfeeding-related symptoms or conditions of the

16 breasts or nipples, unless sold as part of a breast pump

17 kit that is pre-packaged by the breast pump manufacturer

18 or distributor.

19 "Breast pump kit" means a kit that: (1) contains no

20 more than a breast pump, breast pump collection and

21 storage supplies, a rechargeable battery for operating the

22 breast pump, a breastmilk cooler, bottle stands, ice

23 packs, and a breast pump carrying case; and (2) is

24 pre-packaged as a breast pump kit by the breast pump

25 manufacturer or distributor.

26 (42) ~~(41)~~ Tangible personal property sold by or on behalf

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1 of the State Treasurer pursuant to the Revised Uniform

2 Unclaimed Property Act. This item (42) ~~(41)~~ is exempt from the

3 provisions of Section 3-90.

4 (43) On and after January 1, 2024, essential supplies

5 purchased by a day care center that has been granted a

6 certificate of exemption by the Department. The Department of

7 Children and Family Services may share information with the

8 Department of Revenue for the purpose of administering the

9 provisions of this exemption. This item (43) is exempt from

10 the provisions of Section 3-90.

11 As used in this item (43):

12 "Day care center" has the meaning given to that term in

13 Section 2.09 of the Child Care Act of 1969.

14 "Essential supplies" means items designated, by rule, as

15 essential supplies by the Department of Children and Family

16 Services, including, but not limited to: food and beverages to

17 be consumed by a child as a snack or meal at the day care

18 center, including, but not limited to, fruits and vegetables,

19 whole grains, proteins, water, and reduced fat or skim milk;

20 diapers; wipes; first aid kits; smoke detectors; nap mats; and

21 soap and hand sanitizer.

22 (Source: P.A. 101-9, eff. 6-5-19; 101-31, eff. 6-28-19;

23 101-81, eff. 7-12-19; 101-629, eff. 2-5-20; 102-16, eff.

24 6-17-21; 102-700, Article 70, Section 70-5, eff. 4-19-22;

25 102-700, Article 75, Section 75-5, eff. 4-19-22; 102-1026,

26 eff. 5-27-22; revised 8-1-22.)

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1 Section 10. The Service Use Tax Act is amended by changing

2 Section 3-5 as follows:

3 (35 ILCS 110/3-5)

4 Sec. 3-5. Exemptions. Use of the following tangible

5 personal property is exempt from the tax imposed by this Act:

6 (1) Personal property purchased from a corporation,

7 society, association, foundation, institution, or

8 organization, other than a limited liability company, that is

9 organized and operated as a not-for-profit service enterprise

10 for the benefit of persons 65 years of age or older if the

11 personal property was not purchased by the enterprise for the

12 purpose of resale by the enterprise.

13 (2) Personal property purchased by a non-profit Illinois

14 county fair association for use in conducting, operating, or

15 promoting the county fair.

16 (3) Personal property purchased by a not-for-profit arts

17 or cultural organization that establishes, by proof required

18 by the Department by rule, that it has received an exemption

19 under Section 501(c)(3) of the Internal Revenue Code and that

20 is organized and operated primarily for the presentation or

21 support of arts or cultural programming, activities, or

22 services. These organizations include, but are not limited to,

23 music and dramatic arts organizations such as symphony

24 orchestras and theatrical groups, arts and cultural service

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1 organizations, local arts councils, visual arts organizations,

2 and media arts organizations. On and after July 1, 2001 (the

3 effective date of Public Act 92-35), however, an entity

4 otherwise eligible for this exemption shall not make tax-free

5 purchases unless it has an active identification number issued

6 by the Department.

7 (4) Legal tender, currency, medallions, or gold or silver

8 coinage issued by the State of Illinois, the government of the

9 United States of America, or the government of any foreign

10 country, and bullion.

11 (5) Until July 1, 2003 and beginning again on September 1,

12 2004 through August 30, 2014, graphic arts machinery and

13 equipment, including repair and replacement parts, both new

14 and used, and including that manufactured on special order or

15 purchased for lease, certified by the purchaser to be used

16 primarily for graphic arts production. Equipment includes

17 chemicals or chemicals acting as catalysts but only if the

18 chemicals or chemicals acting as catalysts effect a direct and

19 immediate change upon a graphic arts product. Beginning on

20 July 1, 2017, graphic arts machinery and equipment is included

21 in the manufacturing and assembling machinery and equipment

22 exemption under Section 2 of this Act.

23 (6) Personal property purchased from a teacher-sponsored

24 student organization affiliated with an elementary or

25 secondary school located in Illinois.

26 (7) Farm machinery and equipment, both new and used,

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1 including that manufactured on special order, certified by the

2 purchaser to be used primarily for production agriculture or

3 State or federal agricultural programs, including individual

4 replacement parts for the machinery and equipment, including

5 machinery and equipment purchased for lease, and including

6 implements of husbandry defined in Section 1-130 of the

7 Illinois Vehicle Code, farm machinery and agricultural

8 chemical and fertilizer spreaders, and nurse wagons required

9 to be registered under Section 3-809 of the Illinois Vehicle

10 Code, but excluding other motor vehicles required to be

11 registered under the Illinois Vehicle Code. Horticultural

12 polyhouses or hoop houses used for propagating, growing, or

13 overwintering plants shall be considered farm machinery and

14 equipment under this item (7). Agricultural chemical tender

15 tanks and dry boxes shall include units sold separately from a

16 motor vehicle required to be licensed and units sold mounted

17 on a motor vehicle required to be licensed if the selling price

18 of the tender is separately stated.

19 Farm machinery and equipment shall include precision

20 farming equipment that is installed or purchased to be

21 installed on farm machinery and equipment including, but not

22 limited to, tractors, harvesters, sprayers, planters, seeders,

23 or spreaders. Precision farming equipment includes, but is not

24 limited to, soil testing sensors, computers, monitors,

25 software, global positioning and mapping systems, and other

26 such equipment.

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1 Farm machinery and equipment also includes computers,

2 sensors, software, and related equipment used primarily in the

3 computer-assisted operation of production agriculture

4 facilities, equipment, and activities such as, but not limited

5 to, the collection, monitoring, and correlation of animal and

6 crop data for the purpose of formulating animal diets and

7 agricultural chemicals. This item (7) is exempt from the

8 provisions of Section 3-75.

9 (8) Until June 30, 2013, fuel and petroleum products sold