Bill Text: IL SB3364 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning 30 days after the effective date of the amendatory Act, the cents per gallon rate established by the Department of Revenue for the prepayment of tax by motor fuel retailers may not exceed $0.18 per gallon for motor fuel and 80% of that amount for gasohol and biodiesel blends. Provides that the rate of tax imposed under the Acts for motor fuel, gasohol, majority blended ethanol fuel, and biodiesel and biodiesel blends may not exceed that prepayment amount set by the Department of Revenue. Effective immediately.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced) 2024-07-11 - Added as Co-Sponsor Sen. Jason Plummer [SB3364 Detail]

Download: Illinois-2023-SB3364-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB3364 Introduced 2/7/2024, by Sen. Craig Wilcox SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-10
35 ILCS 110/3-10 from Ch. 120, par. 439.33-10
35 ILCS 115/3-10 from Ch. 120, par. 439.103-10
35 ILCS 120/2-10
35 ILCS 120/2d from Ch. 120, par. 441d
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning 30 days after the effective date of the amendatory Act, the cents per gallon rate established by the Department of Revenue for the prepayment of tax by motor fuel retailers may not exceed $0.18 per gallon for motor fuel and 80% of that amount for gasohol and biodiesel blends. Provides that the rate of tax imposed under the Acts for motor fuel, gasohol, majority blended ethanol fuel, and biodiesel and biodiesel blends may not exceed that prepayment amount set by the Department of Revenue. Effective immediately.
LRB103 37906 HLH 68038 b
A BILL FOR
SB3364 LRB103 37906 HLH 68038 b
AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing Section
3-10 as follows:
(35 ILCS 105/3-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax imposed by this Act is at the rate of 6.25% of
either the selling price or the fair market value, if any, of
the tangible personal property. In all cases where property
functionally used or consumed is the same as the property that
was purchased at retail, then the tax is imposed on the selling
price of the property. In all cases where property
functionally used or consumed is a by-product or waste product
that has been refined, manufactured, or produced from property
purchased at retail, then the tax is imposed on the lower of
the fair market value, if any, of the specific property so used
in this State or on the selling price of the property purchased
at retail. For purposes of this Section "fair market value"
means the price at which property would change hands between a
willing buyer and a willing seller, neither being under any
compulsion to buy or sell and both having reasonable knowledge
of the relevant facts. The fair market value shall be

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established by Illinois sales by the taxpayer of the same
property as that functionally used or consumed, or if there
are no such sales by the taxpayer, then comparable sales or
purchases of property of like kind and character in Illinois.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
the Use Tax Act, the tax is imposed at the rate of 1.25%.
Beginning 30 days after the effective date of this
amendatory Act of the 103rd General Assembly, the tax imposed
under this Act on the following items may not exceed the cents
per gallon rate established by the Department under subsection
(e) of Section 2d of the Retailers' Occupation Tax Act: motor
fuel, as defined in Section 1.1 of the Motor Fuel Tax Law;
gasohol, as defined in Section 3-40 of this Act; majority
blended ethanol fuel; and biodiesel and biodiesel blends. With
respect to the tax imposed on biodiesel blends and gasohol,
the maximum cents per gallon rate shall include the reduction
allowed in subsection (e) of Section 2d of the Retailers'
Occupation Tax Act.
Beginning on August 6, 2010 through August 15, 2010, and
beginning again on August 5, 2022 through August 14, 2022,
with respect to sales tax holiday items as defined in Section
3-6 of this Act, the tax is imposed at the rate of 1.25%.
With respect to gasohol, the tax imposed by this Act
applies to (i) 70% of the proceeds of sales made on or after

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January 1, 1990, and before July 1, 2003, (ii) 80% of the
proceeds of sales made on or after July 1, 2003 and on or
before July 1, 2017, (iii) 100% of the proceeds of sales made
after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
the proceeds of sales made on or after January 1, 2024 and on
or before December 31, 2028, and (v) 100% of the proceeds of
sales made after December 31, 2028. If, at any time, however,
the tax under this Act on sales of gasohol is imposed at the
rate of 1.25%, then the tax imposed by this Act applies to 100%
of the proceeds of sales of gasohol made during that time.
With respect to mid-range ethanol blends, the tax imposed
by this Act applies to (i) 80% of the proceeds of sales made on
or after January 1, 2024 and on or before December 31, 2028 and
(ii) 100% of the proceeds of sales made thereafter. If, at any
time, however, the tax under this Act on sales of mid-range
ethanol blends is imposed at the rate of 1.25%, then the tax
imposed by this Act applies to 100% of the proceeds of sales of
mid-range ethanol blends made during that time.
With respect to majority blended ethanol fuel, the tax
imposed by this Act does not apply to the proceeds of sales
made on or after July 1, 2003 and on or before December 31,
2028 but applies to 100% of the proceeds of sales made
thereafter.
With respect to biodiesel blends with no less than 1% and
no more than 10% biodiesel, the tax imposed by this Act applies
to (i) 80% of the proceeds of sales made on or after July 1,

SB3364 - 4 - LRB103 37906 HLH 68038 b
2003 and on or before December 31, 2018 and (ii) 100% of the
proceeds of sales made after December 31, 2018 and before
January 1, 2024. On and after January 1, 2024 and on or before
December 31, 2030, the taxation of biodiesel, renewable
diesel, and biodiesel blends shall be as provided in Section
3-5.1. If, at any time, however, the tax under this Act on
sales of biodiesel blends with no less than 1% and no more than
10% biodiesel is imposed at the rate of 1.25%, then the tax
imposed by this Act applies to 100% of the proceeds of sales of
biodiesel blends with no less than 1% and no more than 10%
biodiesel made during that time.
With respect to biodiesel and biodiesel blends with more
than 10% but no more than 99% biodiesel, the tax imposed by
this Act does not apply to the proceeds of sales made on or
after July 1, 2003 and on or before December 31, 2023. On and
after January 1, 2024 and on or before December 31, 2030, the
taxation of biodiesel, renewable diesel, and biodiesel blends
shall be as provided in Section 3-5.1.
Until July 1, 2022 and beginning again on July 1, 2023,
with respect to food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption), the tax is imposed at the rate of 1%.
Beginning on July 1, 2022 and until July 1, 2023, with respect
to food for human consumption that is to be consumed off the

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premises where it is sold (other than alcoholic beverages,
food consisting of or infused with adult use cannabis, soft
drinks, and food that has been prepared for immediate
consumption), the tax is imposed at the rate of 0%.
With respect to prescription and nonprescription
medicines, drugs, medical appliances, products classified as
Class III medical devices by the United States Food and Drug
Administration that are used for cancer treatment pursuant to
a prescription, as well as any accessories and components
related to those devices, modifications to a motor vehicle for
the purpose of rendering it usable by a person with a
disability, and insulin, blood sugar testing materials,
syringes, and needles used by human diabetics, the tax is
imposed at the rate of 1%. For the purposes of this Section,
until September 1, 2009: the term "soft drinks" means any
complete, finished, ready-to-use, non-alcoholic drink, whether
carbonated or not, including, but not limited to, soda water,
cola, fruit juice, vegetable juice, carbonated water, and all
other preparations commonly known as soft drinks of whatever
kind or description that are contained in any closed or sealed
bottle, can, carton, or container, regardless of size; but
"soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in the
Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act,

SB3364 - 6 - LRB103 37906 HLH 68038 b
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" does not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.

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Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 CFR 201.66. The "over-the-counter-drug"
label includes:
(A) a "Drug Facts" panel; or
(B) a statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered
dispensing organization under the Compassionate Use of Medical
Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the

SB3364 - 8 - LRB103 37906 HLH 68038 b
Compassionate Use of Medical Cannabis Program Act.
If the property that is purchased at retail from a
retailer is acquired outside Illinois and used outside
Illinois before being brought to Illinois for use here and is
taxable under this Act, the "selling price" on which the tax is
computed shall be reduced by an amount that represents a
reasonable allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
Section 20-5, eff. 4-19-22; 102-700, Article 60, Section
60-15, eff. 4-19-22; 102-700, Article 65, Section 65-5, eff.
4-19-22; 103-9, eff. 6-7-23; 103-154 eff. 6-30-23.)
Section 10. The Service Use Tax Act is amended by changing
Section 3-10 as follows:
(35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax imposed by this Act is at the rate of 6.25% of
the selling price of tangible personal property transferred as
an incident to the sale of service, but, for the purpose of
computing this tax, in no event shall the selling price be less
than the cost price of the property to the serviceman.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

SB3364 - 9 - LRB103 37906 HLH 68038 b
the Use Tax Act, the tax is imposed at the rate of 1.25%.
Beginning 30 days after the effective date of this
amendatory Act of the 103rd General Assembly, the tax imposed
under this Act on the following items may not exceed the cents
per gallon rate established by the Department under subsection
(e) of Section 2d of the Retailers' Occupation Tax Act: motor
fuel, as defined in Section 1.1 of the Motor Fuel Tax Law;
gasohol, as defined in Section 3-40 of the Use Tax Act;
majority blended ethanol fuel; and biodiesel and biodiesel
blends. With respect to the tax imposed on biodiesel blends
and gasohol, the maximum cents per gallon rate shall include
the reduction allowed in subsection (e) of Section 2d of the
Retailers' Occupation Tax Act.
With respect to gasohol, as defined in the Use Tax Act, the
tax imposed by this Act applies to (i) 70% of the selling price
of property transferred as an incident to the sale of service
on or after January 1, 1990, and before July 1, 2003, (ii) 80%
of the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
July 1, 2017, (iii) 100% of the selling price of property
transferred as an incident to the sale of service after July 1,
2017 and before January 1, 2024, (iv) 90% of the selling price
of property transferred as an incident to the sale of service
on or after January 1, 2024 and on or before December 31, 2028,
and (v) 100% of the selling price of property transferred as an
incident to the sale of service after December 31, 2028. If, at

SB3364 - 10 - LRB103 37906 HLH 68038 b
any time, however, the tax under this Act on sales of gasohol,
as defined in the Use Tax Act, is imposed at the rate of 1.25%,
then the tax imposed by this Act applies to 100% of the
proceeds of sales of gasohol made during that time.
With respect to mid-range ethanol blends, as defined in
Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
applies to (i) 80% of the selling price of property
transferred as an incident to the sale of service on or after
January 1, 2024 and on or before December 31, 2028 and (ii)
100% of the selling price of property transferred as an
incident to the sale of service after December 31, 2028. If, at
any time, however, the tax under this Act on sales of mid-range
ethanol blends is imposed at the rate of 1.25%, then the tax
imposed by this Act applies to 100% of the selling price of
mid-range ethanol blends transferred as an incident to the
sale of service during that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
December 31, 2028 but applies to 100% of the selling price
thereafter.
With respect to biodiesel blends, as defined in the Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by this Act applies to (i) 80% of the selling
price of property transferred as an incident to the sale of

SB3364 - 11 - LRB103 37906 HLH 68038 b
service on or after July 1, 2003 and on or before December 31,
2018 and (ii) 100% of the proceeds of the selling price after
December 31, 2018 and before January 1, 2024. On and after
January 1, 2024 and on or before December 31, 2030, the
taxation of biodiesel, renewable diesel, and biodiesel blends
shall be as provided in Section 3-5.1 of the Use Tax Act. If,
at any time, however, the tax under this Act on sales of
biodiesel blends, as defined in the Use Tax Act, with no less
than 1% and no more than 10% biodiesel is imposed at the rate
of 1.25%, then the tax imposed by this Act applies to 100% of
the proceeds of sales of biodiesel blends with no less than 1%
and no more than 10% biodiesel made during that time.
With respect to biodiesel, as defined in the Use Tax Act,
and biodiesel blends, as defined in the Use Tax Act, with more
than 10% but no more than 99% biodiesel, the tax imposed by
this Act does not apply to the proceeds of the selling price of
property transferred as an incident to the sale of service on
or after July 1, 2003 and on or before December 31, 2023. On
and after January 1, 2024 and on or before December 31, 2030,
the taxation of biodiesel, renewable diesel, and biodiesel
blends shall be as provided in Section 3-5.1 of the Use Tax
Act.
At the election of any registered serviceman made for each
fiscal year, sales of service in which the aggregate annual
cost price of tangible personal property transferred as an
incident to the sales of service is less than 35%, or 75% in

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the case of servicemen transferring prescription drugs or
servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of
service, the tax imposed by this Act shall be based on the
serviceman's cost price of the tangible personal property
transferred as an incident to the sale of those services.
Until July 1, 2022 and beginning again on July 1, 2023, the
tax shall be imposed at the rate of 1% on food prepared for
immediate consumption and transferred incident to a sale of
service subject to this Act or the Service Occupation Tax Act
by an entity licensed under the Hospital Licensing Act, the
Nursing Home Care Act, the Assisted Living and Shared Housing
Act, the ID/DD Community Care Act, the MC/DD Act, the
Specialized Mental Health Rehabilitation Act of 2013, or the
Child Care Act of 1969, or an entity that holds a permit issued
pursuant to the Life Care Facilities Act. Until July 1, 2022
and beginning again on July 1, 2023, the tax shall also be
imposed at the rate of 1% on food for human consumption that is
to be consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption and is not otherwise included in this
paragraph).
Beginning on July 1, 2022 and until July 1, 2023, the tax
shall be imposed at the rate of 0% on food prepared for
immediate consumption and transferred incident to a sale of

SB3364 - 13 - LRB103 37906 HLH 68038 b
service subject to this Act or the Service Occupation Tax Act
by an entity licensed under the Hospital Licensing Act, the
Nursing Home Care Act, the Assisted Living and Shared Housing
Act, the ID/DD Community Care Act, the MC/DD Act, the
Specialized Mental Health Rehabilitation Act of 2013, or the
Child Care Act of 1969, or an entity that holds a permit issued
pursuant to the Life Care Facilities Act. Beginning on July 1,
2022 and until July 1, 2023, the tax shall also be imposed at
the rate of 0% on food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption and is not otherwise included in this
paragraph).
The tax shall also be imposed at the rate of 1% on
prescription and nonprescription medicines, drugs, medical
appliances, products classified as Class III medical devices
by the United States Food and Drug Administration that are
used for cancer treatment pursuant to a prescription, as well
as any accessories and components related to those devices,
modifications to a motor vehicle for the purpose of rendering
it usable by a person with a disability, and insulin, blood
sugar testing materials, syringes, and needles used by human
diabetics. For the purposes of this Section, until September
1, 2009: the term "soft drinks" means any complete, finished,
ready-to-use, non-alcoholic drink, whether carbonated or not,

SB3364 - 14 - LRB103 37906 HLH 68038 b
including, but not limited to, soda water, cola, fruit juice,
vegetable juice, carbonated water, and all other preparations
commonly known as soft drinks of whatever kind or description
that are contained in any closed or sealed bottle, can,
carton, or container, regardless of size; but "soft drinks"
does not include coffee, tea, non-carbonated water, infant
formula, milk or milk products as defined in the Grade A
Pasteurized Milk and Milk Products Act, or drinks containing
50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" does not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,

SB3364 - 15 - LRB103 37906 HLH 68038 b
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 CFR 201.66. The "over-the-counter-drug"
label includes:
(A) a "Drug Facts" panel; or
(B) a statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,

SB3364 - 16 - LRB103 37906 HLH 68038 b
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered
dispensing organization under the Compassionate Use of Medical
Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the
Compassionate Use of Medical Cannabis Program Act.
If the property that is acquired from a serviceman is
acquired outside Illinois and used outside Illinois before
being brought to Illinois for use here and is taxable under
this Act, the "selling price" on which the tax is computed
shall be reduced by an amount that represents a reasonable
allowance for depreciation for the period of prior
out-of-state use.
(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
102-700, Article 20, Section 20-10, eff. 4-19-22; 102-700,
Article 60, Section 60-20, eff. 4-19-22; 103-9, eff. 6-7-23;
103-154, eff. 6-30-23.)
Section 15. The Service Occupation Tax Act is amended by
changing Section 3-10 as follows:

SB3364 - 17 - LRB103 37906 HLH 68038 b
(35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)
Sec. 3-10. Rate of tax. Unless otherwise provided in this
Section, the tax imposed by this Act is at the rate of 6.25% of
the "selling price", as defined in Section 2 of the Service Use
Tax Act, of the tangible personal property. For the purpose of
computing this tax, in no event shall the "selling price" be
less than the cost price to the serviceman of the tangible
personal property transferred. The selling price of each item
of tangible personal property transferred as an incident of a
sale of service may be shown as a distinct and separate item on
the serviceman's billing to the service customer. If the
selling price is not so shown, the selling price of the
tangible personal property is deemed to be 50% of the
serviceman's entire billing to the service customer. When,
however, a serviceman contracts to design, develop, and
produce special order machinery or equipment, the tax imposed
by this Act shall be based on the serviceman's cost price of
the tangible personal property transferred incident to the
completion of the contract.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
the Use Tax Act, the tax is imposed at the rate of 1.25%.
Beginning 30 days after the effective date of this
amendatory Act of the 103rd General Assembly, the tax imposed
under this Act on the following items may not exceed the cents

SB3364 - 18 - LRB103 37906 HLH 68038 b
per gallon rate established by the Department under subsection
(e) of Section 2d of the Retailers' Occupation Tax Act: motor
fuel, as defined in Section 1.1 of the Motor Fuel Tax Law;
gasohol, as defined in Section 3-40 of the Use Tax Act;
majority blended ethanol fuel; and biodiesel and biodiesel
blends. With respect to the tax imposed on biodiesel blends
and gasohol, the maximum cents per gallon rate shall include
the reduction allowed in subsection (e) of Section 2d of the
Retailers' Occupation Tax Act.
With respect to gasohol, as defined in the Use Tax Act, the
tax imposed by this Act shall apply to (i) 70% of the cost
price of property transferred as an incident to the sale of
service on or after January 1, 1990, and before July 1, 2003,
(ii) 80% of the selling price of property transferred as an
incident to the sale of service on or after July 1, 2003 and on
or before July 1, 2017, (iii) 100% of the selling price of
property transferred as an incident to the sale of service
after July 1, 2017 and prior to January 1, 2024, (iv) 90% of
the selling price of property transferred as an incident to
the sale of service on or after January 1, 2024 and on or
before December 31, 2028, and (v) 100% of the selling price of
property transferred as an incident to the sale of service
after December 31, 2028. If, at any time, however, the tax
under this Act on sales of gasohol, as defined in the Use Tax
Act, is imposed at the rate of 1.25%, then the tax imposed by
this Act applies to 100% of the proceeds of sales of gasohol

SB3364 - 19 - LRB103 37906 HLH 68038 b
made during that time.
With respect to mid-range ethanol blends, as defined in
Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
applies to (i) 80% of the selling price of property
transferred as an incident to the sale of service on or after
January 1, 2024 and on or before December 31, 2028 and (ii)
100% of the selling price of property transferred as an
incident to the sale of service after December 31, 2028. If, at
any time, however, the tax under this Act on sales of mid-range
ethanol blends is imposed at the rate of 1.25%, then the tax
imposed by this Act applies to 100% of the selling price of
mid-range ethanol blends transferred as an incident to the
sale of service during that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply
to the selling price of property transferred as an incident to
the sale of service on or after July 1, 2003 and on or before
December 31, 2028 but applies to 100% of the selling price
thereafter.
With respect to biodiesel blends, as defined in the Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by this Act applies to (i) 80% of the selling
price of property transferred as an incident to the sale of
service on or after July 1, 2003 and on or before December 31,
2018 and (ii) 100% of the proceeds of the selling price after
December 31, 2018 and before January 1, 2024. On and after

SB3364 - 20 - LRB103 37906 HLH 68038 b
January 1, 2024 and on or before December 31, 2030, the
taxation of biodiesel, renewable diesel, and biodiesel blends
shall be as provided in Section 3-5.1 of the Use Tax Act. If,
at any time, however, the tax under this Act on sales of
biodiesel blends, as defined in the Use Tax Act, with no less
than 1% and no more than 10% biodiesel is imposed at the rate
of 1.25%, then the tax imposed by this Act applies to 100% of
the proceeds of sales of biodiesel blends with no less than 1%
and no more than 10% biodiesel made during that time.
With respect to biodiesel, as defined in the Use Tax Act,
and biodiesel blends, as defined in the Use Tax Act, with more
than 10% but no more than 99% biodiesel material, the tax
imposed by this Act does not apply to the proceeds of the
selling price of property transferred as an incident to the
sale of service on or after July 1, 2003 and on or before
December 31, 2023. On and after January 1, 2024 and on or
before December 31, 2030, the taxation of biodiesel, renewable
diesel, and biodiesel blends shall be as provided in Section
3-5.1 of the Use Tax Act.
At the election of any registered serviceman made for each
fiscal year, sales of service in which the aggregate annual
cost price of tangible personal property transferred as an
incident to the sales of service is less than 35%, or 75% in
the case of servicemen transferring prescription drugs or
servicemen engaged in graphic arts production, of the
aggregate annual total gross receipts from all sales of

SB3364 - 21 - LRB103 37906 HLH 68038 b
service, the tax imposed by this Act shall be based on the
serviceman's cost price of the tangible personal property
transferred incident to the sale of those services.
Until July 1, 2022 and beginning again on July 1, 2023, the
tax shall be imposed at the rate of 1% on food prepared for
immediate consumption and transferred incident to a sale of
service subject to this Act or the Service Use Tax Act by an
entity licensed under the Hospital Licensing Act, the Nursing
Home Care Act, the Assisted Living and Shared Housing Act, the
ID/DD Community Care Act, the MC/DD Act, the Specialized
Mental Health Rehabilitation Act of 2013, or the Child Care
Act of 1969, or an entity that holds a permit issued pursuant
to the Life Care Facilities Act. Until July 1, 2022 and
beginning again on July 1, 2023, the tax shall also be imposed
at the rate of 1% on food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption and is not otherwise included in this
paragraph).
Beginning on July 1, 2022 and until July 1, 2023, the tax
shall be imposed at the rate of 0% on food prepared for
immediate consumption and transferred incident to a sale of
service subject to this Act or the Service Use Tax Act by an
entity licensed under the Hospital Licensing Act, the Nursing
Home Care Act, the Assisted Living and Shared Housing Act, the

SB3364 - 22 - LRB103 37906 HLH 68038 b
ID/DD Community Care Act, the MC/DD Act, the Specialized
Mental Health Rehabilitation Act of 2013, or the Child Care
Act of 1969, or an entity that holds a permit issued pursuant
to the Life Care Facilities Act. Beginning July 1, 2022 and
until July 1, 2023, the tax shall also be imposed at the rate
of 0% on food for human consumption that is to be consumed off
the premises where it is sold (other than alcoholic beverages,
food consisting of or infused with adult use cannabis, soft
drinks, and food that has been prepared for immediate
consumption and is not otherwise included in this paragraph).
The tax shall also be imposed at the rate of 1% on
prescription and nonprescription medicines, drugs, medical
appliances, products classified as Class III medical devices
by the United States Food and Drug Administration that are
used for cancer treatment pursuant to a prescription, as well
as any accessories and components related to those devices,
modifications to a motor vehicle for the purpose of rendering
it usable by a person with a disability, and insulin, blood
sugar testing materials, syringes, and needles used by human
diabetics. For the purposes of this Section, until September
1, 2009: the term "soft drinks" means any complete, finished,
ready-to-use, non-alcoholic drink, whether carbonated or not,
including, but not limited to, soda water, cola, fruit juice,
vegetable juice, carbonated water, and all other preparations
commonly known as soft drinks of whatever kind or description
that are contained in any closed or sealed can, carton, or

SB3364 - 23 - LRB103 37906 HLH 68038 b
container, regardless of size; but "soft drinks" does not
include coffee, tea, non-carbonated water, infant formula,
milk or milk products as defined in the Grade A Pasteurized
Milk and Milk Products Act, or drinks containing 50% or more
natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" does not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not

SB3364 - 24 - LRB103 37906 HLH 68038 b
include candy. For purposes of this Section, "candy" means a
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 CFR 201.66. The "over-the-counter-drug"
label includes:
(A) a "Drug Facts" panel; or
(B) a statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered

SB3364 - 25 - LRB103 37906 HLH 68038 b
dispensing organization under the Compassionate Use of Medical
Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the
Compassionate Use of Medical Cannabis Program Act.
(Source: P.A. 102-4, eff. 4-27-21; 102-16, eff. 6-17-21;
102-700, Article 20, Section 20-15, eff. 4-19-22; 102-700,
Article 60, Section 60-25, eff. 4-19-22; 103-9, eff. 6-7-23;
103-154, eff. 6-30-23.)
Section 20. The Retailers' Occupation Tax Act is amended
by changing Sections 2-10 and 2d as follows:
(35 ILCS 120/2-10)
Sec. 2-10. Rate of tax. Unless otherwise provided in this
Section, the tax imposed by this Act is at the rate of 6.25% of
gross receipts from sales of tangible personal property made
in the course of business.
Beginning on July 1, 2000 and through December 31, 2000,
with respect to motor fuel, as defined in Section 1.1 of the
Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
the Use Tax Act, the tax is imposed at the rate of 1.25%.
Beginning 30 days after the effective date of this
amendatory Act of the 103rd General Assembly, the tax imposed

SB3364 - 26 - LRB103 37906 HLH 68038 b
under this Act on the following items may not exceed the cents
per gallon rate established by the Department under subsection
(e) of Section 2d of this Act: motor fuel, as defined in
Section 1.1 of the Motor Fuel Tax Law; gasohol, as defined in
Section 3-40 of the Use Tax Act; majority blended ethanol
fuel; and biodiesel and biodiesel blends. With respect to the
tax imposed on biodiesel blends and gasohol, the maximum cents
per gallon rate shall include the reduction allowed in
subsection (e) of Section 2d.
Beginning on August 6, 2010 through August 15, 2010, and
beginning again on August 5, 2022 through August 14, 2022,
with respect to sales tax holiday items as defined in Section
2-8 of this Act, the tax is imposed at the rate of 1.25%.
Within 14 days after July 1, 2000 (the effective date of
Public Act 91-872), each retailer of motor fuel and gasohol
shall cause the following notice to be posted in a prominently
visible place on each retail dispensing device that is used to
dispense motor fuel or gasohol in the State of Illinois: "As of
July 1, 2000, the State of Illinois has eliminated the State's
share of sales tax on motor fuel and gasohol through December
31, 2000. The price on this pump should reflect the
elimination of the tax." The notice shall be printed in bold
print on a sign that is no smaller than 4 inches by 8 inches.
The sign shall be clearly visible to customers. Any retailer
who fails to post or maintain a required sign through December
31, 2000 is guilty of a petty offense for which the fine shall

SB3364 - 27 - LRB103 37906 HLH 68038 b
be $500 per day per each retail premises where a violation
occurs.
With respect to gasohol, as defined in the Use Tax Act, the
tax imposed by this Act applies to (i) 70% of the proceeds of
sales made on or after January 1, 1990, and before July 1,
2003, (ii) 80% of the proceeds of sales made on or after July
1, 2003 and on or before July 1, 2017, (iii) 100% of the
proceeds of sales made after July 1, 2017 and prior to January
1, 2024, (iv) 90% of the proceeds of sales made on or after
January 1, 2024 and on or before December 31, 2028, and (v)
100% of the proceeds of sales made after December 31, 2028. If,
at any time, however, the tax under this Act on sales of
gasohol, as defined in the Use Tax Act, is imposed at the rate
of 1.25%, then the tax imposed by this Act applies to 100% of
the proceeds of sales of gasohol made during that time.
With respect to mid-range ethanol blends, as defined in
Section 3-44.3 of the Use Tax Act, the tax imposed by this Act
applies to (i) 80% of the proceeds of sales made on or after
January 1, 2024 and on or before December 31, 2028 and (ii)
100% of the proceeds of sales made after December 31, 2028. If,
at any time, however, the tax under this Act on sales of
mid-range ethanol blends is imposed at the rate of 1.25%, then
the tax imposed by this Act applies to 100% of the proceeds of
sales of mid-range ethanol blends made during that time.
With respect to majority blended ethanol fuel, as defined
in the Use Tax Act, the tax imposed by this Act does not apply

SB3364 - 28 - LRB103 37906 HLH 68038 b
to the proceeds of sales made on or after July 1, 2003 and on
or before December 31, 2028 but applies to 100% of the proceeds
of sales made thereafter.
With respect to biodiesel blends, as defined in the Use
Tax Act, with no less than 1% and no more than 10% biodiesel,
the tax imposed by this Act applies to (i) 80% of the proceeds
of sales made on or after July 1, 2003 and on or before
December 31, 2018 and (ii) 100% of the proceeds of sales made
after December 31, 2018 and before January 1, 2024. On and
after January 1, 2024 and on or before December 31, 2030, the
taxation of biodiesel, renewable diesel, and biodiesel blends
shall be as provided in Section 3-5.1 of the Use Tax Act. If,
at any time, however, the tax under this Act on sales of
biodiesel blends, as defined in the Use Tax Act, with no less
than 1% and no more than 10% biodiesel is imposed at the rate
of 1.25%, then the tax imposed by this Act applies to 100% of
the proceeds of sales of biodiesel blends with no less than 1%
and no more than 10% biodiesel made during that time.
With respect to biodiesel, as defined in the Use Tax Act,
and biodiesel blends, as defined in the Use Tax Act, with more
than 10% but no more than 99% biodiesel, the tax imposed by
this Act does not apply to the proceeds of sales made on or
after July 1, 2003 and on or before December 31, 2023. On and
after January 1, 2024 and on or before December 31, 2030, the
taxation of biodiesel, renewable diesel, and biodiesel blends
shall be as provided in Section 3-5.1 of the Use Tax Act.

SB3364 - 29 - LRB103 37906 HLH 68038 b
Until July 1, 2022 and beginning again on July 1, 2023,
with respect to food for human consumption that is to be
consumed off the premises where it is sold (other than
alcoholic beverages, food consisting of or infused with adult
use cannabis, soft drinks, and food that has been prepared for
immediate consumption), the tax is imposed at the rate of 1%.
Beginning July 1, 2022 and until July 1, 2023, with respect to
food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages,
food consisting of or infused with adult use cannabis, soft
drinks, and food that has been prepared for immediate
consumption), the tax is imposed at the rate of 0%.
With respect to prescription and nonprescription
medicines, drugs, medical appliances, products classified as
Class III medical devices by the United States Food and Drug
Administration that are used for cancer treatment pursuant to
a prescription, as well as any accessories and components
related to those devices, modifications to a motor vehicle for
the purpose of rendering it usable by a person with a
disability, and insulin, blood sugar testing materials,
syringes, and needles used by human diabetics, the tax is
imposed at the rate of 1%. For the purposes of this Section,
until September 1, 2009: the term "soft drinks" means any
complete, finished, ready-to-use, non-alcoholic drink, whether
carbonated or not, including, but not limited to, soda water,
cola, fruit juice, vegetable juice, carbonated water, and all

SB3364 - 30 - LRB103 37906 HLH 68038 b
other preparations commonly known as soft drinks of whatever
kind or description that are contained in any closed or sealed
bottle, can, carton, or container, regardless of size; but
"soft drinks" does not include coffee, tea, non-carbonated
water, infant formula, milk or milk products as defined in the
Grade A Pasteurized Milk and Milk Products Act, or drinks
containing 50% or more natural fruit or vegetable juice.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "soft drinks" means non-alcoholic
beverages that contain natural or artificial sweeteners. "Soft
drinks" does not include beverages that contain milk or milk
products, soy, rice or similar milk substitutes, or greater
than 50% of vegetable or fruit juice by volume.
Until August 1, 2009, and notwithstanding any other
provisions of this Act, "food for human consumption that is to
be consumed off the premises where it is sold" includes all
food sold through a vending machine, except soft drinks and
food products that are dispensed hot from a vending machine,
regardless of the location of the vending machine. Beginning
August 1, 2009, and notwithstanding any other provisions of
this Act, "food for human consumption that is to be consumed
off the premises where it is sold" includes all food sold
through a vending machine, except soft drinks, candy, and food
products that are dispensed hot from a vending machine,
regardless of the location of the vending machine.
Notwithstanding any other provisions of this Act,

SB3364 - 31 - LRB103 37906 HLH 68038 b
beginning September 1, 2009, "food for human consumption that
is to be consumed off the premises where it is sold" does not
include candy. For purposes of this Section, "candy" means a
preparation of sugar, honey, or other natural or artificial
sweeteners in combination with chocolate, fruits, nuts or
other ingredients or flavorings in the form of bars, drops, or
pieces. "Candy" does not include any preparation that contains
flour or requires refrigeration.
Notwithstanding any other provisions of this Act,
beginning September 1, 2009, "nonprescription medicines and
drugs" does not include grooming and hygiene products. For
purposes of this Section, "grooming and hygiene products"
includes, but is not limited to, soaps and cleaning solutions,
shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
lotions and screens, unless those products are available by
prescription only, regardless of whether the products meet the
definition of "over-the-counter-drugs". For the purposes of
this paragraph, "over-the-counter-drug" means a drug for human
use that contains a label that identifies the product as a drug
as required by 21 CFR 201.66. The "over-the-counter-drug"
label includes:
(A) a "Drug Facts" panel; or
(B) a statement of the "active ingredient(s)" with a
list of those ingredients contained in the compound,
substance or preparation.
Beginning on January 1, 2014 (the effective date of Public

SB3364 - 32 - LRB103 37906 HLH 68038 b
Act 98-122), "prescription and nonprescription medicines and
drugs" includes medical cannabis purchased from a registered
dispensing organization under the Compassionate Use of Medical
Cannabis Program Act.
As used in this Section, "adult use cannabis" means
cannabis subject to tax under the Cannabis Cultivation
Privilege Tax Law and the Cannabis Purchaser Excise Tax Law
and does not include cannabis subject to tax under the
Compassionate Use of Medical Cannabis Program Act.
(Source: P.A. 102-4, eff. 4-27-21; 102-700, Article 20,
Section 20-20, eff. 4-19-22; 102-700, Article 60, Section
60-30, eff. 4-19-22; 102-700, Article 65, Section 65-10, eff.
4-19-22; 103-9, eff. 6-7-23; 103-154, eff. 6-30-23.)
(35 ILCS 120/2d) (from Ch. 120, par. 441d)
Sec. 2d. Tax prepayment by motor fuel retailer.
(a) Any person engaged in the business of selling motor
fuel at retail, as defined in the Motor Fuel Tax Law, and who
is not a licensed distributor or supplier, as defined in the
Motor Fuel Tax Law, shall prepay to his or her distributor,
supplier, or other reseller of motor fuel a portion of the tax
imposed by this Act if the distributor, supplier, or other
reseller of motor fuel is registered under Section 2a or
Section 2c of this Act. The prepayment requirement provided
for in this Section does not apply to liquid propane gas.
(b) Beginning on July 1, 2000 and through December 31,

SB3364 - 33 - LRB103 37906 HLH 68038 b
2000, the Retailers' Occupation Tax paid to the distributor,
supplier, or other reseller shall be an amount equal to $0.01
per gallon of the motor fuel, except gasohol as defined in
Section 2-10 of this Act which shall be an amount equal to
$0.01 per gallon, purchased from the distributor, supplier, or
other reseller.
(c) Before July 1, 2000 and then beginning on January 1,
2001 and through June 30, 2003, the Retailers' Occupation Tax
paid to the distributor, supplier, or other reseller shall be
an amount equal to $0.04 per gallon of the motor fuel, except
gasohol as defined in Section 2-10 of this Act which shall be
an amount equal to $0.03 per gallon, purchased from the
distributor, supplier, or other reseller.
(d) Beginning July 1, 2003 and through December 31, 2010,
the Retailers' Occupation Tax paid to the distributor,
supplier, or other reseller shall be an amount equal to $0.06
per gallon of the motor fuel, except gasohol as defined in
Section 2-10 of this Act which shall be an amount equal to
$0.05 per gallon, purchased from the distributor, supplier, or
other reseller.
(e) Beginning on January 1, 2011 and thereafter, the
Retailers' Occupation Tax paid to the distributor, supplier,
or other reseller shall be at the rate established by the
Department under this subsection. The rate shall be
established by the Department on January 1 and July 1 of each
year using the average selling price, as defined in Section 1

SB3364 - 34 - LRB103 37906 HLH 68038 b
of this Act, per gallon of motor fuel sold in the State during
the previous 6 months and multiplying that amount by 6.25% to
determine the cents per gallon rate. Beginning 30 days after
the effective date of this amendatory Act of the 103rd General
Assembly, the cents per gallon rate established by the
Department for motor fuel under this subsection may not exceed
$0.18 per gallon. Beginning on January 1, 2024 and through
December 31, 2028, in the case of gasohol, as defined in
Section 3-40 of the Use Tax Act, the rate shall be 90% of the
rate established by the Department under this subsection for
motor fuel. Beginning on January 1, 2024 and through December
31, 2028, in the case of mid-range ethanol blends, as defined
in Section 3-44.3 of the Use Tax Act, the rate shall be 80% of
the rate established by the Department under this subsection
for motor fuel. The Department shall provide persons subject
to this Section notice of the rate established under this
subsection at least 20 days prior to each January 1 and July 1.
The Department shall provide persons subject to this Section
notice of the rate change required by this amendatory Act of
the 103rd General Assembly at least 20 days prior to the date
on which that change takes effect. Publication of the
established rate on the Department's internet website shall
constitute sufficient notice under this Section. The
Department may use data derived from independent surveys
conducted or accumulated by third parties to determine the
average selling price per gallon of motor fuel sold in the

SB3364 - 35 - LRB103 37906 HLH 68038 b
State.
(f) Any person engaged in the business of selling motor
fuel at retail shall be entitled to a credit against tax due
under this Act in an amount equal to the tax paid to the
distributor, supplier, or other reseller.
(g) Every distributor, supplier, or other reseller
registered as provided in Section 2a or Section 2c of this Act
shall remit the prepaid tax on all motor fuel that is due from
any person engaged in the business of selling at retail motor
fuel with the returns filed under Section 2f or Section 3 of
this Act, but the vendors discount provided in Section 3 shall
not apply to the amount of prepaid tax that is remitted. Any
distributor or supplier who fails to properly collect and
remit the tax shall be liable for the tax. For purposes of this
Section, the prepaid tax is due on invoiced gallons sold
during a month by the 20th day of the following month.
(Source: P.A. 103-9, eff. 6-7-23.)