Bill Text: IL SB0346 | 2013-2014 | 98th General Assembly | Amended

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Bill Title: Amends the Property Tax Code. Makes a technical change in a Section concerning the definition of "33 1/3%".

Spectrum: Strong Partisan Bill (Democrat 10-1)

Status: (Failed) 2015-01-13 - Session Sine Die [SB0346 Detail]

Download: Illinois-2013-SB0346-Amended.html

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Rep. John E. Bradley

Filed: 5/30/2014

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AMENDMENT TO SENATE BILL 346
AMENDMENT NO. ______. Amend Senate Bill 346 by replacing
everything after the enacting clause with the following:
"Section 5. The Economic Development for a Growing Economy
Tax Credit Act is amended by changing Sections 5-5, 5-15, 5-20,
and 5-50 and by adding Section 5-37 as follows:
(35 ILCS 10/5-5)
Sec. 5-5. Definitions. As used in this Act:
"Agreement" means the Agreement between a Taxpayer and the
Department under the provisions of Section 5-50 of this Act.
"Applicant" means a Taxpayer that is operating a business
located or that the Taxpayer plans to locate within the State
of Illinois and that is engaged in interstate or intrastate
commerce for the purpose of manufacturing, processing,
assembling, warehousing, or distributing products, conducting
research and development, providing tourism services, or

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providing services in interstate commerce, office industries,
or agricultural processing, but excluding retail, retail food,
health, or professional services. "Applicant" does not include
a Taxpayer who closes or substantially reduces an operation at
one location in the State and relocates substantially the same
operation to another location in the State. This does not
prohibit a Taxpayer from expanding its operations at another
location in the State, provided that existing operations of a
similar nature located within the State are not closed or
substantially reduced. This also does not prohibit a Taxpayer
from moving its operations from one location in the State to
another location in the State for the purpose of expanding the
operation provided that the Department determines that
expansion cannot reasonably be accommodated within the
municipality in which the business is located, or in the case
of a business located in an incorporated area of the county,
within the county in which the business is located, after
conferring with the chief elected official of the municipality
or county and taking into consideration any evidence offered by
the municipality or county regarding the ability to accommodate
expansion within the municipality or county.
"Committee" means the Illinois Business Investment
Committee created under Section 5-25 of this Act within the
Illinois Economic Development Board.
"Credit" means the amount agreed to between the Department
and Applicant under this Act, but not to exceed the Incremental

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Income Tax attributable to the Applicant's project. However,
for agreements entered into on or after the effective date of
this amendatory Act of the 98th General Assembly, if the
Applicant's project includes retained employees, then the
amount of the Credit may also include an amount agreed to
between the Department and the Applicant based on the severity
of the poverty or unemployment in the geographic area in which
the Applicant's project is located or the retained employees
reside. That amount may not be more than 40% of the total
amount withheld during the taxable year under Article 7 of the
Illinois Income Tax Act from the compensation of retained
employees. For the purposes of this definition, "retained
employee" means a full-time employee of the Applicant who is
employed at the project location and whose job is identified in
the application as being at risk of being relocated outside of
Illinois if the Applicant does not receive a credit under this
Act.
"Department" means the Department of Commerce and Economic
Opportunity.
"Director" means the Director of Commerce and Economic
Opportunity.
"Full-time Employee" means an individual who is employed
for consideration for at least 35 hours each week or who
renders any other standard of service generally accepted by
industry custom or practice as full-time employment. An
individual for whom a W-2 is issued by a Professional Employer

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Organization (PEO) is a full-time employee if employed in the
service of the Applicant for consideration for at least 35
hours each week or who renders any other standard of service
generally accepted by industry custom or practice as full-time
employment to Applicant.
"Geographic area of high poverty or high unemployment"
means a census tract in which more than 20% of the residents
live below the poverty level, as determined by the most recent
data from the United States Census Bureau, or the average
unemployment rate for that census tract exceeds the average
unemployment rate for the State by 3% or more.
"Incremental Income Tax" means the total amount withheld
during the taxable year from the compensation of New Employees
under Article 7 of the Illinois Income Tax Act arising from
employment at a project that is the subject of an Agreement.
"New Employee" means:
(a) A Full-time Employee first employed by a Taxpayer
in the project that is the subject of an Agreement and who
is hired after the Taxpayer enters into the tax credit
Agreement.
(b) The term "New Employee" does not include:
(1) an employee of the Taxpayer who performs a job
that was previously performed by another employee, if
that job existed for at least 6 months before hiring
the employee;
(2) an employee of the Taxpayer who was previously

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employed in Illinois by a Related Member of the
Taxpayer and whose employment was shifted to the
Taxpayer after the Taxpayer entered into the tax credit
Agreement; or
(3) a child, grandchild, parent, or spouse, other
than a spouse who is legally separated from the
individual, of any individual who has a direct or an
indirect ownership interest of at least 5% in the
profits, capital, or value of the Taxpayer.
(c) Notwithstanding paragraph (1) of subsection (b),
an employee may be considered a New Employee under the
Agreement if the employee performs a job that was
previously performed by an employee who was:
(1) treated under the Agreement as a New Employee;
and
(2) promoted by the Taxpayer to another job.
(d) Notwithstanding subsection (a), the Department may
award Credit to an Applicant with respect to an employee
hired prior to the date of the Agreement if:
(1) the Applicant is in receipt of a letter from
the Department stating an intent to enter into a credit
Agreement;
(2) the letter described in paragraph (1) is issued
by the Department not later than 15 days after the
effective date of this Act; and
(3) the employee was hired after the date the

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letter described in paragraph (1) was issued.
"Noncompliance Date" means, in the case of a Taxpayer that
is not complying with the requirements of the Agreement or the
provisions of this Act, the day following the last date upon
which the Taxpayer was in compliance with the requirements of
the Agreement and the provisions of this Act, as determined by
the Director, pursuant to Section 5-65.
"Pass Through Entity" means an entity that is exempt from
the tax under subsection (b) or (c) of Section 205 of the
Illinois Income Tax Act.
"Professional Employer Organization" (PEO) means an
employee leasing company, as defined in Section 206.1(A)(2) of
the Illinois Unemployment Insurance Act.
"Related Member" means a person that, with respect to the
Taxpayer during any portion of the taxable year, is any one of
the following:
(1) An individual stockholder, if the stockholder and
the members of the stockholder's family (as defined in
Section 318 of the Internal Revenue Code) own directly,
indirectly, beneficially, or constructively, in the
aggregate, at least 50% of the value of the Taxpayer's
outstanding stock.
(2) A partnership, estate, or trust and any partner or
beneficiary, if the partnership, estate, or trust, and its
partners or beneficiaries own directly, indirectly,
beneficially, or constructively, in the aggregate, at

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least 50% of the profits, capital, stock, or value of the
Taxpayer.
(3) A corporation, and any party related to the
corporation in a manner that would require an attribution
of stock from the corporation to the party or from the
party to the corporation under the attribution rules of
Section 318 of the Internal Revenue Code, if the Taxpayer
owns directly, indirectly, beneficially, or constructively
at least 50% of the value of the corporation's outstanding
stock.
(4) A corporation and any party related to that
corporation in a manner that would require an attribution
of stock from the corporation to the party or from the
party to the corporation under the attribution rules of
Section 318 of the Internal Revenue Code, if the
corporation and all such related parties own in the
aggregate at least 50% of the profits, capital, stock, or
value of the Taxpayer.
(5) A person to or from whom there is attribution of
stock ownership in accordance with Section 1563(e) of the
Internal Revenue Code, except, for purposes of determining
whether a person is a Related Member under this paragraph,
20% shall be substituted for 5% wherever 5% appears in
Section 1563(e) of the Internal Revenue Code.
"Taxpayer" means an individual, corporation, partnership,
or other entity that has any Illinois Income Tax liability.

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(Source: P.A. 94-793, eff. 5-19-06; 95-375, eff. 8-23-07.)
(35 ILCS 10/5-15)
Sec. 5-15. Tax Credit Awards. Subject to the conditions set
forth in this Act, a Taxpayer is entitled to a Credit against
or, as described in subsection (g) of this Section, a payment
towards taxes imposed pursuant to subsections (a) and (b) of
Section 201 of the Illinois Income Tax Act that may be imposed
on the Taxpayer for a taxable year beginning on or after
January 1, 1999, if the Taxpayer is awarded a Credit by the
Department under this Act for that taxable year.
(a) The Department shall make Credit awards under this Act
to foster job creation and retention in Illinois.
(b) A person that proposes a project to create new jobs in
Illinois must enter into an Agreement with the Department for
the Credit under this Act.
(c) The Credit shall be claimed for the taxable years
specified in the Agreement.
(d) The Credit shall not exceed the Incremental Income Tax
attributable to the project that is the subject of the
Agreement.
(e) Nothing herein shall prohibit a Tax Credit Award to an
Applicant that uses a PEO if all other award criteria are
satisfied.
(f) Subject to the requirements of paragraph (5) of this
subsection (f), in In lieu of the Credit allowed under this Act

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against the taxes imposed pursuant to subsections (a) and (b)
of Section 201 of the Illinois Income Tax Act for any taxable
year ending on or after December 31, 2009, the Taxpayer may
elect to claim the Credit against its obligation to pay over
withholding under Section 704A of the Illinois Income Tax Act.
(1) The election under this subsection (f) may be made
only by a Taxpayer that (i) is primarily engaged in one of
the following business activities: water purification and
treatment, motor vehicle metal stamping, automobile
manufacturing, automobile and light duty motor vehicle
manufacturing, motor vehicle manufacturing, light truck
and utility vehicle manufacturing, heavy duty truck
manufacturing, motor vehicle body manufacturing, cable
television infrastructure design or manufacturing, or
wireless telecommunication or computing terminal device
design or manufacturing for use on public networks and (ii)
meets the following criteria:
(A) the Taxpayer (i) had an Illinois net loss or an
Illinois net loss deduction under Section 207 of the
Illinois Income Tax Act for the taxable year in which
the Credit is awarded, (ii) employed a minimum of 1,000
full-time employees in this State during the taxable
year in which the Credit is awarded, (iii) has an
Agreement under this Act on December 14, 2009 (the
effective date of Public Act 96-834), and (iv) is in
compliance with all provisions of that Agreement;

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(B) the Taxpayer (i) had an Illinois net loss or an
Illinois net loss deduction under Section 207 of the
Illinois Income Tax Act for the taxable year in which
the Credit is awarded, (ii) employed a minimum of 1,000
full-time employees in this State during the taxable
year in which the Credit is awarded, and (iii) has
applied for an Agreement within 365 days after December
14, 2009 (the effective date of Public Act 96-834);
(C) the Taxpayer (i) had an Illinois net operating
loss carryforward under Section 207 of the Illinois
Income Tax Act in a taxable year ending during calendar
year 2008, (ii) has applied for an Agreement within 150
days after the effective date of this amendatory Act of
the 96th General Assembly, (iii) creates at least 400
new jobs in Illinois, (iv) retains at least 2,000 jobs
in Illinois that would have been at risk of relocation
out of Illinois over a 10-year period, and (v) makes a
capital investment of at least $75,000,000;
(D) the Taxpayer (i) had an Illinois net operating
loss carryforward under Section 207 of the Illinois
Income Tax Act in a taxable year ending during calendar
year 2009, (ii) has applied for an Agreement within 150
days after the effective date of this amendatory Act of
the 96th General Assembly, (iii) creates at least 150
new jobs, (iv) retains at least 1,000 jobs in Illinois
that would have been at risk of relocation out of

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Illinois over a 10-year period, and (v) makes a capital
investment of at least $57,000,000; or
(E) the Taxpayer (i) employed at least 2,500
full-time employees in the State during the year in
which the Credit is awarded, (ii) commits to make at
least $500,000,000 in combined capital improvements
and project costs under the Agreement, (iii) applies
for an Agreement between January 1, 2011 and June 30,
2011, (iv) executes an Agreement for the Credit during
calendar year 2011, and (v) was incorporated no more
than 5 years before the filing of an application for an
Agreement.
(1.5) The election under this subsection (f) may also
be made by a Taxpayer for any Credit awarded pursuant to an
agreement that was executed between January 1, 2011 and
June 30, 2011, if the Taxpayer (i) is primarily engaged in
the manufacture of inner tubes or tires, or both, from
natural and synthetic rubber, (ii) employs a minimum of
2,400 full-time employees in Illinois at the time of
application, (iii) creates at least 350 full-time jobs and
retains at least 250 full-time jobs in Illinois that would
have been at risk of being created or retained outside of
Illinois, and (iv) makes a capital investment of at least
$200,000,000 at the project location.
(1.6) The election under this subsection (f) may also
be made by a Taxpayer for any Credit awarded pursuant to an

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agreement that was executed within 150 days after the
effective date of this amendatory Act of the 97th General
Assembly, if the Taxpayer (i) is primarily engaged in the
operation of a discount department store, (ii) maintains
its corporate headquarters in Illinois, (iii) employs a
minimum of 4,250 full-time employees at its corporate
headquarters in Illinois at the time of application, (iv)
retains at least 4,250 full-time jobs in Illinois that
would have been at risk of being relocated outside of
Illinois, (v) had a minimum of $40,000,000,000 in total
revenue in 2010, and (vi) makes a capital investment of at
least $300,000,000 at the project location.
(1.7) Notwithstanding any other provision of law, the
election under this subsection (f) may also be made by a
Taxpayer for any Credit awarded pursuant to an agreement
that was executed or applied for on or after July 1, 2011
and on or before March 31, 2012, if the Taxpayer is
primarily engaged in the manufacture of original and
aftermarket filtration parts and products for automobiles,
motor vehicles, light duty motor vehicles, light trucks and
utility vehicles, and heavy duty trucks, (ii) employs a
minimum of 1,000 full-time employees in Illinois at the
time of application, (iii) creates at least 250 full-time
jobs in Illinois, (iv) relocates its corporate
headquarters to Illinois from another state, and (v) makes
a capital investment of at least $4,000,000 at the project

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location.
(2) An election under this subsection shall allow the
credit to be taken against payments otherwise due under
Section 704A of the Illinois Income Tax Act during the
first calendar year beginning after the end of the taxable
year in which the credit is awarded under this Act.
(3) The election shall be made in the form and manner
required by the Illinois Department of Revenue and, once
made, shall be irrevocable.
(4) If a Taxpayer who meets the requirements of
subparagraph (A) of paragraph (1) of this subsection (f)
elects to claim the Credit against its withholdings as
provided in this subsection (f), then, on and after the
date of the election, the terms of the Agreement between
the Taxpayer and the Department may not be further amended
during the term of the Agreement.
(5) With respect to Agreements entered into on or after
the effective date of this amendatory Act of the 98th
General Assembly, no Taxpayer may make an election under
this subsection (f) unless all of the following conditions
are met:
(A) The General Assembly authorizes that election
by law.
(B) The Taxpayer applies with the Department for a
Credit prior to the date the General Assembly
authorizes the election.

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(C) The Taxpayer (i) agrees to hire a specified
number of New Employees at a project location in a
geographic area of high poverty or high unemployment or
(ii) agrees to hire a specified number of New Employees
at least 65% of whom reside in a geographic area of
high poverty or high unemployment; the number of New
Employees hired under item (ii) shall be verified
annually by the Department through payroll information
submitted by the Taxpayer; for the purposes of this
subparagraph (C), an employee who is retained by the
Taxpayer is not considered a New Employee.
(D) The Taxpayer files a statement with the
Department at the time of the application for the
Credit containing the following information from the
Taxpayer's Illinois income tax return for the 2 years
immediately preceding the date of the application; in
addition, the Taxpayer shall file an additional
statement with the Department containing the same
information for the first taxable year with respect to
which an election is made under this subsection (f) and
for each subsequent tax year covered by the Agreement:
(i) the Taxpayer's base income, as calculated
under Section 203 of the Illinois Income Tax Act;
(ii) the apportionment factor to the State for
the Taxpayer;
(iii) the total business income of the

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Taxpayer apportioned to the State;
(iv) the Illinois net operating loss deduction
for the Taxpayer, if any;
(v) the total non-business income of the
Taxpayer and the amount of the Taxpayer's
non-business income allocated to the State;
(vi) the net income of the Taxpayer;
(vii) the Taxpayer's total State income tax
liability before credits;
(viii) the Taxpayer's net income tax
liability;
(ix) the Taxpayer's total personal property
tax replacement tax liability before credits;
(x) the Taxpayer's net personal property tax
replacement tax liability; and
(xi) tax credits claimed by the Taxpayer, with
each credit individually enumerated.
Each additional statement required under this
subparagraph (D) for a taxable year shall be filed no
later than the earlier of 30 days after (i) the
Taxpayer files its Illinois income tax return for that
taxable year, (ii) the due date (including extensions)
for the filing of that return, or (iii) in the case of
the additional statement covering the taxable year in
which an election is made, the date the election is
made under this subsection (f).

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(E) The Taxpayer files a statement with the
Department reporting any changes to the information
required to be reported under subparagraph (D) that
were reported by the Taxpayer on an amended return for
the taxable year or that were made by the Department of
Revenue; the report required under this subparagraph
(E) must be filed within 30 days after the Taxpayer
files the amended return or within 30 days after the
date on which all proceedings in court for review of
the changes made by the Department of Revenue have
terminated or the time for taking thereof has expired
without such proceedings being instituted.
(F) The Agreement includes a consent by the
Taxpayer to allow the Department to confirm with the
Department of Revenue the accuracy of the information
required to be reported under subparagraphs (D) and
(E).
(g) A pass-through entity that has been awarded a credit
under this Act, its shareholders, or its partners may treat
some or all of the credit awarded pursuant to this Act as a tax
payment for purposes of the Illinois Income Tax Act. The term
"tax payment" means a payment as described in Article 6 or
Article 8 of the Illinois Income Tax Act or a composite payment
made by a pass-through entity on behalf of any of its
shareholders or partners to satisfy such shareholders' or
partners' taxes imposed pursuant to subsections (a) and (b) of

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Section 201 of the Illinois Income Tax Act. In no event shall
the amount of the award credited pursuant to this Act exceed
the Illinois income tax liability of the pass-through entity or
its shareholders or partners for the taxable year.
(Source: P.A. 96-834, eff. 12-14-09; 96-836, eff. 12-16-09;
96-905, eff. 6-4-10; 96-1000, eff. 7-2-10; 96-1534, eff.
3-4-11; 97-2, eff. 5-6-11; 97-636, eff. 6-1-12.)
(35 ILCS 10/5-20)
Sec. 5-20. Application for a project to create and retain
new jobs.
(a) Any Taxpayer proposing a project located or planned to
be located in Illinois may request consideration for
designation of its project, by formal written letter of request
or by formal application to the Department, in which the
Applicant states its intent to make at least a specified level
of investment and intends to hire or retain a specified number
of full-time employees at a designated location in Illinois. As
circumstances require, the Department may require a formal
application from an Applicant and a formal letter of request
for assistance. Each application must contain an affidavit
signed by the Taxpayer's chief executive officer or chief
financial officer, or an individual holding an equivalent
position in the organization, stating that, but for the Credit,
the Taxpayer would not locate the project in the State.
(b) In order to qualify for Credits under this Act, an

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Applicant's project must:
(1) except as provided in paragraphs (2) and (3),
involve an investment of at least $5,000,000 in capital
improvements to be placed in service and to employ at least
25 New Employees within the State as a direct result of the
project;
(2) involve an investment of at least an amount (to be
expressly specified by the Department and the Committee) in
capital improvements to be placed in service and will
employ at least an amount (to be expressly specified by the
Department and the Committee) of New Employees within the
State, provided that the Department and the Committee have
determined that the project will provide a substantial
economic benefit to the State; or
(3) if the applicant has 100 or fewer employees, then
the applicant is not subject to the capital improvement
requirements set forth in paragraph (1) of this subsection,
but the applicant's project must involve an investment of
at least $1,000,000 in capital improvements to be placed in
service and to employ at least 5 New Employees within the
State as a direct result of the project.
(c) After receipt of an application, the Department may
enter into an Agreement with the Applicant if the application
is accepted in accordance with Section 5-25.
(Source: P.A. 93-882, eff. 1-1-05.)

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(35 ILCS 10/5-37 new)
Sec. 5-37. Chief Executive Officer; Board of Directors;
fiduciary duty. Notwithstanding any provision of law to the
contrary, neither the Taxpayer's Chief Executive Officer nor
any member of the Taxpayer's Board of Directors may be deemed
to have breached any fiduciary or other duty and are immune
from any liability for breach of fiduciary duty related to the
Taxpayer's actions in (i) keeping its corporate headquarters or
any office, plant, factory, or worksite of the corporation in
Illinois pursuant to an agreement under this Act or (ii)
relocating the Taxpayer's corporate headquarters or any
office, plant, factory, or worksite of the corporation to
Illinois pursuant to an agreement under this Act, if the Chief
Executive Officer or member acts in good faith and is under the
belief that he or she is serving the best interests of the
corporation and is considering the welfare and interests of the
corporation and its workforce in taking those actions.
(35 ILCS 10/5-50)
Sec. 5-50. Contents of Agreements with Applicants. The
Department shall enter into an Agreement with an Applicant that
is awarded a Credit under this Act. The Agreement must include
all of the following:
(1) A detailed description of the project that is the
subject of the Agreement, including the location and amount
of the investment and jobs created or retained.

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(2) The duration of the Credit and the first taxable
year for which the Credit may be claimed.
(3) The Credit amount that will be allowed for each
taxable year.
(4) A requirement that the Taxpayer shall maintain
operations at the project location that shall be stated as
a minimum number of years not to exceed 10.
(5) A specific method for determining the number of New
Employees employed during a taxable year.
(6) A requirement that the Taxpayer shall annually
report to the Department the number of New Employees, the
home addresses of any retained employees, the Incremental
Income Tax withheld in connection with the New Employees
and retained employees, and any other information the
Director needs to perform the Director's duties under this
Act.
(7) A requirement that the Director is authorized to
verify with the appropriate State agencies the amounts
reported under paragraph (6), and after doing so shall
issue a certificate to the Taxpayer stating that the
amounts have been verified.
(8) A requirement that the Taxpayer shall provide
written notification to the Director not more than 30 days
after the Taxpayer makes or receives a proposal that would
transfer the Taxpayer's State tax liability obligations to
a successor Taxpayer.

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(9) A detailed description of the number of New
Employees to be hired, and the occupation and payroll of
the full-time jobs to be created or retained as a result of
the project.
(10) The minimum investment the business enterprise
will make in capital improvements, the time period for
placing the property in service, and the designated
location in Illinois for the investment.
(11) A requirement that the Taxpayer shall provide
written notification to the Director and the Committee not
more than 30 days after the Taxpayer determines that the
minimum job creation or retention, employment payroll, or
investment no longer is being or will be achieved or
maintained as set forth in the terms and conditions of the
Agreement.
(12) A provision that, if the total number of New
Employees falls below a specified level, the allowance of
Credit shall be suspended until the number of New Employees
equals or exceeds the Agreement amount.
(13) A detailed description of the items for which the
costs incurred by the Taxpayer will be included in the
limitation on the Credit provided in Section 5-30.
(13.5) A provision that, if the Taxpayer never meets
either the investment or job creation and retention
requirements specified in the Agreement during the entire
5-year period beginning on the first day of the first

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taxable year in which the Agreement is executed and ending
on the last day of the fifth taxable year after the
Agreement is executed, then the Agreement is automatically
terminated on the last day of the fifth taxable year after
the Agreement is executed and the Taxpayer is not entitled
to the award of any credits for any of that 5-year period.
(14) Any other performance conditions or contract
provisions as the Department determines are appropriate.
The Department shall post on its website (i) the terms of
each Agreement entered into under this Act on or after the
effective date of this amendatory Act of the 97th General
Assembly and (ii) the tax information provided to the
Department under subparagraphs (D) and (E) of paragraph (5) of
subsection (f).
(Source: P.A. 97-2, eff. 5-6-11; 97-749, eff. 7-6-12.)
Section 10. The Illinois Income Tax Act is amended by
changing Section 917 as follows:
(35 ILCS 5/917) (from Ch. 120, par. 9-917)
Sec. 917. Confidentiality and information sharing.
(a) Confidentiality. Except as provided in this Section,
all information received by the Department from returns filed
under this Act, or from any investigation conducted under the
provisions of this Act, shall be confidential, except for
official purposes within the Department or pursuant to official

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procedures for collection of any State tax or pursuant to an
investigation or audit by the Illinois State Scholarship
Commission of a delinquent student loan or monetary award or
enforcement of any civil or criminal penalty or sanction
imposed by this Act or by another statute imposing a State tax,
and any person who divulges any such information in any manner,
except for such purposes and pursuant to order of the Director
or in accordance with a proper judicial order, shall be guilty
of a Class A misdemeanor. However, the provisions of this
paragraph are not applicable to information furnished to (i)
the Department of Healthcare and Family Services (formerly
Department of Public Aid), State's Attorneys, and the Attorney
General for child support enforcement purposes and (ii) a
licensed attorney representing the taxpayer where an appeal or
a protest has been filed on behalf of the taxpayer. If it is
necessary to file information obtained pursuant to this Act in
a child support enforcement proceeding, the information shall
be filed under seal.
(b) Public information. Nothing contained in this Act shall
prevent the Director from publishing or making available to the
public the names and addresses of persons filing returns under
this Act, or from publishing or making available reasonable
statistics concerning the operation of the tax wherein the
contents of returns are grouped into aggregates in such a way
that the information contained in any individual return shall
not be disclosed.

09800SB0346ham001 - 24 - LRB098 04644 HLH 60486 a
(c) Governmental agencies. The Director may make available
to the Secretary of the Treasury of the United States or his
delegate, or the proper officer or his delegate of any other
state imposing a tax upon or measured by income, for
exclusively official purposes, information received by the
Department in the administration of this Act, but such
permission shall be granted only if the United States or such
other state, as the case may be, grants the Department
substantially similar privileges. The Director may exchange
information with the Department of Healthcare and Family
Services and the Department of Human Services (acting as
successor to the Department of Public Aid under the Department
of Human Services Act) for the purpose of verifying sources and
amounts of income and for other purposes directly connected
with the administration of this Act, the Illinois Public Aid
Code, and any other health benefit program administered by the
State. The Director may exchange information with the Director
of the Department of Employment Security for the purpose of
verifying sources and amounts of income and for other purposes
directly connected with the administration of this Act and Acts
administered by the Department of Employment Security. The
Director may make available to the Illinois Workers'
Compensation Commission information regarding employers for
the purpose of verifying the insurance coverage required under
the Workers' Compensation Act and Workers' Occupational
Diseases Act. The Director may exchange information with the

09800SB0346ham001 - 25 - LRB098 04644 HLH 60486 a
Illinois Department on Aging for the purpose of verifying
sources and amounts of income for purposes directly related to
confirming eligibility for participation in the programs of
benefits authorized by the Senior Citizens and Disabled Persons
Property Tax Relief and Pharmaceutical Assistance Act.
The Director may make available to any State agency,
including the Illinois Supreme Court, which licenses persons to
engage in any occupation, information that a person licensed by
such agency has failed to file returns under this Act or pay
the tax, penalty and interest shown therein, or has failed to
pay any final assessment of tax, penalty or interest due under
this Act. The Director may make available to any State agency,
including the Illinois Supreme Court, information regarding
whether a bidder, contractor, or an affiliate of a bidder or
contractor has failed to file returns under this Act or pay the
tax, penalty, and interest shown therein, or has failed to pay
any final assessment of tax, penalty, or interest due under
this Act, for the limited purpose of enforcing bidder and
contractor certifications. For purposes of this Section, the
term "affiliate" means any entity that (1) directly,
indirectly, or constructively controls another entity, (2) is
directly, indirectly, or constructively controlled by another
entity, or (3) is subject to the control of a common entity.
For purposes of this subsection (a), an entity controls another
entity if it owns, directly or individually, more than 10% of
the voting securities of that entity. As used in this

09800SB0346ham001 - 26 - LRB098 04644 HLH 60486 a
subsection (a), the term "voting security" means a security
that (1) confers upon the holder the right to vote for the
election of members of the board of directors or similar
governing body of the business or (2) is convertible into, or
entitles the holder to receive upon its exercise, a security
that confers such a right to vote. A general partnership
interest is a voting security.
The Director may make available to any State agency,
including the Illinois Supreme Court, units of local
government, and school districts, information regarding
whether a bidder or contractor is an affiliate of a person who
is not collecting and remitting Illinois Use taxes, for the
limited purpose of enforcing bidder and contractor
certifications.
The Director may also make available to the Secretary of
State information that a corporation which has been issued a
certificate of incorporation by the Secretary of State has
failed to file returns under this Act or pay the tax, penalty
and interest shown therein, or has failed to pay any final
assessment of tax, penalty or interest due under this Act. An
assessment is final when all proceedings in court for review of
such assessment have terminated or the time for the taking
thereof has expired without such proceedings being instituted.
For taxable years ending on or after December 31, 1987, the
Director may make available to the Director or principal
officer of any Department of the State of Illinois, information

09800SB0346ham001 - 27 - LRB098 04644 HLH 60486 a
that a person employed by such Department has failed to file
returns under this Act or pay the tax, penalty and interest
shown therein. For purposes of this paragraph, the word
"Department" shall have the same meaning as provided in Section
3 of the State Employees Group Insurance Act of 1971.
The Director may provide information to the Department of
Commerce and Economic Opportunity for the purpose of confirming
information provided by a taxpayer under subparagraphs (D) and
(E) of item (5) of subsection (f) of Section 5-15 of the
Economic Development for a Growing Economy Tax Credit Act if
the taxpayer consents to that disclosure in the Agreement under
that Act.
(d) The Director shall make available for public inspection
in the Department's principal office and for publication, at
cost, administrative decisions issued on or after January 1,
1995. These decisions are to be made available in a manner so
that the following taxpayer information is not disclosed:
(1) The names, addresses, and identification numbers
of the taxpayer, related entities, and employees.
(2) At the sole discretion of the Director, trade
secrets or other confidential information identified as
such by the taxpayer, no later than 30 days after receipt
of an administrative decision, by such means as the
Department shall provide by rule.
The Director shall determine the appropriate extent of the
deletions allowed in paragraph (2). In the event the taxpayer

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does not submit deletions, the Director shall make only the
deletions specified in paragraph (1).
The Director shall make available for public inspection and
publication an administrative decision within 180 days after
the issuance of the administrative decision. The term
"administrative decision" has the same meaning as defined in
Section 3-101 of Article III of the Code of Civil Procedure.
Costs collected under this Section shall be paid into the Tax
Compliance and Administration Fund.
(e) Nothing contained in this Act shall prevent the
Director from divulging information to any person pursuant to a
request or authorization made by the taxpayer, by an authorized
representative of the taxpayer, or, in the case of information
related to a joint return, by the spouse filing the joint
return with the taxpayer.
(Source: P.A. 95-331, eff. 8-21-07; 96-1501, eff. 1-25-11.)
Section 15. The Use Tax Act is amended by changing Section
3-85 as follows:
(35 ILCS 105/3-85)
Sec. 3-85. Manufacturer's Purchase Credit. For purchases
of machinery and equipment made on and after January 1, 1995
through June 30, 2003, and on and after September 1, 2004
through February 28, 2015 August 30, 2014, a purchaser of
manufacturing machinery and equipment that qualifies for the

09800SB0346ham001 - 29 - LRB098 04644 HLH 60486 a
exemption provided by paragraph (18) of Section 3-5 of this Act
earns a credit in an amount equal to a fixed percentage of the
tax which would have been incurred under this Act on those
purchases. For purchases of graphic arts machinery and
equipment made on or after July 1, 1996 and through June 30,
2003, and on and after September 1, 2004 through February 28,
2015 August 30, 2014, a purchaser of graphic arts machinery and
equipment that qualifies for the exemption provided by
paragraph (6) of Section 3-5 of this Act earns a credit in an
amount equal to a fixed percentage of the tax that would have
been incurred under this Act on those purchases. The credit
earned for purchases of manufacturing machinery and equipment
or graphic arts machinery and equipment shall be referred to as
the Manufacturer's Purchase Credit. A graphic arts producer is
a person engaged in graphic arts production as defined in
Section 2-30 of the Retailers' Occupation Tax Act. Beginning
July 1, 1996, all references in this Section to manufacturers
or manufacturing shall also be deemed to refer to graphic arts
producers or graphic arts production.
The amount of credit shall be a percentage of the tax that
would have been incurred on the purchase of manufacturing
machinery and equipment or graphic arts machinery and equipment
if the exemptions provided by paragraph (6) or paragraph (18)
of Section 3-5 of this Act had not been applicable. The
percentage shall be as follows:
(1) 15% for purchases made on or before June 30, 1995.

09800SB0346ham001 - 30 - LRB098 04644 HLH 60486 a
(2) 25% for purchases made after June 30, 1995, and on
or before June 30, 1996.
(3) 40% for purchases made after June 30, 1996, and on
or before June 30, 1997.
(4) 50% for purchases made on or after July 1, 1997.
(a) Manufacturer's Purchase Credit earned prior to July 1,
2003. This subsection (a) applies to Manufacturer's Purchase
Credit earned prior to July 1, 2003. A purchaser of production
related tangible personal property desiring to use the
Manufacturer's Purchase Credit shall certify to the seller
prior to October 1, 2003 that the purchaser is satisfying all
or part of the liability under the Use Tax Act or the Service
Use Tax Act that is due on the purchase of the production
related tangible personal property by use of Manufacturer's
Purchase Credit. The Manufacturer's Purchase Credit
certification must be dated and shall include the name and
address of the purchaser, the purchaser's registration number,
if registered, the credit being applied, and a statement that
the State Use Tax or Service Use Tax liability is being
satisfied with the manufacturer's or graphic arts producer's
accumulated purchase credit. Certification may be incorporated
into the manufacturer's or graphic arts producer's purchase
order. Manufacturer's Purchase Credit certification provided
by the manufacturer or graphic arts producer prior to October
1, 2003 may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service

09800SB0346ham001 - 31 - LRB098 04644 HLH 60486 a
Occupation Tax Act for the credit claimed, not to exceed 6.25%
of the receipts subject to tax from a qualifying purchase, but
only if the retailer or serviceman reports the Manufacturer's
Purchase Credit claimed as required by the Department. A
Manufacturer's Purchase Credit reported on any original or
amended return filed under this Act after October 20, 2003
shall be disallowed. The Manufacturer's Purchase Credit earned
by purchase of exempt manufacturing machinery and equipment or
graphic arts machinery and equipment is a non-transferable
credit. A manufacturer or graphic arts producer that enters
into a contract involving the installation of tangible personal
property into real estate within a manufacturing or graphic
arts production facility may, prior to October 1, 2003,
authorize a construction contractor to utilize credit
accumulated by the manufacturer or graphic arts producer to
purchase the tangible personal property. A manufacturer or
graphic arts producer intending to use accumulated credit to
purchase such tangible personal property shall execute a
written contract authorizing the contractor to utilize a
specified dollar amount of credit. The contractor shall
furnish, prior to October 1, 2003, the supplier with the
manufacturer's or graphic arts producer's name, registration
or resale number, and a statement that a specific amount of the
Use Tax or Service Use Tax liability, not to exceed 6.25% of
the selling price, is being satisfied with the credit. The
manufacturer or graphic arts producer shall remain liable to

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timely report all information required by the annual Report of
Manufacturer's Purchase Credit Used for all credit utilized by
a construction contractor.
No Manufacturer's Purchase Credit earned prior to July 1,
2003 may be used after October 1, 2003. The Manufacturer's
Purchase Credit may be used to satisfy liability under the Use
Tax Act or the Service Use Tax Act due on the purchase of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or by
a lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as preproduction material handling, receiving, quality
control, inventory control, storage, staging, and packaging
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as

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described in Section 2-30 of the Retailers' Occupation Tax Act
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible
personal property used or consumed in activities such as
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all tangible
personal property used or consumed by the purchaser for
research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing facility, in
sales, purchasing, accounting, fiscal management, marketing,
personnel recruitment or selection, or landscaping or (ii)
tangible personal property required to be titled or registered
with a department, agency, or unit of federal, state, or local
government. The Manufacturer's Purchase Credit may be used,
prior to October 1, 2003, to satisfy the tax arising either
from the purchase of machinery and equipment on or after
January 1, 1995 for which the exemption provided by paragraph
(18) of Section 3-5 of this Act was erroneously claimed, or the
purchase of machinery and equipment on or after July 1, 1996
for which the exemption provided by paragraph (6) of Section
3-5 of this Act was erroneously claimed, but not in
satisfaction of penalty, if any, and interest for failure to

09800SB0346ham001 - 34 - LRB098 04644 HLH 60486 a
pay the tax when due. A purchaser of production related
tangible personal property who is required to pay Illinois Use
Tax or Service Use Tax on the purchase directly to the
Department may, prior to October 1, 2003, utilize the
Manufacturer's Purchase Credit in satisfaction of the tax
arising from that purchase, but not in satisfaction of penalty
and interest. A purchaser who uses the Manufacturer's Purchase
Credit to purchase property which is later determined not to be
production related tangible personal property may be liable for
tax, penalty, and interest on the purchase of that property as
of the date of purchase but shall be entitled to use the
disallowed Manufacturer's Purchase Credit, so long as it has
not expired and is used prior to October 1, 2003, on qualifying
purchases of production related tangible personal property not
previously subject to credit usage. The Manufacturer's
Purchase Credit earned by a manufacturer or graphic arts
producer expires the last day of the second calendar year
following the calendar year in which the credit arose. No
Manufacturer's Purchase Credit may be used after September 30,
2003 regardless of when that credit was earned.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Earned for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms

09800SB0346ham001 - 35 - LRB098 04644 HLH 60486 a
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts
machinery on which the credit was earned; (ii) the total State
Use Tax or Service Use Tax which would have been due on those
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's
Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms as
prescribed or approved by the Department and shall state, for
each month of the calendar year: (i) the total purchase price
of production related tangible personal property purchased
from Illinois suppliers; (ii) the total purchase price of

09800SB0346ham001 - 36 - LRB098 04644 HLH 60486 a
production related tangible personal property purchased from
out-of-state suppliers; (iii) the total amount of credit used
during such month; and (iv) such other information as the
Department may reasonably require. A purchaser using
Manufacturer's Purchase Credit shall maintain records that
identify, as to each purchase of production related tangible
personal property on which the purchaser used Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit used on each purchase.
No annual report shall be filed before May 1, 1996 or after
June 30, 2004. A purchaser that fails to file an annual Report
of Manufacturer's Purchase Credit Earned or an annual Report of
Manufacturer's Purchase Credit Used by the last day of the
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser have
agreed to an extension of the statute of limitations for the
issuance of a notice of tax liability as provided in Section 4
of the Retailers' Occupation Tax Act. If the time for
assessment or refund has been extended, then amended reports

09800SB0346ham001 - 37 - LRB098 04644 HLH 60486 a
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. No Manufacturer's Purchase
Credit report filed with the Department for periods prior to
January 1, 1995 shall be approved. Manufacturer's Purchase
Credit claimed on an amended report may be used, until October
1, 2003, to satisfy tax liability under the Use Tax Act or the
Service Use Tax Act (i) on qualifying purchases of production
related tangible personal property made after the date the
amended report is filed or (ii) assessed by the Department on
qualifying purchases of production related tangible personal
property made in the case of manufacturers on or after January
1, 1995, or in the case of graphic arts producers on or after
July 1, 1996.
If the purchaser is not the manufacturer or a graphic arts
producer, but rents or leases the use of the property to a
manufacturer or graphic arts producer, the purchaser may earn,
report, and use Manufacturer's Purchase Credit in the same
manner as a manufacturer or graphic arts producer.
A purchaser shall not be entitled to any Manufacturer's
Purchase Credit for a purchase that is required to be reported
and is not timely reported as provided in this Section. A
purchaser remains liable for (i) any tax that was satisfied by
use of a Manufacturer's Purchase Credit, as of the date of
purchase, if that use is not timely reported as required in
this Section and (ii) for any applicable penalties and interest

09800SB0346ham001 - 38 - LRB098 04644 HLH 60486 a
for failing to pay the tax when due. No Manufacturer's Purchase
Credit may be used after September 30, 2003 to satisfy any tax
liability imposed under this Act, including any audit
liability.
(b) Manufacturer's Purchase Credit earned on and after
September 1, 2004. This subsection (b) applies to
Manufacturer's Purchase Credit earned on and after September 1,
2004. Manufacturer's Purchase Credit earned on or after
September 1, 2004 may only be used to satisfy the Use Tax or
Service Use Tax liability incurred on production related
tangible personal property purchased on or after September 1,
2004. A purchaser of production related tangible personal
property desiring to use the Manufacturer's Purchase Credit
shall certify to the seller that the purchaser is satisfying
all or part of the liability under the Use Tax Act or the
Service Use Tax Act that is due on the purchase of the
production related tangible personal property by use of
Manufacturer's Purchase Credit. The Manufacturer's Purchase
Credit certification must be dated and shall include the name
and address of the purchaser, the purchaser's registration
number, if registered, the credit being applied, and a
statement that the State Use Tax or Service Use Tax liability
is being satisfied with the manufacturer's or graphic arts
producer's accumulated purchase credit. Certification may be
incorporated into the manufacturer's or graphic arts
producer's purchase order. Manufacturer's Purchase Credit

09800SB0346ham001 - 39 - LRB098 04644 HLH 60486 a
certification provided by the manufacturer or graphic arts
producer may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed 6.25%
of the receipts subject to tax from a qualifying purchase, but
only if the retailer or serviceman reports the Manufacturer's
Purchase Credit claimed as required by the Department. The
Manufacturer's Purchase Credit earned by purchase of exempt
manufacturing machinery and equipment or graphic arts
machinery and equipment is a non-transferable credit. A
manufacturer or graphic arts producer that enters into a
contract involving the installation of tangible personal
property into real estate within a manufacturing or graphic
arts production facility may, on or after September 1, 2004,
authorize a construction contractor to utilize credit
accumulated by the manufacturer or graphic arts producer to
purchase the tangible personal property. A manufacturer or
graphic arts producer intending to use accumulated credit to
purchase such tangible personal property shall execute a
written contract authorizing the contractor to utilize a
specified dollar amount of credit. The contractor shall furnish
the supplier with the manufacturer's or graphic arts producer's
name, registration or resale number, and a statement that a
specific amount of the Use Tax or Service Use Tax liability,
not to exceed 6.25% of the selling price, is being satisfied
with the credit. The manufacturer or graphic arts producer

09800SB0346ham001 - 40 - LRB098 04644 HLH 60486 a
shall remain liable to timely report all information required
by the annual Report of Manufacturer's Purchase Credit Used for
all credit utilized by a construction contractor.
The Manufacturer's Purchase Credit may be used to satisfy
liability under the Use Tax Act or the Service Use Tax Act due
on the purchase, made on or after September 1, 2004, of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or by
a lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as preproduction material handling, receiving, quality
control, inventory control, storage, staging, and packaging
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as
described in Section 2-30 of the Retailers' Occupation Tax Act

09800SB0346ham001 - 41 - LRB098 04644 HLH 60486 a
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible
personal property used or consumed in activities such as
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all tangible
personal property used or consumed by the purchaser for
research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing facility, in
sales, purchasing, accounting, fiscal management, marketing,
personnel recruitment or selection, or landscaping or (ii)
tangible personal property required to be titled or registered
with a department, agency, or unit of federal, state, or local
government. The Manufacturer's Purchase Credit may be used to
satisfy the tax arising either from the purchase of machinery
and equipment on or after September 1, 2004 for which the
exemption provided by paragraph (18) of Section 3-5 of this Act
was erroneously claimed, or the purchase of machinery and
equipment on or after September 1, 2004 for which the exemption
provided by paragraph (6) of Section 3-5 of this Act was
erroneously claimed, but not in satisfaction of penalty, if
any, and interest for failure to pay the tax when due. A
purchaser of production related tangible personal property

09800SB0346ham001 - 42 - LRB098 04644 HLH 60486 a
that is purchased on or after September 1, 2004 who is required
to pay Illinois Use Tax or Service Use Tax on the purchase
directly to the Department may utilize the Manufacturer's
Purchase Credit in satisfaction of the tax arising from that
purchase, but not in satisfaction of penalty and interest. A
purchaser who uses the Manufacturer's Purchase Credit to
purchase property on and after September 1, 2004 which is later
determined not to be production related tangible personal
property may be liable for tax, penalty, and interest on the
purchase of that property as of the date of purchase but shall
be entitled to use the disallowed Manufacturer's Purchase
Credit, so long as it has not expired and is used on qualifying
purchases of production related tangible personal property not
previously subject to credit usage. The Manufacturer's
Purchase Credit earned by a manufacturer or graphic arts
producer expires the last day of the second calendar year
following the calendar year in which the credit arose. A
purchaser earning Manufacturer's Purchase Credit shall sign
and file an annual Report of Manufacturer's Purchase Credit
Earned for each calendar year no later than the last day of the
sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts

09800SB0346ham001 - 43 - LRB098 04644 HLH 60486 a
machinery on which the credit was earned; (ii) the total State
Use Tax or Service Use Tax which would have been due on those
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's
Purchase Credit earned on each purchase. A purchaser using
Manufacturer's Purchase Credit shall sign and file an annual
Report of Manufacturer's Purchase Credit Used for each calendar
year no later than the last day of the sixth month following
the calendar year in which a Manufacturer's Purchase Credit is
used. A Report of Manufacturer's Purchase Credit Used shall be
filed on forms as prescribed or approved by the Department and
shall state, for each month of the calendar year: (i) the total
purchase price of production related tangible personal
property purchased from Illinois suppliers; (ii) the total
purchase price of production related tangible personal
property purchased from out-of-state suppliers; (iii) the
total amount of credit used during such month; and (iv) such
other information as the Department may reasonably require. A

09800SB0346ham001 - 44 - LRB098 04644 HLH 60486 a
purchaser using Manufacturer's Purchase Credit shall maintain
records that identify, as to each purchase of production
related tangible personal property on which the purchaser used
Manufacturer's Purchase Credit, the vendor (including, if
applicable, either the vendor's registration number or Federal
Employer Identification Number), the purchase price, and the
amount of Manufacturer's Purchase Credit used on each purchase.
A purchaser that fails to file an annual Report of
Manufacturer's Purchase Credit Earned or an annual Report of
Manufacturer's Purchase Credit Used by the last day of the
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser have
agreed to an extension of the statute of limitations for the
issuance of a notice of tax liability as provided in Section 4
of the Retailers' Occupation Tax Act. If the time for
assessment or refund has been extended, then amended reports
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. Manufacturer's Purchase
Credit claimed on an amended report may be used to satisfy tax
liability under the Use Tax Act or the Service Use Tax Act (i)

09800SB0346ham001 - 45 - LRB098 04644 HLH 60486 a
on qualifying purchases of production related tangible
personal property made after the date the amended report is
filed or (ii) assessed by the Department on qualifying
production related tangible personal property purchased on or
after September 1, 2004. If the purchaser is not the
manufacturer or a graphic arts producer, but rents or leases
the use of the property to a manufacturer or graphic arts
producer, the purchaser may earn, report, and use
Manufacturer's Purchase Credit in the same manner as a
manufacturer or graphic arts producer. A purchaser shall not be
entitled to any Manufacturer's Purchase Credit for a purchase
that is required to be reported and is not timely reported as
provided in this Section. A purchaser remains liable for (i)
any tax that was satisfied by use of a Manufacturer's Purchase
Credit, as of the date of purchase, if that use is not timely
reported as required in this Section and (ii) for any
applicable penalties and interest for failing to pay the tax
when due.
(Source: P.A. 96-116, eff. 7-31-09.)
Section 20. The Service Use Tax Act is amended by changing
Section 3-70 as follows:
(35 ILCS 110/3-70)
Sec. 3-70. Manufacturer's Purchase Credit. For purchases
of machinery and equipment made on and after January 1, 1995

09800SB0346ham001 - 46 - LRB098 04644 HLH 60486 a
and through June 30, 2003, and on and after September 1, 2004
through February 28, 2015 August 30, 2014, a purchaser of
manufacturing machinery and equipment that qualifies for the
exemption provided by Section 2 of this Act earns a credit in
an amount equal to a fixed percentage of the tax which would
have been incurred under this Act on those purchases. For
purchases of graphic arts machinery and equipment made on or
after July 1, 1996 through June 30, 2003, and on and after
September 1, 2004 through February 28, 2015 August 30, 2014, a
purchase of graphic arts machinery and equipment that qualifies
for the exemption provided by paragraph (5) of Section 3-5 of
this Act earns a credit in an amount equal to a fixed
percentage of the tax that would have been incurred under this
Act on those purchases. The credit earned for the purchase of
manufacturing machinery and equipment and graphic arts
machinery and equipment shall be referred to as the
Manufacturer's Purchase Credit. A graphic arts producer is a
person engaged in graphic arts production as defined in Section
3-30 of the Service Occupation Tax Act. Beginning July 1, 1996,
all references in this Section to manufacturers or
manufacturing shall also refer to graphic arts producers or
graphic arts production.
The amount of credit shall be a percentage of the tax that
would have been incurred on the purchase of the manufacturing
machinery and equipment or graphic arts machinery and equipment
if the exemptions provided by Section 2 or paragraph (5) of

09800SB0346ham001 - 47 - LRB098 04644 HLH 60486 a
Section 3-5 of this Act had not been applicable.
All purchases prior to October 1, 2003 and on and after
September 1, 2004 and through February 28, 2015, of
manufacturing machinery and equipment and graphic arts
machinery and equipment that qualify for the exemptions
provided by paragraph (5) of Section 2 or paragraph (5) of
Section 3-5 of this Act qualify for the credit without regard
to whether the serviceman elected, or could have elected, under
paragraph (7) of Section 2 of this Act to exclude the
transaction from this Act. If the serviceman's billing to the
service customer separately states a selling price for the
exempt manufacturing machinery or equipment or the exempt
graphic arts machinery and equipment, the credit shall be
calculated, as otherwise provided herein, based on that selling
price. If the serviceman's billing does not separately state a
selling price for the exempt manufacturing machinery and
equipment or the exempt graphic arts machinery and equipment,
the credit shall be calculated, as otherwise provided herein,
based on 50% of the entire billing. If the serviceman contracts
to design, develop, and produce special order manufacturing
machinery and equipment or special order graphic arts machinery
and equipment, and the billing does not separately state a
selling price for such special order machinery and equipment,
the credit shall be calculated, as otherwise provided herein,
based on 50% of the entire billing. The provisions of this
paragraph are effective for purchases made on or after January

09800SB0346ham001 - 48 - LRB098 04644 HLH 60486 a
1, 1995.
The percentage shall be as follows:
(1) 15% for purchases made on or before June 30, 1995.
(2) 25% for purchases made after June 30, 1995, and on
or before June 30, 1996.
(3) 40% for purchases made after June 30, 1996, and on
or before June 30, 1997.
(4) 50% for purchases made on or after July 1, 1997.
(a) Manufacturer's Purchase Credit earned prior to July 1,
2003. This subsection (a) applies to Manufacturer's Purchase
Credit earned prior to July 1, 2003. A purchaser of production
related tangible personal property desiring to use the
Manufacturer's Purchase Credit shall certify to the seller
prior to October 1, 2003 that the purchaser is satisfying all
or part of the liability under the Use Tax Act or the Service
Use Tax Act that is due on the purchase of the production
related tangible personal property by use of a Manufacturer's
Purchase Credit. The Manufacturer's Purchase Credit
certification must be dated and shall include the name and
address of the purchaser, the purchaser's registration number,
if registered, the credit being applied, and a statement that
the State Use Tax or Service Use Tax liability is being
satisfied with the manufacturer's or graphic arts producer's
accumulated purchase credit. Certification may be incorporated
into the manufacturer's or graphic arts producer's purchase
order. Manufacturer's Purchase Credit certification provided

09800SB0346ham001 - 49 - LRB098 04644 HLH 60486 a
by the manufacturer or graphic arts producer prior to October
1, 2003 may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed 6.25%
of the receipts subject to tax from a qualifying purchase, but
only if the retailer or serviceman reports the Manufacturer's
Purchase Credit claimed as required by the Department. A
Manufacturer's Purchase Credit reported on any original or
amended return filed under this Act after October 20, 2003
shall be disallowed. The Manufacturer's Purchase Credit earned
by purchase of exempt manufacturing machinery and equipment or
graphic arts machinery and equipment is a non-transferable
credit. A manufacturer or graphic arts producer that enters
into a contract involving the installation of tangible personal
property into real estate within a manufacturing or graphic
arts production facility, prior to October 1, 2003, may
authorize a construction contractor to utilize credit
accumulated by the manufacturer or graphic arts producer to
purchase the tangible personal property. A manufacturer or
graphic arts producer intending to use accumulated credit to
purchase such tangible personal property shall execute a
written contract authorizing the contractor to utilize a
specified dollar amount of credit. The contractor shall
furnish, prior to October 1, 2003, the supplier with the
manufacturer's or graphic arts producer's name, registration
or resale number, and a statement that a specific amount of the

09800SB0346ham001 - 50 - LRB098 04644 HLH 60486 a
Use Tax or Service Use Tax liability, not to exceed 6.25% of
the selling price, is being satisfied with the credit. The
manufacturer or graphic arts producer shall remain liable to
timely report all information required by the annual Report of
Manufacturer's Purchase Credit Used for credit utilized by a
construction contractor.
No Manufacturer's Purchase Credit earned prior to July 1,
2003 may be used after October 1, 2003. The Manufacturer's
Purchase Credit may be used to satisfy liability under the Use
Tax Act or the Service Use Tax Act due on the purchase of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or a
lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as pre-production material handling, receiving, quality
control, inventory control, storage, staging, and packaging

09800SB0346ham001 - 51 - LRB098 04644 HLH 60486 a
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as
described in Section 2-30 of the Retailers' Occupation Tax Act
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible
personal property used or consumed in activities such as
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all tangible
personal property used or consumed by the purchaser for
research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing or graphic
arts facility, in sales, purchasing, accounting, fiscal
management, marketing, personnel recruitment or selection, or
landscaping or (ii) tangible personal property required to be
titled or registered with a department, agency, or unit of
federal, state, or local government. The Manufacturer's
Purchase Credit may be used, prior to October 1, 2003, to
satisfy the tax arising either from the purchase of machinery
and equipment on or after January 1, 1995 for which the
manufacturing machinery and equipment exemption provided by
Section 2 of this Act was erroneously claimed, or the purchase

09800SB0346ham001 - 52 - LRB098 04644 HLH 60486 a
of machinery and equipment on or after July 1, 1996 for which
the exemption provided by paragraph (5) of Section 3-5 of this
Act was erroneously claimed, but not in satisfaction of
penalty, if any, and interest for failure to pay the tax when
due. A purchaser of production related tangible personal
property who is required to pay Illinois Use Tax or Service Use
Tax on the purchase directly to the Department may, prior to
October 1, 2003, utilize the Manufacturer's Purchase Credit in
satisfaction of the tax arising from that purchase, but not in
satisfaction of penalty and interest. A purchaser who uses the
Manufacturer's Purchase Credit to purchase property which is
later determined not to be production related tangible personal
property may be liable for tax, penalty, and interest on the
purchase of that property as of the date of purchase but shall
be entitled to use the disallowed Manufacturer's Purchase
Credit, so long as it has not expired and is used prior to
October 1, 2003, on qualifying purchases of production related
tangible personal property not previously subject to credit
usage. The Manufacturer's Purchase Credit earned by a
manufacturer or graphic arts producer expires the last day of
the second calendar year following the calendar year in which
the credit arose. No Manufacturer's Purchase Credit may be used
after September 30, 2003 regardless of when that credit was
earned.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase

09800SB0346ham001 - 53 - LRB098 04644 HLH 60486 a
Credit Earned for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts
machinery on which the credit was earned; (ii) the total State
Use Tax or Service Use Tax which would have been due on those
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's
Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms as

09800SB0346ham001 - 54 - LRB098 04644 HLH 60486 a
prescribed or approved by the Department and shall state, for
each month of the calendar year: (i) the total purchase price
of production related tangible personal property purchased
from Illinois suppliers; (ii) the total purchase price of
production related tangible personal property purchased from
out-of-state suppliers; (iii) the total amount of credit used
during such month; and (iv) such other information as the
Department may reasonably require. A purchaser using
Manufacturer's Purchase Credit shall maintain records that
identify, as to each purchase of production related tangible
personal property on which the purchaser used Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit used on each purchase.
No annual report shall be filed before May 1, 1996 or after
June 30, 2004. A purchaser that fails to file an annual Report
of Manufacturer's Purchase Credit Earned or an annual Report of
Manufacturer's Purchase Credit Used by the last day of the
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser have

09800SB0346ham001 - 55 - LRB098 04644 HLH 60486 a
agreed to an extension of the statute of limitations for the
issuance of a notice of tax liability as provided in Section 4
of the Retailers' Occupation Tax Act. If the time for
assessment or refund has been extended, then amended reports
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. No Manufacturer's Purchase
Credit report filed with the Department for periods prior to
January 1, 1995 shall be approved. Manufacturer's Purchase
Credit claimed on an amended report may be used, prior to
October 1, 2003, to satisfy tax liability under the Use Tax Act
or the Service Use Tax Act (i) on qualifying purchases of
production related tangible personal property made after the
date the amended report is filed or (ii) assessed by the
Department on qualifying purchases of production related
tangible personal property made in the case of manufacturers on
or after January 1, 1995, or in the case of graphic arts
producers on or after July 1, 1996.
If the purchaser is not the manufacturer or a graphic arts
producer, but rents or leases the use of the property to a
manufacturer or a graphic arts producer, the purchaser may
earn, report, and use Manufacturer's Purchase Credit in the
same manner as a manufacturer or graphic arts producer.
A purchaser shall not be entitled to any Manufacturer's
Purchase Credit for a purchase that is required to be reported
and is not timely reported as provided in this Section. A

09800SB0346ham001 - 56 - LRB098 04644 HLH 60486 a
purchaser remains liable for (i) any tax that was satisfied by
use of a Manufacturer's Purchase Credit, as of the date of
purchase, if that use is not timely reported as required in
this Section and (ii) for any applicable penalties and interest
for failing to pay the tax when due. No Manufacturer's Purchase
Credit may be used after September 30, 2003 to satisfy any tax
liability imposed under this Act, including any audit
liability.
(b) Manufacturer's Purchase Credit earned on and after
September 1, 2004. This subsection (b) applies to
Manufacturer's Purchase Credit earned on or after September 1,
2004. Manufacturer's Purchase Credit earned on or after
September 1, 2004 may only be used to satisfy the Use Tax or
Service Use Tax liability incurred on production related
tangible personal property purchased on or after September 1,
2004. A purchaser of production related tangible personal
property desiring to use the Manufacturer's Purchase Credit
shall certify to the seller that the purchaser is satisfying
all or part of the liability under the Use Tax Act or the
Service Use Tax Act that is due on the purchase of the
production related tangible personal property by use of a
Manufacturer's Purchase Credit. The Manufacturer's Purchase
Credit certification must be dated and shall include the name
and address of the purchaser, the purchaser's registration
number, if registered, the credit being applied, and a
statement that the State Use Tax or Service Use Tax liability

09800SB0346ham001 - 57 - LRB098 04644 HLH 60486 a
is being satisfied with the manufacturer's or graphic arts
producer's accumulated purchase credit. Certification may be
incorporated into the manufacturer's or graphic arts
producer's purchase order. Manufacturer's Purchase Credit
certification provided by the manufacturer or graphic arts
producer may be used to satisfy the retailer's or serviceman's
liability under the Retailers' Occupation Tax Act or Service
Occupation Tax Act for the credit claimed, not to exceed 6.25%
of the receipts subject to tax from a qualifying purchase, but
only if the retailer or serviceman reports the Manufacturer's
Purchase Credit claimed as required by the Department. The
Manufacturer's Purchase Credit earned by purchase of exempt
manufacturing machinery and equipment or graphic arts
machinery and equipment is a non-transferable credit. A
manufacturer or graphic arts producer that enters into a
contract involving the installation of tangible personal
property into real estate within a manufacturing or graphic
arts production facility may, on or after September 1, 2004,
authorize a construction contractor to utilize credit
accumulated by the manufacturer or graphic arts producer to
purchase the tangible personal property. A manufacturer or
graphic arts producer intending to use accumulated credit to
purchase such tangible personal property shall execute a
written contract authorizing the contractor to utilize a
specified dollar amount of credit. The contractor shall furnish
the supplier with the manufacturer's or graphic arts producer's

09800SB0346ham001 - 58 - LRB098 04644 HLH 60486 a
name, registration or resale number, and a statement that a
specific amount of the Use Tax or Service Use Tax liability,
not to exceed 6.25% of the selling price, is being satisfied
with the credit. The manufacturer or graphic arts producer
shall remain liable to timely report all information required
by the annual Report of Manufacturer's Purchase Credit Used for
credit utilized by a construction contractor.
The Manufacturer's Purchase Credit may be used to satisfy
liability under the Use Tax Act or the Service Use Tax Act due
on the purchase, made on or after September 1, 2004, of
production related tangible personal property (including
purchases by a manufacturer, by a graphic arts producer, or a
lessor who rents or leases the use of the property to a
manufacturer or graphic arts producer) that does not otherwise
qualify for the manufacturing machinery and equipment
exemption or the graphic arts machinery and equipment
exemption. "Production related tangible personal property"
means (i) all tangible personal property used or consumed by
the purchaser in a manufacturing facility in which a
manufacturing process described in Section 2-45 of the
Retailers' Occupation Tax Act takes place, including tangible
personal property purchased for incorporation into real estate
within a manufacturing facility and including, but not limited
to, tangible personal property used or consumed in activities
such as pre-production material handling, receiving, quality
control, inventory control, storage, staging, and packaging

09800SB0346ham001 - 59 - LRB098 04644 HLH 60486 a
for shipping and transportation purposes; (ii) all tangible
personal property used or consumed by the purchaser in a
graphic arts facility in which graphic arts production as
described in Section 2-30 of the Retailers' Occupation Tax Act
takes place, including tangible personal property purchased
for incorporation into real estate within a graphic arts
facility and including, but not limited to, all tangible
personal property used or consumed in activities such as
graphic arts preliminary or pre-press production,
pre-production material handling, receiving, quality control,
inventory control, storage, staging, sorting, labeling,
mailing, tying, wrapping, and packaging; and (iii) all tangible
personal property used or consumed by the purchaser for
research and development. "Production related tangible
personal property" does not include (i) tangible personal
property used, within or without a manufacturing or graphic
arts facility, in sales, purchasing, accounting, fiscal
management, marketing, personnel recruitment or selection, or
landscaping or (ii) tangible personal property required to be
titled or registered with a department, agency, or unit of
federal, state, or local government. The Manufacturer's
Purchase Credit may be used to satisfy the tax arising either
from the purchase of machinery and equipment on or after
September 1, 2004 for which the manufacturing machinery and
equipment exemption provided by Section 2 of this Act was
erroneously claimed, or the purchase of machinery and equipment

09800SB0346ham001 - 60 - LRB098 04644 HLH 60486 a
on or after September 1, 2004 for which the exemption provided
by paragraph (5) of Section 3-5 of this Act was erroneously
claimed, but not in satisfaction of penalty, if any, and
interest for failure to pay the tax when due. A purchaser of
production related tangible personal property that is
purchased on or after September 1, 2004 who is required to pay
Illinois Use Tax or Service Use Tax on the purchase directly to
the Department may utilize the Manufacturer's Purchase Credit
in satisfaction of the tax arising from that purchase, but not
in satisfaction of penalty and interest. A purchaser who uses
the Manufacturer's Purchase Credit to purchase property on and
after September 1, 2004 which is later determined not to be
production related tangible personal property may be liable for
tax, penalty, and interest on the purchase of that property as
of the date of purchase but shall be entitled to use the
disallowed Manufacturer's Purchase Credit, so long as it has
not expired, on qualifying purchases of production related
tangible personal property not previously subject to credit
usage. The Manufacturer's Purchase Credit earned by a
manufacturer or graphic arts producer expires the last day of
the second calendar year following the calendar year in which
the credit arose.
A purchaser earning Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Earned for each calendar year no later than the last day
of the sixth month following the calendar year in which a

09800SB0346ham001 - 61 - LRB098 04644 HLH 60486 a
Manufacturer's Purchase Credit is earned. A Report of
Manufacturer's Purchase Credit Earned shall be filed on forms
as prescribed or approved by the Department and shall state,
for each month of the calendar year: (i) the total purchase
price of all purchases of exempt manufacturing or graphic arts
machinery on which the credit was earned; (ii) the total State
Use Tax or Service Use Tax which would have been due on those
items; (iii) the percentage used to calculate the amount of
credit earned; (iv) the amount of credit earned; and (v) such
other information as the Department may reasonably require. A
purchaser earning Manufacturer's Purchase Credit shall
maintain records which identify, as to each purchase of
manufacturing or graphic arts machinery and equipment on which
the purchaser earned Manufacturer's Purchase Credit, the
vendor (including, if applicable, either the vendor's
registration number or Federal Employer Identification
Number), the purchase price, and the amount of Manufacturer's
Purchase Credit earned on each purchase.
A purchaser using Manufacturer's Purchase Credit shall
sign and file an annual Report of Manufacturer's Purchase
Credit Used for each calendar year no later than the last day
of the sixth month following the calendar year in which a
Manufacturer's Purchase Credit is used. A Report of
Manufacturer's Purchase Credit Used shall be filed on forms as
prescribed or approved by the Department and shall state, for
each month of the calendar year: (i) the total purchase price

09800SB0346ham001 - 62 - LRB098 04644 HLH 60486 a
of production related tangible personal property purchased
from Illinois suppliers; (ii) the total purchase price of
production related tangible personal property purchased from
out-of-state suppliers; (iii) the total amount of credit used
during such month; and (iv) such other information as the
Department may reasonably require. A purchaser using
Manufacturer's Purchase Credit shall maintain records that
identify, as to each purchase of production related tangible
personal property on which the purchaser used Manufacturer's
Purchase Credit, the vendor (including, if applicable, either
the vendor's registration number or Federal Employer
Identification Number), the purchase price, and the amount of
Manufacturer's Purchase Credit used on each purchase.
A purchaser that fails to file an annual Report of
Manufacturer's Purchase Credit Earned or an annual Report of
Manufacturer's Purchase Credit Used by the last day of the
sixth month following the end of the calendar year shall
forfeit all Manufacturer's Purchase Credit for that calendar
year unless it establishes that its failure to file was due to
reasonable cause. Manufacturer's Purchase Credit reports may
be amended to report and claim credit on qualifying purchases
not previously reported at any time before the credit would
have expired, unless both the Department and the purchaser have
agreed to an extension of the statute of limitations for the
issuance of a notice of tax liability as provided in Section 4
of the Retailers' Occupation Tax Act. If the time for

09800SB0346ham001 - 63 - LRB098 04644 HLH 60486 a
assessment or refund has been extended, then amended reports
for a calendar year may be filed at any time prior to the date
to which the statute of limitations for the calendar year or
portion thereof has been extended. Manufacturer's Purchase
Credit claimed on an amended report may be used to satisfy tax
liability under the Use Tax Act or the Service Use Tax Act (i)
on qualifying purchases of production related tangible
personal property made after the date the amended report is
filed or (ii) assessed by the Department on qualifying
production related tangible personal property purchased on or
after September 1, 2004.
If the purchaser is not the manufacturer or a graphic arts
producer, but rents or leases the use of the property to a
manufacturer or a graphic arts producer, the purchaser may
earn, report, and use Manufacturer's Purchase Credit in the
same manner as a manufacturer or graphic arts producer. A
purchaser shall not be entitled to any Manufacturer's Purchase
Credit for a purchase that is required to be reported and is
not timely reported as provided in this Section. A purchaser
remains liable for (i) any tax that was satisfied by use of a
Manufacturer's Purchase Credit, as of the date of purchase, if
that use is not timely reported as required in this Section and
(ii) for any applicable penalties and interest for failing to
pay the tax when due.
(Source: P.A. 96-116, eff. 7-31-09.)

09800SB0346ham001 - 64 - LRB098 04644 HLH 60486 a
Section 99. Effective date. This Act takes effect upon
becoming law.".