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| | 102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB2422 Introduced 2/26/2021, by Sen. Napoleon Harris, III SYNOPSIS AS INTRODUCED:
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| New Act | | 35 ILCS 5/201 | | 35 ILCS 105/3-5 | | 35 ILCS 110/3-5 | | 35 ILCS 115/3-5 | | 35 ILCS 120/2-5 | | 35 ILCS 120/5m new | | 35 ILCS 200/184.10 new | | 220 ILCS 5/9-222 | from Ch. 111 2/3, par. 9-222 | 220 ILCS 5/9-222.1B new | |
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Creates the Big Empties Site Act. Provides that property located in the State consisting of one or more PINs but under common ownership at the time of the application, that contains at least one vacant and unused building of specified square footage, is qualified to be designated as a Big Empties Site. Provides that a county or municipality that has adopted an ordinance designating a qualified site as a Big Empties Site shall make written application to the Department of Commerce and Economic Opportunity to have that site certified by the Department as a Big Empties Site. Contains procedures for certification by the Department of Commerce and Economic Opportunity. Amends the Illinois Income Tax Act, the Use Tax Act, the Service Use Tax Act, and the Public Utilities Act to provide certain tax incentives for Big Empties Sites. Amends the Property Tax Code to provide that a taxing district may issue an abatement. Effective immediately.
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| | | FISCAL NOTE ACT MAY APPLY | | HOUSING AFFORDABILITY IMPACT NOTE ACT MAY APPLY |
| | A BILL FOR |
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| 1 | | AN ACT concerning revenue.
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| 2 | | Be it enacted by the People of the State of Illinois,
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| 3 | | represented in the General Assembly:
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| 4 | | Section 1. Short title. This Act may be cited as the Big |
| 5 | | Empties Site Act.
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| 6 | | Section 5. Definitions. As used in this Act: |
| 7 | | "Department" means the Department of Commerce and Economic |
| 8 | | Opportunity. |
| 9 | | "Qualified site" means property located in the State |
| 10 | | consisting of one or more PINs but under common ownership at |
| 11 | | the time of the application that contains at least one vacant |
| 12 | | and unused building of (i) 1,000,000 square feet or greater in |
| 13 | | Cook, DuPage, Kane, Kendall, Lake, McHenry, or Will County or |
| 14 | | (ii) 500,000 square feet or greater in any other county.
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| 15 | | Section 10. Site designation; application. A county or |
| 16 | | municipality that has adopted an ordinance designating a |
| 17 | | qualified site as a Big Empties Site shall make written |
| 18 | | application to the Department to have that site certified by |
| 19 | | the Department as a Big Empties Site. The application shall |
| 20 | | include a copy of the ordinance designating the proposed site |
| 21 | | and such other information as the Department may, by rule, |
| 22 | | require. All applications which are to be considered and acted |
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| 1 | | upon by the Department during a calendar year must be received |
| 2 | | by the Department no later than December 31 of the preceding |
| 3 | | calendar year. Any application received after December 31 of |
| 4 | | any calendar year shall be held by the Department for |
| 5 | | consideration and action during the following calendar year.
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| 6 | | Section 15. Certification. Certification of a |
| 7 | | Department-approved Big Empties Site shall be made by the |
| 8 | | Department by certification of the designating ordinance. The |
| 9 | | Department shall promptly issue a certificate for site upon |
| 10 | | approval. The certificate shall be signed by the Director of |
| 11 | | the Department, shall make specific reference to the |
| 12 | | designating ordinance, which shall be attached thereto, and |
| 13 | | shall be filed in the office of the Secretary of State. A |
| 14 | | certified copy of the certificate, or a duplicate original |
| 15 | | thereof, shall be recorded in the office of recorder of deeds |
| 16 | | of the county in which the site lies. Such certification shall |
| 17 | | have a term of no greater than 15 years.
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| 18 | | Section 900. The Illinois Income Tax Act is amended by |
| 19 | | changing Section 201 as follows:
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| 20 | | (35 ILCS 5/201)
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| 21 | | (Text of Section without the changes made by P.A. 101-8, |
| 22 | | which did not take effect (see Section 99 of P.A. 101-8)) |
| 23 | | Sec. 201. Tax imposed. |
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| 1 | | (a) In general. A tax measured by net income is hereby |
| 2 | | imposed on every
individual, corporation, trust and estate for |
| 3 | | each taxable year ending
after July 31, 1969 on the privilege |
| 4 | | of earning or receiving income in or
as a resident of this |
| 5 | | State. Such tax shall be in addition to all other
occupation or |
| 6 | | privilege taxes imposed by this State or by any municipal
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| 7 | | corporation or political subdivision thereof. |
| 8 | | (b) Rates. The tax imposed by subsection (a) of this |
| 9 | | Section shall be
determined as follows, except as adjusted by |
| 10 | | subsection (d-1): |
| 11 | | (1) In the case of an individual, trust or estate, for |
| 12 | | taxable years
ending prior to July 1, 1989, an amount |
| 13 | | equal to 2 1/2% of the taxpayer's
net income for the |
| 14 | | taxable year. |
| 15 | | (2) In the case of an individual, trust or estate, for |
| 16 | | taxable years
beginning prior to July 1, 1989 and ending |
| 17 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
| 18 | | 1/2% of the taxpayer's net income for the period
prior to |
| 19 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
| 20 | | 3% of the
taxpayer's net income for the period after June |
| 21 | | 30, 1989, as calculated
under Section 202.3. |
| 22 | | (3) In the case of an individual, trust or estate, for |
| 23 | | taxable years
beginning after June 30, 1989, and ending |
| 24 | | prior to January 1, 2011, an amount equal to 3% of the |
| 25 | | taxpayer's net
income for the taxable year. |
| 26 | | (4) In the case of an individual, trust, or estate, |
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| 1 | | for taxable years beginning prior to January 1, 2011, and |
| 2 | | ending after December 31, 2010, an amount equal to the sum |
| 3 | | of (i) 3% of the taxpayer's net income for the period prior |
| 4 | | to January 1, 2011, as calculated under Section 202.5, and |
| 5 | | (ii) 5% of the taxpayer's net income for the period after |
| 6 | | December 31, 2010, as calculated under Section 202.5. |
| 7 | | (5) In the case of an individual, trust, or estate, |
| 8 | | for taxable years beginning on or after January 1, 2011, |
| 9 | | and ending prior to January 1, 2015, an amount equal to 5% |
| 10 | | of the taxpayer's net income for the taxable year. |
| 11 | | (5.1) In the case of an individual, trust, or estate, |
| 12 | | for taxable years beginning prior to January 1, 2015, and |
| 13 | | ending after December 31, 2014, an amount equal to the sum |
| 14 | | of (i) 5% of the taxpayer's net income for the period prior |
| 15 | | to January 1, 2015, as calculated under Section 202.5, and |
| 16 | | (ii) 3.75% of the taxpayer's net income for the period |
| 17 | | after December 31, 2014, as calculated under Section |
| 18 | | 202.5. |
| 19 | | (5.2) In the case of an individual, trust, or estate, |
| 20 | | for taxable years beginning on or after January 1, 2015, |
| 21 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
| 22 | | of the taxpayer's net income for the taxable year. |
| 23 | | (5.3) In the case of an individual, trust, or estate, |
| 24 | | for taxable years beginning prior to July 1, 2017, and |
| 25 | | ending after June 30, 2017, an amount equal to the sum of |
| 26 | | (i) 3.75% of the taxpayer's net income for the period |
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| 1 | | prior to July 1, 2017, as calculated under Section 202.5, |
| 2 | | and (ii) 4.95% of the taxpayer's net income for the period |
| 3 | | after June 30, 2017, as calculated under Section 202.5. |
| 4 | | (5.4) In the case of an individual, trust, or estate, |
| 5 | | for taxable years beginning on or after July 1, 2017, an |
| 6 | | amount equal to 4.95% of the taxpayer's net income for the |
| 7 | | taxable year. |
| 8 | | (6) In the case of a corporation, for taxable years
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| 9 | | ending prior to July 1, 1989, an amount equal to 4% of the
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| 10 | | taxpayer's net income for the taxable year. |
| 11 | | (7) In the case of a corporation, for taxable years |
| 12 | | beginning prior to
July 1, 1989 and ending after June 30, |
| 13 | | 1989, an amount equal to the sum of
(i) 4% of the |
| 14 | | taxpayer's net income for the period prior to July 1, |
| 15 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
| 16 | | the taxpayer's net
income for the period after June 30, |
| 17 | | 1989, as calculated under Section
202.3. |
| 18 | | (8) In the case of a corporation, for taxable years |
| 19 | | beginning after
June 30, 1989, and ending prior to January |
| 20 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
| 21 | | income for the
taxable year. |
| 22 | | (9) In the case of a corporation, for taxable years |
| 23 | | beginning prior to January 1, 2011, and ending after |
| 24 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
| 25 | | of the taxpayer's net income for the period prior to |
| 26 | | January 1, 2011, as calculated under Section 202.5, and |
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| 1 | | (ii) 7% of the taxpayer's net income for the period after |
| 2 | | December 31, 2010, as calculated under Section 202.5. |
| 3 | | (10) In the case of a corporation, for taxable years |
| 4 | | beginning on or after January 1, 2011, and ending prior to |
| 5 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
| 6 | | net income for the taxable year. |
| 7 | | (11) In the case of a corporation, for taxable years |
| 8 | | beginning prior to January 1, 2015, and ending after |
| 9 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
| 10 | | the taxpayer's net income for the period prior to January |
| 11 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
| 12 | | of the taxpayer's net income for the period after December |
| 13 | | 31, 2014, as calculated under Section 202.5. |
| 14 | | (12) In the case of a corporation, for taxable years |
| 15 | | beginning on or after January 1, 2015, and ending prior to |
| 16 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
| 17 | | net income for the taxable year. |
| 18 | | (13) In the case of a corporation, for taxable years |
| 19 | | beginning prior to July 1, 2017, and ending after June 30, |
| 20 | | 2017, an amount equal to the sum of (i) 5.25% of the |
| 21 | | taxpayer's net income for the period prior to July 1, |
| 22 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
| 23 | | the taxpayer's net income for the period after June 30, |
| 24 | | 2017, as calculated under Section 202.5. |
| 25 | | (14) In the case of a corporation, for taxable years |
| 26 | | beginning on or after July 1, 2017, an amount equal to 7% |
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| 1 | | of the taxpayer's net income for the taxable year. |
| 2 | | The rates under this subsection (b) are subject to the |
| 3 | | provisions of Section 201.5. |
| 4 | | (b-5) Surcharge; sale or exchange of assets, properties, |
| 5 | | and intangibles of organization gaming licensees. For each of |
| 6 | | taxable years 2019 through 2027, a surcharge is imposed on all |
| 7 | | taxpayers on income arising from the sale or exchange of |
| 8 | | capital assets, depreciable business property, real property |
| 9 | | used in the trade or business, and Section 197 intangibles (i) |
| 10 | | of an organization licensee under the Illinois Horse Racing |
| 11 | | Act of 1975 and (ii) of an organization gaming licensee under |
| 12 | | the Illinois Gambling Act. The amount of the surcharge is |
| 13 | | equal to the amount of federal income tax liability for the |
| 14 | | taxable year attributable to those sales and exchanges. The |
| 15 | | surcharge imposed shall not apply if: |
| 16 | | (1) the organization gaming license, organization |
| 17 | | license, or racetrack property is transferred as a result |
| 18 | | of any of the following: |
| 19 | | (A) bankruptcy, a receivership, or a debt |
| 20 | | adjustment initiated by or against the initial |
| 21 | | licensee or the substantial owners of the initial |
| 22 | | licensee; |
| 23 | | (B) cancellation, revocation, or termination of |
| 24 | | any such license by the Illinois Gaming Board or the |
| 25 | | Illinois Racing Board; |
| 26 | | (C) a determination by the Illinois Gaming Board |
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| 1 | | that transfer of the license is in the best interests |
| 2 | | of Illinois gaming; |
| 3 | | (D) the death of an owner of the equity interest in |
| 4 | | a licensee; |
| 5 | | (E) the acquisition of a controlling interest in |
| 6 | | the stock or substantially all of the assets of a |
| 7 | | publicly traded company; |
| 8 | | (F) a transfer by a parent company to a wholly |
| 9 | | owned subsidiary; or |
| 10 | | (G) the transfer or sale to or by one person to |
| 11 | | another person where both persons were initial owners |
| 12 | | of the license when the license was issued; or |
| 13 | | (2) the controlling interest in the organization |
| 14 | | gaming license, organization license, or racetrack |
| 15 | | property is transferred in a transaction to lineal |
| 16 | | descendants in which no gain or loss is recognized or as a |
| 17 | | result of a transaction in accordance with Section 351 of |
| 18 | | the Internal Revenue Code in which no gain or loss is |
| 19 | | recognized; or |
| 20 | | (3) live horse racing was not conducted in 2010 at a |
| 21 | | racetrack located within 3 miles of the Mississippi River |
| 22 | | under a license issued pursuant to the Illinois Horse |
| 23 | | Racing Act of 1975. |
| 24 | | The transfer of an organization gaming license, |
| 25 | | organization license, or racetrack property by a person other |
| 26 | | than the initial licensee to receive the organization gaming |
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| 1 | | license is not subject to a surcharge. The Department shall |
| 2 | | adopt rules necessary to implement and administer this |
| 3 | | subsection. |
| 4 | | (c) Personal Property Tax Replacement Income Tax.
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| 5 | | Beginning on July 1, 1979 and thereafter, in addition to such |
| 6 | | income
tax, there is also hereby imposed the Personal Property |
| 7 | | Tax Replacement
Income Tax measured by net income on every |
| 8 | | corporation (including Subchapter
S corporations), partnership |
| 9 | | and trust, for each taxable year ending after
June 30, 1979. |
| 10 | | Such taxes are imposed on the privilege of earning or
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| 11 | | receiving income in or as a resident of this State. The |
| 12 | | Personal Property
Tax Replacement Income Tax shall be in |
| 13 | | addition to the income tax imposed
by subsections (a) and (b) |
| 14 | | of this Section and in addition to all other
occupation or |
| 15 | | privilege taxes imposed by this State or by any municipal
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| 16 | | corporation or political subdivision thereof. |
| 17 | | (d) Additional Personal Property Tax Replacement Income |
| 18 | | Tax Rates.
The personal property tax replacement income tax |
| 19 | | imposed by this subsection
and subsection (c) of this Section |
| 20 | | in the case of a corporation, other
than a Subchapter S |
| 21 | | corporation and except as adjusted by subsection (d-1),
shall |
| 22 | | be an additional amount equal to
2.85% of such taxpayer's net |
| 23 | | income for the taxable year, except that
beginning on January |
| 24 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
| 25 | | subsection shall be reduced to 2.5%, and in the case of a
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| 26 | | partnership, trust or a Subchapter S corporation shall be an |
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| 1 | | additional
amount equal to 1.5% of such taxpayer's net income |
| 2 | | for the taxable year. |
| 3 | | (d-1) Rate reduction for certain foreign insurers. In the |
| 4 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
| 5 | | Illinois Insurance Code,
whose state or country of domicile |
| 6 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
| 7 | | (excluding any insurer
whose premiums from reinsurance assumed |
| 8 | | are 50% or more of its total insurance
premiums as determined |
| 9 | | under paragraph (2) of subsection (b) of Section 304,
except |
| 10 | | that for purposes of this determination premiums from |
| 11 | | reinsurance do
not include premiums from inter-affiliate |
| 12 | | reinsurance arrangements),
beginning with taxable years ending |
| 13 | | on or after December 31, 1999,
the sum of
the rates of tax |
| 14 | | imposed by subsections (b) and (d) shall be reduced (but not
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| 15 | | increased) to the rate at which the total amount of tax imposed |
| 16 | | under this Act,
net of all credits allowed under this Act, |
| 17 | | shall equal (i) the total amount of
tax that would be imposed |
| 18 | | on the foreign insurer's net income allocable to
Illinois for |
| 19 | | the taxable year by such foreign insurer's state or country of
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| 20 | | domicile if that net income were subject to all income taxes |
| 21 | | and taxes
measured by net income imposed by such foreign |
| 22 | | insurer's state or country of
domicile, net of all credits |
| 23 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
| 24 | | such income by the foreign insurer's state of domicile.
For |
| 25 | | the purposes of this subsection (d-1), an inter-affiliate |
| 26 | | includes a
mutual insurer under common management. |
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| 1 | | (1) For the purposes of subsection (d-1), in no event |
| 2 | | shall the sum of the
rates of tax imposed by subsections |
| 3 | | (b) and (d) be reduced below the rate at
which the sum of: |
| 4 | | (A) the total amount of tax imposed on such |
| 5 | | foreign insurer under
this Act for a taxable year, net |
| 6 | | of all credits allowed under this Act, plus |
| 7 | | (B) the privilege tax imposed by Section 409 of |
| 8 | | the Illinois Insurance
Code, the fire insurance |
| 9 | | company tax imposed by Section 12 of the Fire
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| 10 | | Investigation Act, and the fire department taxes |
| 11 | | imposed under Section 11-10-1
of the Illinois |
| 12 | | Municipal Code, |
| 13 | | equals 1.25% for taxable years ending prior to December |
| 14 | | 31, 2003, or
1.75% for taxable years ending on or after |
| 15 | | December 31, 2003, of the net
taxable premiums written for |
| 16 | | the taxable year,
as described by subsection (1) of |
| 17 | | Section 409 of the Illinois Insurance Code.
This paragraph |
| 18 | | will in no event increase the rates imposed under |
| 19 | | subsections
(b) and (d). |
| 20 | | (2) Any reduction in the rates of tax imposed by this |
| 21 | | subsection shall be
applied first against the rates |
| 22 | | imposed by subsection (b) and only after the
tax imposed |
| 23 | | by subsection (a) net of all credits allowed under this |
| 24 | | Section
other than the credit allowed under subsection (i) |
| 25 | | has been reduced to zero,
against the rates imposed by |
| 26 | | subsection (d). |
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| 1 | | This subsection (d-1) is exempt from the provisions of |
| 2 | | Section 250. |
| 3 | | (e) Investment credit. A taxpayer shall be allowed a |
| 4 | | credit
against the Personal Property Tax Replacement Income |
| 5 | | Tax for
investment in qualified property. |
| 6 | | (1) A taxpayer shall be allowed a credit equal to .5% |
| 7 | | of
the basis of qualified property placed in service |
| 8 | | during the taxable year,
provided such property is placed |
| 9 | | in service on or after
July 1, 1984. There shall be allowed |
| 10 | | an additional credit equal
to .5% of the basis of |
| 11 | | qualified property placed in service during the
taxable |
| 12 | | year, provided such property is placed in service on or
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| 13 | | after July 1, 1986, and the taxpayer's base employment
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| 14 | | within Illinois has increased by 1% or more over the |
| 15 | | preceding year as
determined by the taxpayer's employment |
| 16 | | records filed with the
Illinois Department of Employment |
| 17 | | Security. Taxpayers who are new to
Illinois shall be |
| 18 | | deemed to have met the 1% growth in base employment for
the |
| 19 | | first year in which they file employment records with the |
| 20 | | Illinois
Department of Employment Security. The provisions |
| 21 | | added to this Section by
Public Act 85-1200 (and restored |
| 22 | | by Public Act 87-895) shall be
construed as declaratory of |
| 23 | | existing law and not as a new enactment. If,
in any year, |
| 24 | | the increase in base employment within Illinois over the
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| 25 | | preceding year is less than 1%, the additional credit |
| 26 | | shall be limited to that
percentage times a fraction, the |
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| 1 | | numerator of which is .5% and the denominator
of which is |
| 2 | | 1%, but shall not exceed .5%. The investment credit shall |
| 3 | | not be
allowed to the extent that it would reduce a |
| 4 | | taxpayer's liability in any tax
year below zero, nor may |
| 5 | | any credit for qualified property be allowed for any
year |
| 6 | | other than the year in which the property was placed in |
| 7 | | service in
Illinois. For tax years ending on or after |
| 8 | | December 31, 1987, and on or
before December 31, 1988, the |
| 9 | | credit shall be allowed for the tax year in
which the |
| 10 | | property is placed in service, or, if the amount of the |
| 11 | | credit
exceeds the tax liability for that year, whether it |
| 12 | | exceeds the original
liability or the liability as later |
| 13 | | amended, such excess may be carried
forward and applied to |
| 14 | | the tax liability of the 5 taxable years following
the |
| 15 | | excess credit years if the taxpayer (i) makes investments |
| 16 | | which cause
the creation of a minimum of 2,000 full-time |
| 17 | | equivalent jobs in Illinois,
(ii) is located in an |
| 18 | | enterprise zone established pursuant to the Illinois
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| 19 | | Enterprise Zone Act and (iii) is certified by the |
| 20 | | Department of Commerce
and Community Affairs (now |
| 21 | | Department of Commerce and Economic Opportunity) as |
| 22 | | complying with the requirements specified in
clause (i) |
| 23 | | and (ii) by July 1, 1986. The Department of Commerce and
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| 24 | | Community Affairs (now Department of Commerce and Economic |
| 25 | | Opportunity) shall notify the Department of Revenue of all |
| 26 | | such
certifications immediately. For tax years ending |
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| 1 | | after December 31, 1988,
the credit shall be allowed for |
| 2 | | the tax year in which the property is
placed in service, |
| 3 | | or, if the amount of the credit exceeds the tax
liability |
| 4 | | for that year, whether it exceeds the original liability |
| 5 | | or the
liability as later amended, such excess may be |
| 6 | | carried forward and applied
to the tax liability of the 5 |
| 7 | | taxable years following the excess credit
years. The |
| 8 | | credit shall be applied to the earliest year for which |
| 9 | | there is
a liability. If there is credit from more than one |
| 10 | | tax year that is
available to offset a liability, earlier |
| 11 | | credit shall be applied first. |
| 12 | | (2) The term "qualified property" means property |
| 13 | | which: |
| 14 | | (A) is tangible, whether new or used, including |
| 15 | | buildings and structural
components of buildings and |
| 16 | | signs that are real property, but not including
land |
| 17 | | or improvements to real property that are not a |
| 18 | | structural component of a
building such as |
| 19 | | landscaping, sewer lines, local access roads, fencing, |
| 20 | | parking
lots, and other appurtenances; |
| 21 | | (B) is depreciable pursuant to Section 167 of the |
| 22 | | Internal Revenue Code,
except that "3-year property" |
| 23 | | as defined in Section 168(c)(2)(A) of that
Code is not |
| 24 | | eligible for the credit provided by this subsection |
| 25 | | (e); |
| 26 | | (C) is acquired by purchase as defined in Section |
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| 1 | | 179(d) of
the Internal Revenue Code; |
| 2 | | (D) is used in Illinois by a taxpayer who is |
| 3 | | primarily engaged in
manufacturing, or in mining coal |
| 4 | | or fluorite, or in retailing, or was placed in service |
| 5 | | on or after July 1, 2006 in a River Edge Redevelopment |
| 6 | | Zone established pursuant to the River Edge |
| 7 | | Redevelopment Zone Act; and |
| 8 | | (E) has not previously been used in Illinois in |
| 9 | | such a manner and by
such a person as would qualify for |
| 10 | | the credit provided by this subsection
(e) or |
| 11 | | subsection (f). |
| 12 | | (3) For purposes of this subsection (e), |
| 13 | | "manufacturing" means
the material staging and production |
| 14 | | of tangible personal property by
procedures commonly |
| 15 | | regarded as manufacturing, processing, fabrication, or
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| 16 | | assembling which changes some existing material into new |
| 17 | | shapes, new
qualities, or new combinations. For purposes |
| 18 | | of this subsection
(e) the term "mining" shall have the |
| 19 | | same meaning as the term "mining" in
Section 613(c) of the |
| 20 | | Internal Revenue Code. For purposes of this subsection
|
| 21 | | (e), the term "retailing" means the sale of tangible |
| 22 | | personal property for use or consumption and not for |
| 23 | | resale, or
services rendered in conjunction with the sale |
| 24 | | of tangible personal property for use or consumption and |
| 25 | | not for resale. For purposes of this subsection (e), |
| 26 | | "tangible personal property" has the same meaning as when |
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| 1 | | that term is used in the Retailers' Occupation Tax Act, |
| 2 | | and, for taxable years ending after December 31, 2008, |
| 3 | | does not include the generation, transmission, or |
| 4 | | distribution of electricity. |
| 5 | | (4) The basis of qualified property shall be the basis
|
| 6 | | used to compute the depreciation deduction for federal |
| 7 | | income tax purposes. |
| 8 | | (5) If the basis of the property for federal income |
| 9 | | tax depreciation
purposes is increased after it has been |
| 10 | | placed in service in Illinois by
the taxpayer, the amount |
| 11 | | of such increase shall be deemed property placed
in |
| 12 | | service on the date of such increase in basis. |
| 13 | | (6) The term "placed in service" shall have the same
|
| 14 | | meaning as under Section 46 of the Internal Revenue Code. |
| 15 | | (7) If during any taxable year, any property ceases to
|
| 16 | | be qualified property in the hands of the taxpayer within |
| 17 | | 48 months after
being placed in service, or the situs of |
| 18 | | any qualified property is
moved outside Illinois within 48 |
| 19 | | months after being placed in service, the
Personal |
| 20 | | Property Tax Replacement Income Tax for such taxable year |
| 21 | | shall be
increased. Such increase shall be determined by |
| 22 | | (i) recomputing the
investment credit which would have |
| 23 | | been allowed for the year in which
credit for such |
| 24 | | property was originally allowed by eliminating such
|
| 25 | | property from such computation and, (ii) subtracting such |
| 26 | | recomputed credit
from the amount of credit previously |
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| 1 | | allowed. For the purposes of this
paragraph (7), a |
| 2 | | reduction of the basis of qualified property resulting
|
| 3 | | from a redetermination of the purchase price shall be |
| 4 | | deemed a disposition
of qualified property to the extent |
| 5 | | of such reduction. |
| 6 | | (8) Unless the investment credit is extended by law, |
| 7 | | the
basis of qualified property shall not include costs |
| 8 | | incurred after
December 31, 2018, except for costs |
| 9 | | incurred pursuant to a binding
contract entered into on or |
| 10 | | before December 31, 2018. |
| 11 | | (9) Each taxable year ending before December 31, 2000, |
| 12 | | a partnership may
elect to pass through to its
partners |
| 13 | | the credits to which the partnership is entitled under |
| 14 | | this subsection
(e) for the taxable year. A partner may |
| 15 | | use the credit allocated to him or her
under this |
| 16 | | paragraph only against the tax imposed in subsections (c) |
| 17 | | and (d) of
this Section. If the partnership makes that |
| 18 | | election, those credits shall be
allocated among the |
| 19 | | partners in the partnership in accordance with the rules
|
| 20 | | set forth in Section 704(b) of the Internal Revenue Code, |
| 21 | | and the rules
promulgated under that Section, and the |
| 22 | | allocated amount of the credits shall
be allowed to the |
| 23 | | partners for that taxable year. The partnership shall make
|
| 24 | | this election on its Personal Property Tax Replacement |
| 25 | | Income Tax return for
that taxable year. The election to |
| 26 | | pass through the credits shall be
irrevocable. |
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| 1 | | For taxable years ending on or after December 31, |
| 2 | | 2000, a
partner that qualifies its
partnership for a |
| 3 | | subtraction under subparagraph (I) of paragraph (2) of
|
| 4 | | subsection (d) of Section 203 or a shareholder that |
| 5 | | qualifies a Subchapter S
corporation for a subtraction |
| 6 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
| 7 | | of Section 203 shall be allowed a credit under this |
| 8 | | subsection
(e) equal to its share of the credit earned |
| 9 | | under this subsection (e) during
the taxable year by the |
| 10 | | partnership or Subchapter S corporation, determined in
|
| 11 | | accordance with the determination of income and |
| 12 | | distributive share of
income under Sections 702 and 704 |
| 13 | | and Subchapter S of the Internal Revenue
Code. This |
| 14 | | paragraph is exempt from the provisions of Section 250. |
| 15 | | (f) Investment credit; Enterprise Zone; River Edge |
| 16 | | Redevelopment Zone. |
| 17 | | (1) A taxpayer shall be allowed a credit against the |
| 18 | | tax imposed
by subsections (a) and (b) of this Section for |
| 19 | | investment in qualified
property which is placed in |
| 20 | | service in an Enterprise Zone created
pursuant to the |
| 21 | | Illinois Enterprise Zone Act or, for property placed in |
| 22 | | service on or after July 1, 2006, a River Edge |
| 23 | | Redevelopment Zone established pursuant to the River Edge |
| 24 | | Redevelopment Zone Act. For partners, shareholders
of |
| 25 | | Subchapter S corporations, and owners of limited liability |
| 26 | | companies,
if the liability company is treated as a |
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| 1 | | partnership for purposes of
federal and State income |
| 2 | | taxation, there shall be allowed a credit under
this |
| 3 | | subsection (f) to be determined in accordance with the |
| 4 | | determination
of income and distributive share of income |
| 5 | | under Sections 702 and 704 and
Subchapter S of the |
| 6 | | Internal Revenue Code. The credit shall be .5% of the
|
| 7 | | basis for such property. The credit shall be available |
| 8 | | only in the taxable
year in which the property is placed in |
| 9 | | service in the Enterprise Zone or River Edge Redevelopment |
| 10 | | Zone and
shall not be allowed to the extent that it would |
| 11 | | reduce a taxpayer's
liability for the tax imposed by |
| 12 | | subsections (a) and (b) of this Section to
below zero. For |
| 13 | | tax years ending on or after December 31, 1985, the credit
|
| 14 | | shall be allowed for the tax year in which the property is |
| 15 | | placed in
service, or, if the amount of the credit exceeds |
| 16 | | the tax liability for that
year, whether it exceeds the |
| 17 | | original liability or the liability as later
amended, such |
| 18 | | excess may be carried forward and applied to the tax
|
| 19 | | liability of the 5 taxable years following the excess |
| 20 | | credit year.
The credit shall be applied to the earliest |
| 21 | | year for which there is a
liability. If there is credit |
| 22 | | from more than one tax year that is available
to offset a |
| 23 | | liability, the credit accruing first in time shall be |
| 24 | | applied
first. |
| 25 | | (2) The term qualified property means property which: |
| 26 | | (A) is tangible, whether new or used, including |
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| 1 | | buildings and
structural components of buildings; |
| 2 | | (B) is depreciable pursuant to Section 167 of the |
| 3 | | Internal Revenue
Code, except that "3-year property" |
| 4 | | as defined in Section 168(c)(2)(A) of
that Code is not |
| 5 | | eligible for the credit provided by this subsection |
| 6 | | (f); |
| 7 | | (C) is acquired by purchase as defined in Section |
| 8 | | 179(d) of
the Internal Revenue Code; |
| 9 | | (D) is used in the Enterprise Zone or River Edge |
| 10 | | Redevelopment Zone by the taxpayer; and |
| 11 | | (E) has not been previously used in Illinois in |
| 12 | | such a manner and by
such a person as would qualify for |
| 13 | | the credit provided by this subsection
(f) or |
| 14 | | subsection (e). |
| 15 | | (3) The basis of qualified property shall be the basis |
| 16 | | used to compute
the depreciation deduction for federal |
| 17 | | income tax purposes. |
| 18 | | (4) If the basis of the property for federal income |
| 19 | | tax depreciation
purposes is increased after it has been |
| 20 | | placed in service in the Enterprise
Zone or River Edge |
| 21 | | Redevelopment Zone by the taxpayer, the amount of such |
| 22 | | increase shall be deemed property
placed in service on the |
| 23 | | date of such increase in basis. |
| 24 | | (5) The term "placed in service" shall have the same |
| 25 | | meaning as under
Section 46 of the Internal Revenue Code. |
| 26 | | (6) If during any taxable year, any property ceases to |
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| 1 | | be qualified
property in the hands of the taxpayer within |
| 2 | | 48 months after being placed
in service, or the situs of |
| 3 | | any qualified property is moved outside the
Enterprise |
| 4 | | Zone or River Edge Redevelopment Zone within 48 months |
| 5 | | after being placed in service, the tax
imposed under |
| 6 | | subsections (a) and (b) of this Section for such taxable |
| 7 | | year
shall be increased. Such increase shall be determined |
| 8 | | by (i) recomputing
the investment credit which would have |
| 9 | | been allowed for the year in which
credit for such |
| 10 | | property was originally allowed by eliminating such
|
| 11 | | property from such computation, and (ii) subtracting such |
| 12 | | recomputed credit
from the amount of credit previously |
| 13 | | allowed. For the purposes of this
paragraph (6), a |
| 14 | | reduction of the basis of qualified property resulting
|
| 15 | | from a redetermination of the purchase price shall be |
| 16 | | deemed a disposition
of qualified property to the extent |
| 17 | | of such reduction. |
| 18 | | (7) There shall be allowed an additional credit equal |
| 19 | | to 0.5% of the basis of qualified property placed in |
| 20 | | service during the taxable year in a River Edge |
| 21 | | Redevelopment Zone, provided such property is placed in |
| 22 | | service on or after July 1, 2006, and the taxpayer's base |
| 23 | | employment within Illinois has increased by 1% or more |
| 24 | | over the preceding year as determined by the taxpayer's |
| 25 | | employment records filed with the Illinois Department of |
| 26 | | Employment Security. Taxpayers who are new to Illinois |
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| 1 | | shall be deemed to have met the 1% growth in base |
| 2 | | employment for the first year in which they file |
| 3 | | employment records with the Illinois Department of |
| 4 | | Employment Security. If, in any year, the increase in base |
| 5 | | employment within Illinois over the preceding year is less |
| 6 | | than 1%, the additional credit shall be limited to that |
| 7 | | percentage times a fraction, the numerator of which is |
| 8 | | 0.5% and the denominator of which is 1%, but shall not |
| 9 | | exceed 0.5%.
|
| 10 | | (8) For taxable years beginning on or after January 1, |
| 11 | | 2021, there shall be allowed an Enterprise Zone |
| 12 | | construction jobs credit against the taxes imposed under |
| 13 | | subsections (a) and (b) of this Section as provided in |
| 14 | | Section 13 of the Illinois Enterprise Zone Act. |
| 15 | | The credit or credits may not reduce the taxpayer's |
| 16 | | liability to less than zero. If the amount of the credit or |
| 17 | | credits exceeds the taxpayer's liability, the excess may |
| 18 | | be carried forward and applied against the taxpayer's |
| 19 | | liability in succeeding calendar years in the same manner |
| 20 | | provided under paragraph (4) of Section 211 of this Act. |
| 21 | | The credit or credits shall be applied to the earliest |
| 22 | | year for which there is a tax liability. If there are |
| 23 | | credits from more than one taxable year that are available |
| 24 | | to offset a liability, the earlier credit shall be applied |
| 25 | | first. |
| 26 | | For partners, shareholders of Subchapter S |
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| 1 | | corporations, and owners of limited liability companies, |
| 2 | | if the liability company is treated as a partnership for |
| 3 | | the purposes of federal and State income taxation, there |
| 4 | | shall be allowed a credit under this Section to be |
| 5 | | determined in accordance with the determination of income |
| 6 | | and distributive share of income under Sections 702 and |
| 7 | | 704 and Subchapter S of the Internal Revenue Code. |
| 8 | | The total aggregate amount of credits awarded under |
| 9 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
| 10 | | this amendatory Act of the 101st General Assembly) shall |
| 11 | | not exceed $20,000,000 in any State fiscal year. |
| 12 | | This paragraph (8) is exempt from the provisions of |
| 13 | | Section 250. |
| 14 | | (g) (Blank). |
| 15 | | (h) Investment credit; High Impact Business. |
| 16 | | (1) Subject to subsections (b) and (b-5) of Section
|
| 17 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
| 18 | | be allowed a credit
against the tax imposed by subsections |
| 19 | | (a) and (b) of this Section for
investment in qualified
|
| 20 | | property which is placed in service by a Department of |
| 21 | | Commerce and Economic Opportunity
designated High Impact |
| 22 | | Business. The credit shall be .5% of the basis
for such |
| 23 | | property. The credit shall not be available (i) until the |
| 24 | | minimum
investments in qualified property set forth in |
| 25 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
| 26 | | Enterprise Zone Act have been satisfied
or (ii) until the |
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| 1 | | time authorized in subsection (b-5) of the Illinois
|
| 2 | | Enterprise Zone Act for entities designated as High Impact |
| 3 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
| 4 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
| 5 | | Act, and shall not be allowed to the extent that it would
|
| 6 | | reduce a taxpayer's liability for the tax imposed by |
| 7 | | subsections (a) and (b) of
this Section to below zero. The |
| 8 | | credit applicable to such investments shall be
taken in |
| 9 | | the taxable year in which such investments have been |
| 10 | | completed. The
credit for additional investments beyond |
| 11 | | the minimum investment by a designated
high impact |
| 12 | | business authorized under subdivision (a)(3)(A) of Section |
| 13 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
| 14 | | only in the taxable year in
which the property is placed in |
| 15 | | service and shall not be allowed to the extent
that it |
| 16 | | would reduce a taxpayer's liability for the tax imposed by |
| 17 | | subsections
(a) and (b) of this Section to below zero.
For |
| 18 | | tax years ending on or after December 31, 1987, the credit |
| 19 | | shall be
allowed for the tax year in which the property is |
| 20 | | placed in service, or, if
the amount of the credit exceeds |
| 21 | | the tax liability for that year, whether
it exceeds the |
| 22 | | original liability or the liability as later amended, such
|
| 23 | | excess may be carried forward and applied to the tax |
| 24 | | liability of the 5
taxable years following the excess |
| 25 | | credit year. The credit shall be
applied to the earliest |
| 26 | | year for which there is a liability. If there is
credit |
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| 1 | | from more than one tax year that is available to offset a |
| 2 | | liability,
the credit accruing first in time shall be |
| 3 | | applied first. |
| 4 | | Changes made in this subdivision (h)(1) by Public Act |
| 5 | | 88-670
restore changes made by Public Act 85-1182 and |
| 6 | | reflect existing law. |
| 7 | | (2) The term qualified property means property which: |
| 8 | | (A) is tangible, whether new or used, including |
| 9 | | buildings and
structural components of buildings; |
| 10 | | (B) is depreciable pursuant to Section 167 of the |
| 11 | | Internal Revenue
Code, except that "3-year property" |
| 12 | | as defined in Section 168(c)(2)(A) of
that Code is not |
| 13 | | eligible for the credit provided by this subsection |
| 14 | | (h); |
| 15 | | (C) is acquired by purchase as defined in Section |
| 16 | | 179(d) of the
Internal Revenue Code; and |
| 17 | | (D) is not eligible for the Enterprise Zone |
| 18 | | Investment Credit provided
by subsection (f) of this |
| 19 | | Section. |
| 20 | | (3) The basis of qualified property shall be the basis |
| 21 | | used to compute
the depreciation deduction for federal |
| 22 | | income tax purposes. |
| 23 | | (4) If the basis of the property for federal income |
| 24 | | tax depreciation
purposes is increased after it has been |
| 25 | | placed in service in a federally
designated Foreign Trade |
| 26 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
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| 1 | | amount of such increase shall be deemed property placed in |
| 2 | | service on
the date of such increase in basis. |
| 3 | | (5) The term "placed in service" shall have the same |
| 4 | | meaning as under
Section 46 of the Internal Revenue Code. |
| 5 | | (6) If during any taxable year ending on or before |
| 6 | | December 31, 1996,
any property ceases to be qualified
|
| 7 | | property in the hands of the taxpayer within 48 months |
| 8 | | after being placed
in service, or the situs of any |
| 9 | | qualified property is moved outside
Illinois within 48 |
| 10 | | months after being placed in service, the tax imposed
|
| 11 | | under subsections (a) and (b) of this Section for such |
| 12 | | taxable year shall
be increased. Such increase shall be |
| 13 | | determined by (i) recomputing the
investment credit which |
| 14 | | would have been allowed for the year in which
credit for |
| 15 | | such property was originally allowed by eliminating such
|
| 16 | | property from such computation, and (ii) subtracting such |
| 17 | | recomputed credit
from the amount of credit previously |
| 18 | | allowed. For the purposes of this
paragraph (6), a |
| 19 | | reduction of the basis of qualified property resulting
|
| 20 | | from a redetermination of the purchase price shall be |
| 21 | | deemed a disposition
of qualified property to the extent |
| 22 | | of such reduction. |
| 23 | | (7) Beginning with tax years ending after December 31, |
| 24 | | 1996, if a
taxpayer qualifies for the credit under this |
| 25 | | subsection (h) and thereby is
granted a tax abatement and |
| 26 | | the taxpayer relocates its entire facility in
violation of |
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| 1 | | the explicit terms and length of the contract under |
| 2 | | Section
18-183 of the Property Tax Code, the tax imposed |
| 3 | | under subsections
(a) and (b) of this Section shall be |
| 4 | | increased for the taxable year
in which the taxpayer |
| 5 | | relocated its facility by an amount equal to the
amount of |
| 6 | | credit received by the taxpayer under this subsection (h). |
| 7 | | (h-1) Investment credit; Big Empties Site. For taxable |
| 8 | | years beginning on or after January 1, 2022, a taxpayer shall |
| 9 | | be allowed a credit
against the tax imposed by subsections (a) |
| 10 | | and (b) of this Section for
investment in qualified
property |
| 11 | | which is placed in service by a Department of Commerce and |
| 12 | | Economic Opportunity
designated Big Empties Site. The credit |
| 13 | | shall be .5% of the basis
for such property. As used in this |
| 14 | | subsection (h-1), the terms "qualified property" and "placed |
| 15 | | in service" have the same meanings as in subsection (h). This |
| 16 | | subsection is exempt from the provisions of Section 250. |
| 17 | | (h-5) High Impact Business construction constructions jobs |
| 18 | | credit. For taxable years beginning on or after January 1, |
| 19 | | 2021, there shall also be allowed a High Impact Business |
| 20 | | construction jobs credit against the tax imposed under |
| 21 | | subsections (a) and (b) of this Section as provided in |
| 22 | | subsections (i) and (j) of Section 5.5 of the Illinois |
| 23 | | Enterprise Zone Act. |
| 24 | | The credit or credits may not reduce the taxpayer's |
| 25 | | liability to less than zero. If the amount of the credit or |
| 26 | | credits exceeds the taxpayer's liability, the excess may be |
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| 1 | | carried forward and applied against the taxpayer's liability |
| 2 | | in succeeding calendar years in the manner provided under |
| 3 | | paragraph (4) of Section 211 of this Act. The credit or credits |
| 4 | | shall be applied to the earliest year for which there is a tax |
| 5 | | liability. If there are credits from more than one taxable |
| 6 | | year that are available to offset a liability, the earlier |
| 7 | | credit shall be applied first. |
| 8 | | For partners, shareholders of Subchapter S corporations, |
| 9 | | and owners of limited liability companies, if the liability |
| 10 | | company is treated as a partnership for the purposes of |
| 11 | | federal and State income taxation, there shall be allowed a |
| 12 | | credit under this Section to be determined in accordance with |
| 13 | | the determination of income and distributive share of income |
| 14 | | under Sections 702 and 704 and Subchapter S of the Internal |
| 15 | | Revenue Code. |
| 16 | | The total aggregate amount of credits awarded under the |
| 17 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this |
| 18 | | amendatory Act of the 101st General Assembly) shall not exceed |
| 19 | | $20,000,000 in any State fiscal year. |
| 20 | | This subsection (h-5) is exempt from the provisions of |
| 21 | | Section 250. |
| 22 | | (i) Credit for Personal Property Tax Replacement Income |
| 23 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
| 24 | | shall be allowed
against the tax imposed by
subsections (a) |
| 25 | | and (b) of this Section for the tax imposed by subsections (c)
|
| 26 | | and (d) of this Section. This credit shall be computed by |
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| 1 | | multiplying the tax
imposed by subsections (c) and (d) of this |
| 2 | | Section by a fraction, the numerator
of which is base income |
| 3 | | allocable to Illinois and the denominator of which is
Illinois |
| 4 | | base income, and further multiplying the product by the tax |
| 5 | | rate
imposed by subsections (a) and (b) of this Section. |
| 6 | | Any credit earned on or after December 31, 1986 under
this |
| 7 | | subsection which is unused in the year
the credit is computed |
| 8 | | because it exceeds the tax liability imposed by
subsections |
| 9 | | (a) and (b) for that year (whether it exceeds the original
|
| 10 | | liability or the liability as later amended) may be carried |
| 11 | | forward and
applied to the tax liability imposed by |
| 12 | | subsections (a) and (b) of the 5
taxable years following the |
| 13 | | excess credit year, provided that no credit may
be carried |
| 14 | | forward to any year ending on or
after December 31, 2003. This |
| 15 | | credit shall be
applied first to the earliest year for which |
| 16 | | there is a liability. If
there is a credit under this |
| 17 | | subsection from more than one tax year that is
available to |
| 18 | | offset a liability the earliest credit arising under this
|
| 19 | | subsection shall be applied first. |
| 20 | | If, during any taxable year ending on or after December |
| 21 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
| 22 | | Section for which a taxpayer
has claimed a credit under this |
| 23 | | subsection (i) is reduced, the amount of
credit for such tax |
| 24 | | shall also be reduced. Such reduction shall be
determined by |
| 25 | | recomputing the credit to take into account the reduced tax
|
| 26 | | imposed by subsections (c) and (d). If any portion of the
|
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| 1 | | reduced amount of credit has been carried to a different |
| 2 | | taxable year, an
amended return shall be filed for such |
| 3 | | taxable year to reduce the amount of
credit claimed. |
| 4 | | (j) Training expense credit. Beginning with tax years |
| 5 | | ending on or
after December 31, 1986 and prior to December 31, |
| 6 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
| 7 | | imposed by subsections (a) and (b) under this Section
for all |
| 8 | | amounts paid or accrued, on behalf of all persons
employed by |
| 9 | | the taxpayer in Illinois or Illinois residents employed
|
| 10 | | outside of Illinois by a taxpayer, for educational or |
| 11 | | vocational training in
semi-technical or technical fields or |
| 12 | | semi-skilled or skilled fields, which
were deducted from gross |
| 13 | | income in the computation of taxable income. The
credit |
| 14 | | against the tax imposed by subsections (a) and (b) shall be |
| 15 | | 1.6% of
such training expenses. For partners, shareholders of |
| 16 | | subchapter S
corporations, and owners of limited liability |
| 17 | | companies, if the liability
company is treated as a |
| 18 | | partnership for purposes of federal and State income
taxation, |
| 19 | | there shall be allowed a credit under this subsection (j) to be
|
| 20 | | determined in accordance with the determination of income and |
| 21 | | distributive
share of income under Sections 702 and 704 and |
| 22 | | subchapter S of the Internal
Revenue Code. |
| 23 | | Any credit allowed under this subsection which is unused |
| 24 | | in the year
the credit is earned may be carried forward to each |
| 25 | | of the 5 taxable
years following the year for which the credit |
| 26 | | is first computed until it is
used. This credit shall be |
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| 1 | | applied first to the earliest year for which
there is a |
| 2 | | liability. If there is a credit under this subsection from |
| 3 | | more
than one tax year that is available to offset a liability, |
| 4 | | the earliest
credit arising under this subsection shall be |
| 5 | | applied first. No carryforward
credit may be claimed in any |
| 6 | | tax year ending on or after
December 31, 2003. |
| 7 | | (k) Research and development credit. For tax years ending |
| 8 | | after July 1, 1990 and prior to
December 31, 2003, and |
| 9 | | beginning again for tax years ending on or after December 31, |
| 10 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
| 11 | | allowed a credit against the tax imposed by subsections (a) |
| 12 | | and (b) of this
Section for increasing research activities in |
| 13 | | this State. The credit
allowed against the tax imposed by |
| 14 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
| 15 | | qualifying expenditures for increasing research activities
in |
| 16 | | this State. For partners, shareholders of subchapter S |
| 17 | | corporations, and
owners of limited liability companies, if |
| 18 | | the liability company is treated as a
partnership for purposes |
| 19 | | of federal and State income taxation, there shall be
allowed a |
| 20 | | credit under this subsection to be determined in accordance |
| 21 | | with the
determination of income and distributive share of |
| 22 | | income under Sections 702 and
704 and subchapter S of the |
| 23 | | Internal Revenue Code. |
| 24 | | For purposes of this subsection, "qualifying expenditures" |
| 25 | | means the
qualifying expenditures as defined for the federal |
| 26 | | credit for increasing
research activities which would be |
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| 1 | | allowable under Section 41 of the
Internal Revenue Code and |
| 2 | | which are conducted in this State, "qualifying
expenditures |
| 3 | | for increasing research activities in this State" means the
|
| 4 | | excess of qualifying expenditures for the taxable year in |
| 5 | | which incurred
over qualifying expenditures for the base |
| 6 | | period, "qualifying expenditures
for the base period" means |
| 7 | | the average of the qualifying expenditures for
each year in |
| 8 | | the base period, and "base period" means the 3 taxable years
|
| 9 | | immediately preceding the taxable year for which the |
| 10 | | determination is
being made. |
| 11 | | Any credit in excess of the tax liability for the taxable |
| 12 | | year
may be carried forward. A taxpayer may elect to have the
|
| 13 | | unused credit shown on its final completed return carried over |
| 14 | | as a credit
against the tax liability for the following 5 |
| 15 | | taxable years or until it has
been fully used, whichever |
| 16 | | occurs first; provided that no credit earned in a tax year |
| 17 | | ending prior to December 31, 2003 may be carried forward to any |
| 18 | | year ending on or after December 31, 2003. |
| 19 | | If an unused credit is carried forward to a given year from |
| 20 | | 2 or more
earlier years, that credit arising in the earliest |
| 21 | | year will be applied
first against the tax liability for the |
| 22 | | given year. If a tax liability for
the given year still |
| 23 | | remains, the credit from the next earliest year will
then be |
| 24 | | applied, and so on, until all credits have been used or no tax
|
| 25 | | liability for the given year remains. Any remaining unused |
| 26 | | credit or
credits then will be carried forward to the next |
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| 1 | | following year in which a
tax liability is incurred, except |
| 2 | | that no credit can be carried forward to
a year which is more |
| 3 | | than 5 years after the year in which the expense for
which the |
| 4 | | credit is given was incurred. |
| 5 | | No inference shall be drawn from Public Act 91-644 this |
| 6 | | amendatory Act of the 91st General
Assembly in construing this |
| 7 | | Section for taxable years beginning before January
1, 1999. |
| 8 | | It is the intent of the General Assembly that the research |
| 9 | | and development credit under this subsection (k) shall apply |
| 10 | | continuously for all tax years ending on or after December 31, |
| 11 | | 2004 and ending prior to January 1, 2027, including, but not |
| 12 | | limited to, the period beginning on January 1, 2016 and ending |
| 13 | | on July 6, 2017 (the effective date of Public Act 100-22) this |
| 14 | | amendatory Act of the 100th General Assembly. All actions |
| 15 | | taken in reliance on the continuation of the credit under this |
| 16 | | subsection (k) by any taxpayer are hereby validated. |
| 17 | | (l) Environmental Remediation Tax Credit. |
| 18 | | (i) For tax years ending after December 31, 1997 and |
| 19 | | on or before
December 31, 2001, a taxpayer shall be |
| 20 | | allowed a credit against the tax
imposed by subsections |
| 21 | | (a) and (b) of this Section for certain amounts paid
for |
| 22 | | unreimbursed eligible remediation costs, as specified in |
| 23 | | this subsection.
For purposes of this Section, |
| 24 | | "unreimbursed eligible remediation costs" means
costs |
| 25 | | approved by the Illinois Environmental Protection Agency |
| 26 | | ("Agency") under
Section 58.14 of the Environmental |
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| 1 | | Protection Act that were paid in performing
environmental |
| 2 | | remediation at a site for which a No Further Remediation |
| 3 | | Letter
was issued by the Agency and recorded under Section |
| 4 | | 58.10 of the Environmental
Protection Act. The credit must |
| 5 | | be claimed for the taxable year in which
Agency approval |
| 6 | | of the eligible remediation costs is granted. The credit |
| 7 | | is
not available to any taxpayer if the taxpayer or any |
| 8 | | related party caused or
contributed to, in any material |
| 9 | | respect, a release of regulated substances on,
in, or |
| 10 | | under the site that was identified and addressed by the |
| 11 | | remedial
action pursuant to the Site Remediation Program |
| 12 | | of the Environmental Protection
Act. After the Pollution |
| 13 | | Control Board rules are adopted pursuant to the
Illinois |
| 14 | | Administrative Procedure Act for the administration and |
| 15 | | enforcement of
Section 58.9 of the Environmental |
| 16 | | Protection Act, determinations as to credit
availability |
| 17 | | for purposes of this Section shall be made consistent with |
| 18 | | those
rules. For purposes of this Section, "taxpayer" |
| 19 | | includes a person whose tax
attributes the taxpayer has |
| 20 | | succeeded to under Section 381 of the Internal
Revenue |
| 21 | | Code and "related party" includes the persons disallowed a |
| 22 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
| 23 | | Section 267 of the Internal
Revenue Code by virtue of |
| 24 | | being a related taxpayer, as well as any of its
partners. |
| 25 | | The credit allowed against the tax imposed by subsections |
| 26 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
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| 1 | | eligible remediation costs in
excess of $100,000 per site, |
| 2 | | except that the $100,000 threshold shall not apply
to any |
| 3 | | site contained in an enterprise zone as determined by the |
| 4 | | Department of
Commerce and Community Affairs (now |
| 5 | | Department of Commerce and Economic Opportunity). The |
| 6 | | total credit allowed shall not exceed
$40,000 per year |
| 7 | | with a maximum total of $150,000 per site. For partners |
| 8 | | and
shareholders of subchapter S corporations, there shall |
| 9 | | be allowed a credit
under this subsection to be determined |
| 10 | | in accordance with the determination of
income and |
| 11 | | distributive share of income under Sections 702 and 704 |
| 12 | | and
subchapter S of the Internal Revenue Code. |
| 13 | | (ii) A credit allowed under this subsection that is |
| 14 | | unused in the year
the credit is earned may be carried |
| 15 | | forward to each of the 5 taxable years
following the year |
| 16 | | for which the credit is first earned until it is used.
The |
| 17 | | term "unused credit" does not include any amounts of |
| 18 | | unreimbursed eligible
remediation costs in excess of the |
| 19 | | maximum credit per site authorized under
paragraph (i). |
| 20 | | This credit shall be applied first to the earliest year
|
| 21 | | for which there is a liability. If there is a credit under |
| 22 | | this subsection
from more than one tax year that is |
| 23 | | available to offset a liability, the
earliest credit |
| 24 | | arising under this subsection shall be applied first. A
|
| 25 | | credit allowed under this subsection may be sold to a |
| 26 | | buyer as part of a sale
of all or part of the remediation |
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| 1 | | site for which the credit was granted. The
purchaser of a |
| 2 | | remediation site and the tax credit shall succeed to the |
| 3 | | unused
credit and remaining carry-forward period of the |
| 4 | | seller. To perfect the
transfer, the assignor shall record |
| 5 | | the transfer in the chain of title for the
site and provide |
| 6 | | written notice to the Director of the Illinois Department |
| 7 | | of
Revenue of the assignor's intent to sell the |
| 8 | | remediation site and the amount of
the tax credit to be |
| 9 | | transferred as a portion of the sale. In no event may a
|
| 10 | | credit be transferred to any taxpayer if the taxpayer or a |
| 11 | | related party would
not be eligible under the provisions |
| 12 | | of subsection (i). |
| 13 | | (iii) For purposes of this Section, the term "site" |
| 14 | | shall have the same
meaning as under Section 58.2 of the |
| 15 | | Environmental Protection Act. |
| 16 | | (m) Education expense credit. Beginning with tax years |
| 17 | | ending after
December 31, 1999, a taxpayer who
is the |
| 18 | | custodian of one or more qualifying pupils shall be allowed a |
| 19 | | credit
against the tax imposed by subsections (a) and (b) of |
| 20 | | this Section for
qualified education expenses incurred on |
| 21 | | behalf of the qualifying pupils.
The credit shall be equal to |
| 22 | | 25% of qualified education expenses, but in no
event may the |
| 23 | | total credit under this subsection claimed by a
family that is |
| 24 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
| 25 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
| 26 | | years ending on or after December 31, 2017. In no event shall a |
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| 1 | | credit under
this subsection reduce the taxpayer's liability |
| 2 | | under this Act to less than
zero. Notwithstanding any other |
| 3 | | provision of law, for taxable years beginning on or after |
| 4 | | January 1, 2017, no taxpayer may claim a credit under this |
| 5 | | subsection (m) if the taxpayer's adjusted gross income for the |
| 6 | | taxable year exceeds (i) $500,000, in the case of spouses |
| 7 | | filing a joint federal tax return or (ii) $250,000, in the case |
| 8 | | of all other taxpayers. This subsection is exempt from the |
| 9 | | provisions of Section 250 of this
Act. |
| 10 | | For purposes of this subsection: |
| 11 | | "Qualifying pupils" means individuals who (i) are |
| 12 | | residents of the State of
Illinois, (ii) are under the age of |
| 13 | | 21 at the close of the school year for
which a credit is |
| 14 | | sought, and (iii) during the school year for which a credit
is |
| 15 | | sought were full-time pupils enrolled in a kindergarten |
| 16 | | through twelfth
grade education program at any school, as |
| 17 | | defined in this subsection. |
| 18 | | "Qualified education expense" means the amount incurred
on |
| 19 | | behalf of a qualifying pupil in excess of $250 for tuition, |
| 20 | | book fees, and
lab fees at the school in which the pupil is |
| 21 | | enrolled during the regular school
year. |
| 22 | | "School" means any public or nonpublic elementary or |
| 23 | | secondary school in
Illinois that is in compliance with Title |
| 24 | | VI of the Civil Rights Act of 1964
and attendance at which |
| 25 | | satisfies the requirements of Section 26-1 of the
School Code, |
| 26 | | except that nothing shall be construed to require a child to
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| 1 | | attend any particular public or nonpublic school to qualify |
| 2 | | for the credit
under this Section. |
| 3 | | "Custodian" means, with respect to qualifying pupils, an |
| 4 | | Illinois resident
who is a parent, the parents, a legal |
| 5 | | guardian, or the legal guardians of the
qualifying pupils. |
| 6 | | (n) River Edge Redevelopment Zone site remediation tax |
| 7 | | credit.
|
| 8 | | (i) For tax years ending on or after December 31, |
| 9 | | 2006, a taxpayer shall be allowed a credit against the tax |
| 10 | | imposed by subsections (a) and (b) of this Section for |
| 11 | | certain amounts paid for unreimbursed eligible remediation |
| 12 | | costs, as specified in this subsection. For purposes of |
| 13 | | this Section, "unreimbursed eligible remediation costs" |
| 14 | | means costs approved by the Illinois Environmental |
| 15 | | Protection Agency ("Agency") under Section 58.14a of the |
| 16 | | Environmental Protection Act that were paid in performing |
| 17 | | environmental remediation at a site within a River Edge |
| 18 | | Redevelopment Zone for which a No Further Remediation |
| 19 | | Letter was issued by the Agency and recorded under Section |
| 20 | | 58.10 of the Environmental Protection Act. The credit must |
| 21 | | be claimed for the taxable year in which Agency approval |
| 22 | | of the eligible remediation costs is granted. The credit |
| 23 | | is not available to any taxpayer if the taxpayer or any |
| 24 | | related party caused or contributed to, in any material |
| 25 | | respect, a release of regulated substances on, in, or |
| 26 | | under the site that was identified and addressed by the |
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| 1 | | remedial action pursuant to the Site Remediation Program |
| 2 | | of the Environmental Protection Act. Determinations as to |
| 3 | | credit availability for purposes of this Section shall be |
| 4 | | made consistent with rules adopted by the Pollution |
| 5 | | Control Board pursuant to the Illinois Administrative |
| 6 | | Procedure Act for the administration and enforcement of |
| 7 | | Section 58.9 of the Environmental Protection Act. For |
| 8 | | purposes of this Section, "taxpayer" includes a person |
| 9 | | whose tax attributes the taxpayer has succeeded to under |
| 10 | | Section 381 of the Internal Revenue Code and "related |
| 11 | | party" includes the persons disallowed a deduction for |
| 12 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
| 13 | | of the Internal Revenue Code by virtue of being a related |
| 14 | | taxpayer, as well as any of its partners. The credit |
| 15 | | allowed against the tax imposed by subsections (a) and (b) |
| 16 | | shall be equal to 25% of the unreimbursed eligible |
| 17 | | remediation costs in excess of $100,000 per site. |
| 18 | | (ii) A credit allowed under this subsection that is |
| 19 | | unused in the year the credit is earned may be carried |
| 20 | | forward to each of the 5 taxable years following the year |
| 21 | | for which the credit is first earned until it is used. This |
| 22 | | credit shall be applied first to the earliest year for |
| 23 | | which there is a liability. If there is a credit under this |
| 24 | | subsection from more than one tax year that is available |
| 25 | | to offset a liability, the earliest credit arising under |
| 26 | | this subsection shall be applied first. A credit allowed |
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| 1 | | under this subsection may be sold to a buyer as part of a |
| 2 | | sale of all or part of the remediation site for which the |
| 3 | | credit was granted. The purchaser of a remediation site |
| 4 | | and the tax credit shall succeed to the unused credit and |
| 5 | | remaining carry-forward period of the seller. To perfect |
| 6 | | the transfer, the assignor shall record the transfer in |
| 7 | | the chain of title for the site and provide written notice |
| 8 | | to the Director of the Illinois Department of Revenue of |
| 9 | | the assignor's intent to sell the remediation site and the |
| 10 | | amount of the tax credit to be transferred as a portion of |
| 11 | | the sale. In no event may a credit be transferred to any |
| 12 | | taxpayer if the taxpayer or a related party would not be |
| 13 | | eligible under the provisions of subsection (i). |
| 14 | | (iii) For purposes of this Section, the term "site" |
| 15 | | shall have the same meaning as under Section 58.2 of the |
| 16 | | Environmental Protection Act. |
| 17 | | (o) For each of taxable years during the Compassionate Use |
| 18 | | of Medical Cannabis Program, a surcharge is imposed on all |
| 19 | | taxpayers on income arising from the sale or exchange of |
| 20 | | capital assets, depreciable business property, real property |
| 21 | | used in the trade or business, and Section 197 intangibles of |
| 22 | | an organization registrant under the Compassionate Use of |
| 23 | | Medical Cannabis Program Act. The amount of the surcharge is |
| 24 | | equal to the amount of federal income tax liability for the |
| 25 | | taxable year attributable to those sales and exchanges. The |
| 26 | | surcharge imposed does not apply if: |
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| 1 | | (1) the medical cannabis cultivation center |
| 2 | | registration, medical cannabis dispensary registration, or |
| 3 | | the property of a registration is transferred as a result |
| 4 | | of any of the following: |
| 5 | | (A) bankruptcy, a receivership, or a debt |
| 6 | | adjustment initiated by or against the initial |
| 7 | | registration or the substantial owners of the initial |
| 8 | | registration; |
| 9 | | (B) cancellation, revocation, or termination of |
| 10 | | any registration by the Illinois Department of Public |
| 11 | | Health; |
| 12 | | (C) a determination by the Illinois Department of |
| 13 | | Public Health that transfer of the registration is in |
| 14 | | the best interests of Illinois qualifying patients as |
| 15 | | defined by the Compassionate Use of Medical Cannabis |
| 16 | | Program Act; |
| 17 | | (D) the death of an owner of the equity interest in |
| 18 | | a registrant; |
| 19 | | (E) the acquisition of a controlling interest in |
| 20 | | the stock or substantially all of the assets of a |
| 21 | | publicly traded company; |
| 22 | | (F) a transfer by a parent company to a wholly |
| 23 | | owned subsidiary; or |
| 24 | | (G) the transfer or sale to or by one person to |
| 25 | | another person where both persons were initial owners |
| 26 | | of the registration when the registration was issued; |
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| 1 | | or |
| 2 | | (2) the cannabis cultivation center registration, |
| 3 | | medical cannabis dispensary registration, or the |
| 4 | | controlling interest in a registrant's property is |
| 5 | | transferred in a transaction to lineal descendants in |
| 6 | | which no gain or loss is recognized or as a result of a |
| 7 | | transaction in accordance with Section 351 of the Internal |
| 8 | | Revenue Code in which no gain or loss is recognized. |
| 9 | | (Source: P.A. 100-22, eff. 7-6-17; 101-9, eff. 6-5-19; 101-31, |
| 10 | | eff. 6-28-19; 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; |
| 11 | | revised 11-18-20.)
|
| 12 | | (Text of Section with the changes made by P.A. 101-8, |
| 13 | | which did not take effect (see Section 99 of P.A. 101-8))
|
| 14 | | Sec. 201. Tax imposed. |
| 15 | | (a) In general. A tax measured by net income is hereby |
| 16 | | imposed on every
individual, corporation, trust and estate for |
| 17 | | each taxable year ending
after July 31, 1969 on the privilege |
| 18 | | of earning or receiving income in or
as a resident of this |
| 19 | | State. Such tax shall be in addition to all other
occupation or |
| 20 | | privilege taxes imposed by this State or by any municipal
|
| 21 | | corporation or political subdivision thereof. |
| 22 | | (b) Rates. The tax imposed by subsection (a) of this |
| 23 | | Section shall be
determined as follows, except as adjusted by |
| 24 | | subsection (d-1): |
| 25 | | (1) In the case of an individual, trust or estate, for |
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| 1 | | taxable years
ending prior to July 1, 1989, an amount |
| 2 | | equal to 2 1/2% of the taxpayer's
net income for the |
| 3 | | taxable year. |
| 4 | | (2) In the case of an individual, trust or estate, for |
| 5 | | taxable years
beginning prior to July 1, 1989 and ending |
| 6 | | after June 30, 1989, an amount
equal to the sum of (i) 2 |
| 7 | | 1/2% of the taxpayer's net income for the period
prior to |
| 8 | | July 1, 1989, as calculated under Section 202.3, and (ii) |
| 9 | | 3% of the
taxpayer's net income for the period after June |
| 10 | | 30, 1989, as calculated
under Section 202.3. |
| 11 | | (3) In the case of an individual, trust or estate, for |
| 12 | | taxable years
beginning after June 30, 1989, and ending |
| 13 | | prior to January 1, 2011, an amount equal to 3% of the |
| 14 | | taxpayer's net
income for the taxable year. |
| 15 | | (4) In the case of an individual, trust, or estate, |
| 16 | | for taxable years beginning prior to January 1, 2011, and |
| 17 | | ending after December 31, 2010, an amount equal to the sum |
| 18 | | of (i) 3% of the taxpayer's net income for the period prior |
| 19 | | to January 1, 2011, as calculated under Section 202.5, and |
| 20 | | (ii) 5% of the taxpayer's net income for the period after |
| 21 | | December 31, 2010, as calculated under Section 202.5. |
| 22 | | (5) In the case of an individual, trust, or estate, |
| 23 | | for taxable years beginning on or after January 1, 2011, |
| 24 | | and ending prior to January 1, 2015, an amount equal to 5% |
| 25 | | of the taxpayer's net income for the taxable year. |
| 26 | | (5.1) In the case of an individual, trust, or estate, |
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| 1 | | for taxable years beginning prior to January 1, 2015, and |
| 2 | | ending after December 31, 2014, an amount equal to the sum |
| 3 | | of (i) 5% of the taxpayer's net income for the period prior |
| 4 | | to January 1, 2015, as calculated under Section 202.5, and |
| 5 | | (ii) 3.75% of the taxpayer's net income for the period |
| 6 | | after December 31, 2014, as calculated under Section |
| 7 | | 202.5. |
| 8 | | (5.2) In the case of an individual, trust, or estate, |
| 9 | | for taxable years beginning on or after January 1, 2015, |
| 10 | | and ending prior to July 1, 2017, an amount equal to 3.75% |
| 11 | | of the taxpayer's net income for the taxable year. |
| 12 | | (5.3) In the case of an individual, trust, or estate, |
| 13 | | for taxable years beginning prior to July 1, 2017, and |
| 14 | | ending after June 30, 2017, an amount equal to the sum of |
| 15 | | (i) 3.75% of the taxpayer's net income for the period |
| 16 | | prior to July 1, 2017, as calculated under Section 202.5, |
| 17 | | and (ii) 4.95% of the taxpayer's net income for the period |
| 18 | | after June 30, 2017, as calculated under Section 202.5. |
| 19 | | (5.4) In the case of an individual, trust, or estate, |
| 20 | | for taxable years beginning on or after July 1, 2017 and |
| 21 | | beginning prior to January 1, 2021, an amount equal to |
| 22 | | 4.95% of the taxpayer's net income for the taxable year. |
| 23 | | (5.5) In the case of an individual, trust, or estate, |
| 24 | | for taxable years beginning on or after January 1, 2021, |
| 25 | | an amount calculated under the rate structure set forth in |
| 26 | | Section 201.1. |
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| 1 | | (6) In the case of a corporation, for taxable years
|
| 2 | | ending prior to July 1, 1989, an amount equal to 4% of the
|
| 3 | | taxpayer's net income for the taxable year. |
| 4 | | (7) In the case of a corporation, for taxable years |
| 5 | | beginning prior to
July 1, 1989 and ending after June 30, |
| 6 | | 1989, an amount equal to the sum of
(i) 4% of the |
| 7 | | taxpayer's net income for the period prior to July 1, |
| 8 | | 1989,
as calculated under Section 202.3, and (ii) 4.8% of |
| 9 | | the taxpayer's net
income for the period after June 30, |
| 10 | | 1989, as calculated under Section
202.3. |
| 11 | | (8) In the case of a corporation, for taxable years |
| 12 | | beginning after
June 30, 1989, and ending prior to January |
| 13 | | 1, 2011, an amount equal to 4.8% of the taxpayer's net |
| 14 | | income for the
taxable year. |
| 15 | | (9) In the case of a corporation, for taxable years |
| 16 | | beginning prior to January 1, 2011, and ending after |
| 17 | | December 31, 2010, an amount equal to the sum of (i) 4.8% |
| 18 | | of the taxpayer's net income for the period prior to |
| 19 | | January 1, 2011, as calculated under Section 202.5, and |
| 20 | | (ii) 7% of the taxpayer's net income for the period after |
| 21 | | December 31, 2010, as calculated under Section 202.5. |
| 22 | | (10) In the case of a corporation, for taxable years |
| 23 | | beginning on or after January 1, 2011, and ending prior to |
| 24 | | January 1, 2015, an amount equal to 7% of the taxpayer's |
| 25 | | net income for the taxable year. |
| 26 | | (11) In the case of a corporation, for taxable years |
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| 1 | | beginning prior to January 1, 2015, and ending after |
| 2 | | December 31, 2014, an amount equal to the sum of (i) 7% of |
| 3 | | the taxpayer's net income for the period prior to January |
| 4 | | 1, 2015, as calculated under Section 202.5, and (ii) 5.25% |
| 5 | | of the taxpayer's net income for the period after December |
| 6 | | 31, 2014, as calculated under Section 202.5. |
| 7 | | (12) In the case of a corporation, for taxable years |
| 8 | | beginning on or after January 1, 2015, and ending prior to |
| 9 | | July 1, 2017, an amount equal to 5.25% of the taxpayer's |
| 10 | | net income for the taxable year. |
| 11 | | (13) In the case of a corporation, for taxable years |
| 12 | | beginning prior to July 1, 2017, and ending after June 30, |
| 13 | | 2017, an amount equal to the sum of (i) 5.25% of the |
| 14 | | taxpayer's net income for the period prior to July 1, |
| 15 | | 2017, as calculated under Section 202.5, and (ii) 7% of |
| 16 | | the taxpayer's net income for the period after June 30, |
| 17 | | 2017, as calculated under Section 202.5. |
| 18 | | (14) In the case of a corporation, for taxable years |
| 19 | | beginning on or after July 1, 2017 and beginning prior to |
| 20 | | January 1, 2021, an amount equal to 7% of the taxpayer's |
| 21 | | net income for the taxable year. |
| 22 | | (15) In the case of a corporation, for taxable years |
| 23 | | beginning on or after January 1, 2021, an amount equal to |
| 24 | | 7.99% of the taxpayer's net income for the taxable year. |
| 25 | | The rates under this subsection (b) are subject to the |
| 26 | | provisions of Section 201.5. |
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| 1 | | (b-5) Surcharge; sale or exchange of assets, properties, |
| 2 | | and intangibles of organization gaming licensees. For each of |
| 3 | | taxable years 2019 through 2027, a surcharge is imposed on all |
| 4 | | taxpayers on income arising from the sale or exchange of |
| 5 | | capital assets, depreciable business property, real property |
| 6 | | used in the trade or business, and Section 197 intangibles (i) |
| 7 | | of an organization licensee under the Illinois Horse Racing |
| 8 | | Act of 1975 and (ii) of an organization gaming licensee under |
| 9 | | the Illinois Gambling Act. The amount of the surcharge is |
| 10 | | equal to the amount of federal income tax liability for the |
| 11 | | taxable year attributable to those sales and exchanges. The |
| 12 | | surcharge imposed shall not apply if: |
| 13 | | (1) the organization gaming license, organization |
| 14 | | license, or racetrack property is transferred as a result |
| 15 | | of any of the following: |
| 16 | | (A) bankruptcy, a receivership, or a debt |
| 17 | | adjustment initiated by or against the initial |
| 18 | | licensee or the substantial owners of the initial |
| 19 | | licensee; |
| 20 | | (B) cancellation, revocation, or termination of |
| 21 | | any such license by the Illinois Gaming Board or the |
| 22 | | Illinois Racing Board; |
| 23 | | (C) a determination by the Illinois Gaming Board |
| 24 | | that transfer of the license is in the best interests |
| 25 | | of Illinois gaming; |
| 26 | | (D) the death of an owner of the equity interest in |
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| 1 | | a licensee; |
| 2 | | (E) the acquisition of a controlling interest in |
| 3 | | the stock or substantially all of the assets of a |
| 4 | | publicly traded company; |
| 5 | | (F) a transfer by a parent company to a wholly |
| 6 | | owned subsidiary; or |
| 7 | | (G) the transfer or sale to or by one person to |
| 8 | | another person where both persons were initial owners |
| 9 | | of the license when the license was issued; or |
| 10 | | (2) the controlling interest in the organization |
| 11 | | gaming license, organization license, or racetrack |
| 12 | | property is transferred in a transaction to lineal |
| 13 | | descendants in which no gain or loss is recognized or as a |
| 14 | | result of a transaction in accordance with Section 351 of |
| 15 | | the Internal Revenue Code in which no gain or loss is |
| 16 | | recognized; or |
| 17 | | (3) live horse racing was not conducted in 2010 at a |
| 18 | | racetrack located within 3 miles of the Mississippi River |
| 19 | | under a license issued pursuant to the Illinois Horse |
| 20 | | Racing Act of 1975. |
| 21 | | The transfer of an organization gaming license, |
| 22 | | organization license, or racetrack property by a person other |
| 23 | | than the initial licensee to receive the organization gaming |
| 24 | | license is not subject to a surcharge. The Department shall |
| 25 | | adopt rules necessary to implement and administer this |
| 26 | | subsection. |
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| 1 | | (c) Personal Property Tax Replacement Income Tax.
|
| 2 | | Beginning on July 1, 1979 and thereafter, in addition to such |
| 3 | | income
tax, there is also hereby imposed the Personal Property |
| 4 | | Tax Replacement
Income Tax measured by net income on every |
| 5 | | corporation (including Subchapter
S corporations), partnership |
| 6 | | and trust, for each taxable year ending after
June 30, 1979. |
| 7 | | Such taxes are imposed on the privilege of earning or
|
| 8 | | receiving income in or as a resident of this State. The |
| 9 | | Personal Property
Tax Replacement Income Tax shall be in |
| 10 | | addition to the income tax imposed
by subsections (a) and (b) |
| 11 | | of this Section and in addition to all other
occupation or |
| 12 | | privilege taxes imposed by this State or by any municipal
|
| 13 | | corporation or political subdivision thereof. |
| 14 | | (d) Additional Personal Property Tax Replacement Income |
| 15 | | Tax Rates.
The personal property tax replacement income tax |
| 16 | | imposed by this subsection
and subsection (c) of this Section |
| 17 | | in the case of a corporation, other
than a Subchapter S |
| 18 | | corporation and except as adjusted by subsection (d-1),
shall |
| 19 | | be an additional amount equal to
2.85% of such taxpayer's net |
| 20 | | income for the taxable year, except that
beginning on January |
| 21 | | 1, 1981, and thereafter, the rate of 2.85% specified
in this |
| 22 | | subsection shall be reduced to 2.5%, and in the case of a
|
| 23 | | partnership, trust or a Subchapter S corporation shall be an |
| 24 | | additional
amount equal to 1.5% of such taxpayer's net income |
| 25 | | for the taxable year. |
| 26 | | (d-1) Rate reduction for certain foreign insurers. In the |
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| 1 | | case of a
foreign insurer, as defined by Section 35A-5 of the |
| 2 | | Illinois Insurance Code,
whose state or country of domicile |
| 3 | | imposes on insurers domiciled in Illinois
a retaliatory tax |
| 4 | | (excluding any insurer
whose premiums from reinsurance assumed |
| 5 | | are 50% or more of its total insurance
premiums as determined |
| 6 | | under paragraph (2) of subsection (b) of Section 304,
except |
| 7 | | that for purposes of this determination premiums from |
| 8 | | reinsurance do
not include premiums from inter-affiliate |
| 9 | | reinsurance arrangements),
beginning with taxable years ending |
| 10 | | on or after December 31, 1999,
the sum of
the rates of tax |
| 11 | | imposed by subsections (b) and (d) shall be reduced (but not
|
| 12 | | increased) to the rate at which the total amount of tax imposed |
| 13 | | under this Act,
net of all credits allowed under this Act, |
| 14 | | shall equal (i) the total amount of
tax that would be imposed |
| 15 | | on the foreign insurer's net income allocable to
Illinois for |
| 16 | | the taxable year by such foreign insurer's state or country of
|
| 17 | | domicile if that net income were subject to all income taxes |
| 18 | | and taxes
measured by net income imposed by such foreign |
| 19 | | insurer's state or country of
domicile, net of all credits |
| 20 | | allowed or (ii) a rate of zero if no such tax is
imposed on |
| 21 | | such income by the foreign insurer's state of domicile.
For |
| 22 | | the purposes of this subsection (d-1), an inter-affiliate |
| 23 | | includes a
mutual insurer under common management. |
| 24 | | (1) For the purposes of subsection (d-1), in no event |
| 25 | | shall the sum of the
rates of tax imposed by subsections |
| 26 | | (b) and (d) be reduced below the rate at
which the sum of: |
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| 1 | | (A) the total amount of tax imposed on such |
| 2 | | foreign insurer under
this Act for a taxable year, net |
| 3 | | of all credits allowed under this Act, plus |
| 4 | | (B) the privilege tax imposed by Section 409 of |
| 5 | | the Illinois Insurance
Code, the fire insurance |
| 6 | | company tax imposed by Section 12 of the Fire
|
| 7 | | Investigation Act, and the fire department taxes |
| 8 | | imposed under Section 11-10-1
of the Illinois |
| 9 | | Municipal Code, |
| 10 | | equals 1.25% for taxable years ending prior to December |
| 11 | | 31, 2003, or
1.75% for taxable years ending on or after |
| 12 | | December 31, 2003, of the net
taxable premiums written for |
| 13 | | the taxable year,
as described by subsection (1) of |
| 14 | | Section 409 of the Illinois Insurance Code.
This paragraph |
| 15 | | will in no event increase the rates imposed under |
| 16 | | subsections
(b) and (d). |
| 17 | | (2) Any reduction in the rates of tax imposed by this |
| 18 | | subsection shall be
applied first against the rates |
| 19 | | imposed by subsection (b) and only after the
tax imposed |
| 20 | | by subsection (a) net of all credits allowed under this |
| 21 | | Section
other than the credit allowed under subsection (i) |
| 22 | | has been reduced to zero,
against the rates imposed by |
| 23 | | subsection (d). |
| 24 | | This subsection (d-1) is exempt from the provisions of |
| 25 | | Section 250. |
| 26 | | (e) Investment credit. A taxpayer shall be allowed a |
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| 1 | | credit
against the Personal Property Tax Replacement Income |
| 2 | | Tax for
investment in qualified property. |
| 3 | | (1) A taxpayer shall be allowed a credit equal to .5% |
| 4 | | of
the basis of qualified property placed in service |
| 5 | | during the taxable year,
provided such property is placed |
| 6 | | in service on or after
July 1, 1984. There shall be allowed |
| 7 | | an additional credit equal
to .5% of the basis of |
| 8 | | qualified property placed in service during the
taxable |
| 9 | | year, provided such property is placed in service on or
|
| 10 | | after July 1, 1986, and the taxpayer's base employment
|
| 11 | | within Illinois has increased by 1% or more over the |
| 12 | | preceding year as
determined by the taxpayer's employment |
| 13 | | records filed with the
Illinois Department of Employment |
| 14 | | Security. Taxpayers who are new to
Illinois shall be |
| 15 | | deemed to have met the 1% growth in base employment for
the |
| 16 | | first year in which they file employment records with the |
| 17 | | Illinois
Department of Employment Security. The provisions |
| 18 | | added to this Section by
Public Act 85-1200 (and restored |
| 19 | | by Public Act 87-895) shall be
construed as declaratory of |
| 20 | | existing law and not as a new enactment. If,
in any year, |
| 21 | | the increase in base employment within Illinois over the
|
| 22 | | preceding year is less than 1%, the additional credit |
| 23 | | shall be limited to that
percentage times a fraction, the |
| 24 | | numerator of which is .5% and the denominator
of which is |
| 25 | | 1%, but shall not exceed .5%. The investment credit shall |
| 26 | | not be
allowed to the extent that it would reduce a |
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| 1 | | taxpayer's liability in any tax
year below zero, nor may |
| 2 | | any credit for qualified property be allowed for any
year |
| 3 | | other than the year in which the property was placed in |
| 4 | | service in
Illinois. For tax years ending on or after |
| 5 | | December 31, 1987, and on or
before December 31, 1988, the |
| 6 | | credit shall be allowed for the tax year in
which the |
| 7 | | property is placed in service, or, if the amount of the |
| 8 | | credit
exceeds the tax liability for that year, whether it |
| 9 | | exceeds the original
liability or the liability as later |
| 10 | | amended, such excess may be carried
forward and applied to |
| 11 | | the tax liability of the 5 taxable years following
the |
| 12 | | excess credit years if the taxpayer (i) makes investments |
| 13 | | which cause
the creation of a minimum of 2,000 full-time |
| 14 | | equivalent jobs in Illinois,
(ii) is located in an |
| 15 | | enterprise zone established pursuant to the Illinois
|
| 16 | | Enterprise Zone Act and (iii) is certified by the |
| 17 | | Department of Commerce
and Community Affairs (now |
| 18 | | Department of Commerce and Economic Opportunity) as |
| 19 | | complying with the requirements specified in
clause (i) |
| 20 | | and (ii) by July 1, 1986. The Department of Commerce and
|
| 21 | | Community Affairs (now Department of Commerce and Economic |
| 22 | | Opportunity) shall notify the Department of Revenue of all |
| 23 | | such
certifications immediately. For tax years ending |
| 24 | | after December 31, 1988,
the credit shall be allowed for |
| 25 | | the tax year in which the property is
placed in service, |
| 26 | | or, if the amount of the credit exceeds the tax
liability |
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| 1 | | for that year, whether it exceeds the original liability |
| 2 | | or the
liability as later amended, such excess may be |
| 3 | | carried forward and applied
to the tax liability of the 5 |
| 4 | | taxable years following the excess credit
years. The |
| 5 | | credit shall be applied to the earliest year for which |
| 6 | | there is
a liability. If there is credit from more than one |
| 7 | | tax year that is
available to offset a liability, earlier |
| 8 | | credit shall be applied first. |
| 9 | | (2) The term "qualified property" means property |
| 10 | | which: |
| 11 | | (A) is tangible, whether new or used, including |
| 12 | | buildings and structural
components of buildings and |
| 13 | | signs that are real property, but not including
land |
| 14 | | or improvements to real property that are not a |
| 15 | | structural component of a
building such as |
| 16 | | landscaping, sewer lines, local access roads, fencing, |
| 17 | | parking
lots, and other appurtenances; |
| 18 | | (B) is depreciable pursuant to Section 167 of the |
| 19 | | Internal Revenue Code,
except that "3-year property" |
| 20 | | as defined in Section 168(c)(2)(A) of that
Code is not |
| 21 | | eligible for the credit provided by this subsection |
| 22 | | (e); |
| 23 | | (C) is acquired by purchase as defined in Section |
| 24 | | 179(d) of
the Internal Revenue Code; |
| 25 | | (D) is used in Illinois by a taxpayer who is |
| 26 | | primarily engaged in
manufacturing, or in mining coal |
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| 1 | | or fluorite, or in retailing, or was placed in service |
| 2 | | on or after July 1, 2006 in a River Edge Redevelopment |
| 3 | | Zone established pursuant to the River Edge |
| 4 | | Redevelopment Zone Act; and |
| 5 | | (E) has not previously been used in Illinois in |
| 6 | | such a manner and by
such a person as would qualify for |
| 7 | | the credit provided by this subsection
(e) or |
| 8 | | subsection (f). |
| 9 | | (3) For purposes of this subsection (e), |
| 10 | | "manufacturing" means
the material staging and production |
| 11 | | of tangible personal property by
procedures commonly |
| 12 | | regarded as manufacturing, processing, fabrication, or
|
| 13 | | assembling which changes some existing material into new |
| 14 | | shapes, new
qualities, or new combinations. For purposes |
| 15 | | of this subsection
(e) the term "mining" shall have the |
| 16 | | same meaning as the term "mining" in
Section 613(c) of the |
| 17 | | Internal Revenue Code. For purposes of this subsection
|
| 18 | | (e), the term "retailing" means the sale of tangible |
| 19 | | personal property for use or consumption and not for |
| 20 | | resale, or
services rendered in conjunction with the sale |
| 21 | | of tangible personal property for use or consumption and |
| 22 | | not for resale. For purposes of this subsection (e), |
| 23 | | "tangible personal property" has the same meaning as when |
| 24 | | that term is used in the Retailers' Occupation Tax Act, |
| 25 | | and, for taxable years ending after December 31, 2008, |
| 26 | | does not include the generation, transmission, or |
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| 1 | | distribution of electricity. |
| 2 | | (4) The basis of qualified property shall be the basis
|
| 3 | | used to compute the depreciation deduction for federal |
| 4 | | income tax purposes. |
| 5 | | (5) If the basis of the property for federal income |
| 6 | | tax depreciation
purposes is increased after it has been |
| 7 | | placed in service in Illinois by
the taxpayer, the amount |
| 8 | | of such increase shall be deemed property placed
in |
| 9 | | service on the date of such increase in basis. |
| 10 | | (6) The term "placed in service" shall have the same
|
| 11 | | meaning as under Section 46 of the Internal Revenue Code. |
| 12 | | (7) If during any taxable year, any property ceases to
|
| 13 | | be qualified property in the hands of the taxpayer within |
| 14 | | 48 months after
being placed in service, or the situs of |
| 15 | | any qualified property is
moved outside Illinois within 48 |
| 16 | | months after being placed in service, the
Personal |
| 17 | | Property Tax Replacement Income Tax for such taxable year |
| 18 | | shall be
increased. Such increase shall be determined by |
| 19 | | (i) recomputing the
investment credit which would have |
| 20 | | been allowed for the year in which
credit for such |
| 21 | | property was originally allowed by eliminating such
|
| 22 | | property from such computation and, (ii) subtracting such |
| 23 | | recomputed credit
from the amount of credit previously |
| 24 | | allowed. For the purposes of this
paragraph (7), a |
| 25 | | reduction of the basis of qualified property resulting
|
| 26 | | from a redetermination of the purchase price shall be |
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| 1 | | deemed a disposition
of qualified property to the extent |
| 2 | | of such reduction. |
| 3 | | (8) Unless the investment credit is extended by law, |
| 4 | | the
basis of qualified property shall not include costs |
| 5 | | incurred after
December 31, 2018, except for costs |
| 6 | | incurred pursuant to a binding
contract entered into on or |
| 7 | | before December 31, 2018. |
| 8 | | (9) Each taxable year ending before December 31, 2000, |
| 9 | | a partnership may
elect to pass through to its
partners |
| 10 | | the credits to which the partnership is entitled under |
| 11 | | this subsection
(e) for the taxable year. A partner may |
| 12 | | use the credit allocated to him or her
under this |
| 13 | | paragraph only against the tax imposed in subsections (c) |
| 14 | | and (d) of
this Section. If the partnership makes that |
| 15 | | election, those credits shall be
allocated among the |
| 16 | | partners in the partnership in accordance with the rules
|
| 17 | | set forth in Section 704(b) of the Internal Revenue Code, |
| 18 | | and the rules
promulgated under that Section, and the |
| 19 | | allocated amount of the credits shall
be allowed to the |
| 20 | | partners for that taxable year. The partnership shall make
|
| 21 | | this election on its Personal Property Tax Replacement |
| 22 | | Income Tax return for
that taxable year. The election to |
| 23 | | pass through the credits shall be
irrevocable. |
| 24 | | For taxable years ending on or after December 31, |
| 25 | | 2000, a
partner that qualifies its
partnership for a |
| 26 | | subtraction under subparagraph (I) of paragraph (2) of
|
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| 1 | | subsection (d) of Section 203 or a shareholder that |
| 2 | | qualifies a Subchapter S
corporation for a subtraction |
| 3 | | under subparagraph (S) of paragraph (2) of
subsection (b) |
| 4 | | of Section 203 shall be allowed a credit under this |
| 5 | | subsection
(e) equal to its share of the credit earned |
| 6 | | under this subsection (e) during
the taxable year by the |
| 7 | | partnership or Subchapter S corporation, determined in
|
| 8 | | accordance with the determination of income and |
| 9 | | distributive share of
income under Sections 702 and 704 |
| 10 | | and Subchapter S of the Internal Revenue
Code. This |
| 11 | | paragraph is exempt from the provisions of Section 250. |
| 12 | | (f) Investment credit; Enterprise Zone; River Edge |
| 13 | | Redevelopment Zone. |
| 14 | | (1) A taxpayer shall be allowed a credit against the |
| 15 | | tax imposed
by subsections (a) and (b) of this Section for |
| 16 | | investment in qualified
property which is placed in |
| 17 | | service in an Enterprise Zone created
pursuant to the |
| 18 | | Illinois Enterprise Zone Act or, for property placed in |
| 19 | | service on or after July 1, 2006, a River Edge |
| 20 | | Redevelopment Zone established pursuant to the River Edge |
| 21 | | Redevelopment Zone Act. For partners, shareholders
of |
| 22 | | Subchapter S corporations, and owners of limited liability |
| 23 | | companies,
if the liability company is treated as a |
| 24 | | partnership for purposes of
federal and State income |
| 25 | | taxation, there shall be allowed a credit under
this |
| 26 | | subsection (f) to be determined in accordance with the |
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| 1 | | determination
of income and distributive share of income |
| 2 | | under Sections 702 and 704 and
Subchapter S of the |
| 3 | | Internal Revenue Code. The credit shall be .5% of the
|
| 4 | | basis for such property. The credit shall be available |
| 5 | | only in the taxable
year in which the property is placed in |
| 6 | | service in the Enterprise Zone or River Edge Redevelopment |
| 7 | | Zone and
shall not be allowed to the extent that it would |
| 8 | | reduce a taxpayer's
liability for the tax imposed by |
| 9 | | subsections (a) and (b) of this Section to
below zero. For |
| 10 | | tax years ending on or after December 31, 1985, the credit
|
| 11 | | shall be allowed for the tax year in which the property is |
| 12 | | placed in
service, or, if the amount of the credit exceeds |
| 13 | | the tax liability for that
year, whether it exceeds the |
| 14 | | original liability or the liability as later
amended, such |
| 15 | | excess may be carried forward and applied to the tax
|
| 16 | | liability of the 5 taxable years following the excess |
| 17 | | credit year.
The credit shall be applied to the earliest |
| 18 | | year for which there is a
liability. If there is credit |
| 19 | | from more than one tax year that is available
to offset a |
| 20 | | liability, the credit accruing first in time shall be |
| 21 | | applied
first. |
| 22 | | (2) The term qualified property means property which: |
| 23 | | (A) is tangible, whether new or used, including |
| 24 | | buildings and
structural components of buildings; |
| 25 | | (B) is depreciable pursuant to Section 167 of the |
| 26 | | Internal Revenue
Code, except that "3-year property" |
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| 1 | | as defined in Section 168(c)(2)(A) of
that Code is not |
| 2 | | eligible for the credit provided by this subsection |
| 3 | | (f); |
| 4 | | (C) is acquired by purchase as defined in Section |
| 5 | | 179(d) of
the Internal Revenue Code; |
| 6 | | (D) is used in the Enterprise Zone or River Edge |
| 7 | | Redevelopment Zone by the taxpayer; and |
| 8 | | (E) has not been previously used in Illinois in |
| 9 | | such a manner and by
such a person as would qualify for |
| 10 | | the credit provided by this subsection
(f) or |
| 11 | | subsection (e). |
| 12 | | (3) The basis of qualified property shall be the basis |
| 13 | | used to compute
the depreciation deduction for federal |
| 14 | | income tax purposes. |
| 15 | | (4) If the basis of the property for federal income |
| 16 | | tax depreciation
purposes is increased after it has been |
| 17 | | placed in service in the Enterprise
Zone or River Edge |
| 18 | | Redevelopment Zone by the taxpayer, the amount of such |
| 19 | | increase shall be deemed property
placed in service on the |
| 20 | | date of such increase in basis. |
| 21 | | (5) The term "placed in service" shall have the same |
| 22 | | meaning as under
Section 46 of the Internal Revenue Code. |
| 23 | | (6) If during any taxable year, any property ceases to |
| 24 | | be qualified
property in the hands of the taxpayer within |
| 25 | | 48 months after being placed
in service, or the situs of |
| 26 | | any qualified property is moved outside the
Enterprise |
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| 1 | | Zone or River Edge Redevelopment Zone within 48 months |
| 2 | | after being placed in service, the tax
imposed under |
| 3 | | subsections (a) and (b) of this Section for such taxable |
| 4 | | year
shall be increased. Such increase shall be determined |
| 5 | | by (i) recomputing
the investment credit which would have |
| 6 | | been allowed for the year in which
credit for such |
| 7 | | property was originally allowed by eliminating such
|
| 8 | | property from such computation, and (ii) subtracting such |
| 9 | | recomputed credit
from the amount of credit previously |
| 10 | | allowed. For the purposes of this
paragraph (6), a |
| 11 | | reduction of the basis of qualified property resulting
|
| 12 | | from a redetermination of the purchase price shall be |
| 13 | | deemed a disposition
of qualified property to the extent |
| 14 | | of such reduction. |
| 15 | | (7) There shall be allowed an additional credit equal |
| 16 | | to 0.5% of the basis of qualified property placed in |
| 17 | | service during the taxable year in a River Edge |
| 18 | | Redevelopment Zone, provided such property is placed in |
| 19 | | service on or after July 1, 2006, and the taxpayer's base |
| 20 | | employment within Illinois has increased by 1% or more |
| 21 | | over the preceding year as determined by the taxpayer's |
| 22 | | employment records filed with the Illinois Department of |
| 23 | | Employment Security. Taxpayers who are new to Illinois |
| 24 | | shall be deemed to have met the 1% growth in base |
| 25 | | employment for the first year in which they file |
| 26 | | employment records with the Illinois Department of |
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| 1 | | Employment Security. If, in any year, the increase in base |
| 2 | | employment within Illinois over the preceding year is less |
| 3 | | than 1%, the additional credit shall be limited to that |
| 4 | | percentage times a fraction, the numerator of which is |
| 5 | | 0.5% and the denominator of which is 1%, but shall not |
| 6 | | exceed 0.5%.
|
| 7 | | (8) For taxable years beginning on or after January 1, |
| 8 | | 2021, there shall be allowed an Enterprise Zone |
| 9 | | construction jobs credit against the taxes imposed under |
| 10 | | subsections (a) and (b) of this Section as provided in |
| 11 | | Section 13 of the Illinois Enterprise Zone Act. |
| 12 | | The credit or credits may not reduce the taxpayer's |
| 13 | | liability to less than zero. If the amount of the credit or |
| 14 | | credits exceeds the taxpayer's liability, the excess may |
| 15 | | be carried forward and applied against the taxpayer's |
| 16 | | liability in succeeding calendar years in the same manner |
| 17 | | provided under paragraph (4) of Section 211 of this Act. |
| 18 | | The credit or credits shall be applied to the earliest |
| 19 | | year for which there is a tax liability. If there are |
| 20 | | credits from more than one taxable year that are available |
| 21 | | to offset a liability, the earlier credit shall be applied |
| 22 | | first. |
| 23 | | For partners, shareholders of Subchapter S |
| 24 | | corporations, and owners of limited liability companies, |
| 25 | | if the liability company is treated as a partnership for |
| 26 | | the purposes of federal and State income taxation, there |
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| 1 | | shall be allowed a credit under this Section to be |
| 2 | | determined in accordance with the determination of income |
| 3 | | and distributive share of income under Sections 702 and |
| 4 | | 704 and Subchapter S of the Internal Revenue Code. |
| 5 | | The total aggregate amount of credits awarded under |
| 6 | | the Blue Collar Jobs Act (Article 20 of Public Act 101-9 |
| 7 | | this amendatory Act of the 101st General Assembly) shall |
| 8 | | not exceed $20,000,000 in any State fiscal year. |
| 9 | | This paragraph (8) is exempt from the provisions of |
| 10 | | Section 250. |
| 11 | | (g) (Blank). |
| 12 | | (h) Investment credit; High Impact Business. |
| 13 | | (1) Subject to subsections (b) and (b-5) of Section
|
| 14 | | 5.5 of the Illinois Enterprise Zone Act, a taxpayer shall |
| 15 | | be allowed a credit
against the tax imposed by subsections |
| 16 | | (a) and (b) of this Section for
investment in qualified
|
| 17 | | property which is placed in service by a Department of |
| 18 | | Commerce and Economic Opportunity
designated High Impact |
| 19 | | Business. The credit shall be .5% of the basis
for such |
| 20 | | property. The credit shall not be available (i) until the |
| 21 | | minimum
investments in qualified property set forth in |
| 22 | | subdivision (a)(3)(A) of
Section 5.5 of the Illinois
|
| 23 | | Enterprise Zone Act have been satisfied
or (ii) until the |
| 24 | | time authorized in subsection (b-5) of the Illinois
|
| 25 | | Enterprise Zone Act for entities designated as High Impact |
| 26 | | Businesses under
subdivisions (a)(3)(B), (a)(3)(C), and |
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| 1 | | (a)(3)(D) of Section 5.5 of the Illinois
Enterprise Zone |
| 2 | | Act, and shall not be allowed to the extent that it would
|
| 3 | | reduce a taxpayer's liability for the tax imposed by |
| 4 | | subsections (a) and (b) of
this Section to below zero. The |
| 5 | | credit applicable to such investments shall be
taken in |
| 6 | | the taxable year in which such investments have been |
| 7 | | completed. The
credit for additional investments beyond |
| 8 | | the minimum investment by a designated
high impact |
| 9 | | business authorized under subdivision (a)(3)(A) of Section |
| 10 | | 5.5 of
the Illinois Enterprise Zone Act shall be available |
| 11 | | only in the taxable year in
which the property is placed in |
| 12 | | service and shall not be allowed to the extent
that it |
| 13 | | would reduce a taxpayer's liability for the tax imposed by |
| 14 | | subsections
(a) and (b) of this Section to below zero.
For |
| 15 | | tax years ending on or after December 31, 1987, the credit |
| 16 | | shall be
allowed for the tax year in which the property is |
| 17 | | placed in service, or, if
the amount of the credit exceeds |
| 18 | | the tax liability for that year, whether
it exceeds the |
| 19 | | original liability or the liability as later amended, such
|
| 20 | | excess may be carried forward and applied to the tax |
| 21 | | liability of the 5
taxable years following the excess |
| 22 | | credit year. The credit shall be
applied to the earliest |
| 23 | | year for which there is a liability. If there is
credit |
| 24 | | from more than one tax year that is available to offset a |
| 25 | | liability,
the credit accruing first in time shall be |
| 26 | | applied first. |
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| 1 | | Changes made in this subdivision (h)(1) by Public Act |
| 2 | | 88-670
restore changes made by Public Act 85-1182 and |
| 3 | | reflect existing law. |
| 4 | | (2) The term qualified property means property which: |
| 5 | | (A) is tangible, whether new or used, including |
| 6 | | buildings and
structural components of buildings; |
| 7 | | (B) is depreciable pursuant to Section 167 of the |
| 8 | | Internal Revenue
Code, except that "3-year property" |
| 9 | | as defined in Section 168(c)(2)(A) of
that Code is not |
| 10 | | eligible for the credit provided by this subsection |
| 11 | | (h); |
| 12 | | (C) is acquired by purchase as defined in Section |
| 13 | | 179(d) of the
Internal Revenue Code; and |
| 14 | | (D) is not eligible for the Enterprise Zone |
| 15 | | Investment Credit provided
by subsection (f) of this |
| 16 | | Section. |
| 17 | | (3) The basis of qualified property shall be the basis |
| 18 | | used to compute
the depreciation deduction for federal |
| 19 | | income tax purposes. |
| 20 | | (4) If the basis of the property for federal income |
| 21 | | tax depreciation
purposes is increased after it has been |
| 22 | | placed in service in a federally
designated Foreign Trade |
| 23 | | Zone or Sub-Zone located in Illinois by the taxpayer,
the |
| 24 | | amount of such increase shall be deemed property placed in |
| 25 | | service on
the date of such increase in basis. |
| 26 | | (5) The term "placed in service" shall have the same |
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| 1 | | meaning as under
Section 46 of the Internal Revenue Code. |
| 2 | | (6) If during any taxable year ending on or before |
| 3 | | December 31, 1996,
any property ceases to be qualified
|
| 4 | | property in the hands of the taxpayer within 48 months |
| 5 | | after being placed
in service, or the situs of any |
| 6 | | qualified property is moved outside
Illinois within 48 |
| 7 | | months after being placed in service, the tax imposed
|
| 8 | | under subsections (a) and (b) of this Section for such |
| 9 | | taxable year shall
be increased. Such increase shall be |
| 10 | | determined by (i) recomputing the
investment credit which |
| 11 | | would have been allowed for the year in which
credit for |
| 12 | | such property was originally allowed by eliminating such
|
| 13 | | property from such computation, and (ii) subtracting such |
| 14 | | recomputed credit
from the amount of credit previously |
| 15 | | allowed. For the purposes of this
paragraph (6), a |
| 16 | | reduction of the basis of qualified property resulting
|
| 17 | | from a redetermination of the purchase price shall be |
| 18 | | deemed a disposition
of qualified property to the extent |
| 19 | | of such reduction. |
| 20 | | (7) Beginning with tax years ending after December 31, |
| 21 | | 1996, if a
taxpayer qualifies for the credit under this |
| 22 | | subsection (h) and thereby is
granted a tax abatement and |
| 23 | | the taxpayer relocates its entire facility in
violation of |
| 24 | | the explicit terms and length of the contract under |
| 25 | | Section
18-183 of the Property Tax Code, the tax imposed |
| 26 | | under subsections
(a) and (b) of this Section shall be |
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| 1 | | increased for the taxable year
in which the taxpayer |
| 2 | | relocated its facility by an amount equal to the
amount of |
| 3 | | credit received by the taxpayer under this subsection (h). |
| 4 | | (h-1) Investment credit; Big Empties Site. For taxable |
| 5 | | years beginning on or after January 1, 2022, a taxpayer shall |
| 6 | | be allowed a credit
against the tax imposed by subsections (a) |
| 7 | | and (b) of this Section for
investment in qualified
property |
| 8 | | which is placed in service by a Department of Commerce and |
| 9 | | Economic Opportunity
designated Big Empties Site. The credit |
| 10 | | shall be .5% of the basis
for such property. As used in this |
| 11 | | subsection (h-1), the terms "qualified property" and "placed |
| 12 | | in service" have the same meanings as in subsection (h). This |
| 13 | | subsection is exempt from the provisions of Section 250. |
| 14 | | (h-5) High Impact Business construction constructions jobs |
| 15 | | credit. For taxable years beginning on or after January 1, |
| 16 | | 2021, there shall also be allowed a High Impact Business |
| 17 | | construction jobs credit against the tax imposed under |
| 18 | | subsections (a) and (b) of this Section as provided in |
| 19 | | subsections (i) and (j) of Section 5.5 of the Illinois |
| 20 | | Enterprise Zone Act. |
| 21 | | The credit or credits may not reduce the taxpayer's |
| 22 | | liability to less than zero. If the amount of the credit or |
| 23 | | credits exceeds the taxpayer's liability, the excess may be |
| 24 | | carried forward and applied against the taxpayer's liability |
| 25 | | in succeeding calendar years in the manner provided under |
| 26 | | paragraph (4) of Section 211 of this Act. The credit or credits |
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| 1 | | shall be applied to the earliest year for which there is a tax |
| 2 | | liability. If there are credits from more than one taxable |
| 3 | | year that are available to offset a liability, the earlier |
| 4 | | credit shall be applied first. |
| 5 | | For partners, shareholders of Subchapter S corporations, |
| 6 | | and owners of limited liability companies, if the liability |
| 7 | | company is treated as a partnership for the purposes of |
| 8 | | federal and State income taxation, there shall be allowed a |
| 9 | | credit under this Section to be determined in accordance with |
| 10 | | the determination of income and distributive share of income |
| 11 | | under Sections 702 and 704 and Subchapter S of the Internal |
| 12 | | Revenue Code. |
| 13 | | The total aggregate amount of credits awarded under the |
| 14 | | Blue Collar Jobs Act (Article 20 of Public Act 101-9 this |
| 15 | | amendatory Act of the 101st General Assembly) shall not exceed |
| 16 | | $20,000,000 in any State fiscal year. |
| 17 | | This subsection (h-5) is exempt from the provisions of |
| 18 | | Section 250. |
| 19 | | (i) Credit for Personal Property Tax Replacement Income |
| 20 | | Tax.
For tax years ending prior to December 31, 2003, a credit |
| 21 | | shall be allowed
against the tax imposed by
subsections (a) |
| 22 | | and (b) of this Section for the tax imposed by subsections (c)
|
| 23 | | and (d) of this Section. This credit shall be computed by |
| 24 | | multiplying the tax
imposed by subsections (c) and (d) of this |
| 25 | | Section by a fraction, the numerator
of which is base income |
| 26 | | allocable to Illinois and the denominator of which is
Illinois |
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| 1 | | base income, and further multiplying the product by the tax |
| 2 | | rate
imposed by subsections (a) and (b) of this Section. |
| 3 | | Any credit earned on or after December 31, 1986 under
this |
| 4 | | subsection which is unused in the year
the credit is computed |
| 5 | | because it exceeds the tax liability imposed by
subsections |
| 6 | | (a) and (b) for that year (whether it exceeds the original
|
| 7 | | liability or the liability as later amended) may be carried |
| 8 | | forward and
applied to the tax liability imposed by |
| 9 | | subsections (a) and (b) of the 5
taxable years following the |
| 10 | | excess credit year, provided that no credit may
be carried |
| 11 | | forward to any year ending on or
after December 31, 2003. This |
| 12 | | credit shall be
applied first to the earliest year for which |
| 13 | | there is a liability. If
there is a credit under this |
| 14 | | subsection from more than one tax year that is
available to |
| 15 | | offset a liability the earliest credit arising under this
|
| 16 | | subsection shall be applied first. |
| 17 | | If, during any taxable year ending on or after December |
| 18 | | 31, 1986, the
tax imposed by subsections (c) and (d) of this |
| 19 | | Section for which a taxpayer
has claimed a credit under this |
| 20 | | subsection (i) is reduced, the amount of
credit for such tax |
| 21 | | shall also be reduced. Such reduction shall be
determined by |
| 22 | | recomputing the credit to take into account the reduced tax
|
| 23 | | imposed by subsections (c) and (d). If any portion of the
|
| 24 | | reduced amount of credit has been carried to a different |
| 25 | | taxable year, an
amended return shall be filed for such |
| 26 | | taxable year to reduce the amount of
credit claimed. |
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| 1 | | (j) Training expense credit. Beginning with tax years |
| 2 | | ending on or
after December 31, 1986 and prior to December 31, |
| 3 | | 2003, a taxpayer shall be
allowed a credit against the
tax |
| 4 | | imposed by subsections (a) and (b) under this Section
for all |
| 5 | | amounts paid or accrued, on behalf of all persons
employed by |
| 6 | | the taxpayer in Illinois or Illinois residents employed
|
| 7 | | outside of Illinois by a taxpayer, for educational or |
| 8 | | vocational training in
semi-technical or technical fields or |
| 9 | | semi-skilled or skilled fields, which
were deducted from gross |
| 10 | | income in the computation of taxable income. The
credit |
| 11 | | against the tax imposed by subsections (a) and (b) shall be |
| 12 | | 1.6% of
such training expenses. For partners, shareholders of |
| 13 | | subchapter S
corporations, and owners of limited liability |
| 14 | | companies, if the liability
company is treated as a |
| 15 | | partnership for purposes of federal and State income
taxation, |
| 16 | | there shall be allowed a credit under this subsection (j) to be
|
| 17 | | determined in accordance with the determination of income and |
| 18 | | distributive
share of income under Sections 702 and 704 and |
| 19 | | subchapter S of the Internal
Revenue Code. |
| 20 | | Any credit allowed under this subsection which is unused |
| 21 | | in the year
the credit is earned may be carried forward to each |
| 22 | | of the 5 taxable
years following the year for which the credit |
| 23 | | is first computed until it is
used. This credit shall be |
| 24 | | applied first to the earliest year for which
there is a |
| 25 | | liability. If there is a credit under this subsection from |
| 26 | | more
than one tax year that is available to offset a liability, |
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| 1 | | the earliest
credit arising under this subsection shall be |
| 2 | | applied first. No carryforward
credit may be claimed in any |
| 3 | | tax year ending on or after
December 31, 2003. |
| 4 | | (k) Research and development credit. For tax years ending |
| 5 | | after July 1, 1990 and prior to
December 31, 2003, and |
| 6 | | beginning again for tax years ending on or after December 31, |
| 7 | | 2004, and ending prior to January 1, 2027, a taxpayer shall be
|
| 8 | | allowed a credit against the tax imposed by subsections (a) |
| 9 | | and (b) of this
Section for increasing research activities in |
| 10 | | this State. The credit
allowed against the tax imposed by |
| 11 | | subsections (a) and (b) shall be equal
to 6 1/2% of the |
| 12 | | qualifying expenditures for increasing research activities
in |
| 13 | | this State. For partners, shareholders of subchapter S |
| 14 | | corporations, and
owners of limited liability companies, if |
| 15 | | the liability company is treated as a
partnership for purposes |
| 16 | | of federal and State income taxation, there shall be
allowed a |
| 17 | | credit under this subsection to be determined in accordance |
| 18 | | with the
determination of income and distributive share of |
| 19 | | income under Sections 702 and
704 and subchapter S of the |
| 20 | | Internal Revenue Code. |
| 21 | | For purposes of this subsection, "qualifying expenditures" |
| 22 | | means the
qualifying expenditures as defined for the federal |
| 23 | | credit for increasing
research activities which would be |
| 24 | | allowable under Section 41 of the
Internal Revenue Code and |
| 25 | | which are conducted in this State, "qualifying
expenditures |
| 26 | | for increasing research activities in this State" means the
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| 1 | | excess of qualifying expenditures for the taxable year in |
| 2 | | which incurred
over qualifying expenditures for the base |
| 3 | | period, "qualifying expenditures
for the base period" means |
| 4 | | the average of the qualifying expenditures for
each year in |
| 5 | | the base period, and "base period" means the 3 taxable years
|
| 6 | | immediately preceding the taxable year for which the |
| 7 | | determination is
being made. |
| 8 | | Any credit in excess of the tax liability for the taxable |
| 9 | | year
may be carried forward. A taxpayer may elect to have the
|
| 10 | | unused credit shown on its final completed return carried over |
| 11 | | as a credit
against the tax liability for the following 5 |
| 12 | | taxable years or until it has
been fully used, whichever |
| 13 | | occurs first; provided that no credit earned in a tax year |
| 14 | | ending prior to December 31, 2003 may be carried forward to any |
| 15 | | year ending on or after December 31, 2003. |
| 16 | | If an unused credit is carried forward to a given year from |
| 17 | | 2 or more
earlier years, that credit arising in the earliest |
| 18 | | year will be applied
first against the tax liability for the |
| 19 | | given year. If a tax liability for
the given year still |
| 20 | | remains, the credit from the next earliest year will
then be |
| 21 | | applied, and so on, until all credits have been used or no tax
|
| 22 | | liability for the given year remains. Any remaining unused |
| 23 | | credit or
credits then will be carried forward to the next |
| 24 | | following year in which a
tax liability is incurred, except |
| 25 | | that no credit can be carried forward to
a year which is more |
| 26 | | than 5 years after the year in which the expense for
which the |
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| 1 | | credit is given was incurred. |
| 2 | | No inference shall be drawn from Public Act 91-644 this |
| 3 | | amendatory Act of the 91st General
Assembly in construing this |
| 4 | | Section for taxable years beginning before January
1, 1999. |
| 5 | | It is the intent of the General Assembly that the research |
| 6 | | and development credit under this subsection (k) shall apply |
| 7 | | continuously for all tax years ending on or after December 31, |
| 8 | | 2004 and ending prior to January 1, 2027, including, but not |
| 9 | | limited to, the period beginning on January 1, 2016 and ending |
| 10 | | on July 6, 2017 (the effective date of Public Act 100-22) this |
| 11 | | amendatory Act of the 100th General Assembly. All actions |
| 12 | | taken in reliance on the continuation of the credit under this |
| 13 | | subsection (k) by any taxpayer are hereby validated. |
| 14 | | (l) Environmental Remediation Tax Credit. |
| 15 | | (i) For tax years ending after December 31, 1997 and |
| 16 | | on or before
December 31, 2001, a taxpayer shall be |
| 17 | | allowed a credit against the tax
imposed by subsections |
| 18 | | (a) and (b) of this Section for certain amounts paid
for |
| 19 | | unreimbursed eligible remediation costs, as specified in |
| 20 | | this subsection.
For purposes of this Section, |
| 21 | | "unreimbursed eligible remediation costs" means
costs |
| 22 | | approved by the Illinois Environmental Protection Agency |
| 23 | | ("Agency") under
Section 58.14 of the Environmental |
| 24 | | Protection Act that were paid in performing
environmental |
| 25 | | remediation at a site for which a No Further Remediation |
| 26 | | Letter
was issued by the Agency and recorded under Section |
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| 1 | | 58.10 of the Environmental
Protection Act. The credit must |
| 2 | | be claimed for the taxable year in which
Agency approval |
| 3 | | of the eligible remediation costs is granted. The credit |
| 4 | | is
not available to any taxpayer if the taxpayer or any |
| 5 | | related party caused or
contributed to, in any material |
| 6 | | respect, a release of regulated substances on,
in, or |
| 7 | | under the site that was identified and addressed by the |
| 8 | | remedial
action pursuant to the Site Remediation Program |
| 9 | | of the Environmental Protection
Act. After the Pollution |
| 10 | | Control Board rules are adopted pursuant to the
Illinois |
| 11 | | Administrative Procedure Act for the administration and |
| 12 | | enforcement of
Section 58.9 of the Environmental |
| 13 | | Protection Act, determinations as to credit
availability |
| 14 | | for purposes of this Section shall be made consistent with |
| 15 | | those
rules. For purposes of this Section, "taxpayer" |
| 16 | | includes a person whose tax
attributes the taxpayer has |
| 17 | | succeeded to under Section 381 of the Internal
Revenue |
| 18 | | Code and "related party" includes the persons disallowed a |
| 19 | | deduction
for losses by paragraphs (b), (c), and (f)(1) of |
| 20 | | Section 267 of the Internal
Revenue Code by virtue of |
| 21 | | being a related taxpayer, as well as any of its
partners. |
| 22 | | The credit allowed against the tax imposed by subsections |
| 23 | | (a) and
(b) shall be equal to 25% of the unreimbursed |
| 24 | | eligible remediation costs in
excess of $100,000 per site, |
| 25 | | except that the $100,000 threshold shall not apply
to any |
| 26 | | site contained in an enterprise zone as determined by the |
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| 1 | | Department of
Commerce and Community Affairs (now |
| 2 | | Department of Commerce and Economic Opportunity). The |
| 3 | | total credit allowed shall not exceed
$40,000 per year |
| 4 | | with a maximum total of $150,000 per site. For partners |
| 5 | | and
shareholders of subchapter S corporations, there shall |
| 6 | | be allowed a credit
under this subsection to be determined |
| 7 | | in accordance with the determination of
income and |
| 8 | | distributive share of income under Sections 702 and 704 |
| 9 | | and
subchapter S of the Internal Revenue Code. |
| 10 | | (ii) A credit allowed under this subsection that is |
| 11 | | unused in the year
the credit is earned may be carried |
| 12 | | forward to each of the 5 taxable years
following the year |
| 13 | | for which the credit is first earned until it is used.
The |
| 14 | | term "unused credit" does not include any amounts of |
| 15 | | unreimbursed eligible
remediation costs in excess of the |
| 16 | | maximum credit per site authorized under
paragraph (i). |
| 17 | | This credit shall be applied first to the earliest year
|
| 18 | | for which there is a liability. If there is a credit under |
| 19 | | this subsection
from more than one tax year that is |
| 20 | | available to offset a liability, the
earliest credit |
| 21 | | arising under this subsection shall be applied first. A
|
| 22 | | credit allowed under this subsection may be sold to a |
| 23 | | buyer as part of a sale
of all or part of the remediation |
| 24 | | site for which the credit was granted. The
purchaser of a |
| 25 | | remediation site and the tax credit shall succeed to the |
| 26 | | unused
credit and remaining carry-forward period of the |
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| 1 | | seller. To perfect the
transfer, the assignor shall record |
| 2 | | the transfer in the chain of title for the
site and provide |
| 3 | | written notice to the Director of the Illinois Department |
| 4 | | of
Revenue of the assignor's intent to sell the |
| 5 | | remediation site and the amount of
the tax credit to be |
| 6 | | transferred as a portion of the sale. In no event may a
|
| 7 | | credit be transferred to any taxpayer if the taxpayer or a |
| 8 | | related party would
not be eligible under the provisions |
| 9 | | of subsection (i). |
| 10 | | (iii) For purposes of this Section, the term "site" |
| 11 | | shall have the same
meaning as under Section 58.2 of the |
| 12 | | Environmental Protection Act. |
| 13 | | (m) Education expense credit. Beginning with tax years |
| 14 | | ending after
December 31, 1999, a taxpayer who
is the |
| 15 | | custodian of one or more qualifying pupils shall be allowed a |
| 16 | | credit
against the tax imposed by subsections (a) and (b) of |
| 17 | | this Section for
qualified education expenses incurred on |
| 18 | | behalf of the qualifying pupils.
The credit shall be equal to |
| 19 | | 25% of qualified education expenses, but in no
event may the |
| 20 | | total credit under this subsection claimed by a
family that is |
| 21 | | the
custodian of qualifying pupils exceed (i) $500 for tax |
| 22 | | years ending prior to December 31, 2017, and (ii) $750 for tax |
| 23 | | years ending on or after December 31, 2017. In no event shall a |
| 24 | | credit under
this subsection reduce the taxpayer's liability |
| 25 | | under this Act to less than
zero. Notwithstanding any other |
| 26 | | provision of law, for taxable years beginning on or after |
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| 1 | | January 1, 2017, no taxpayer may claim a credit under this |
| 2 | | subsection (m) if the taxpayer's adjusted gross income for the |
| 3 | | taxable year exceeds (i) $500,000, in the case of spouses |
| 4 | | filing a joint federal tax return or (ii) $250,000, in the case |
| 5 | | of all other taxpayers. This subsection is exempt from the |
| 6 | | provisions of Section 250 of this
Act. |
| 7 | | For purposes of this subsection: |
| 8 | | "Qualifying pupils" means individuals who (i) are |
| 9 | | residents of the State of
Illinois, (ii) are under the age of |
| 10 | | 21 at the close of the school year for
which a credit is |
| 11 | | sought, and (iii) during the school year for which a credit
is |
| 12 | | sought were full-time pupils enrolled in a kindergarten |
| 13 | | through twelfth
grade education program at any school, as |
| 14 | | defined in this subsection. |
| 15 | | "Qualified education expense" means the amount incurred
on |
| 16 | | behalf of a qualifying pupil in excess of $250 for tuition, |
| 17 | | book fees, and
lab fees at the school in which the pupil is |
| 18 | | enrolled during the regular school
year. |
| 19 | | "School" means any public or nonpublic elementary or |
| 20 | | secondary school in
Illinois that is in compliance with Title |
| 21 | | VI of the Civil Rights Act of 1964
and attendance at which |
| 22 | | satisfies the requirements of Section 26-1 of the
School Code, |
| 23 | | except that nothing shall be construed to require a child to
|
| 24 | | attend any particular public or nonpublic school to qualify |
| 25 | | for the credit
under this Section. |
| 26 | | "Custodian" means, with respect to qualifying pupils, an |
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| 1 | | Illinois resident
who is a parent, the parents, a legal |
| 2 | | guardian, or the legal guardians of the
qualifying pupils. |
| 3 | | (n) River Edge Redevelopment Zone site remediation tax |
| 4 | | credit.
|
| 5 | | (i) For tax years ending on or after December 31, |
| 6 | | 2006, a taxpayer shall be allowed a credit against the tax |
| 7 | | imposed by subsections (a) and (b) of this Section for |
| 8 | | certain amounts paid for unreimbursed eligible remediation |
| 9 | | costs, as specified in this subsection. For purposes of |
| 10 | | this Section, "unreimbursed eligible remediation costs" |
| 11 | | means costs approved by the Illinois Environmental |
| 12 | | Protection Agency ("Agency") under Section 58.14a of the |
| 13 | | Environmental Protection Act that were paid in performing |
| 14 | | environmental remediation at a site within a River Edge |
| 15 | | Redevelopment Zone for which a No Further Remediation |
| 16 | | Letter was issued by the Agency and recorded under Section |
| 17 | | 58.10 of the Environmental Protection Act. The credit must |
| 18 | | be claimed for the taxable year in which Agency approval |
| 19 | | of the eligible remediation costs is granted. The credit |
| 20 | | is not available to any taxpayer if the taxpayer or any |
| 21 | | related party caused or contributed to, in any material |
| 22 | | respect, a release of regulated substances on, in, or |
| 23 | | under the site that was identified and addressed by the |
| 24 | | remedial action pursuant to the Site Remediation Program |
| 25 | | of the Environmental Protection Act. Determinations as to |
| 26 | | credit availability for purposes of this Section shall be |
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| 1 | | made consistent with rules adopted by the Pollution |
| 2 | | Control Board pursuant to the Illinois Administrative |
| 3 | | Procedure Act for the administration and enforcement of |
| 4 | | Section 58.9 of the Environmental Protection Act. For |
| 5 | | purposes of this Section, "taxpayer" includes a person |
| 6 | | whose tax attributes the taxpayer has succeeded to under |
| 7 | | Section 381 of the Internal Revenue Code and "related |
| 8 | | party" includes the persons disallowed a deduction for |
| 9 | | losses by paragraphs (b), (c), and (f)(1) of Section 267 |
| 10 | | of the Internal Revenue Code by virtue of being a related |
| 11 | | taxpayer, as well as any of its partners. The credit |
| 12 | | allowed against the tax imposed by subsections (a) and (b) |
| 13 | | shall be equal to 25% of the unreimbursed eligible |
| 14 | | remediation costs in excess of $100,000 per site. |
| 15 | | (ii) A credit allowed under this subsection that is |
| 16 | | unused in the year the credit is earned may be carried |
| 17 | | forward to each of the 5 taxable years following the year |
| 18 | | for which the credit is first earned until it is used. This |
| 19 | | credit shall be applied first to the earliest year for |
| 20 | | which there is a liability. If there is a credit under this |
| 21 | | subsection from more than one tax year that is available |
| 22 | | to offset a liability, the earliest credit arising under |
| 23 | | this subsection shall be applied first. A credit allowed |
| 24 | | under this subsection may be sold to a buyer as part of a |
| 25 | | sale of all or part of the remediation site for which the |
| 26 | | credit was granted. The purchaser of a remediation site |
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| 1 | | and the tax credit shall succeed to the unused credit and |
| 2 | | remaining carry-forward period of the seller. To perfect |
| 3 | | the transfer, the assignor shall record the transfer in |
| 4 | | the chain of title for the site and provide written notice |
| 5 | | to the Director of the Illinois Department of Revenue of |
| 6 | | the assignor's intent to sell the remediation site and the |
| 7 | | amount of the tax credit to be transferred as a portion of |
| 8 | | the sale. In no event may a credit be transferred to any |
| 9 | | taxpayer if the taxpayer or a related party would not be |
| 10 | | eligible under the provisions of subsection (i). |
| 11 | | (iii) For purposes of this Section, the term "site" |
| 12 | | shall have the same meaning as under Section 58.2 of the |
| 13 | | Environmental Protection Act. |
| 14 | | (o) For each of taxable years during the Compassionate Use |
| 15 | | of Medical Cannabis Program, a surcharge is imposed on all |
| 16 | | taxpayers on income arising from the sale or exchange of |
| 17 | | capital assets, depreciable business property, real property |
| 18 | | used in the trade or business, and Section 197 intangibles of |
| 19 | | an organization registrant under the Compassionate Use of |
| 20 | | Medical Cannabis Program Act. The amount of the surcharge is |
| 21 | | equal to the amount of federal income tax liability for the |
| 22 | | taxable year attributable to those sales and exchanges. The |
| 23 | | surcharge imposed does not apply if: |
| 24 | | (1) the medical cannabis cultivation center |
| 25 | | registration, medical cannabis dispensary registration, or |
| 26 | | the property of a registration is transferred as a result |
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| 1 | | of any of the following: |
| 2 | | (A) bankruptcy, a receivership, or a debt |
| 3 | | adjustment initiated by or against the initial |
| 4 | | registration or the substantial owners of the initial |
| 5 | | registration; |
| 6 | | (B) cancellation, revocation, or termination of |
| 7 | | any registration by the Illinois Department of Public |
| 8 | | Health; |
| 9 | | (C) a determination by the Illinois Department of |
| 10 | | Public Health that transfer of the registration is in |
| 11 | | the best interests of Illinois qualifying patients as |
| 12 | | defined by the Compassionate Use of Medical Cannabis |
| 13 | | Program Act; |
| 14 | | (D) the death of an owner of the equity interest in |
| 15 | | a registrant; |
| 16 | | (E) the acquisition of a controlling interest in |
| 17 | | the stock or substantially all of the assets of a |
| 18 | | publicly traded company; |
| 19 | | (F) a transfer by a parent company to a wholly |
| 20 | | owned subsidiary; or |
| 21 | | (G) the transfer or sale to or by one person to |
| 22 | | another person where both persons were initial owners |
| 23 | | of the registration when the registration was issued; |
| 24 | | or |
| 25 | | (2) the cannabis cultivation center registration, |
| 26 | | medical cannabis dispensary registration, or the |
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| 1 | | controlling interest in a registrant's property is |
| 2 | | transferred in a transaction to lineal descendants in |
| 3 | | which no gain or loss is recognized or as a result of a |
| 4 | | transaction in accordance with Section 351 of the Internal |
| 5 | | Revenue Code in which no gain or loss is recognized. |
| 6 | | (Source: P.A. 100-22, eff. 7-6-17; 101-8, see Section 99 for |
| 7 | | effective date; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; |
| 8 | | 101-207, eff. 8-2-19; 101-363, eff. 8-9-19; revised 11-18-20.)
|
| 9 | | Section 905. The Use Tax Act is amended by changing |
| 10 | | Section 3-5 as follows:
|
| 11 | | (35 ILCS 105/3-5)
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| 12 | | Sec. 3-5. Exemptions. Use of the following tangible |
| 13 | | personal property is exempt from the tax imposed by this Act:
|
| 14 | | (1) Personal property purchased from a corporation, |
| 15 | | society, association,
foundation, institution, or |
| 16 | | organization, other than a limited liability
company, that is |
| 17 | | organized and operated as a not-for-profit service enterprise
|
| 18 | | for the benefit of persons 65 years of age or older if the |
| 19 | | personal property was not purchased by the enterprise for the |
| 20 | | purpose of resale by the
enterprise.
|
| 21 | | (2) Personal property purchased by a not-for-profit |
| 22 | | Illinois county
fair association for use in conducting, |
| 23 | | operating, or promoting the
county fair.
|
| 24 | | (3) Personal property purchased by a not-for-profit
arts |
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| 1 | | or cultural organization that establishes, by proof required |
| 2 | | by the
Department by
rule, that it has received an exemption |
| 3 | | under Section 501(c)(3) of the Internal
Revenue Code and that |
| 4 | | is organized and operated primarily for the
presentation
or |
| 5 | | support of arts or cultural programming, activities, or |
| 6 | | services. These
organizations include, but are not limited to, |
| 7 | | music and dramatic arts
organizations such as symphony |
| 8 | | orchestras and theatrical groups, arts and
cultural service |
| 9 | | organizations, local arts councils, visual arts organizations,
|
| 10 | | and media arts organizations.
On and after July 1, 2001 (the |
| 11 | | effective date of Public Act 92-35), however, an entity |
| 12 | | otherwise eligible for this exemption shall not
make tax-free |
| 13 | | purchases unless it has an active identification number issued |
| 14 | | by
the Department.
|
| 15 | | (4) Personal property purchased by a governmental body, by |
| 16 | | a
corporation, society, association, foundation, or |
| 17 | | institution organized and
operated exclusively for charitable, |
| 18 | | religious, or educational purposes, or
by a not-for-profit |
| 19 | | corporation, society, association, foundation,
institution, or |
| 20 | | organization that has no compensated officers or employees
and |
| 21 | | that is organized and operated primarily for the recreation of |
| 22 | | persons
55 years of age or older. A limited liability company |
| 23 | | may qualify for the
exemption under this paragraph only if the |
| 24 | | limited liability company is
organized and operated |
| 25 | | exclusively for educational purposes. On and after July
1, |
| 26 | | 1987, however, no entity otherwise eligible for this exemption |
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| 1 | | shall make
tax-free purchases unless it has an active |
| 2 | | exemption identification number
issued by the Department.
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| 3 | | (5) Until July 1, 2003, a passenger car that is a |
| 4 | | replacement vehicle to
the extent that the
purchase price of |
| 5 | | the car is subject to the Replacement Vehicle Tax.
|
| 6 | | (6) Until July 1, 2003 and beginning again on September 1, |
| 7 | | 2004 through August 30, 2014, graphic arts machinery and |
| 8 | | equipment, including
repair and replacement
parts, both new |
| 9 | | and used, and including that manufactured on special order,
|
| 10 | | certified by the purchaser to be used primarily for graphic |
| 11 | | arts production,
and including machinery and equipment |
| 12 | | purchased for lease.
Equipment includes chemicals or chemicals |
| 13 | | acting as catalysts but only if
the
chemicals or chemicals |
| 14 | | acting as catalysts effect a direct and immediate change
upon |
| 15 | | a graphic arts product. Beginning on July 1, 2017, graphic |
| 16 | | arts machinery and equipment is included in the manufacturing |
| 17 | | and assembling machinery and equipment exemption under |
| 18 | | paragraph (18).
|
| 19 | | (7) Farm chemicals.
|
| 20 | | (8) Legal tender, currency, medallions, or gold or silver |
| 21 | | coinage issued by
the State of Illinois, the government of the |
| 22 | | United States of America, or the
government of any foreign |
| 23 | | country, and bullion.
|
| 24 | | (9) Personal property purchased from a teacher-sponsored |
| 25 | | student
organization affiliated with an elementary or |
| 26 | | secondary school located in
Illinois.
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| 1 | | (10) A motor vehicle that is used for automobile renting, |
| 2 | | as defined in the
Automobile Renting Occupation and Use Tax |
| 3 | | Act.
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| 4 | | (11) Farm machinery and equipment, both new and used,
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| 5 | | including that manufactured on special order, certified by the |
| 6 | | purchaser
to be used primarily for production agriculture or |
| 7 | | State or federal
agricultural programs, including individual |
| 8 | | replacement parts for
the machinery and equipment, including |
| 9 | | machinery and equipment
purchased
for lease,
and including |
| 10 | | implements of husbandry defined in Section 1-130 of
the |
| 11 | | Illinois Vehicle Code, farm machinery and agricultural |
| 12 | | chemical and
fertilizer spreaders, and nurse wagons required |
| 13 | | to be registered
under Section 3-809 of the Illinois Vehicle |
| 14 | | Code,
but excluding other motor
vehicles required to be
|
| 15 | | registered under the Illinois Vehicle Code.
Horticultural |
| 16 | | polyhouses or hoop houses used for propagating, growing, or
|
| 17 | | overwintering plants shall be considered farm machinery and |
| 18 | | equipment under
this item (11).
Agricultural chemical tender |
| 19 | | tanks and dry boxes shall include units sold
separately from a |
| 20 | | motor vehicle required to be licensed and units sold mounted
|
| 21 | | on a motor vehicle required to be licensed if the selling price |
| 22 | | of the tender
is separately stated.
|
| 23 | | Farm machinery and equipment shall include precision |
| 24 | | farming equipment
that is
installed or purchased to be |
| 25 | | installed on farm machinery and equipment
including, but not |
| 26 | | limited to, tractors, harvesters, sprayers, planters,
seeders, |
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| 1 | | or spreaders.
Precision farming equipment includes, but is not |
| 2 | | limited to, soil testing
sensors, computers, monitors, |
| 3 | | software, global positioning
and mapping systems, and other |
| 4 | | such equipment.
|
| 5 | | Farm machinery and equipment also includes computers, |
| 6 | | sensors, software, and
related equipment used primarily in the
|
| 7 | | computer-assisted operation of production agriculture |
| 8 | | facilities, equipment,
and
activities such as, but not limited |
| 9 | | to,
the collection, monitoring, and correlation of
animal and |
| 10 | | crop data for the purpose of
formulating animal diets and |
| 11 | | agricultural chemicals. This item (11) is exempt
from the |
| 12 | | provisions of
Section 3-90.
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| 13 | | (12) Until June 30, 2013, fuel and petroleum products sold |
| 14 | | to or used by an air common
carrier, certified by the carrier |
| 15 | | to be used for consumption, shipment, or
storage in the |
| 16 | | conduct of its business as an air common carrier, for a
flight |
| 17 | | destined for or returning from a location or locations
outside |
| 18 | | the United States without regard to previous or subsequent |
| 19 | | domestic
stopovers.
|
| 20 | | Beginning July 1, 2013, fuel and petroleum products sold |
| 21 | | to or used by an air carrier, certified by the carrier to be |
| 22 | | used for consumption, shipment, or storage in the conduct of |
| 23 | | its business as an air common carrier, for a flight that (i) is |
| 24 | | engaged in foreign trade or is engaged in trade between the |
| 25 | | United States and any of its possessions and (ii) transports |
| 26 | | at least one individual or package for hire from the city of |
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| 1 | | origination to the city of final destination on the same |
| 2 | | aircraft, without regard to a change in the flight number of |
| 3 | | that aircraft. |
| 4 | | (13) Proceeds of mandatory service charges separately
|
| 5 | | stated on customers' bills for the purchase and consumption of |
| 6 | | food and
beverages purchased at retail from a retailer, to the |
| 7 | | extent that the proceeds
of the service charge are in fact |
| 8 | | turned over as tips or as a substitute
for tips to the |
| 9 | | employees who participate directly in preparing, serving,
|
| 10 | | hosting or cleaning up the food or beverage function with |
| 11 | | respect to which
the service charge is imposed.
|
| 12 | | (14) Until July 1, 2003, oil field exploration, drilling, |
| 13 | | and production
equipment,
including (i) rigs and parts of |
| 14 | | rigs, rotary
rigs, cable tool rigs, and workover rigs, (ii) |
| 15 | | pipe and tubular goods,
including casing and drill strings, |
| 16 | | (iii) pumps and pump-jack units, (iv)
storage tanks and flow |
| 17 | | lines, (v) any individual replacement part for oil
field |
| 18 | | exploration, drilling, and production equipment, and (vi) |
| 19 | | machinery and
equipment purchased
for lease; but excluding |
| 20 | | motor vehicles required to be registered under the
Illinois |
| 21 | | Vehicle Code.
|
| 22 | | (15) Photoprocessing machinery and equipment, including |
| 23 | | repair and
replacement parts, both new and used, including |
| 24 | | that
manufactured on special order, certified by the purchaser |
| 25 | | to be used
primarily for photoprocessing, and including
|
| 26 | | photoprocessing machinery and equipment purchased for lease.
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| 1 | | (16) Until July 1, 2023, coal and aggregate exploration, |
| 2 | | mining, off-highway hauling,
processing, maintenance, and |
| 3 | | reclamation equipment,
including replacement parts and |
| 4 | | equipment, and
including equipment purchased for lease, but |
| 5 | | excluding motor
vehicles required to be registered under the |
| 6 | | Illinois Vehicle Code. The changes made to this Section by |
| 7 | | Public Act 97-767 apply on and after July 1, 2003, but no claim |
| 8 | | for credit or refund is allowed on or after August 16, 2013 |
| 9 | | (the effective date of Public Act 98-456)
for such taxes paid |
| 10 | | during the period beginning July 1, 2003 and ending on August |
| 11 | | 16, 2013 (the effective date of Public Act 98-456).
|
| 12 | | (17) Until July 1, 2003, distillation machinery and |
| 13 | | equipment, sold as a
unit or kit,
assembled or installed by the |
| 14 | | retailer, certified by the user to be used
only for the |
| 15 | | production of ethyl alcohol that will be used for consumption
|
| 16 | | as motor fuel or as a component of motor fuel for the personal |
| 17 | | use of the
user, and not subject to sale or resale.
|
| 18 | | (18) Manufacturing and assembling machinery and equipment |
| 19 | | used
primarily in the process of manufacturing or assembling |
| 20 | | tangible
personal property for wholesale or retail sale or |
| 21 | | lease, whether that sale
or lease is made directly by the |
| 22 | | manufacturer or by some other person,
whether the materials |
| 23 | | used in the process are
owned by the manufacturer or some other |
| 24 | | person, or whether that sale or
lease is made apart from or as |
| 25 | | an incident to the seller's engaging in
the service occupation |
| 26 | | of producing machines, tools, dies, jigs,
patterns, gauges, or |
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| 1 | | other similar items of no commercial value on
special order |
| 2 | | for a particular purchaser. The exemption provided by this |
| 3 | | paragraph (18) includes production related tangible personal |
| 4 | | property, as defined in Section 3-50, purchased on or after |
| 5 | | July 1, 2019. The exemption provided by this paragraph (18) |
| 6 | | does not include machinery and equipment used in (i) the |
| 7 | | generation of electricity for wholesale or retail sale; (ii) |
| 8 | | the generation or treatment of natural or artificial gas for |
| 9 | | wholesale or retail sale that is delivered to customers |
| 10 | | through pipes, pipelines, or mains; or (iii) the treatment of |
| 11 | | water for wholesale or retail sale that is delivered to |
| 12 | | customers through pipes, pipelines, or mains. The provisions |
| 13 | | of Public Act 98-583 are declaratory of existing law as to the |
| 14 | | meaning and scope of this exemption. Beginning on July 1, |
| 15 | | 2017, the exemption provided by this paragraph (18) includes, |
| 16 | | but is not limited to, graphic arts machinery and equipment, |
| 17 | | as defined in paragraph (6) of this Section.
|
| 18 | | (19) Personal property delivered to a purchaser or |
| 19 | | purchaser's donee
inside Illinois when the purchase order for |
| 20 | | that personal property was
received by a florist located |
| 21 | | outside Illinois who has a florist located
inside Illinois |
| 22 | | deliver the personal property.
|
| 23 | | (20) Semen used for artificial insemination of livestock |
| 24 | | for direct
agricultural production.
|
| 25 | | (21) Horses, or interests in horses, registered with and |
| 26 | | meeting the
requirements of any of the
Arabian Horse Club |
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| 1 | | Registry of America, Appaloosa Horse Club, American Quarter
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| 2 | | Horse Association, United States
Trotting Association, or |
| 3 | | Jockey Club, as appropriate, used for
purposes of breeding or |
| 4 | | racing for prizes. This item (21) is exempt from the |
| 5 | | provisions of Section 3-90, and the exemption provided for |
| 6 | | under this item (21) applies for all periods beginning May 30, |
| 7 | | 1995, but no claim for credit or refund is allowed on or after |
| 8 | | January 1, 2008
for such taxes paid during the period |
| 9 | | beginning May 30, 2000 and ending on January 1, 2008.
|
| 10 | | (22) Computers and communications equipment utilized for |
| 11 | | any
hospital
purpose
and equipment used in the diagnosis,
|
| 12 | | analysis, or treatment of hospital patients purchased by a |
| 13 | | lessor who leases
the
equipment, under a lease of one year or |
| 14 | | longer executed or in effect at the
time the lessor would |
| 15 | | otherwise be subject to the tax imposed by this Act, to a
|
| 16 | | hospital
that has been issued an active tax exemption |
| 17 | | identification number by
the
Department under Section 1g of |
| 18 | | the Retailers' Occupation Tax Act. If the
equipment is leased |
| 19 | | in a manner that does not qualify for
this exemption or is used |
| 20 | | in any other non-exempt manner, the lessor
shall be liable for |
| 21 | | the
tax imposed under this Act or the Service Use Tax Act, as |
| 22 | | the case may
be, based on the fair market value of the property |
| 23 | | at the time the
non-qualifying use occurs. No lessor shall |
| 24 | | collect or attempt to collect an
amount (however
designated) |
| 25 | | that purports to reimburse that lessor for the tax imposed by |
| 26 | | this
Act or the Service Use Tax Act, as the case may be, if the |
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| 1 | | tax has not been
paid by the lessor. If a lessor improperly |
| 2 | | collects any such amount from the
lessee, the lessee shall |
| 3 | | have a legal right to claim a refund of that amount
from the |
| 4 | | lessor. If, however, that amount is not refunded to the lessee |
| 5 | | for
any reason, the lessor is liable to pay that amount to the |
| 6 | | Department.
|
| 7 | | (23) Personal property purchased by a lessor who leases |
| 8 | | the
property, under
a
lease of
one year or longer executed or |
| 9 | | in effect at the time
the lessor would otherwise be subject to |
| 10 | | the tax imposed by this Act,
to a governmental body
that has |
| 11 | | been issued an active sales tax exemption identification |
| 12 | | number by the
Department under Section 1g of the Retailers' |
| 13 | | Occupation Tax Act.
If the
property is leased in a manner that |
| 14 | | does not qualify for
this exemption
or used in any other |
| 15 | | non-exempt manner, the lessor shall be liable for the
tax |
| 16 | | imposed under this Act or the Service Use Tax Act, as the case |
| 17 | | may
be, based on the fair market value of the property at the |
| 18 | | time the
non-qualifying use occurs. No lessor shall collect or |
| 19 | | attempt to collect an
amount (however
designated) that |
| 20 | | purports to reimburse that lessor for the tax imposed by this
|
| 21 | | Act or the Service Use Tax Act, as the case may be, if the tax |
| 22 | | has not been
paid by the lessor. If a lessor improperly |
| 23 | | collects any such amount from the
lessee, the lessee shall |
| 24 | | have a legal right to claim a refund of that amount
from the |
| 25 | | lessor. If, however, that amount is not refunded to the lessee |
| 26 | | for
any reason, the lessor is liable to pay that amount to the |
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| 1 | | Department.
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| 2 | | (24) Beginning with taxable years ending on or after |
| 3 | | December
31, 1995
and
ending with taxable years ending on or |
| 4 | | before December 31, 2004,
personal property that is
donated |
| 5 | | for disaster relief to be used in a State or federally declared
|
| 6 | | disaster area in Illinois or bordering Illinois by a |
| 7 | | manufacturer or retailer
that is registered in this State to a |
| 8 | | corporation, society, association,
foundation, or institution |
| 9 | | that has been issued a sales tax exemption
identification |
| 10 | | number by the Department that assists victims of the disaster
|
| 11 | | who reside within the declared disaster area.
|
| 12 | | (25) Beginning with taxable years ending on or after |
| 13 | | December
31, 1995 and
ending with taxable years ending on or |
| 14 | | before December 31, 2004, personal
property that is used in |
| 15 | | the performance of infrastructure repairs in this
State, |
| 16 | | including but not limited to municipal roads and streets, |
| 17 | | access roads,
bridges, sidewalks, waste disposal systems, |
| 18 | | water and sewer line extensions,
water distribution and |
| 19 | | purification facilities, storm water drainage and
retention |
| 20 | | facilities, and sewage treatment facilities, resulting from a |
| 21 | | State
or federally declared disaster in Illinois or bordering |
| 22 | | Illinois when such
repairs are initiated on facilities located |
| 23 | | in the declared disaster area
within 6 months after the |
| 24 | | disaster.
|
| 25 | | (26) Beginning July 1, 1999, game or game birds purchased |
| 26 | | at a "game
breeding
and hunting preserve area" as that term is
|
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| 1 | | used in
the Wildlife Code. This paragraph is exempt from the |
| 2 | | provisions
of
Section 3-90.
|
| 3 | | (27) A motor vehicle, as that term is defined in Section |
| 4 | | 1-146
of the
Illinois
Vehicle Code, that is donated to a |
| 5 | | corporation, limited liability company,
society, association, |
| 6 | | foundation, or institution that is determined by the
|
| 7 | | Department to be organized and operated exclusively for |
| 8 | | educational purposes.
For purposes of this exemption, "a |
| 9 | | corporation, limited liability company,
society, association, |
| 10 | | foundation, or institution organized and operated
exclusively |
| 11 | | for educational purposes" means all tax-supported public |
| 12 | | schools,
private schools that offer systematic instruction in |
| 13 | | useful branches of
learning by methods common to public |
| 14 | | schools and that compare favorably in
their scope and |
| 15 | | intensity with the course of study presented in tax-supported
|
| 16 | | schools, and vocational or technical schools or institutes |
| 17 | | organized and
operated exclusively to provide a course of |
| 18 | | study of not less than 6 weeks
duration and designed to prepare |
| 19 | | individuals to follow a trade or to pursue a
manual, |
| 20 | | technical, mechanical, industrial, business, or commercial
|
| 21 | | occupation.
|
| 22 | | (28) Beginning January 1, 2000, personal property, |
| 23 | | including
food,
purchased through fundraising
events for the |
| 24 | | benefit of
a public or private elementary or
secondary school, |
| 25 | | a group of those schools, or one or more school
districts if |
| 26 | | the events are
sponsored by an entity recognized by the school |
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| 1 | | district that consists
primarily of volunteers and includes
|
| 2 | | parents and teachers of the school children. This paragraph |
| 3 | | does not apply
to fundraising
events (i) for the benefit of |
| 4 | | private home instruction or (ii)
for which the fundraising |
| 5 | | entity purchases the personal property sold at
the events from |
| 6 | | another individual or entity that sold the property for the
|
| 7 | | purpose of resale by the fundraising entity and that
profits |
| 8 | | from the sale to the
fundraising entity. This paragraph is |
| 9 | | exempt
from the provisions
of Section 3-90.
|
| 10 | | (29) Beginning January 1, 2000 and through December 31, |
| 11 | | 2001, new or
used automatic vending
machines that prepare and |
| 12 | | serve hot food and beverages, including coffee, soup,
and
|
| 13 | | other items, and replacement parts for these machines.
|
| 14 | | Beginning January 1,
2002 and through June 30, 2003, machines |
| 15 | | and parts for machines used in
commercial, coin-operated |
| 16 | | amusement and vending business if a use or occupation
tax is |
| 17 | | paid on the gross receipts derived from the use of the |
| 18 | | commercial,
coin-operated amusement and vending machines.
This
|
| 19 | | paragraph
is exempt from the provisions of Section 3-90.
|
| 20 | | (30) Beginning January 1, 2001 and through June 30, 2016, |
| 21 | | food for human consumption that is to be consumed off the |
| 22 | | premises
where it is sold (other than alcoholic beverages, |
| 23 | | soft drinks, and food that
has been prepared for immediate |
| 24 | | consumption) and prescription and
nonprescription medicines, |
| 25 | | drugs, medical appliances, and insulin, urine
testing |
| 26 | | materials, syringes, and needles used by diabetics, for human |
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| 1 | | use, when
purchased for use by a person receiving medical |
| 2 | | assistance under Article V of
the Illinois Public Aid Code who |
| 3 | | resides in a licensed long-term care facility,
as defined in |
| 4 | | the Nursing Home Care Act, or in a licensed facility as defined |
| 5 | | in the ID/DD Community Care Act, the MC/DD Act, or the |
| 6 | | Specialized Mental Health Rehabilitation Act of 2013.
|
| 7 | | (31) Beginning on August 2, 2001 (the effective date of |
| 8 | | Public Act 92-227),
computers and communications equipment
|
| 9 | | utilized for any hospital purpose and equipment used in the |
| 10 | | diagnosis,
analysis, or treatment of hospital patients |
| 11 | | purchased by a lessor who leases
the equipment, under a lease |
| 12 | | of one year or longer executed or in effect at the
time the |
| 13 | | lessor would otherwise be subject to the tax imposed by this |
| 14 | | Act, to a
hospital that has been issued an active tax exemption |
| 15 | | identification number by
the Department under Section 1g of |
| 16 | | the Retailers' Occupation Tax Act. If the
equipment is leased |
| 17 | | in a manner that does not qualify for this exemption or is
used |
| 18 | | in any other nonexempt manner, the lessor shall be liable for |
| 19 | | the tax
imposed under this Act or the Service Use Tax Act, as |
| 20 | | the case may be, based on
the fair market value of the property |
| 21 | | at the time the nonqualifying use
occurs. No lessor shall |
| 22 | | collect or attempt to collect an amount (however
designated) |
| 23 | | that purports to reimburse that lessor for the tax imposed by |
| 24 | | this
Act or the Service Use Tax Act, as the case may be, if the |
| 25 | | tax has not been
paid by the lessor. If a lessor improperly |
| 26 | | collects any such amount from the
lessee, the lessee shall |
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| 1 | | have a legal right to claim a refund of that amount
from the |
| 2 | | lessor. If, however, that amount is not refunded to the lessee |
| 3 | | for
any reason, the lessor is liable to pay that amount to the |
| 4 | | Department.
This paragraph is exempt from the provisions of |
| 5 | | Section 3-90.
|
| 6 | | (32) Beginning on August 2, 2001 (the effective date of |
| 7 | | Public Act 92-227),
personal property purchased by a lessor |
| 8 | | who leases the property,
under a lease of one year or longer |
| 9 | | executed or in effect at the time the
lessor would otherwise be |
| 10 | | subject to the tax imposed by this Act, to a
governmental body |
| 11 | | that has been issued an active sales tax exemption
|
| 12 | | identification number by the Department under Section 1g of |
| 13 | | the Retailers'
Occupation Tax Act. If the property is leased |
| 14 | | in a manner that does not
qualify for this exemption or used in |
| 15 | | any other nonexempt manner, the lessor
shall be liable for the |
| 16 | | tax imposed under this Act or the Service Use Tax Act,
as the |
| 17 | | case may be, based on the fair market value of the property at |
| 18 | | the time
the nonqualifying use occurs. No lessor shall collect |
| 19 | | or attempt to collect
an amount (however designated) that |
| 20 | | purports to reimburse that lessor for the
tax imposed by this |
| 21 | | Act or the Service Use Tax Act, as the case may be, if the
tax |
| 22 | | has not been paid by the lessor. If a lessor improperly |
| 23 | | collects any such
amount from the lessee, the lessee shall |
| 24 | | have a legal right to claim a refund
of that amount from the |
| 25 | | lessor. If, however, that amount is not refunded to
the lessee |
| 26 | | for any reason, the lessor is liable to pay that amount to the
|
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| 1 | | Department. This paragraph is exempt from the provisions of |
| 2 | | Section 3-90.
|
| 3 | | (33) On and after July 1, 2003 and through June 30, 2004, |
| 4 | | the use in this State of motor vehicles of
the second division |
| 5 | | with a gross vehicle weight in excess of 8,000 pounds and
that |
| 6 | | are subject to the commercial distribution fee imposed under |
| 7 | | Section
3-815.1 of the Illinois Vehicle Code. Beginning on |
| 8 | | July 1, 2004 and through June 30, 2005, the use in this State |
| 9 | | of motor vehicles of the second division: (i) with a gross |
| 10 | | vehicle weight rating in excess of 8,000 pounds; (ii) that are |
| 11 | | subject to the commercial distribution fee imposed under |
| 12 | | Section 3-815.1 of the Illinois Vehicle Code; and (iii) that |
| 13 | | are primarily used for commercial purposes. Through June 30, |
| 14 | | 2005, this exemption applies to repair and
replacement parts |
| 15 | | added after the initial purchase of such a motor vehicle if
|
| 16 | | that motor
vehicle is used in a manner that would qualify for |
| 17 | | the rolling stock exemption
otherwise provided for in this |
| 18 | | Act. For purposes of this paragraph, the term "used for |
| 19 | | commercial purposes" means the transportation of persons or |
| 20 | | property in furtherance of any commercial or industrial |
| 21 | | enterprise, whether for-hire or not.
|
| 22 | | (34) Beginning January 1, 2008, tangible personal property |
| 23 | | used in the construction or maintenance of a community water |
| 24 | | supply, as defined under Section 3.145 of the Environmental |
| 25 | | Protection Act, that is operated by a not-for-profit |
| 26 | | corporation that holds a valid water supply permit issued |
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| 1 | | under Title IV of the Environmental Protection Act. This |
| 2 | | paragraph is exempt from the provisions of Section 3-90. |
| 3 | | (35) Beginning January 1, 2010 and continuing through |
| 4 | | December 31, 2024, materials, parts, equipment, components, |
| 5 | | and furnishings incorporated into or upon an aircraft as part |
| 6 | | of the modification, refurbishment, completion, replacement, |
| 7 | | repair, or maintenance of the aircraft. This exemption |
| 8 | | includes consumable supplies used in the modification, |
| 9 | | refurbishment, completion, replacement, repair, and |
| 10 | | maintenance of aircraft, but excludes any materials, parts, |
| 11 | | equipment, components, and consumable supplies used in the |
| 12 | | modification, replacement, repair, and maintenance of aircraft |
| 13 | | engines or power plants, whether such engines or power plants |
| 14 | | are installed or uninstalled upon any such aircraft. |
| 15 | | "Consumable supplies" include, but are not limited to, |
| 16 | | adhesive, tape, sandpaper, general purpose lubricants, |
| 17 | | cleaning solution, latex gloves, and protective films. This |
| 18 | | exemption applies only to the use of qualifying tangible |
| 19 | | personal property by persons who modify, refurbish, complete, |
| 20 | | repair, replace, or maintain aircraft and who (i) hold an Air |
| 21 | | Agency Certificate and are empowered to operate an approved |
| 22 | | repair station by the Federal Aviation Administration, (ii) |
| 23 | | have a Class IV Rating, and (iii) conduct operations in |
| 24 | | accordance with Part 145 of the Federal Aviation Regulations. |
| 25 | | The exemption does not include aircraft operated by a |
| 26 | | commercial air carrier providing scheduled passenger air |
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| 1 | | service pursuant to authority issued under Part 121 or Part |
| 2 | | 129 of the Federal Aviation Regulations. The changes made to |
| 3 | | this paragraph (35) by Public Act 98-534 are declarative of |
| 4 | | existing law. It is the intent of the General Assembly that the |
| 5 | | exemption under this paragraph (35) applies continuously from |
| 6 | | January 1, 2010 through December 31, 2024; however, no claim |
| 7 | | for credit or refund is allowed for taxes paid as a result of |
| 8 | | the disallowance of this exemption on or after January 1, 2015 |
| 9 | | and prior to the effective date of this amendatory Act of the |
| 10 | | 101st General Assembly. |
| 11 | | (36) Tangible personal property purchased by a |
| 12 | | public-facilities corporation, as described in Section |
| 13 | | 11-65-10 of the Illinois Municipal Code, for purposes of |
| 14 | | constructing or furnishing a municipal convention hall, but |
| 15 | | only if the legal title to the municipal convention hall is |
| 16 | | transferred to the municipality without any further |
| 17 | | consideration by or on behalf of the municipality at the time |
| 18 | | of the completion of the municipal convention hall or upon the |
| 19 | | retirement or redemption of any bonds or other debt |
| 20 | | instruments issued by the public-facilities corporation in |
| 21 | | connection with the development of the municipal convention |
| 22 | | hall. This exemption includes existing public-facilities |
| 23 | | corporations as provided in Section 11-65-25 of the Illinois |
| 24 | | Municipal Code. This paragraph is exempt from the provisions |
| 25 | | of Section 3-90. |
| 26 | | (37) Beginning January 1, 2017, menstrual pads, tampons, |
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| 1 | | and menstrual cups. |
| 2 | | (38) Merchandise that is subject to the Rental Purchase |
| 3 | | Agreement Occupation and Use Tax. The purchaser must certify |
| 4 | | that the item is purchased to be rented subject to a rental |
| 5 | | purchase agreement, as defined in the Rental Purchase |
| 6 | | Agreement Act, and provide proof of registration under the |
| 7 | | Rental Purchase Agreement Occupation and Use Tax Act. This |
| 8 | | paragraph is exempt from the provisions of Section 3-90. |
| 9 | | (39) Tangible personal property purchased by a purchaser |
| 10 | | who is exempt from the tax imposed by this Act by operation of |
| 11 | | federal law. This paragraph is exempt from the provisions of |
| 12 | | Section 3-90. |
| 13 | | (40) Qualified tangible personal property used in the |
| 14 | | construction or operation of a data center that has been |
| 15 | | granted a certificate of exemption by the Department of |
| 16 | | Commerce and Economic Opportunity, whether that tangible |
| 17 | | personal property is purchased by the owner, operator, or |
| 18 | | tenant of the data center or by a contractor or subcontractor |
| 19 | | of the owner, operator, or tenant. Data centers that would |
| 20 | | have qualified for a certificate of exemption prior to January |
| 21 | | 1, 2020 had Public Act 101-31 been in effect may apply for and |
| 22 | | obtain an exemption for subsequent purchases of computer |
| 23 | | equipment or enabling software purchased or leased to upgrade, |
| 24 | | supplement, or replace computer equipment or enabling software |
| 25 | | purchased or leased in the original investment that would have |
| 26 | | qualified. |
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| 1 | | (41) On and after January 1, 2022, any software purchased |
| 2 | | to lease, upgrade, supplement, or replace computer equipment |
| 3 | | or enabling software purchased or leased in the initial |
| 4 | | investment made at a Big Empties Site designated under the Big |
| 5 | | Empties Site Act. This paragraph is exempt from the provisions |
| 6 | | of Section 3-90. |
| 7 | | The Department of Commerce and Economic Opportunity shall |
| 8 | | grant a certificate of exemption under this item (40) to |
| 9 | | qualified data centers as defined by Section 605-1025 of the |
| 10 | | Department of Commerce and Economic Opportunity Law of the
|
| 11 | | Civil Administrative Code of Illinois. |
| 12 | | For the purposes of this item (40): |
| 13 | | "Data center" means a building or a series of |
| 14 | | buildings rehabilitated or constructed to house working |
| 15 | | servers in one physical location or multiple sites within |
| 16 | | the State of Illinois. |
| 17 | | "Qualified tangible personal property" means: |
| 18 | | electrical systems and equipment; climate control and |
| 19 | | chilling equipment and systems; mechanical systems and |
| 20 | | equipment; monitoring and secure systems; emergency |
| 21 | | generators; hardware; computers; servers; data storage |
| 22 | | devices; network connectivity equipment; racks; cabinets; |
| 23 | | telecommunications cabling infrastructure; raised floor |
| 24 | | systems; peripheral components or systems; software; |
| 25 | | mechanical, electrical, or plumbing systems; battery |
| 26 | | systems; cooling systems and towers; temperature control |
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| 1 | | systems; other cabling; and other data center |
| 2 | | infrastructure equipment and systems necessary to operate |
| 3 | | qualified tangible personal property, including fixtures; |
| 4 | | and component parts of any of the foregoing, including |
| 5 | | installation, maintenance, repair, refurbishment, and |
| 6 | | replacement of qualified tangible personal property to |
| 7 | | generate, transform, transmit, distribute, or manage |
| 8 | | electricity necessary to operate qualified tangible |
| 9 | | personal property; and all other tangible personal |
| 10 | | property that is essential to the operations of a computer |
| 11 | | data center. The term "qualified tangible personal |
| 12 | | property" also includes building materials physically |
| 13 | | incorporated in to the qualifying data center. To document |
| 14 | | the exemption allowed under this Section, the retailer |
| 15 | | must obtain from the purchaser a copy of the certificate |
| 16 | | of eligibility issued by the Department of Commerce and |
| 17 | | Economic Opportunity. |
| 18 | | This item (40) is exempt from the provisions of Section |
| 19 | | 3-90. |
| 20 | | (Source: P.A. 100-22, eff. 7-6-17; 100-437, eff. 1-1-18; |
| 21 | | 100-594, eff. 6-29-18; 100-863, eff. 8-14-18; 100-1171, eff. |
| 22 | | 1-4-19; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-81, eff. |
| 23 | | 7-12-19; 101-629, eff. 2-5-20.)
|
| 24 | | Section 910. The Service Use Tax Act is amended by |
| 25 | | changing Section 3-5 as follows:
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| 1 | | (35 ILCS 110/3-5)
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| 2 | | Sec. 3-5. Exemptions. Use of the following tangible |
| 3 | | personal property
is exempt from the tax imposed by this Act:
|
| 4 | | (1) Personal property purchased from a corporation, |
| 5 | | society,
association, foundation, institution, or |
| 6 | | organization, other than a limited
liability company, that is |
| 7 | | organized and operated as a not-for-profit service
enterprise |
| 8 | | for the benefit of persons 65 years of age or older if the |
| 9 | | personal
property was not purchased by the enterprise for the |
| 10 | | purpose of resale by the
enterprise.
|
| 11 | | (2) Personal property purchased by a non-profit Illinois |
| 12 | | county fair
association for use in conducting, operating, or |
| 13 | | promoting the county fair.
|
| 14 | | (3) Personal property purchased by a not-for-profit arts
|
| 15 | | or cultural
organization that establishes, by proof required |
| 16 | | by the Department by rule,
that it has received an exemption |
| 17 | | under Section 501(c)(3) of the Internal
Revenue Code and that |
| 18 | | is organized and operated primarily for the
presentation
or |
| 19 | | support of arts or cultural programming, activities, or |
| 20 | | services. These
organizations include, but are not limited to, |
| 21 | | music and dramatic arts
organizations such as symphony |
| 22 | | orchestras and theatrical groups, arts and
cultural service |
| 23 | | organizations, local arts councils, visual arts organizations,
|
| 24 | | and media arts organizations.
On and after July 1, 2001 (the |
| 25 | | effective date of Public Act 92-35), however, an entity |
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| 1 | | otherwise eligible for this exemption shall not
make tax-free |
| 2 | | purchases unless it has an active identification number issued |
| 3 | | by
the Department.
|
| 4 | | (4) Legal tender, currency, medallions, or gold or silver |
| 5 | | coinage issued
by the State of Illinois, the government of the |
| 6 | | United States of America,
or the government of any foreign |
| 7 | | country, and bullion.
|
| 8 | | (5) Until July 1, 2003 and beginning again on September 1, |
| 9 | | 2004 through August 30, 2014, graphic arts machinery and |
| 10 | | equipment, including
repair and
replacement parts, both new |
| 11 | | and used, and including that manufactured on
special order or |
| 12 | | purchased for lease, certified by the purchaser to be used
|
| 13 | | primarily for graphic arts production.
Equipment includes |
| 14 | | chemicals or
chemicals acting as catalysts but only if
the |
| 15 | | chemicals or chemicals acting as catalysts effect a direct and |
| 16 | | immediate
change upon a graphic arts product. Beginning on |
| 17 | | July 1, 2017, graphic arts machinery and equipment is included |
| 18 | | in the manufacturing and assembling machinery and equipment |
| 19 | | exemption under Section 2 of this Act.
|
| 20 | | (6) Personal property purchased from a teacher-sponsored |
| 21 | | student
organization affiliated with an elementary or |
| 22 | | secondary school located
in Illinois.
|
| 23 | | (7) Farm machinery and equipment, both new and used, |
| 24 | | including that
manufactured on special order, certified by the |
| 25 | | purchaser to be used
primarily for production agriculture or |
| 26 | | State or federal agricultural
programs, including individual |
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| 1 | | replacement parts for the machinery and
equipment, including |
| 2 | | machinery and equipment purchased for lease,
and including |
| 3 | | implements of husbandry defined in Section 1-130 of
the |
| 4 | | Illinois Vehicle Code, farm machinery and agricultural |
| 5 | | chemical and
fertilizer spreaders, and nurse wagons required |
| 6 | | to be registered
under Section 3-809 of the Illinois Vehicle |
| 7 | | Code,
but
excluding other motor vehicles required to be |
| 8 | | registered under the Illinois
Vehicle Code.
Horticultural |
| 9 | | polyhouses or hoop houses used for propagating, growing, or
|
| 10 | | overwintering plants shall be considered farm machinery and |
| 11 | | equipment under
this item (7).
Agricultural chemical tender |
| 12 | | tanks and dry boxes shall include units sold
separately from a |
| 13 | | motor vehicle required to be licensed and units sold mounted
|
| 14 | | on a motor vehicle required to be licensed if the selling price |
| 15 | | of the tender
is separately stated.
|
| 16 | | Farm machinery and equipment shall include precision |
| 17 | | farming equipment
that is
installed or purchased to be |
| 18 | | installed on farm machinery and equipment
including, but not |
| 19 | | limited to, tractors, harvesters, sprayers, planters,
seeders, |
| 20 | | or spreaders.
Precision farming equipment includes, but is not |
| 21 | | limited to,
soil testing sensors, computers, monitors, |
| 22 | | software, global positioning
and mapping systems, and other |
| 23 | | such equipment.
|
| 24 | | Farm machinery and equipment also includes computers, |
| 25 | | sensors, software, and
related equipment used primarily in the
|
| 26 | | computer-assisted operation of production agriculture |
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| 1 | | facilities, equipment,
and activities such as, but
not limited |
| 2 | | to,
the collection, monitoring, and correlation of
animal and |
| 3 | | crop data for the purpose of
formulating animal diets and |
| 4 | | agricultural chemicals. This item (7) is exempt
from the |
| 5 | | provisions of
Section 3-75.
|
| 6 | | (8) Until June 30, 2013, fuel and petroleum products sold |
| 7 | | to or used by an air common
carrier, certified by the carrier |
| 8 | | to be used for consumption, shipment, or
storage in the |
| 9 | | conduct of its business as an air common carrier, for a
flight |
| 10 | | destined for or returning from a location or locations
outside |
| 11 | | the United States without regard to previous or subsequent |
| 12 | | domestic
stopovers.
|
| 13 | | Beginning July 1, 2013, fuel and petroleum products sold |
| 14 | | to or used by an air carrier, certified by the carrier to be |
| 15 | | used for consumption, shipment, or storage in the conduct of |
| 16 | | its business as an air common carrier, for a flight that (i) is |
| 17 | | engaged in foreign trade or is engaged in trade between the |
| 18 | | United States and any of its possessions and (ii) transports |
| 19 | | at least one individual or package for hire from the city of |
| 20 | | origination to the city of final destination on the same |
| 21 | | aircraft, without regard to a change in the flight number of |
| 22 | | that aircraft. |
| 23 | | (9) Proceeds of mandatory service charges separately |
| 24 | | stated on
customers' bills for the purchase and consumption of |
| 25 | | food and beverages
acquired as an incident to the purchase of a |
| 26 | | service from a serviceman, to
the extent that the proceeds of |
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| 1 | | the service charge are in fact
turned over as tips or as a |
| 2 | | substitute for tips to the employees who
participate directly |
| 3 | | in preparing, serving, hosting or cleaning up the
food or |
| 4 | | beverage function with respect to which the service charge is |
| 5 | | imposed.
|
| 6 | | (10) Until July 1, 2003, oil field exploration, drilling, |
| 7 | | and production
equipment, including
(i) rigs and parts of |
| 8 | | rigs, rotary rigs, cable tool
rigs, and workover rigs, (ii) |
| 9 | | pipe and tubular goods, including casing and
drill strings, |
| 10 | | (iii) pumps and pump-jack units, (iv) storage tanks and flow
|
| 11 | | lines, (v) any individual replacement part for oil field |
| 12 | | exploration,
drilling, and production equipment, and (vi) |
| 13 | | machinery and equipment purchased
for lease; but
excluding |
| 14 | | motor vehicles required to be registered under the Illinois
|
| 15 | | Vehicle Code.
|
| 16 | | (11) Proceeds from the sale of photoprocessing machinery |
| 17 | | and
equipment, including repair and replacement parts, both |
| 18 | | new and
used, including that manufactured on special order, |
| 19 | | certified by the
purchaser to be used primarily for |
| 20 | | photoprocessing, and including
photoprocessing machinery and |
| 21 | | equipment purchased for lease.
|
| 22 | | (12) Until July 1, 2023, coal and aggregate exploration, |
| 23 | | mining, off-highway hauling,
processing,
maintenance, and |
| 24 | | reclamation equipment, including
replacement parts and |
| 25 | | equipment, and including
equipment purchased for lease, but |
| 26 | | excluding motor vehicles required to be
registered under the |
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| 1 | | Illinois Vehicle Code. The changes made to this Section by |
| 2 | | Public Act 97-767 apply on and after July 1, 2003, but no claim |
| 3 | | for credit or refund is allowed on or after August 16, 2013 |
| 4 | | (the effective date of Public Act 98-456)
for such taxes paid |
| 5 | | during the period beginning July 1, 2003 and ending on August |
| 6 | | 16, 2013 (the effective date of Public Act 98-456).
|
| 7 | | (13) Semen used for artificial insemination of livestock |
| 8 | | for direct
agricultural production.
|
| 9 | | (14) Horses, or interests in horses, registered with and |
| 10 | | meeting the
requirements of any of the
Arabian Horse Club |
| 11 | | Registry of America, Appaloosa Horse Club, American Quarter
|
| 12 | | Horse Association, United States
Trotting Association, or |
| 13 | | Jockey Club, as appropriate, used for
purposes of breeding or |
| 14 | | racing for prizes. This item (14) is exempt from the |
| 15 | | provisions of Section 3-75, and the exemption provided for |
| 16 | | under this item (14) applies for all periods beginning May 30, |
| 17 | | 1995, but no claim for credit or refund is allowed on or after |
| 18 | | January 1, 2008 (the effective date of Public Act 95-88) for |
| 19 | | such taxes paid during the period beginning May 30, 2000 and |
| 20 | | ending on January 1, 2008 (the effective date of Public Act |
| 21 | | 95-88).
|
| 22 | | (15) Computers and communications equipment utilized for |
| 23 | | any
hospital
purpose
and equipment used in the diagnosis,
|
| 24 | | analysis, or treatment of hospital patients purchased by a |
| 25 | | lessor who leases
the
equipment, under a lease of one year or |
| 26 | | longer executed or in effect at the
time
the lessor would |
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| 1 | | otherwise be subject to the tax imposed by this Act,
to a
|
| 2 | | hospital
that has been issued an active tax exemption |
| 3 | | identification number by the
Department under Section 1g of |
| 4 | | the Retailers' Occupation Tax Act.
If the
equipment is leased |
| 5 | | in a manner that does not qualify for
this exemption
or is used |
| 6 | | in any other non-exempt manner,
the lessor shall be liable for |
| 7 | | the
tax imposed under this Act or the Use Tax Act, as the case |
| 8 | | may
be, based on the fair market value of the property at the |
| 9 | | time the
non-qualifying use occurs. No lessor shall collect or |
| 10 | | attempt to collect an
amount (however
designated) that |
| 11 | | purports to reimburse that lessor for the tax imposed by this
|
| 12 | | Act or the Use Tax Act, as the case may be, if the tax has not |
| 13 | | been
paid by the lessor. If a lessor improperly collects any |
| 14 | | such amount from the
lessee, the lessee shall have a legal |
| 15 | | right to claim a refund of that amount
from the lessor. If, |
| 16 | | however, that amount is not refunded to the lessee for
any |
| 17 | | reason, the lessor is liable to pay that amount to the |
| 18 | | Department.
|
| 19 | | (16) Personal property purchased by a lessor who leases |
| 20 | | the
property, under
a
lease of one year or longer executed or |
| 21 | | in effect at the time
the lessor would otherwise be subject to |
| 22 | | the tax imposed by this Act,
to a governmental body
that has |
| 23 | | been issued an active tax exemption identification number by |
| 24 | | the
Department under Section 1g of the Retailers' Occupation |
| 25 | | Tax Act.
If the
property is leased in a manner that does not |
| 26 | | qualify for
this exemption
or is used in any other non-exempt |
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| 1 | | manner,
the lessor shall be liable for the
tax imposed under |
| 2 | | this Act or the Use Tax Act, as the case may
be, based on the |
| 3 | | fair market value of the property at the time the
|
| 4 | | non-qualifying use occurs. No lessor shall collect or attempt |
| 5 | | to collect an
amount (however
designated) that purports to |
| 6 | | reimburse that lessor for the tax imposed by this
Act or the |
| 7 | | Use Tax Act, as the case may be, if the tax has not been
paid |
| 8 | | by the lessor. If a lessor improperly collects any such amount |
| 9 | | from the
lessee, the lessee shall have a legal right to claim a |
| 10 | | refund of that amount
from the lessor. If, however, that |
| 11 | | amount is not refunded to the lessee for
any reason, the lessor |
| 12 | | is liable to pay that amount to the Department.
|
| 13 | | (17) Beginning with taxable years ending on or after |
| 14 | | December
31,
1995
and
ending with taxable years ending on or |
| 15 | | before December 31, 2004,
personal property that is
donated |
| 16 | | for disaster relief to be used in a State or federally declared
|
| 17 | | disaster area in Illinois or bordering Illinois by a |
| 18 | | manufacturer or retailer
that is registered in this State to a |
| 19 | | corporation, society, association,
foundation, or institution |
| 20 | | that has been issued a sales tax exemption
identification |
| 21 | | number by the Department that assists victims of the disaster
|
| 22 | | who reside within the declared disaster area.
|
| 23 | | (18) Beginning with taxable years ending on or after |
| 24 | | December
31, 1995 and
ending with taxable years ending on or |
| 25 | | before December 31, 2004, personal
property that is used in |
| 26 | | the performance of infrastructure repairs in this
State, |
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| 1 | | including but not limited to municipal roads and streets, |
| 2 | | access roads,
bridges, sidewalks, waste disposal systems, |
| 3 | | water and sewer line extensions,
water distribution and |
| 4 | | purification facilities, storm water drainage and
retention |
| 5 | | facilities, and sewage treatment facilities, resulting from a |
| 6 | | State
or federally declared disaster in Illinois or bordering |
| 7 | | Illinois when such
repairs are initiated on facilities located |
| 8 | | in the declared disaster area
within 6 months after the |
| 9 | | disaster.
|
| 10 | | (19) Beginning July 1, 1999, game or game birds purchased |
| 11 | | at a "game
breeding
and hunting preserve area" as that term is
|
| 12 | | used in
the Wildlife Code. This paragraph is exempt from the |
| 13 | | provisions
of
Section 3-75.
|
| 14 | | (20) A motor vehicle, as that term is defined in Section |
| 15 | | 1-146
of the
Illinois Vehicle Code, that is donated to a |
| 16 | | corporation, limited liability
company, society, association, |
| 17 | | foundation, or institution that is determined by
the |
| 18 | | Department to be organized and operated exclusively for |
| 19 | | educational
purposes. For purposes of this exemption, "a |
| 20 | | corporation, limited liability
company, society, association, |
| 21 | | foundation, or institution organized and
operated
exclusively |
| 22 | | for educational purposes" means all tax-supported public |
| 23 | | schools,
private schools that offer systematic instruction in |
| 24 | | useful branches of
learning by methods common to public |
| 25 | | schools and that compare favorably in
their scope and |
| 26 | | intensity with the course of study presented in tax-supported
|
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| 1 | | schools, and vocational or technical schools or institutes |
| 2 | | organized and
operated exclusively to provide a course of |
| 3 | | study of not less than 6 weeks
duration and designed to prepare |
| 4 | | individuals to follow a trade or to pursue a
manual, |
| 5 | | technical, mechanical, industrial, business, or commercial
|
| 6 | | occupation.
|
| 7 | | (21) Beginning January 1, 2000, personal property, |
| 8 | | including
food,
purchased through fundraising
events for the |
| 9 | | benefit of
a public or private elementary or
secondary school, |
| 10 | | a group of those schools, or one or more school
districts if |
| 11 | | the events are
sponsored by an entity recognized by the school |
| 12 | | district that consists
primarily of volunteers and includes
|
| 13 | | parents and teachers of the school children. This paragraph |
| 14 | | does not apply
to fundraising
events (i) for the benefit of |
| 15 | | private home instruction or (ii)
for which the fundraising |
| 16 | | entity purchases the personal property sold at
the events from |
| 17 | | another individual or entity that sold the property for the
|
| 18 | | purpose of resale by the fundraising entity and that
profits |
| 19 | | from the sale to the
fundraising entity. This paragraph is |
| 20 | | exempt
from the provisions
of Section 3-75.
|
| 21 | | (22) Beginning January 1, 2000
and through December 31, |
| 22 | | 2001, new or used automatic vending
machines that prepare and |
| 23 | | serve hot food and beverages, including coffee, soup,
and
|
| 24 | | other items, and replacement parts for these machines.
|
| 25 | | Beginning January 1,
2002 and through June 30, 2003, machines |
| 26 | | and parts for machines used in
commercial, coin-operated
|
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| 1 | | amusement
and vending business if a use or occupation tax is |
| 2 | | paid on the gross receipts
derived from
the use of the |
| 3 | | commercial, coin-operated amusement and vending machines.
This
|
| 4 | | paragraph
is exempt from the provisions of Section 3-75.
|
| 5 | | (23) Beginning August 23, 2001 and through June 30, 2016, |
| 6 | | food for human consumption that is to be consumed off the
|
| 7 | | premises
where it is sold (other than alcoholic beverages, |
| 8 | | soft drinks, and food that
has been prepared for immediate |
| 9 | | consumption) and prescription and
nonprescription medicines, |
| 10 | | drugs, medical appliances, and insulin, urine
testing |
| 11 | | materials, syringes, and needles used by diabetics, for human |
| 12 | | use, when
purchased for use by a person receiving medical |
| 13 | | assistance under Article V of
the Illinois Public Aid Code who |
| 14 | | resides in a licensed long-term care facility,
as defined in |
| 15 | | the Nursing Home Care Act, or in a licensed facility as defined |
| 16 | | in the ID/DD Community Care Act, the MC/DD Act, or the |
| 17 | | Specialized Mental Health Rehabilitation Act of 2013.
|
| 18 | | (24) Beginning on August 2, 2001 (the effective date of |
| 19 | | Public Act 92-227), computers and communications equipment
|
| 20 | | utilized for any hospital purpose and equipment used in the |
| 21 | | diagnosis,
analysis, or treatment of hospital patients |
| 22 | | purchased by a lessor who leases
the equipment, under a lease |
| 23 | | of one year or longer executed or in effect at the
time the |
| 24 | | lessor would otherwise be subject to the tax imposed by this |
| 25 | | Act, to a
hospital that has been issued an active tax exemption |
| 26 | | identification number by
the Department under Section 1g of |
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| 1 | | the Retailers' Occupation Tax Act. If the
equipment is leased |
| 2 | | in a manner that does not qualify for this exemption or is
used |
| 3 | | in any other nonexempt manner, the lessor shall be liable for |
| 4 | | the
tax imposed under this Act or the Use Tax Act, as the case |
| 5 | | may be, based on the
fair market value of the property at the |
| 6 | | time the nonqualifying use occurs.
No lessor shall collect or |
| 7 | | attempt to collect an amount (however
designated) that |
| 8 | | purports to reimburse that lessor for the tax imposed by this
|
| 9 | | Act or the Use Tax Act, as the case may be, if the tax has not |
| 10 | | been
paid by the lessor. If a lessor improperly collects any |
| 11 | | such amount from the
lessee, the lessee shall have a legal |
| 12 | | right to claim a refund of that amount
from the lessor. If, |
| 13 | | however, that amount is not refunded to the lessee for
any |
| 14 | | reason, the lessor is liable to pay that amount to the |
| 15 | | Department.
This paragraph is exempt from the provisions of |
| 16 | | Section 3-75.
|
| 17 | | (25) Beginning
on August 2, 2001 (the effective date of |
| 18 | | Public Act 92-227),
personal property purchased by a lessor
|
| 19 | | who leases the property, under a lease of one year or longer |
| 20 | | executed or in
effect at the time the lessor would otherwise be |
| 21 | | subject to the tax imposed by
this Act, to a governmental body |
| 22 | | that has been issued an active tax exemption
identification |
| 23 | | number by the Department under Section 1g of the Retailers'
|
| 24 | | Occupation Tax Act. If the property is leased in a manner that |
| 25 | | does not
qualify for this exemption or is used in any other |
| 26 | | nonexempt manner, the
lessor shall be liable for the tax |
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| 1 | | imposed under this Act or the Use Tax Act,
as the case may be, |
| 2 | | based on the fair market value of the property at the time
the |
| 3 | | nonqualifying use occurs. No lessor shall collect or attempt |
| 4 | | to collect
an amount (however designated) that purports to |
| 5 | | reimburse that lessor for the
tax imposed by this Act or the |
| 6 | | Use Tax Act, as the case may be, if the tax has
not been paid |
| 7 | | by the lessor. If a lessor improperly collects any such amount
|
| 8 | | from the lessee, the lessee shall have a legal right to claim a |
| 9 | | refund of that
amount from the lessor. If, however, that |
| 10 | | amount is not refunded to the lessee
for any reason, the lessor |
| 11 | | is liable to pay that amount to the Department.
This paragraph |
| 12 | | is exempt from the provisions of Section 3-75.
|
| 13 | | (26) Beginning January 1, 2008, tangible personal property |
| 14 | | used in the construction or maintenance of a community water |
| 15 | | supply, as defined under Section 3.145 of the Environmental |
| 16 | | Protection Act, that is operated by a not-for-profit |
| 17 | | corporation that holds a valid water supply permit issued |
| 18 | | under Title IV of the Environmental Protection Act. This |
| 19 | | paragraph is exempt from the provisions of Section 3-75.
|
| 20 | | (27) Beginning January 1, 2010 and continuing through |
| 21 | | December 31, 2024, materials, parts, equipment, components, |
| 22 | | and furnishings incorporated into or upon an aircraft as part |
| 23 | | of the modification, refurbishment, completion, replacement, |
| 24 | | repair, or maintenance of the aircraft. This exemption |
| 25 | | includes consumable supplies used in the modification, |
| 26 | | refurbishment, completion, replacement, repair, and |
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| 1 | | maintenance of aircraft, but excludes any materials, parts, |
| 2 | | equipment, components, and consumable supplies used in the |
| 3 | | modification, replacement, repair, and maintenance of aircraft |
| 4 | | engines or power plants, whether such engines or power plants |
| 5 | | are installed or uninstalled upon any such aircraft. |
| 6 | | "Consumable supplies" include, but are not limited to, |
| 7 | | adhesive, tape, sandpaper, general purpose lubricants, |
| 8 | | cleaning solution, latex gloves, and protective films. This |
| 9 | | exemption applies only to the use of qualifying tangible |
| 10 | | personal property transferred incident to the modification, |
| 11 | | refurbishment, completion, replacement, repair, or maintenance |
| 12 | | of aircraft by persons who (i) hold an Air Agency Certificate |
| 13 | | and are empowered to operate an approved repair station by the |
| 14 | | Federal Aviation Administration, (ii) have a Class IV Rating, |
| 15 | | and (iii) conduct operations in accordance with Part 145 of |
| 16 | | the Federal Aviation Regulations. The exemption does not |
| 17 | | include aircraft operated by a commercial air carrier |
| 18 | | providing scheduled passenger air service pursuant to |
| 19 | | authority issued under Part 121 or Part 129 of the Federal |
| 20 | | Aviation Regulations. The changes made to this paragraph (27) |
| 21 | | by Public Act 98-534 are declarative of existing law. It is the |
| 22 | | intent of the General Assembly that the exemption under this |
| 23 | | paragraph (27) applies continuously from January 1, 2010 |
| 24 | | through December 31, 2024; however, no claim for credit or |
| 25 | | refund is allowed for taxes paid as a result of the |
| 26 | | disallowance of this exemption on or after January 1, 2015 and |
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| 1 | | prior to the effective date of this amendatory Act of the 101st |
| 2 | | General Assembly. |
| 3 | | (28) Tangible personal property purchased by a |
| 4 | | public-facilities corporation, as described in Section |
| 5 | | 11-65-10 of the Illinois Municipal Code, for purposes of |
| 6 | | constructing or furnishing a municipal convention hall, but |
| 7 | | only if the legal title to the municipal convention hall is |
| 8 | | transferred to the municipality without any further |
| 9 | | consideration by or on behalf of the municipality at the time |
| 10 | | of the completion of the municipal convention hall or upon the |
| 11 | | retirement or redemption of any bonds or other debt |
| 12 | | instruments issued by the public-facilities corporation in |
| 13 | | connection with the development of the municipal convention |
| 14 | | hall. This exemption includes existing public-facilities |
| 15 | | corporations as provided in Section 11-65-25 of the Illinois |
| 16 | | Municipal Code. This paragraph is exempt from the provisions |
| 17 | | of Section 3-75. |
| 18 | | (29) Beginning January 1, 2017, menstrual pads, tampons, |
| 19 | | and menstrual cups. |
| 20 | | (30) Tangible personal property transferred to a purchaser |
| 21 | | who is exempt from the tax imposed by this Act by operation of |
| 22 | | federal law. This paragraph is exempt from the provisions of |
| 23 | | Section 3-75. |
| 24 | | (31) Qualified tangible personal property used in the |
| 25 | | construction or operation of a data center that has been |
| 26 | | granted a certificate of exemption by the Department of |
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| 1 | | Commerce and Economic Opportunity, whether that tangible |
| 2 | | personal property is purchased by the owner, operator, or |
| 3 | | tenant of the data center or by a contractor or subcontractor |
| 4 | | of the owner, operator, or tenant. Data centers that would |
| 5 | | have qualified for a certificate of exemption prior to January |
| 6 | | 1, 2020 had this amendatory Act of the 101st General Assembly |
| 7 | | been in effect, may apply for and obtain an exemption for |
| 8 | | subsequent purchases of computer equipment or enabling |
| 9 | | software purchased or leased to upgrade, supplement, or |
| 10 | | replace computer equipment or enabling software purchased or |
| 11 | | leased in the original investment that would have qualified. |
| 12 | | (32) On and after January 1, 2022, any software purchased |
| 13 | | to lease, upgrade, supplement, or replace computer equipment |
| 14 | | or enabling software purchased or leased in the initial |
| 15 | | investment made at a Big Empties Site designated under the Big |
| 16 | | Empties Site Act. This paragraph is exempt from the provisions |
| 17 | | of Section 3-75. |
| 18 | | The Department of Commerce and Economic Opportunity shall |
| 19 | | grant a certificate of exemption under this item (31) to |
| 20 | | qualified data centers as defined by Section 605-1025 of the |
| 21 | | Department of Commerce and Economic Opportunity Law of the
|
| 22 | | Civil Administrative Code of Illinois. |
| 23 | | For the purposes of this item (31): |
| 24 | | "Data center" means a building or a series of |
| 25 | | buildings rehabilitated or constructed to house working |
| 26 | | servers in one physical location or multiple sites within |
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| 1 | | the State of Illinois. |
| 2 | | "Qualified tangible personal property" means: |
| 3 | | electrical systems and equipment; climate control and |
| 4 | | chilling equipment and systems; mechanical systems and |
| 5 | | equipment; monitoring and secure systems; emergency |
| 6 | | generators; hardware; computers; servers; data storage |
| 7 | | devices; network connectivity equipment; racks; cabinets; |
| 8 | | telecommunications cabling infrastructure; raised floor |
| 9 | | systems; peripheral components or systems; software; |
| 10 | | mechanical, electrical, or plumbing systems; battery |
| 11 | | systems; cooling systems and towers; temperature control |
| 12 | | systems; other cabling; and other data center |
| 13 | | infrastructure equipment and systems necessary to operate |
| 14 | | qualified tangible personal property, including fixtures; |
| 15 | | and component parts of any of the foregoing, including |
| 16 | | installation, maintenance, repair, refurbishment, and |
| 17 | | replacement of qualified tangible personal property to |
| 18 | | generate, transform, transmit, distribute, or manage |
| 19 | | electricity necessary to operate qualified tangible |
| 20 | | personal property; and all other tangible personal |
| 21 | | property that is essential to the operations of a computer |
| 22 | | data center. The term "qualified tangible personal |
| 23 | | property" also includes building materials physically |
| 24 | | incorporated in to the qualifying data center. To document |
| 25 | | the exemption allowed under this Section, the retailer |
| 26 | | must obtain from the purchaser a copy of the certificate |
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| 1 | | of eligibility issued by the Department of Commerce and |
| 2 | | Economic Opportunity. |
| 3 | | This item (31) is exempt from the provisions of Section |
| 4 | | 3-75. |
| 5 | | (Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18; |
| 6 | | 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff. |
| 7 | | 7-12-19; 101-629, eff. 2-5-20.)
|
| 8 | | Section 915. The Service Occupation Tax Act is amended by |
| 9 | | changing Section 3-5 as follows:
|
| 10 | | (35 ILCS 115/3-5)
|
| 11 | | Sec. 3-5. Exemptions. The following tangible personal |
| 12 | | property is
exempt from the tax imposed by this Act:
|
| 13 | | (1) Personal property sold by a corporation, society, |
| 14 | | association,
foundation, institution, or organization, other |
| 15 | | than a limited liability
company, that is organized and |
| 16 | | operated as a not-for-profit service enterprise
for the |
| 17 | | benefit of persons 65 years of age or older if the personal |
| 18 | | property
was not purchased by the enterprise for the purpose |
| 19 | | of resale by the
enterprise.
|
| 20 | | (2) Personal property purchased by a not-for-profit |
| 21 | | Illinois county fair
association for use in conducting, |
| 22 | | operating, or promoting the county fair.
|
| 23 | | (3) Personal property purchased by any not-for-profit
arts |
| 24 | | or cultural organization that establishes, by proof required |
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| 1 | | by the
Department by
rule, that it has received an exemption |
| 2 | | under Section 501(c)(3) of the
Internal Revenue Code and that |
| 3 | | is organized and operated primarily for the
presentation
or |
| 4 | | support of arts or cultural programming, activities, or |
| 5 | | services. These
organizations include, but are not limited to, |
| 6 | | music and dramatic arts
organizations such as symphony |
| 7 | | orchestras and theatrical groups, arts and
cultural service |
| 8 | | organizations, local arts councils, visual arts organizations,
|
| 9 | | and media arts organizations.
On and after July 1, 2001 (the |
| 10 | | effective date of Public Act 92-35), however, an entity |
| 11 | | otherwise eligible for this exemption shall not
make tax-free |
| 12 | | purchases unless it has an active identification number issued |
| 13 | | by
the Department.
|
| 14 | | (4) Legal tender, currency, medallions, or gold or silver |
| 15 | | coinage
issued by the State of Illinois, the government of the |
| 16 | | United States of
America, or the government of any foreign |
| 17 | | country, and bullion.
|
| 18 | | (5) Until July 1, 2003 and beginning again on September 1, |
| 19 | | 2004 through August 30, 2014, graphic arts machinery and |
| 20 | | equipment, including
repair and
replacement parts, both new |
| 21 | | and used, and including that manufactured on
special order or |
| 22 | | purchased for lease, certified by the purchaser to be used
|
| 23 | | primarily for graphic arts production.
Equipment includes |
| 24 | | chemicals or chemicals acting as catalysts but only if
the
|
| 25 | | chemicals or chemicals acting as catalysts effect a direct and |
| 26 | | immediate change
upon a graphic arts product. Beginning on |
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| 1 | | July 1, 2017, graphic arts machinery and equipment is included |
| 2 | | in the manufacturing and assembling machinery and equipment |
| 3 | | exemption under Section 2 of this Act.
|
| 4 | | (6) Personal property sold by a teacher-sponsored student |
| 5 | | organization
affiliated with an elementary or secondary school |
| 6 | | located in Illinois.
|
| 7 | | (7) Farm machinery and equipment, both new and used, |
| 8 | | including that
manufactured on special order, certified by the |
| 9 | | purchaser to be used
primarily for production agriculture or |
| 10 | | State or federal agricultural
programs, including individual |
| 11 | | replacement parts for the machinery and
equipment, including |
| 12 | | machinery and equipment purchased for lease,
and including |
| 13 | | implements of husbandry defined in Section 1-130 of
the |
| 14 | | Illinois Vehicle Code, farm machinery and agricultural |
| 15 | | chemical and
fertilizer spreaders, and nurse wagons required |
| 16 | | to be registered
under Section 3-809 of the Illinois Vehicle |
| 17 | | Code,
but
excluding other motor vehicles required to be |
| 18 | | registered under the Illinois
Vehicle
Code.
Horticultural |
| 19 | | polyhouses or hoop houses used for propagating, growing, or
|
| 20 | | overwintering plants shall be considered farm machinery and |
| 21 | | equipment under
this item (7).
Agricultural chemical tender |
| 22 | | tanks and dry boxes shall include units sold
separately from a |
| 23 | | motor vehicle required to be licensed and units sold mounted
|
| 24 | | on a motor vehicle required to be licensed if the selling price |
| 25 | | of the tender
is separately stated.
|
| 26 | | Farm machinery and equipment shall include precision |
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| 1 | | farming equipment
that is
installed or purchased to be |
| 2 | | installed on farm machinery and equipment
including, but not |
| 3 | | limited to, tractors, harvesters, sprayers, planters,
seeders, |
| 4 | | or spreaders.
Precision farming equipment includes, but is not |
| 5 | | limited to,
soil testing sensors, computers, monitors, |
| 6 | | software, global positioning
and mapping systems, and other |
| 7 | | such equipment.
|
| 8 | | Farm machinery and equipment also includes computers, |
| 9 | | sensors, software, and
related equipment used primarily in the
|
| 10 | | computer-assisted operation of production agriculture |
| 11 | | facilities, equipment,
and activities such as, but
not limited |
| 12 | | to,
the collection, monitoring, and correlation of
animal and |
| 13 | | crop data for the purpose of
formulating animal diets and |
| 14 | | agricultural chemicals. This item (7) is exempt
from the |
| 15 | | provisions of
Section 3-55.
|
| 16 | | (8) Until June 30, 2013, fuel and petroleum products sold |
| 17 | | to or used by an air common
carrier, certified by the carrier |
| 18 | | to be used for consumption, shipment,
or storage in the |
| 19 | | conduct of its business as an air common carrier, for
a flight |
| 20 | | destined for or returning from a location or locations
outside |
| 21 | | the United States without regard to previous or subsequent |
| 22 | | domestic
stopovers.
|
| 23 | | Beginning July 1, 2013, fuel and petroleum products sold |
| 24 | | to or used by an air carrier, certified by the carrier to be |
| 25 | | used for consumption, shipment, or storage in the conduct of |
| 26 | | its business as an air common carrier, for a flight that (i) is |
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| 1 | | engaged in foreign trade or is engaged in trade between the |
| 2 | | United States and any of its possessions and (ii) transports |
| 3 | | at least one individual or package for hire from the city of |
| 4 | | origination to the city of final destination on the same |
| 5 | | aircraft, without regard to a change in the flight number of |
| 6 | | that aircraft. |
| 7 | | (9) Proceeds of mandatory service charges separately
|
| 8 | | stated on customers' bills for the purchase and consumption of |
| 9 | | food and
beverages, to the extent that the proceeds of the |
| 10 | | service charge are in fact
turned over as tips or as a |
| 11 | | substitute for tips to the employees who
participate directly |
| 12 | | in preparing, serving, hosting or cleaning up the
food or |
| 13 | | beverage function with respect to which the service charge is |
| 14 | | imposed.
|
| 15 | | (10) Until July 1, 2003, oil field exploration, drilling, |
| 16 | | and production
equipment,
including (i) rigs and parts of |
| 17 | | rigs, rotary rigs, cable tool
rigs, and workover rigs, (ii) |
| 18 | | pipe and tubular goods, including casing and
drill strings, |
| 19 | | (iii) pumps and pump-jack units, (iv) storage tanks and flow
|
| 20 | | lines, (v) any individual replacement part for oil field |
| 21 | | exploration,
drilling, and production equipment, and (vi) |
| 22 | | machinery and equipment purchased
for lease; but
excluding |
| 23 | | motor vehicles required to be registered under the Illinois
|
| 24 | | Vehicle Code.
|
| 25 | | (11) Photoprocessing machinery and equipment, including |
| 26 | | repair and
replacement parts, both new and used, including |
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| 1 | | that manufactured on
special order, certified by the purchaser |
| 2 | | to be used primarily for
photoprocessing, and including |
| 3 | | photoprocessing machinery and equipment
purchased for lease.
|
| 4 | | (12) Until July 1, 2023, coal and aggregate exploration, |
| 5 | | mining, off-highway hauling,
processing,
maintenance, and |
| 6 | | reclamation equipment, including
replacement parts and |
| 7 | | equipment, and including
equipment
purchased for lease, but |
| 8 | | excluding motor vehicles required to be registered
under the |
| 9 | | Illinois Vehicle Code. The changes made to this Section by |
| 10 | | Public Act 97-767 apply on and after July 1, 2003, but no claim |
| 11 | | for credit or refund is allowed on or after August 16, 2013 |
| 12 | | (the effective date of Public Act 98-456)
for such taxes paid |
| 13 | | during the period beginning July 1, 2003 and ending on August |
| 14 | | 16, 2013 (the effective date of Public Act 98-456).
|
| 15 | | (13) Beginning January 1, 1992 and through June 30, 2016, |
| 16 | | food for human consumption that is to be consumed off the |
| 17 | | premises
where it is sold (other than alcoholic beverages, |
| 18 | | soft drinks and food that
has been prepared for immediate |
| 19 | | consumption) and prescription and
non-prescription medicines, |
| 20 | | drugs, medical appliances, and insulin, urine
testing |
| 21 | | materials, syringes, and needles used by diabetics, for human |
| 22 | | use,
when purchased for use by a person receiving medical |
| 23 | | assistance under
Article V of the Illinois Public Aid Code who |
| 24 | | resides in a licensed
long-term care facility, as defined in |
| 25 | | the Nursing Home Care Act, or in a licensed facility as defined |
| 26 | | in the ID/DD Community Care Act, the MC/DD Act, or the |
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| 1 | | Specialized Mental Health Rehabilitation Act of 2013.
|
| 2 | | (14) Semen used for artificial insemination of livestock |
| 3 | | for direct
agricultural production.
|
| 4 | | (15) Horses, or interests in horses, registered with and |
| 5 | | meeting the
requirements of any of the
Arabian Horse Club |
| 6 | | Registry of America, Appaloosa Horse Club, American Quarter
|
| 7 | | Horse Association, United States
Trotting Association, or |
| 8 | | Jockey Club, as appropriate, used for
purposes of breeding or |
| 9 | | racing for prizes. This item (15) is exempt from the |
| 10 | | provisions of Section 3-55, and the exemption provided for |
| 11 | | under this item (15) applies for all periods beginning May 30, |
| 12 | | 1995, but no claim for credit or refund is allowed on or after |
| 13 | | January 1, 2008 (the effective date of Public Act 95-88)
for |
| 14 | | such taxes paid during the period beginning May 30, 2000 and |
| 15 | | ending on January 1, 2008 (the effective date of Public Act |
| 16 | | 95-88).
|
| 17 | | (16) Computers and communications equipment utilized for |
| 18 | | any
hospital
purpose
and equipment used in the diagnosis,
|
| 19 | | analysis, or treatment of hospital patients sold to a lessor |
| 20 | | who leases the
equipment, under a lease of one year or longer |
| 21 | | executed or in effect at the
time of the purchase, to a
|
| 22 | | hospital
that has been issued an active tax exemption |
| 23 | | identification number by the
Department under Section 1g of |
| 24 | | the Retailers' Occupation Tax Act.
|
| 25 | | (17) Personal property sold to a lessor who leases the
|
| 26 | | property, under a
lease of one year or longer executed or in |
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| 1 | | effect at the time of the purchase,
to a governmental body
that |
| 2 | | has been issued an active tax exemption identification number |
| 3 | | by the
Department under Section 1g of the Retailers' |
| 4 | | Occupation Tax Act.
|
| 5 | | (18) Beginning with taxable years ending on or after |
| 6 | | December
31, 1995
and
ending with taxable years ending on or |
| 7 | | before December 31, 2004,
personal property that is
donated |
| 8 | | for disaster relief to be used in a State or federally declared
|
| 9 | | disaster area in Illinois or bordering Illinois by a |
| 10 | | manufacturer or retailer
that is registered in this State to a |
| 11 | | corporation, society, association,
foundation, or institution |
| 12 | | that has been issued a sales tax exemption
identification |
| 13 | | number by the Department that assists victims of the disaster
|
| 14 | | who reside within the declared disaster area.
|
| 15 | | (19) Beginning with taxable years ending on or after |
| 16 | | December
31, 1995 and
ending with taxable years ending on or |
| 17 | | before December 31, 2004, personal
property that is used in |
| 18 | | the performance of infrastructure repairs in this
State, |
| 19 | | including but not limited to municipal roads and streets, |
| 20 | | access roads,
bridges, sidewalks, waste disposal systems, |
| 21 | | water and sewer line extensions,
water distribution and |
| 22 | | purification facilities, storm water drainage and
retention |
| 23 | | facilities, and sewage treatment facilities, resulting from a |
| 24 | | State
or federally declared disaster in Illinois or bordering |
| 25 | | Illinois when such
repairs are initiated on facilities located |
| 26 | | in the declared disaster area
within 6 months after the |
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| 1 | | disaster.
|
| 2 | | (20) Beginning July 1, 1999, game or game birds sold at a |
| 3 | | "game breeding
and
hunting preserve area" as that term is used
|
| 4 | | in the
Wildlife Code. This paragraph is exempt from the |
| 5 | | provisions
of
Section 3-55.
|
| 6 | | (21) A motor vehicle, as that term is defined in Section |
| 7 | | 1-146
of the
Illinois Vehicle Code, that is donated to a |
| 8 | | corporation, limited liability
company, society, association, |
| 9 | | foundation, or institution that is determined by
the |
| 10 | | Department to be organized and operated exclusively for |
| 11 | | educational
purposes. For purposes of this exemption, "a |
| 12 | | corporation, limited liability
company, society, association, |
| 13 | | foundation, or institution organized and
operated
exclusively |
| 14 | | for educational purposes" means all tax-supported public |
| 15 | | schools,
private schools that offer systematic instruction in |
| 16 | | useful branches of
learning by methods common to public |
| 17 | | schools and that compare favorably in
their scope and |
| 18 | | intensity with the course of study presented in tax-supported
|
| 19 | | schools, and vocational or technical schools or institutes |
| 20 | | organized and
operated exclusively to provide a course of |
| 21 | | study of not less than 6 weeks
duration and designed to prepare |
| 22 | | individuals to follow a trade or to pursue a
manual, |
| 23 | | technical, mechanical, industrial, business, or commercial
|
| 24 | | occupation.
|
| 25 | | (22) Beginning January 1, 2000, personal property, |
| 26 | | including
food,
purchased through fundraising
events for the |
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| 1 | | benefit of
a public or private elementary or
secondary school, |
| 2 | | a group of those schools, or one or more school
districts if |
| 3 | | the events are
sponsored by an entity recognized by the school |
| 4 | | district that consists
primarily of volunteers and includes
|
| 5 | | parents and teachers of the school children. This paragraph |
| 6 | | does not apply
to fundraising
events (i) for the benefit of |
| 7 | | private home instruction or (ii)
for which the fundraising |
| 8 | | entity purchases the personal property sold at
the events from |
| 9 | | another individual or entity that sold the property for the
|
| 10 | | purpose of resale by the fundraising entity and that
profits |
| 11 | | from the sale to the
fundraising entity. This paragraph is |
| 12 | | exempt
from the provisions
of Section 3-55.
|
| 13 | | (23) Beginning January 1, 2000
and through December 31, |
| 14 | | 2001, new or used automatic vending
machines that prepare and |
| 15 | | serve hot food and beverages, including coffee, soup,
and
|
| 16 | | other items, and replacement parts for these machines.
|
| 17 | | Beginning January 1,
2002 and through June 30, 2003, machines |
| 18 | | and parts for
machines used in commercial, coin-operated |
| 19 | | amusement
and vending business if a use or occupation tax is |
| 20 | | paid on the gross receipts
derived from
the use of the |
| 21 | | commercial, coin-operated amusement and vending machines.
This |
| 22 | | paragraph is exempt from the provisions of Section 3-55.
|
| 23 | | (24) Beginning
on August 2, 2001 (the effective date of |
| 24 | | Public Act 92-227),
computers and communications equipment
|
| 25 | | utilized for any hospital purpose and equipment used in the |
| 26 | | diagnosis,
analysis, or treatment of hospital patients sold to |
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| 1 | | a lessor who leases the
equipment, under a lease of one year or |
| 2 | | longer executed or in effect at the
time of the purchase, to a |
| 3 | | hospital that has been issued an active tax
exemption |
| 4 | | identification number by the Department under Section 1g of |
| 5 | | the
Retailers' Occupation Tax Act. This paragraph is exempt |
| 6 | | from the provisions of
Section 3-55.
|
| 7 | | (25) Beginning
on August 2, 2001 (the effective date of |
| 8 | | Public Act 92-227),
personal property sold to a lessor who
|
| 9 | | leases the property, under a lease of one year or longer |
| 10 | | executed or in effect
at the time of the purchase, to a |
| 11 | | governmental body that has been issued an
active tax exemption |
| 12 | | identification number by the Department under Section 1g
of |
| 13 | | the Retailers' Occupation Tax Act. This paragraph is exempt |
| 14 | | from the
provisions of Section 3-55.
|
| 15 | | (26) Beginning on January 1, 2002 and through June 30, |
| 16 | | 2016, tangible personal property
purchased
from an Illinois |
| 17 | | retailer by a taxpayer engaged in centralized purchasing
|
| 18 | | activities in Illinois who will, upon receipt of the property |
| 19 | | in Illinois,
temporarily store the property in Illinois (i) |
| 20 | | for the purpose of subsequently
transporting it outside this |
| 21 | | State for use or consumption thereafter solely
outside this |
| 22 | | State or (ii) for the purpose of being processed, fabricated, |
| 23 | | or
manufactured into, attached to, or incorporated into other |
| 24 | | tangible personal
property to be transported outside this |
| 25 | | State and thereafter used or consumed
solely outside this |
| 26 | | State. The Director of Revenue shall, pursuant to rules
|
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| 1 | | adopted in accordance with the Illinois Administrative |
| 2 | | Procedure Act, issue a
permit to any taxpayer in good standing |
| 3 | | with the Department who is eligible for
the exemption under |
| 4 | | this paragraph (26). The permit issued under
this paragraph |
| 5 | | (26) shall authorize the holder, to the extent and
in the |
| 6 | | manner specified in the rules adopted under this Act, to |
| 7 | | purchase
tangible personal property from a retailer exempt |
| 8 | | from the taxes imposed by
this Act. Taxpayers shall maintain |
| 9 | | all necessary books and records to
substantiate the use and |
| 10 | | consumption of all such tangible personal property
outside of |
| 11 | | the State of Illinois.
|
| 12 | | (27) Beginning January 1, 2008, tangible personal property |
| 13 | | used in the construction or maintenance of a community water |
| 14 | | supply, as defined under Section 3.145 of the Environmental |
| 15 | | Protection Act, that is operated by a not-for-profit |
| 16 | | corporation that holds a valid water supply permit issued |
| 17 | | under Title IV of the Environmental Protection Act. This |
| 18 | | paragraph is exempt from the provisions of Section 3-55.
|
| 19 | | (28) Tangible personal property sold to a |
| 20 | | public-facilities corporation, as described in Section |
| 21 | | 11-65-10 of the Illinois Municipal Code, for purposes of |
| 22 | | constructing or furnishing a municipal convention hall, but |
| 23 | | only if the legal title to the municipal convention hall is |
| 24 | | transferred to the municipality without any further |
| 25 | | consideration by or on behalf of the municipality at the time |
| 26 | | of the completion of the municipal convention hall or upon the |
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| 1 | | retirement or redemption of any bonds or other debt |
| 2 | | instruments issued by the public-facilities corporation in |
| 3 | | connection with the development of the municipal convention |
| 4 | | hall. This exemption includes existing public-facilities |
| 5 | | corporations as provided in Section 11-65-25 of the Illinois |
| 6 | | Municipal Code. This paragraph is exempt from the provisions |
| 7 | | of Section 3-55. |
| 8 | | (29) Beginning January 1, 2010 and continuing through |
| 9 | | December 31, 2024, materials, parts, equipment, components, |
| 10 | | and furnishings incorporated into or upon an aircraft as part |
| 11 | | of the modification, refurbishment, completion, replacement, |
| 12 | | repair, or maintenance of the aircraft. This exemption |
| 13 | | includes consumable supplies used in the modification, |
| 14 | | refurbishment, completion, replacement, repair, and |
| 15 | | maintenance of aircraft, but excludes any materials, parts, |
| 16 | | equipment, components, and consumable supplies used in the |
| 17 | | modification, replacement, repair, and maintenance of aircraft |
| 18 | | engines or power plants, whether such engines or power plants |
| 19 | | are installed or uninstalled upon any such aircraft. |
| 20 | | "Consumable supplies" include, but are not limited to, |
| 21 | | adhesive, tape, sandpaper, general purpose lubricants, |
| 22 | | cleaning solution, latex gloves, and protective films. This |
| 23 | | exemption applies only to the transfer of qualifying tangible |
| 24 | | personal property incident to the modification, refurbishment, |
| 25 | | completion, replacement, repair, or maintenance of an aircraft |
| 26 | | by persons who (i) hold an Air Agency Certificate and are |
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| 1 | | empowered to operate an approved repair station by the Federal |
| 2 | | Aviation Administration, (ii) have a Class IV Rating, and |
| 3 | | (iii) conduct operations in accordance with Part 145 of the |
| 4 | | Federal Aviation Regulations. The exemption does not include |
| 5 | | aircraft operated by a commercial air carrier providing |
| 6 | | scheduled passenger air service pursuant to authority issued |
| 7 | | under Part 121 or Part 129 of the Federal Aviation |
| 8 | | Regulations. The changes made to this paragraph (29) by Public |
| 9 | | Act 98-534 are declarative of existing law. It is the intent of |
| 10 | | the General Assembly that the exemption under this paragraph |
| 11 | | (29) applies continuously from January 1, 2010 through |
| 12 | | December 31, 2024; however, no claim for credit or refund is |
| 13 | | allowed for taxes paid as a result of the disallowance of this |
| 14 | | exemption on or after January 1, 2015 and prior to the |
| 15 | | effective date of this amendatory Act of the 101st General |
| 16 | | Assembly. |
| 17 | | (30) Beginning January 1, 2017, menstrual pads, tampons, |
| 18 | | and menstrual cups. |
| 19 | | (31) Tangible personal property transferred to a purchaser |
| 20 | | who is exempt from tax by operation of federal law. This |
| 21 | | paragraph is exempt from the provisions of Section 3-55. |
| 22 | | (32) Qualified tangible personal property used in the |
| 23 | | construction or operation of a data center that has been |
| 24 | | granted a certificate of exemption by the Department of |
| 25 | | Commerce and Economic Opportunity, whether that tangible |
| 26 | | personal property is purchased by the owner, operator, or |
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| 1 | | tenant of the data center or by a contractor or subcontractor |
| 2 | | of the owner, operator, or tenant. Data centers that would |
| 3 | | have qualified for a certificate of exemption prior to January |
| 4 | | 1, 2020 had this amendatory Act of the 101st General Assembly |
| 5 | | been in effect, may apply for and obtain an exemption for |
| 6 | | subsequent purchases of computer equipment or enabling |
| 7 | | software purchased or leased to upgrade, supplement, or |
| 8 | | replace computer equipment or enabling software purchased or |
| 9 | | leased in the original investment that would have qualified. |
| 10 | | (33) On and after January 1, 2022, any software purchased |
| 11 | | to lease, upgrade, supplement, or replace computer equipment |
| 12 | | or enabling software purchased or leased in the initial |
| 13 | | investment made at a Big Empties Site designated under the Big |
| 14 | | Empties Site Act. This paragraph is exempt from the provisions |
| 15 | | of Section 3-55. |
| 16 | | The Department of Commerce and Economic Opportunity shall |
| 17 | | grant a certificate of exemption under this item (32) to |
| 18 | | qualified data centers as defined by Section 605-1025 of the |
| 19 | | Department of Commerce and Economic Opportunity Law of the
|
| 20 | | Civil Administrative Code of Illinois. |
| 21 | | For the purposes of this item (32): |
| 22 | | "Data center" means a building or a series of |
| 23 | | buildings rehabilitated or constructed to house working |
| 24 | | servers in one physical location or multiple sites within |
| 25 | | the State of Illinois. |
| 26 | | "Qualified tangible personal property" means: |
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| 1 | | electrical systems and equipment; climate control and |
| 2 | | chilling equipment and systems; mechanical systems and |
| 3 | | equipment; monitoring and secure systems; emergency |
| 4 | | generators; hardware; computers; servers; data storage |
| 5 | | devices; network connectivity equipment; racks; cabinets; |
| 6 | | telecommunications cabling infrastructure; raised floor |
| 7 | | systems; peripheral components or systems; software; |
| 8 | | mechanical, electrical, or plumbing systems; battery |
| 9 | | systems; cooling systems and towers; temperature control |
| 10 | | systems; other cabling; and other data center |
| 11 | | infrastructure equipment and systems necessary to operate |
| 12 | | qualified tangible personal property, including fixtures; |
| 13 | | and component parts of any of the foregoing, including |
| 14 | | installation, maintenance, repair, refurbishment, and |
| 15 | | replacement of qualified tangible personal property to |
| 16 | | generate, transform, transmit, distribute, or manage |
| 17 | | electricity necessary to operate qualified tangible |
| 18 | | personal property; and all other tangible personal |
| 19 | | property that is essential to the operations of a computer |
| 20 | | data center. The term "qualified tangible personal |
| 21 | | property" also includes building materials physically |
| 22 | | incorporated in to the qualifying data center. To document |
| 23 | | the exemption allowed under this Section, the retailer |
| 24 | | must obtain from the purchaser a copy of the certificate |
| 25 | | of eligibility issued by the Department of Commerce and |
| 26 | | Economic Opportunity. |
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| 1 | | This item (32) is exempt from the provisions of Section |
| 2 | | 3-55. |
| 3 | | (Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18; |
| 4 | | 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff. |
| 5 | | 7-12-19; 101-629, eff. 2-5-20.)
|
| 6 | | Section 920. The Retailers' Occupation Tax Act is amended |
| 7 | | by changing Section 2-5 and by adding Section 5m as follows:
|
| 8 | | (35 ILCS 120/2-5)
|
| 9 | | Sec. 2-5. Exemptions. Gross receipts from proceeds from |
| 10 | | the sale of
the following tangible personal property are |
| 11 | | exempt from the tax imposed
by this Act:
|
| 12 | | (1) Farm chemicals.
|
| 13 | | (2) Farm machinery and equipment, both new and used, |
| 14 | | including that
manufactured on special order, certified by |
| 15 | | the purchaser to be used
primarily for production |
| 16 | | agriculture or State or federal agricultural
programs, |
| 17 | | including individual replacement parts for the machinery |
| 18 | | and
equipment, including machinery and equipment purchased |
| 19 | | for lease,
and including implements of husbandry defined |
| 20 | | in Section 1-130 of
the Illinois Vehicle Code, farm |
| 21 | | machinery and agricultural chemical and
fertilizer |
| 22 | | spreaders, and nurse wagons required to be registered
|
| 23 | | under Section 3-809 of the Illinois Vehicle Code,
but
|
| 24 | | excluding other motor vehicles required to be registered |
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| 1 | | under the Illinois
Vehicle Code.
Horticultural polyhouses |
| 2 | | or hoop houses used for propagating, growing, or
|
| 3 | | overwintering plants shall be considered farm machinery |
| 4 | | and equipment under
this item (2).
Agricultural chemical |
| 5 | | tender tanks and dry boxes shall include units sold
|
| 6 | | separately from a motor vehicle required to be licensed |
| 7 | | and units sold mounted
on a motor vehicle required to be |
| 8 | | licensed, if the selling price of the tender
is separately |
| 9 | | stated.
|
| 10 | | Farm machinery and equipment shall include precision |
| 11 | | farming equipment
that is
installed or purchased to be |
| 12 | | installed on farm machinery and equipment
including, but |
| 13 | | not limited to, tractors, harvesters, sprayers, planters,
|
| 14 | | seeders, or spreaders.
Precision farming equipment |
| 15 | | includes, but is not limited to,
soil testing sensors, |
| 16 | | computers, monitors, software, global positioning
and |
| 17 | | mapping systems, and other such equipment.
|
| 18 | | Farm machinery and equipment also includes computers, |
| 19 | | sensors, software, and
related equipment used primarily in |
| 20 | | the
computer-assisted operation of production agriculture |
| 21 | | facilities, equipment,
and activities such as, but
not |
| 22 | | limited to,
the collection, monitoring, and correlation of
|
| 23 | | animal and crop data for the purpose of
formulating animal |
| 24 | | diets and agricultural chemicals. This item (2) is exempt
|
| 25 | | from the provisions of
Section 2-70.
|
| 26 | | (3) Until July 1, 2003, distillation machinery and |
|
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| 1 | | equipment, sold as a
unit or kit,
assembled or installed |
| 2 | | by the retailer, certified by the user to be used
only for |
| 3 | | the production of ethyl alcohol that will be used for |
| 4 | | consumption
as motor fuel or as a component of motor fuel |
| 5 | | for the personal use of the
user, and not subject to sale |
| 6 | | or resale.
|
| 7 | | (4) Until July 1, 2003 and beginning again September |
| 8 | | 1, 2004 through August 30, 2014, graphic arts machinery |
| 9 | | and equipment, including
repair and
replacement parts, |
| 10 | | both new and used, and including that manufactured on
|
| 11 | | special order or purchased for lease, certified by the |
| 12 | | purchaser to be used
primarily for graphic arts |
| 13 | | production.
Equipment includes chemicals or
chemicals |
| 14 | | acting as catalysts but only if
the chemicals or chemicals |
| 15 | | acting as catalysts effect a direct and immediate
change |
| 16 | | upon a
graphic arts product. Beginning on July 1, 2017, |
| 17 | | graphic arts machinery and equipment is included in the |
| 18 | | manufacturing and assembling machinery and equipment |
| 19 | | exemption under paragraph (14).
|
| 20 | | (5) A motor vehicle that is used for automobile |
| 21 | | renting, as defined in the Automobile Renting Occupation |
| 22 | | and Use Tax Act. This paragraph is exempt from
the |
| 23 | | provisions of Section 2-70.
|
| 24 | | (6) Personal property sold by a teacher-sponsored |
| 25 | | student organization
affiliated with an elementary or |
| 26 | | secondary school located in Illinois.
|
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| 1 | | (7) Until July 1, 2003, proceeds of that portion of |
| 2 | | the selling price of
a passenger car the
sale of which is |
| 3 | | subject to the Replacement Vehicle Tax.
|
| 4 | | (8) Personal property sold to an Illinois county fair |
| 5 | | association for
use in conducting, operating, or promoting |
| 6 | | the county fair.
|
| 7 | | (9) Personal property sold to a not-for-profit arts
or |
| 8 | | cultural organization that establishes, by proof required |
| 9 | | by the Department
by
rule, that it has received an |
| 10 | | exemption under Section 501(c)(3) of the
Internal Revenue |
| 11 | | Code and that is organized and operated primarily for the
|
| 12 | | presentation
or support of arts or cultural programming, |
| 13 | | activities, or services. These
organizations include, but |
| 14 | | are not limited to, music and dramatic arts
organizations |
| 15 | | such as symphony orchestras and theatrical groups, arts |
| 16 | | and
cultural service organizations, local arts councils, |
| 17 | | visual arts organizations,
and media arts organizations.
|
| 18 | | On and after July 1, 2001 (the effective date of Public Act |
| 19 | | 92-35), however, an entity otherwise eligible for this |
| 20 | | exemption shall not
make tax-free purchases unless it has |
| 21 | | an active identification number issued by
the Department.
|
| 22 | | (10) Personal property sold by a corporation, society, |
| 23 | | association,
foundation, institution, or organization, |
| 24 | | other than a limited liability
company, that is organized |
| 25 | | and operated as a not-for-profit service enterprise
for |
| 26 | | the benefit of persons 65 years of age or older if the |
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| 1 | | personal property
was not purchased by the enterprise for |
| 2 | | the purpose of resale by the
enterprise.
|
| 3 | | (11) Personal property sold to a governmental body, to |
| 4 | | a corporation,
society, association, foundation, or |
| 5 | | institution organized and operated
exclusively for |
| 6 | | charitable, religious, or educational purposes, or to a
|
| 7 | | not-for-profit corporation, society, association, |
| 8 | | foundation, institution,
or organization that has no |
| 9 | | compensated officers or employees and that is
organized |
| 10 | | and operated primarily for the recreation of persons 55 |
| 11 | | years of
age or older. A limited liability company may |
| 12 | | qualify for the exemption under
this paragraph only if the |
| 13 | | limited liability company is organized and operated
|
| 14 | | exclusively for educational purposes. On and after July 1, |
| 15 | | 1987, however, no
entity otherwise eligible for this |
| 16 | | exemption shall make tax-free purchases
unless it has an |
| 17 | | active identification number issued by the Department.
|
| 18 | | (12) (Blank).
|
| 19 | | (12-5) On and after July 1, 2003 and through June 30, |
| 20 | | 2004, motor vehicles of the second division
with a gross |
| 21 | | vehicle weight in excess of 8,000 pounds
that
are
subject |
| 22 | | to the commercial distribution fee imposed under Section |
| 23 | | 3-815.1 of
the Illinois
Vehicle Code. Beginning on July 1, |
| 24 | | 2004 and through June 30, 2005, the use in this State of |
| 25 | | motor vehicles of the second division: (i) with a gross |
| 26 | | vehicle weight rating in excess of 8,000 pounds; (ii) that |
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| 1 | | are subject to the commercial distribution fee imposed |
| 2 | | under Section 3-815.1 of the Illinois Vehicle Code; and |
| 3 | | (iii) that are primarily used for commercial purposes. |
| 4 | | Through June 30, 2005, this
exemption applies to repair |
| 5 | | and replacement parts added
after the
initial purchase of |
| 6 | | such a motor vehicle if that motor vehicle is used in a
|
| 7 | | manner that
would qualify for the rolling stock exemption |
| 8 | | otherwise provided for in this
Act. For purposes of this |
| 9 | | paragraph, "used for commercial purposes" means the |
| 10 | | transportation of persons or property in furtherance of |
| 11 | | any commercial or industrial enterprise whether for-hire |
| 12 | | or not.
|
| 13 | | (13) Proceeds from sales to owners, lessors, or
|
| 14 | | shippers of
tangible personal property that is utilized by |
| 15 | | interstate carriers for
hire for use as rolling stock |
| 16 | | moving in interstate commerce
and equipment operated by a |
| 17 | | telecommunications provider, licensed as a
common carrier |
| 18 | | by the Federal Communications Commission, which is
|
| 19 | | permanently installed in or affixed to aircraft moving in |
| 20 | | interstate commerce.
|
| 21 | | (14) Machinery and equipment that will be used by the |
| 22 | | purchaser, or a
lessee of the purchaser, primarily in the |
| 23 | | process of manufacturing or
assembling tangible personal |
| 24 | | property for wholesale or retail sale or
lease, whether |
| 25 | | the sale or lease is made directly by the manufacturer or |
| 26 | | by
some other person, whether the materials used in the |
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| 1 | | process are owned by
the manufacturer or some other |
| 2 | | person, or whether the sale or lease is made
apart from or |
| 3 | | as an incident to the seller's engaging in the service
|
| 4 | | occupation of producing machines, tools, dies, jigs, |
| 5 | | patterns, gauges, or
other similar items of no commercial |
| 6 | | value on special order for a particular
purchaser. The |
| 7 | | exemption provided by this paragraph (14) does not include |
| 8 | | machinery and equipment used in (i) the generation of |
| 9 | | electricity for wholesale or retail sale; (ii) the |
| 10 | | generation or treatment of natural or artificial gas for |
| 11 | | wholesale or retail sale that is delivered to customers |
| 12 | | through pipes, pipelines, or mains; or (iii) the treatment |
| 13 | | of water for wholesale or retail sale that is delivered to |
| 14 | | customers through pipes, pipelines, or mains. The |
| 15 | | provisions of Public Act 98-583 are declaratory of |
| 16 | | existing law as to the meaning and scope of this |
| 17 | | exemption. Beginning on July 1, 2017, the exemption |
| 18 | | provided by this paragraph (14) includes, but is not |
| 19 | | limited to, graphic arts machinery and equipment, as |
| 20 | | defined in paragraph (4) of this Section.
|
| 21 | | (15) Proceeds of mandatory service charges separately |
| 22 | | stated on
customers' bills for purchase and consumption of |
| 23 | | food and beverages, to the
extent that the proceeds of the |
| 24 | | service charge are in fact turned over as
tips or as a |
| 25 | | substitute for tips to the employees who participate |
| 26 | | directly
in preparing, serving, hosting or cleaning up the |
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| 1 | | food or beverage function
with respect to which the |
| 2 | | service charge is imposed.
|
| 3 | | (16) Tangible personal property sold to a purchaser if |
| 4 | | the purchaser is exempt from use tax by operation of |
| 5 | | federal law. This paragraph is exempt from the provisions |
| 6 | | of Section 2-70.
|
| 7 | | (17) Tangible personal property sold to a common |
| 8 | | carrier by rail or
motor that
receives the physical |
| 9 | | possession of the property in Illinois and that
transports |
| 10 | | the property, or shares with another common carrier in the
|
| 11 | | transportation of the property, out of Illinois on a |
| 12 | | standard uniform bill
of lading showing the seller of the |
| 13 | | property as the shipper or consignor of
the property to a |
| 14 | | destination outside Illinois, for use outside Illinois.
|
| 15 | | (18) Legal tender, currency, medallions, or gold or |
| 16 | | silver coinage
issued by the State of Illinois, the |
| 17 | | government of the United States of
America, or the |
| 18 | | government of any foreign country, and bullion.
|
| 19 | | (19) Until July 1, 2003, oil field exploration, |
| 20 | | drilling, and production
equipment, including
(i) rigs and |
| 21 | | parts of rigs, rotary rigs, cable tool
rigs, and workover |
| 22 | | rigs, (ii) pipe and tubular goods, including casing and
|
| 23 | | drill strings, (iii) pumps and pump-jack units, (iv) |
| 24 | | storage tanks and flow
lines, (v) any individual |
| 25 | | replacement part for oil field exploration,
drilling, and |
| 26 | | production equipment, and (vi) machinery and equipment |
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| 1 | | purchased
for lease; but
excluding motor vehicles required |
| 2 | | to be registered under the Illinois
Vehicle Code.
|
| 3 | | (20) Photoprocessing machinery and equipment, |
| 4 | | including repair and
replacement parts, both new and used, |
| 5 | | including that manufactured on
special order, certified by |
| 6 | | the purchaser to be used primarily for
photoprocessing, |
| 7 | | and including photoprocessing machinery and equipment
|
| 8 | | purchased for lease.
|
| 9 | | (21) Until July 1, 2023, coal and aggregate |
| 10 | | exploration, mining, off-highway hauling,
processing,
|
| 11 | | maintenance, and reclamation equipment, including
|
| 12 | | replacement parts and equipment, and including
equipment |
| 13 | | purchased for lease, but excluding motor vehicles required |
| 14 | | to be
registered under the Illinois Vehicle Code. The |
| 15 | | changes made to this Section by Public Act 97-767 apply on |
| 16 | | and after July 1, 2003, but no claim for credit or refund |
| 17 | | is allowed on or after August 16, 2013 (the effective date |
| 18 | | of Public Act 98-456)
for such taxes paid during the |
| 19 | | period beginning July 1, 2003 and ending on August 16, |
| 20 | | 2013 (the effective date of Public Act 98-456).
|
| 21 | | (22) Until June 30, 2013, fuel and petroleum products |
| 22 | | sold to or used by an air carrier,
certified by the carrier |
| 23 | | to be used for consumption, shipment, or storage
in the |
| 24 | | conduct of its business as an air common carrier, for a |
| 25 | | flight
destined for or returning from a location or |
| 26 | | locations
outside the United States without regard to |
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| 1 | | previous or subsequent domestic
stopovers.
|
| 2 | | Beginning July 1, 2013, fuel and petroleum products |
| 3 | | sold to or used by an air carrier, certified by the carrier |
| 4 | | to be used for consumption, shipment, or storage in the |
| 5 | | conduct of its business as an air common carrier, for a |
| 6 | | flight that (i) is engaged in foreign trade or is engaged |
| 7 | | in trade between the United States and any of its |
| 8 | | possessions and (ii) transports at least one individual or |
| 9 | | package for hire from the city of origination to the city |
| 10 | | of final destination on the same aircraft, without regard |
| 11 | | to a change in the flight number of that aircraft. |
| 12 | | (23) A transaction in which the purchase order is |
| 13 | | received by a florist
who is located outside Illinois, but |
| 14 | | who has a florist located in Illinois
deliver the property |
| 15 | | to the purchaser or the purchaser's donee in Illinois.
|
| 16 | | (24) Fuel consumed or used in the operation of ships, |
| 17 | | barges, or vessels
that are used primarily in or for the |
| 18 | | transportation of property or the
conveyance of persons |
| 19 | | for hire on rivers bordering on this State if the
fuel is |
| 20 | | delivered by the seller to the purchaser's barge, ship, or |
| 21 | | vessel
while it is afloat upon that bordering river.
|
| 22 | | (25) Except as provided in item (25-5) of this |
| 23 | | Section, a
motor vehicle sold in this State to a |
| 24 | | nonresident even though the
motor vehicle is delivered to |
| 25 | | the nonresident in this State, if the motor
vehicle is not |
| 26 | | to be titled in this State, and if a drive-away permit
is |
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| 1 | | issued to the motor vehicle as provided in Section 3-603 |
| 2 | | of the Illinois
Vehicle Code or if the nonresident |
| 3 | | purchaser has vehicle registration
plates to transfer to |
| 4 | | the motor vehicle upon returning to his or her home
state. |
| 5 | | The issuance of the drive-away permit or having
the
|
| 6 | | out-of-state registration plates to be transferred is |
| 7 | | prima facie evidence
that the motor vehicle will not be |
| 8 | | titled in this State.
|
| 9 | | (25-5) The exemption under item (25) does not apply if |
| 10 | | the state in which the motor vehicle will be titled does |
| 11 | | not allow a reciprocal exemption for a motor vehicle sold |
| 12 | | and delivered in that state to an Illinois resident but |
| 13 | | titled in Illinois. The tax collected under this Act on |
| 14 | | the sale of a motor vehicle in this State to a resident of |
| 15 | | another state that does not allow a reciprocal exemption |
| 16 | | shall be imposed at a rate equal to the state's rate of tax |
| 17 | | on taxable property in the state in which the purchaser is |
| 18 | | a resident, except that the tax shall not exceed the tax |
| 19 | | that would otherwise be imposed under this Act. At the |
| 20 | | time of the sale, the purchaser shall execute a statement, |
| 21 | | signed under penalty of perjury, of his or her intent to |
| 22 | | title the vehicle in the state in which the purchaser is a |
| 23 | | resident within 30 days after the sale and of the fact of |
| 24 | | the payment to the State of Illinois of tax in an amount |
| 25 | | equivalent to the state's rate of tax on taxable property |
| 26 | | in his or her state of residence and shall submit the |
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| 1 | | statement to the appropriate tax collection agency in his |
| 2 | | or her state of residence. In addition, the retailer must |
| 3 | | retain a signed copy of the statement in his or her |
| 4 | | records. Nothing in this item shall be construed to |
| 5 | | require the removal of the vehicle from this state |
| 6 | | following the filing of an intent to title the vehicle in |
| 7 | | the purchaser's state of residence if the purchaser titles |
| 8 | | the vehicle in his or her state of residence within 30 days |
| 9 | | after the date of sale. The tax collected under this Act in |
| 10 | | accordance with this item (25-5) shall be proportionately |
| 11 | | distributed as if the tax were collected at the 6.25% |
| 12 | | general rate imposed under this Act.
|
| 13 | | (25-7) Beginning on July 1, 2007, no tax is imposed |
| 14 | | under this Act on the sale of an aircraft, as defined in |
| 15 | | Section 3 of the Illinois Aeronautics Act, if all of the |
| 16 | | following conditions are met: |
| 17 | | (1) the aircraft leaves this State within 15 days |
| 18 | | after the later of either the issuance of the final |
| 19 | | billing for the sale of the aircraft, or the |
| 20 | | authorized approval for return to service, completion |
| 21 | | of the maintenance record entry, and completion of the |
| 22 | | test flight and ground test for inspection, as |
| 23 | | required by 14 C.F.R. 91.407; |
| 24 | | (2) the aircraft is not based or registered in |
| 25 | | this State after the sale of the aircraft; and |
| 26 | | (3) the seller retains in his or her books and |
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| 1 | | records and provides to the Department a signed and |
| 2 | | dated certification from the purchaser, on a form |
| 3 | | prescribed by the Department, certifying that the |
| 4 | | requirements of this item (25-7) are met. The |
| 5 | | certificate must also include the name and address of |
| 6 | | the purchaser, the address of the location where the |
| 7 | | aircraft is to be titled or registered, the address of |
| 8 | | the primary physical location of the aircraft, and |
| 9 | | other information that the Department may reasonably |
| 10 | | require. |
| 11 | | For purposes of this item (25-7): |
| 12 | | "Based in this State" means hangared, stored, or |
| 13 | | otherwise used, excluding post-sale customizations as |
| 14 | | defined in this Section, for 10 or more days in each |
| 15 | | 12-month period immediately following the date of the sale |
| 16 | | of the aircraft. |
| 17 | | "Registered in this State" means an aircraft |
| 18 | | registered with the Department of Transportation, |
| 19 | | Aeronautics Division, or titled or registered with the |
| 20 | | Federal Aviation Administration to an address located in |
| 21 | | this State. |
| 22 | | This paragraph (25-7) is exempt from the provisions
of
|
| 23 | | Section 2-70.
|
| 24 | | (26) Semen used for artificial insemination of |
| 25 | | livestock for direct
agricultural production.
|
| 26 | | (27) Horses, or interests in horses, registered with |
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| 1 | | and meeting the
requirements of any of the
Arabian Horse |
| 2 | | Club Registry of America, Appaloosa Horse Club, American |
| 3 | | Quarter
Horse Association, United States
Trotting |
| 4 | | Association, or Jockey Club, as appropriate, used for
|
| 5 | | purposes of breeding or racing for prizes. This item (27) |
| 6 | | is exempt from the provisions of Section 2-70, and the |
| 7 | | exemption provided for under this item (27) applies for |
| 8 | | all periods beginning May 30, 1995, but no claim for |
| 9 | | credit or refund is allowed on or after January 1, 2008 |
| 10 | | (the effective date of Public Act 95-88)
for such taxes |
| 11 | | paid during the period beginning May 30, 2000 and ending |
| 12 | | on January 1, 2008 (the effective date of Public Act |
| 13 | | 95-88).
|
| 14 | | (28) Computers and communications equipment utilized |
| 15 | | for any
hospital
purpose
and equipment used in the |
| 16 | | diagnosis,
analysis, or treatment of hospital patients |
| 17 | | sold to a lessor who leases the
equipment, under a lease of |
| 18 | | one year or longer executed or in effect at the
time of the |
| 19 | | purchase, to a
hospital
that has been issued an active tax |
| 20 | | exemption identification number by the
Department under |
| 21 | | Section 1g of this Act.
|
| 22 | | (29) Personal property sold to a lessor who leases the
|
| 23 | | property, under a
lease of one year or longer executed or |
| 24 | | in effect at the time of the purchase,
to a governmental |
| 25 | | body
that has been issued an active tax exemption |
| 26 | | identification number by the
Department under Section 1g |
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| 1 | | of this Act.
|
| 2 | | (30) Beginning with taxable years ending on or after |
| 3 | | December
31, 1995
and
ending with taxable years ending on |
| 4 | | or before December 31, 2004,
personal property that is
|
| 5 | | donated for disaster relief to be used in a State or |
| 6 | | federally declared
disaster area in Illinois or bordering |
| 7 | | Illinois by a manufacturer or retailer
that is registered |
| 8 | | in this State to a corporation, society, association,
|
| 9 | | foundation, or institution that has been issued a sales |
| 10 | | tax exemption
identification number by the Department that |
| 11 | | assists victims of the disaster
who reside within the |
| 12 | | declared disaster area.
|
| 13 | | (31) Beginning with taxable years ending on or after |
| 14 | | December
31, 1995 and
ending with taxable years ending on |
| 15 | | or before December 31, 2004, personal
property that is |
| 16 | | used in the performance of infrastructure repairs in this
|
| 17 | | State, including but not limited to municipal roads and |
| 18 | | streets, access roads,
bridges, sidewalks, waste disposal |
| 19 | | systems, water and sewer line extensions,
water |
| 20 | | distribution and purification facilities, storm water |
| 21 | | drainage and
retention facilities, and sewage treatment |
| 22 | | facilities, resulting from a State
or federally declared |
| 23 | | disaster in Illinois or bordering Illinois when such
|
| 24 | | repairs are initiated on facilities located in the |
| 25 | | declared disaster area
within 6 months after the disaster.
|
| 26 | | (32) Beginning July 1, 1999, game or game birds sold |
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| 1 | | at a "game breeding
and
hunting preserve area" as that |
| 2 | | term is used
in the
Wildlife Code. This paragraph is |
| 3 | | exempt from the provisions
of
Section 2-70.
|
| 4 | | (33) A motor vehicle, as that term is defined in |
| 5 | | Section 1-146
of the
Illinois Vehicle Code, that is |
| 6 | | donated to a corporation, limited liability
company, |
| 7 | | society, association, foundation, or institution that is |
| 8 | | determined by
the Department to be organized and operated |
| 9 | | exclusively for educational
purposes. For purposes of this |
| 10 | | exemption, "a corporation, limited liability
company, |
| 11 | | society, association, foundation, or institution organized |
| 12 | | and
operated
exclusively for educational purposes" means |
| 13 | | all tax-supported public schools,
private schools that |
| 14 | | offer systematic instruction in useful branches of
|
| 15 | | learning by methods common to public schools and that |
| 16 | | compare favorably in
their scope and intensity with the |
| 17 | | course of study presented in tax-supported
schools, and |
| 18 | | vocational or technical schools or institutes organized |
| 19 | | and
operated exclusively to provide a course of study of |
| 20 | | not less than 6 weeks
duration and designed to prepare |
| 21 | | individuals to follow a trade or to pursue a
manual, |
| 22 | | technical, mechanical, industrial, business, or commercial
|
| 23 | | occupation.
|
| 24 | | (34) Beginning January 1, 2000, personal property, |
| 25 | | including food, purchased
through fundraising events for |
| 26 | | the benefit of a public or private elementary or
secondary |
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| 1 | | school, a group of those schools, or one or more school |
| 2 | | districts if
the events are sponsored by an entity |
| 3 | | recognized by the school district that
consists primarily |
| 4 | | of volunteers and includes parents and teachers of the
|
| 5 | | school children. This paragraph does not apply to |
| 6 | | fundraising events (i) for
the benefit of private home |
| 7 | | instruction or (ii) for which the fundraising
entity |
| 8 | | purchases the personal property sold at the events from |
| 9 | | another
individual or entity that sold the property for |
| 10 | | the purpose of resale by the
fundraising entity and that |
| 11 | | profits from the sale to the fundraising entity.
This |
| 12 | | paragraph is exempt from the provisions of Section 2-70.
|
| 13 | | (35) Beginning January 1, 2000 and through December |
| 14 | | 31, 2001, new or used
automatic vending machines that |
| 15 | | prepare and serve hot food and beverages,
including |
| 16 | | coffee, soup, and other items, and replacement parts for |
| 17 | | these
machines. Beginning January 1, 2002 and through June |
| 18 | | 30, 2003, machines
and parts for machines used in
|
| 19 | | commercial, coin-operated amusement and vending business |
| 20 | | if a use or occupation
tax is paid on the gross receipts |
| 21 | | derived from the use of the commercial,
coin-operated |
| 22 | | amusement and vending machines. This paragraph is exempt |
| 23 | | from
the provisions of Section 2-70.
|
| 24 | | (35-5) Beginning August 23, 2001 and through June 30, |
| 25 | | 2016, food for human consumption that is to be consumed |
| 26 | | off
the premises where it is sold (other than alcoholic |
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| 1 | | beverages, soft drinks,
and food that has been prepared |
| 2 | | for immediate consumption) and prescription
and |
| 3 | | nonprescription medicines, drugs, medical appliances, and |
| 4 | | insulin, urine
testing materials, syringes, and needles |
| 5 | | used by diabetics, for human use, when
purchased for use |
| 6 | | by a person receiving medical assistance under Article V |
| 7 | | of
the Illinois Public Aid Code who resides in a licensed |
| 8 | | long-term care facility,
as defined in the Nursing Home |
| 9 | | Care Act, or a licensed facility as defined in the ID/DD |
| 10 | | Community Care Act, the MC/DD Act, or the Specialized |
| 11 | | Mental Health Rehabilitation Act of 2013.
|
| 12 | | (36) Beginning August 2, 2001, computers and |
| 13 | | communications equipment
utilized for any hospital purpose |
| 14 | | and equipment used in the diagnosis,
analysis, or |
| 15 | | treatment of hospital patients sold to a lessor who leases |
| 16 | | the
equipment, under a lease of one year or longer |
| 17 | | executed or in effect at the
time of the purchase, to a |
| 18 | | hospital that has been issued an active tax
exemption |
| 19 | | identification number by the Department under Section 1g |
| 20 | | of this Act.
This paragraph is exempt from the provisions |
| 21 | | of Section 2-70.
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| 22 | | (37) Beginning August 2, 2001, personal property sold |
| 23 | | to a lessor who
leases the property, under a lease of one |
| 24 | | year or longer executed or in effect
at the time of the |
| 25 | | purchase, to a governmental body that has been issued an
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| 26 | | active tax exemption identification number by the |
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| 1 | | Department under Section 1g
of this Act. This paragraph is |
| 2 | | exempt from the provisions of Section 2-70.
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| 3 | | (38) Beginning on January 1, 2002 and through June 30, |
| 4 | | 2016, tangible personal property purchased
from an |
| 5 | | Illinois retailer by a taxpayer engaged in centralized |
| 6 | | purchasing
activities in Illinois who will, upon receipt |
| 7 | | of the property in Illinois,
temporarily store the |
| 8 | | property in Illinois (i) for the purpose of subsequently
|
| 9 | | transporting it outside this State for use or consumption |
| 10 | | thereafter solely
outside this State or (ii) for the |
| 11 | | purpose of being processed, fabricated, or
manufactured |
| 12 | | into, attached to, or incorporated into other tangible |
| 13 | | personal
property to be transported outside this State and |
| 14 | | thereafter used or consumed
solely outside this State. The |
| 15 | | Director of Revenue shall, pursuant to rules
adopted in |
| 16 | | accordance with the Illinois Administrative Procedure Act, |
| 17 | | issue a
permit to any taxpayer in good standing with the |
| 18 | | Department who is eligible for
the exemption under this |
| 19 | | paragraph (38). The permit issued under
this paragraph |
| 20 | | (38) shall authorize the holder, to the extent and
in the |
| 21 | | manner specified in the rules adopted under this Act, to |
| 22 | | purchase
tangible personal property from a retailer exempt |
| 23 | | from the taxes imposed by
this Act. Taxpayers shall |
| 24 | | maintain all necessary books and records to
substantiate |
| 25 | | the use and consumption of all such tangible personal |
| 26 | | property
outside of the State of Illinois.
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| 1 | | (39) Beginning January 1, 2008, tangible personal |
| 2 | | property used in the construction or maintenance of a |
| 3 | | community water supply, as defined under Section 3.145 of |
| 4 | | the Environmental Protection Act, that is operated by a |
| 5 | | not-for-profit corporation that holds a valid water supply |
| 6 | | permit issued under Title IV of the Environmental |
| 7 | | Protection Act. This paragraph is exempt from the |
| 8 | | provisions of Section 2-70.
|
| 9 | | (40) Beginning January 1, 2010 and continuing through |
| 10 | | December 31, 2024, materials, parts, equipment, |
| 11 | | components, and furnishings incorporated into or upon an |
| 12 | | aircraft as part of the modification, refurbishment, |
| 13 | | completion, replacement, repair, or maintenance of the |
| 14 | | aircraft. This exemption includes consumable supplies used |
| 15 | | in the modification, refurbishment, completion, |
| 16 | | replacement, repair, and maintenance of aircraft, but |
| 17 | | excludes any materials, parts, equipment, components, and |
| 18 | | consumable supplies used in the modification, replacement, |
| 19 | | repair, and maintenance of aircraft engines or power |
| 20 | | plants, whether such engines or power plants are installed |
| 21 | | or uninstalled upon any such aircraft. "Consumable |
| 22 | | supplies" include, but are not limited to, adhesive, tape, |
| 23 | | sandpaper, general purpose lubricants, cleaning solution, |
| 24 | | latex gloves, and protective films. This exemption applies |
| 25 | | only to the sale of qualifying tangible personal property |
| 26 | | to persons who modify, refurbish, complete, replace, or |
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| 1 | | maintain an aircraft and who (i) hold an Air Agency |
| 2 | | Certificate and are empowered to operate an approved |
| 3 | | repair station by the Federal Aviation Administration, |
| 4 | | (ii) have a Class IV Rating, and (iii) conduct operations |
| 5 | | in accordance with Part 145 of the Federal Aviation |
| 6 | | Regulations. The exemption does not include aircraft |
| 7 | | operated by a commercial air carrier providing scheduled |
| 8 | | passenger air service pursuant to authority issued under |
| 9 | | Part 121 or Part 129 of the Federal Aviation Regulations. |
| 10 | | The changes made to this paragraph (40) by Public Act |
| 11 | | 98-534 are declarative of existing law. It is the intent |
| 12 | | of the General Assembly that the exemption under this |
| 13 | | paragraph (40) applies continuously from January 1, 2010 |
| 14 | | through December 31, 2024; however, no claim for credit or |
| 15 | | refund is allowed for taxes paid as a result of the |
| 16 | | disallowance of this exemption on or after January 1, 2015 |
| 17 | | and prior to the effective date of this amendatory Act of |
| 18 | | the 101st General Assembly. |
| 19 | | (41) Tangible personal property sold to a |
| 20 | | public-facilities corporation, as described in Section |
| 21 | | 11-65-10 of the Illinois Municipal Code, for purposes of |
| 22 | | constructing or furnishing a municipal convention hall, |
| 23 | | but only if the legal title to the municipal convention |
| 24 | | hall is transferred to the municipality without any |
| 25 | | further consideration by or on behalf of the municipality |
| 26 | | at the time of the completion of the municipal convention |
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| 1 | | hall or upon the retirement or redemption of any bonds or |
| 2 | | other debt instruments issued by the public-facilities |
| 3 | | corporation in connection with the development of the |
| 4 | | municipal convention hall. This exemption includes |
| 5 | | existing public-facilities corporations as provided in |
| 6 | | Section 11-65-25 of the Illinois Municipal Code. This |
| 7 | | paragraph is exempt from the provisions of Section 2-70. |
| 8 | | (42) Beginning January 1, 2017, menstrual pads, |
| 9 | | tampons, and menstrual cups. |
| 10 | | (43) Merchandise that is subject to the Rental |
| 11 | | Purchase Agreement Occupation and Use Tax. The purchaser |
| 12 | | must certify that the item is purchased to be rented |
| 13 | | subject to a rental purchase agreement, as defined in the |
| 14 | | Rental Purchase Agreement Act, and provide proof of |
| 15 | | registration under the Rental Purchase Agreement |
| 16 | | Occupation and Use Tax Act. This paragraph is exempt from |
| 17 | | the provisions of Section 2-70. |
| 18 | | (44) Qualified tangible personal property used in the |
| 19 | | construction or operation of a data center that has been |
| 20 | | granted a certificate of exemption by the Department of |
| 21 | | Commerce and Economic Opportunity, whether that tangible |
| 22 | | personal property is purchased by the owner, operator, or |
| 23 | | tenant of the data center or by a contractor or |
| 24 | | subcontractor of the owner, operator, or tenant. Data |
| 25 | | centers that would have qualified for a certificate of |
| 26 | | exemption prior to January 1, 2020 had this amendatory Act |
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| 1 | | of the 101st General Assembly been in effect, may apply |
| 2 | | for and obtain an exemption for subsequent purchases of |
| 3 | | computer equipment or enabling software purchased or |
| 4 | | leased to upgrade, supplement, or replace computer |
| 5 | | equipment or enabling software purchased or leased in the |
| 6 | | original investment that would have qualified. |
| 7 | | (45) On and after January 1, 2022, any software |
| 8 | | purchased to lease, upgrade, supplement, or replace |
| 9 | | computer equipment or enabling software purchased or |
| 10 | | leased in the initial investment made at a Big Empties |
| 11 | | Site designated under the Big Empties Site Act. This |
| 12 | | paragraph is exempt from the provisions of Section 2-70. |
| 13 | | The Department of Commerce and Economic Opportunity |
| 14 | | shall grant a certificate of exemption under this item |
| 15 | | (44) to qualified data centers as defined by Section |
| 16 | | 605-1025 of the Department of Commerce and Economic |
| 17 | | Opportunity Law of the
Civil Administrative Code of |
| 18 | | Illinois. |
| 19 | | For the purposes of this item (44): |
| 20 | | "Data center" means a building or a series of |
| 21 | | buildings rehabilitated or constructed to house |
| 22 | | working servers in one physical location or multiple |
| 23 | | sites within the State of Illinois. |
| 24 | | "Qualified tangible personal property" means: |
| 25 | | electrical systems and equipment; climate control and |
| 26 | | chilling equipment and systems; mechanical systems and |
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| 1 | | equipment; monitoring and secure systems; emergency |
| 2 | | generators; hardware; computers; servers; data storage |
| 3 | | devices; network connectivity equipment; racks; |
| 4 | | cabinets; telecommunications cabling infrastructure; |
| 5 | | raised floor systems; peripheral components or |
| 6 | | systems; software; mechanical, electrical, or plumbing |
| 7 | | systems; battery systems; cooling systems and towers; |
| 8 | | temperature control systems; other cabling; and other |
| 9 | | data center infrastructure equipment and systems |
| 10 | | necessary to operate qualified tangible personal |
| 11 | | property, including fixtures; and component parts of |
| 12 | | any of the foregoing, including installation, |
| 13 | | maintenance, repair, refurbishment, and replacement of |
| 14 | | qualified tangible personal property to generate, |
| 15 | | transform, transmit, distribute, or manage electricity |
| 16 | | necessary to operate qualified tangible personal |
| 17 | | property; and all other tangible personal property |
| 18 | | that is essential to the operations of a computer data |
| 19 | | center. The term "qualified tangible personal |
| 20 | | property" also includes building materials physically |
| 21 | | incorporated in to the qualifying data center. To |
| 22 | | document the exemption allowed under this Section, the |
| 23 | | retailer must obtain from the purchaser a copy of the |
| 24 | | certificate of eligibility issued by the Department of |
| 25 | | Commerce and Economic Opportunity. |
| 26 | | This item (44) is exempt from the provisions of |
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| 1 | | Section 2-70. |
| 2 | | (Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17; |
| 3 | | 100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff. |
| 4 | | 8-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, |
| 5 | | eff. 7-12-19; 101-629, eff. 2-5-20.)
|
| 6 | | (35 ILCS 120/5m new) |
| 7 | | Sec. 5m. Building materials exemption; Big Empties Site. |
| 8 | | Beginning January 1, 2022, each retailer who makes a sale of |
| 9 | | building materials that will be incorporated into a Big |
| 10 | | Empties site, as designated by the Department of Commerce and |
| 11 | | Economic Opportunity, may deduct receipts from such sales when |
| 12 | | calculating any State or local use and occupation taxes. Upon |
| 13 | | request from the owner of the Big Empties Site, the Department |
| 14 | | shall issue a High Impact Business Building Materials |
| 15 | | Exemption Certificate for each construction contractor or |
| 16 | | other entity identified by the designated High Impact |
| 17 | | Business. The retailer must obtain from the purchaser the |
| 18 | | purchaser's exemption certificate number issued by the |
| 19 | | Department. A construction contractor or other entity shall |
| 20 | | not make tax-free purchases unless it has an active Exemption |
| 21 | | Certificate issued by the Department at the time of purchase. |
| 22 | | This Section is exempt from the provisions of Section 2-70.
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| 23 | | Section 925. The Property Tax Code is amended by adding |
| 24 | | Section 184.10 as follows:
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| 1 | | (35 ILCS 200/184.10 new) |
| 2 | | Sec. 184.10. Abatement for Big Empties Sites. Any taxing |
| 3 | | district may, upon a majority vote of its governing authority |
| 4 | | and after the determination of the assessed valuation of its |
| 5 | | property, order the clerk of that county to abate up to 50% of |
| 6 | | its taxes imposed on a Big Empties Site designated by the |
| 7 | | Department of Commerce and Economic Opportunity.
|
| 8 | | Section 930. The Public Utilities Act is amended by |
| 9 | | changing Section 9-222 and by adding Section 9-222.1B as |
| 10 | | follows:
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| 11 | | (220 ILCS 5/9-222) (from Ch. 111 2/3, par. 9-222)
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| 12 | | Sec. 9-222.
Whenever a tax is imposed upon a public |
| 13 | | utility
engaged in the business of distributing, supplying,
|
| 14 | | furnishing, or selling gas for use or consumption pursuant to |
| 15 | | Section 2 of
the Gas Revenue Tax Act, or whenever a tax is
|
| 16 | | required to be collected by a delivering supplier pursuant to |
| 17 | | Section 2-7 of
the Electricity Excise Tax Act, or whenever a |
| 18 | | tax is imposed upon a public
utility pursuant to Section
2-202 |
| 19 | | of this Act, such utility may charge its customers, other than
|
| 20 | | customers who are high impact businesses under Section 5.5
of |
| 21 | | the Illinois Enterprise Zone Act, owners of certified big |
| 22 | | empties sites, or certified business enterprises
under Section |
| 23 | | 9-222.1 of this Act, to the extent of such exemption and
during |
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| 1 | | the period in which such exemption is in effect,
in addition to |
| 2 | | any rate authorized by this Act, an additional
charge equal to |
| 3 | | the total amount of such taxes. The exemption of this
Section |
| 4 | | relating to high impact businesses shall be subject to the
|
| 5 | | provisions of subsections (a), (b), and (b-5) of Section 5.5 |
| 6 | | of
the Illinois
Enterprise Zone Act. This requirement shall |
| 7 | | not
apply to taxes on invested capital imposed pursuant to the |
| 8 | | Messages Tax
Act, the Gas Revenue Tax Act and the Public |
| 9 | | Utilities Revenue Act.
Such utility shall file with the |
| 10 | | Commission
a supplemental schedule which shall specify such |
| 11 | | additional charge and
which shall become effective upon filing |
| 12 | | without further notice. Such
additional charge shall be shown |
| 13 | | separately on the utility bill to each
customer. The |
| 14 | | Commission shall have the power to investigate whether or
not |
| 15 | | such supplemental schedule correctly specifies such additional |
| 16 | | charge,
but shall have no power to suspend such supplemental |
| 17 | | schedule. If the
Commission finds, after a hearing, that such |
| 18 | | supplemental schedule does not
correctly specify such |
| 19 | | additional charge, it shall by order require a
refund to the |
| 20 | | appropriate customers of the excess, if any, with interest,
in |
| 21 | | such manner as it shall deem just and reasonable, and in and by |
| 22 | | such
order shall require the utility to file an amended |
| 23 | | supplemental schedule
corresponding to the finding and order |
| 24 | | of the Commission.
Except with respect to taxes imposed on |
| 25 | | invested capital,
such tax liabilities shall be recovered from |
| 26 | | customers solely by means of
the additional charges authorized |
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| 1 | | by this Section.
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| 2 | | (Source: P.A. 91-914, eff. 7-7-00; 92-12, eff. 7-1-01.)
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| 3 | | (220 ILCS 5/9-222.1B new) |
| 4 | | Sec. 9-222.1B. Big Empties exemption. The owner of a site |
| 5 | | designated as a Big Empties Site under the Big Empties Site Act |
| 6 | | shall be exempt from the additional charges added to the |
| 7 | | business enterprise's utility bills as a pass-on of State |
| 8 | | utility taxes under Section 9-222 of this Act if the owner |
| 9 | | makes an investment of at least $75,000,000 at the site. The |
| 10 | | Department of Commerce and Economic Opportunity shall |
| 11 | | determine the period during which such exemption from the |
| 12 | | charges imposed under Section 9-222 is in effect which shall |
| 13 | | not exceed 15 years or the certified term of the site, |
| 14 | | whichever period is shorter.
|
| 15 | | Section 999. Effective date. This Act takes effect upon |
| 16 | | becoming law.
|