Illinois Laws > Government > Revenue > Retailers' Occupation Tax Act.
REVENUE
(35 ILCS 120/1) (from Ch. 120, par. 440)
Sec. 1. Definitions. "Sale at retail" means any transfer of the ownership of or title to tangible personal property to a purchaser, for the purpose of use or consumption, and not for the purpose of resale in any form as tangible personal property to the extent not first subjected to a use for which it was purchased, for a valuable consideration: Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing. For this purpose, slag produced as an incident to manufacturing pig iron or steel and sold is considered to be an intentionally produced byproduct of manufacturing. Transactions whereby the possession of the property is transferred but the seller retains the title as security for payment of the selling price shall be deemed to be sales.
"Sale at retail" shall be construed to include any transfer of the ownership of or title to tangible personal property to a purchaser, for use or consumption by any other person to whom such purchaser may transfer the tangible personal property without a valuable consideration, and to include any transfer, whether made for or without a valuable consideration, for resale in any form as tangible personal property unless made in compliance with Section 2c of this Act.
Sales of tangible personal property, which property, to the extent not first subjected to a use for which it was purchased, as an ingredient or constituent, goes into and forms a part of tangible personal property subsequently the subject of a "Sale at retail", are not sales at retail as defined in this Act: Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing.
"Sale at retail" shall be construed to include any Illinois florist's sales transaction in which the purchase order is received in Illinois by a florist and the sale is for use or consumption, but the Illinois florist has a florist in another state deliver the property to the purchaser or the purchaser's donee in such other state.
Nonreusable tangible personal property that is used by persons engaged in the business of operating a restaurant, cafeteria, or drive‑in is a sale for resale when it is transferred to customers in the ordinary course of business as part of the sale of food or beverages and is used to deliver, package, or consume food or beverages, regardless of where consumption of the food or beverages occurs. Examples of those items include, but are not limited to nonreusable, paper and plastic cups, plates, baskets, boxes, sleeves, buckets or other containers, utensils, straws, placemats, napkins, doggie bags, and wrapping or packaging materials that are transferred to customers as part of the sale of food or beverages in the ordinary course of business.
The purchase, employment and transfer of such tangible personal property as newsprint and ink for the primary purpose of conveying news (with or without other information) is not a purchase, use or sale of tangible personal property.
A person whose activities are organized and conducted primarily as a not‑for‑profit service enterprise, and who engages in selling tangible personal property at retail (whether to the public or merely to members and their guests) is engaged in the business of selling tangible personal property at retail with respect to such transactions, excepting only a person organized and operated exclusively for charitable, religious or educational purposes either (1), to the extent of sales by such person to its members, students, patients or inmates of tangible personal property to be used primarily for the purposes of such person, or (2), to the extent of sales by such person of tangible personal property which is not sold or offered for sale by persons organized for profit. The selling of school books and school supplies by schools at retail to students is not "primarily for the purposes of" the school which does such selling. The provisions of this paragraph shall not apply to nor subject to taxation occasional dinners, socials or similar activities of a person organized and operated exclusively for charitable, religious or educational purposes, whether or not such activities are open to the public.
A person who is the recipient of a grant or contract under Title VII of the Older Americans Act of 1965 (P.L. 92‑258) and serves meals to participants in the federal Nutrition Program for the Elderly in return for contributions established in amount by the individual participant pursuant to a schedule of suggested fees as provided for in the federal Act is not engaged in the business of selling tangible personal property at retail with respect to such transactions.
"Purchaser" means anyone who, through a sale at retail, acquires the ownership of or title to tangible personal property for a valuable consideration.
"Reseller of motor fuel" means any person engaged in the business of selling or delivering or transferring title of motor fuel to another person other than for use or consumption. No person shall act as a reseller of motor fuel within this State without first being registered as a reseller pursuant to Section 2c or a retailer pursuant to Section 2a.
"Selling price" or the "amount of sale" means the consideration for a sale valued in money whether received in money or otherwise, including cash, credits, property, other than as hereinafter provided, and services, but not including the value of or credit given for traded‑in tangible personal property where the item that is traded‑in is of like kind and character as that which is being sold, and shall be determined without any deduction on account of the cost of the property sold, the cost of materials used, labor or service cost or any other expense whatsoever, but does not include charges that are added to prices by sellers on account of the seller's tax liability under this Act, or on account of the seller's duty to collect, from the purchaser, the tax that is imposed by the Use Tax Act, or on account of the seller's tax liability under Section 8‑11‑1 of the Illinois Municipal Code, as heretofore and hereafter amended, or on account of the seller's tax liability under the County Retailers' Occupation Tax Act, or on account of the seller's tax liability under the Home Rule Municipal Soft Drink Retailers' Occupation Tax, or on account of the seller's tax liability under any tax imposed under the "Regional Transportation Authority Act", approved December 12, 1973. Effective December 1, 1985, "selling price" shall include charges that are added to prices by sellers on account of the seller's tax liability under the Cigarette Tax Act, on account of the sellers' duty to collect, from the purchaser, the tax imposed under the Cigarette Use Tax Act, and on account of the seller's duty to collect, from the purchaser, any cigarette tax imposed by a home rule unit.
The phrase "like kind and character" shall be liberally construed (including but not limited to any form of motor vehicle for any form of motor vehicle, or any kind of farm or agricultural implement for any other kind of farm or agricultural implement), while not including a kind of item which, if sold at retail by that retailer, would be exempt from retailers' occupation tax and use tax as an isolated or occasional sale.
"Gross receipts" from the sales of tangible personal property at retail means the total selling price or the amount of such sales, as hereinbefore defined. In the case of charge and time sales, the amount thereof shall be included only as and when payments are received by the seller. Receipts or other consideration derived by a seller from the sale, transfer or assignment of accounts receivable to a wholly owned subsidiary will not be deemed payments prior to the time the purchaser makes payment on such accounts.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian or other representative appointed by order of any court.
The isolated or occasional sale of tangible personal property at retail by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such tangible personal property at retail, or a sale through a bulk vending machine, does not constitute engaging in a business of selling such tangible personal property at retail within the meaning of this Act; provided that any person who is engaged in a business which is not subject to the tax imposed by this Act because of involving the sale of or a contract to sell real estate or a construction contract to improve real estate or a construction contract to engineer, install, and maintain an integrated system of products, but who, in the course of conducting such business, transfers tangible personal property to users or consumers in the finished form in which it was purchased, and which does not become real estate or was not engineered and installed, under any provision of a construction contract or real estate sale or real estate sales agreement entered into with some other person arising out of or because of such nontaxable business, is engaged in the business of selling tangible personal property at retail to the extent of the value of the tangible personal property so transferred. If, in such a transaction, a separate charge is made for the tangible personal property so transferred, the value of such property, for the purpose of this Act, shall be the amount so separately charged, but not less than the cost of such property to the transferor; if no separate charge is made, the value of such property, for the purposes of this Act, is the cost to the transferor of such tangible personal property. Construction contracts for the improvement of real estate consisting of engineering, installation, and maintenance of voice, data, video, security, and all telecommunication systems do not constitute engaging in a business of selling tangible personal property at retail within the meaning of this Act if they are sold at one specified contract price.
A person who holds himself or herself out as being engaged (or who habitually engages) in selling tangible personal property at retail is a person engaged in the business of selling tangible personal property at retail hereunder with respect to such sales (and not primarily in a service occupation) notwithstanding the fact that such person designs and produces such tangible personal property on special order for the purchaser and in such a way as to render the property of value only to such purchaser, if such tangible personal property so produced on special order serves substantially the same function as stock or standard items of tangible personal property that are sold at retail.
Persons who engage in the business of transferring tangible personal property upon the redemption of trading stamps are engaged in the business of selling such property at retail and shall be liable for and shall pay the tax imposed by this Act on the basis of the retail value of the property transferred upon redemption of such stamps.
"Bulk vending machine" means a vending machine, containing unsorted confections, nuts, toys, or other items designed primarily to be used or played with by children which, when a coin or coins of a denomination not larger than $0.50 are inserted, are dispensed in equal portions, at random and without selection by the customer.
(Source: P.A. 92‑213, eff. 1‑1‑02.)
(35 ILCS 120/1a) (from Ch. 120, par. 440a)
Sec. 1a. "Pollution control facilities" means any system, method, construction, device or appliance appurtenant thereto sold or used or intended for the primary purpose of eliminating, preventing, or reducing air and water pollution as the term "air pollution" or "water pollution" is defined in the "Environmental Protection Act", enacted by the 76th General Assembly, or for the primary purpose of treating, pretreating, modifying or disposing of any potential solid, liquid or gaseous pollutant which if released without such treatment, pretreatment, modification or disposal might be harmful, detrimental or offensive to human, plant or animal life, or to property.
Until July 1, 2003, the purchase, employment and transfer of such tangible personal property as pollution control facilities is not a purchase, use or sale of tangible personal property.
(Source: P.A. 93‑24, eff. 6‑20‑03.)
(35 ILCS 120/1a‑1) (from Ch. 120, par. 440a‑1)
Sec. 1a‑1. "Low sulfur dioxide emission coal fueled devices" means any device sold or used or intended for the purpose of burning, combusting or converting locally available coal in a manner which eliminates or significantly reduces the need for additional sulfur dioxide abatement that would otherwise be required under State or Federal air emission standards. Such device includes all machinery, equipment, structures and all related apparatus of a coal gasification facility, including coal feeding equipment, designed to convert locally available coal into a low sulfur gaseous fuel and to manage all waste and byproduct streams.
The purchase, employment and transfer of such tangible personal property as low sulfur dioxide emission coal fueled devices is not a purchase, use or sale of tangible personal property.
This amendatory Act of 1981 is not intended to nor does it make any change in the meaning of any provision in this Section but is intended to remove possible ambiguities, thereby confirming the existing meaning of this Section in effect prior to the effective date of this amendatory Act of 1981.
(Source: P.A. 82‑672.)
(35 ILCS 120/1c) (from Ch. 120, par. 440c)
Sec. 1c. A person who is engaged in the business of leasing or renting motor vehicles or, beginning July 1, 2003, aircraft or, beginning September 1, 2004, watercraft to others and who, in connection with such business sells any used motor vehicle, aircraft, or watercraft to a purchaser for his use and not for the purpose of resale, is a retailer engaged in the business of selling tangible personal property at retail under this Act to the extent of the value of the motor vehicle, aircraft, or watercraft sold. For the purpose of this Section "motor vehicle" has the meaning prescribed in Section 1‑157 of the Illinois Vehicle Code, as now or hereafter amended. For the purpose of this Section "aircraft" has the meaning prescribed in Section 3 of the Illinois Aeronautics Act. For the purpose of this Section, "watercraft" has the meaning prescribed in Section 5‑5 of the Watercraft Use Tax Law. (Nothing provided herein shall affect liability incurred under this Act because of the sale at retail of such motor vehicles, aircraft, or watercraft to a lessor.)
(Source: P.A. 93‑24, eff. 6‑20‑03; 93‑840, eff. 7‑30‑04.)
(35 ILCS 120/1d) (from Ch. 120, par. 440d)
Sec. 1d. Subject to the provisions of Section 1f, all tangible personal property to be used or consumed within an enterprise zone established pursuant to the "Illinois Enterprise Zone Act", as amended, or subject to the provisions of Section 5.5 of the Illinois Enterprise Zone Act, all tangible personal property to be used or consumed by any High Impact Business, in the process of the manufacturing or assembly of tangible personal property for wholesale or retail sale or lease or in the process of graphic arts production if used or consumed at a facility which is a Department of Commerce and Community Affairs certified business and located in a county of more than 4,000 persons and less than 45,000 persons is exempt from the tax imposed by this Act. This exemption includes repair and replacement parts for machinery and equipment used primarily in the process of manufacturing or assembling tangible personal property or in the process of graphic arts production if used or consumed at a facility which is a Department of Commerce and Community Affairs certified business and located in a county of more than 4,000 persons and less than 45,000 persons for wholesale or retail sale, or lease, and equipment, manufacturing or graphic arts fuels, material and supplies for the maintenance, repair or operation of such manufacturing or assembling or graphic arts machinery or equipment.
(Source: P.A. 85‑1182; 86‑1456.)
(35 ILCS 120/1e) (from Ch. 120, par. 440e)
Sec. 1e. Subject to the provisions of Section 1f, or subject to the provisions of Section 5.5 of the Illinois Enterprise Zone Act, all tangible personal property to be used or consumed in the operation of pollution control facilities, as defined in Section 1a of this Act, within an enterprise zone established pursuant to the "Illinois Enterprise Zone Act", as amended, shall be exempt from the tax imposed by this Act.
(Source: P.A. 85‑1182.)
(35 ILCS 120/1f) (from Ch. 120, par. 440f)
Sec. 1f. Except for High Impact Businesses, the exemption stated in Sections 1d and 1e of this Act shall only apply to business enterprises which:
(1) either (i) make investments which cause the
The Department of Commerce and Community Affairs shall determine whether the business enterprise meets the criteria prescribed in this Section. If the Department of Commerce and Community Affairs determines that such business enterprise meets the criteria, it shall issue a certificate of eligibility for exemption to the business enterprise in such form as is prescribed by the Department of Revenue. The Department of Commerce and Community Affairs shall act upon such certification requests within 60 days after receipt of the application, and shall file with the Department of Revenue a copy of each certificate of eligibility for exemption.
The Department of Commerce and Community Affairs shall have the power to promulgate rules and regulations to carry out the provisions of this Section including the power to define the amounts and types of eligible investments not specified in this Section which business enterprises must make in order to receive the exemptions stated in Sections 1d and 1e of this Act; and to require that any business enterprise that is granted a tax exemption repay the exempted tax if the business enterprise fails to comply with the terms and conditions of the certification.
Such certificate of eligibility for exemption shall be presented by the business enterprise to its supplier when making the initial purchase of tangible personal property for which an exemption is granted by Section 1d or Section 1e, or both, together with a certification by the business enterprise that such tangible personal property is exempt from taxation under Section 1d or Section 1e and by indicating the exempt status of each subsequent purchase on the face of the purchase order.
The Department of Commerce and Community Affairs shall determine the period during which such exemption from the taxes imposed under this Act is in effect which shall not exceed 20 years.
(Source: P.A. 86‑44; 86‑1456.)
(35 ILCS 120/1g) (from Ch. 120, par. 440g)
Sec. 1g. Application for exemption identification number. On or before December 31, 1986, except as hereinafter provided, each entity otherwise eligible under exemption (11) of Section 2‑5 of this Act and on and after the effective date of this amendatory Act of the 92nd General Assembly each entity otherwise eligible under exemption (9) of Section 2‑5 of this Act shall make application to the Department for an exemption identification number. In the case of a corporation, society, association, foundation, or institution organized and operated exclusively for charitable purposes and that has more than 50 subsidiary organizations in Illinois, the Department, in its sole discretion, may issue one exemption identification number to be used by the parent organization and each subsidiary organization.
Each exemption identification number or renewal number shall be valid for 5 years after the first day of the month following the month of issuance. Not less than 3 months before the expiration date, an application for renewal shall be filed.
Each application for an exemption identification number or a renewal number shall contain information and be accompanied by documentation as shall be requested by the Department.
(Source: P.A. 92‑35, eff. 7‑1‑01.)
(35 ILCS 120/1h) (from Ch. 120, par. 440h)
Sec. 1h. Upon request made on or after July 1, 1987, the Department shall furnish to any county or municipality a list containing the name of each corporation, society, association, foundation or institution organized and operated exclusively for charitable, religious or educational purposes, and each not‑for‑profit corporation, society, association, foundation, institution or organization which has no compensated officers or employees and which is organized and operated primarily for the recreation of persons 55 years of age or older, which had a valid exemption identification number on the first day of January or July, as the case may be, proceeding the date on which such request is received and which is located within the corporate limits of such municipality or the unincorporated territory of such county, except that the list need not include subsidiary organizations using an exemption identification number issued to its parent organization as provided by Section 1d of this Act.
(Source: P.A. 85‑293.)
(35 ILCS 120/1i) (from Ch. 120, par. 440i)
Sec. 1i. High Impact Service Facility means a facility used primarily for the sorting, handling and redistribution of mail, freight, cargo, or other parcels received from agents or employees of the handler or shipper for processing at a common location and redistribution to other employees or agents for delivery to an ultimate destination on an item‑by‑item basis, and which: (1) will make an investment in a business enterprise project of $100,000,000 dollars or more; (2) will cause the creation of at least 750 to 1,000 jobs or more in an enterprise zone established pursuant to the Illinois Enterprise Zone Act; and (3) is certified by the Department of Commerce and Community Affairs as contractually obligated to meet the requirements specified in divisions (1) and (2) of this paragraph within the time period as specified by the certification. Any business enterprise project applying for the exemption stated in this Section shall make application to the Department of Commerce and Community Affairs in such form and providing such information as may be prescribed by the Department of Commerce and Community Affairs.
The Department of Commerce and Community Affairs shall determine whether the business enterprise project meets the criteria prescribed in this Section. If the Department of Commerce and Community Affairs determines that such business enterprise project meets the criteria, it shall issue a certificate of eligibility for exemption to the business enterprise in such form as is prescribed by the Department of Revenue. The Department of Commerce and Community Affairs shall act upon such certification requests within 60 days after receipt of the application, and shall file with the Department of Revenue a copy of each certificate of eligibility for exemption.
The Department of Commerce and Community Affairs shall have the power to promulgate rules and regulations to carry out the provisions of this Section and to require that any business enterprise that is granted a tax exemption repay the exempted tax if the business enterprise fails to comply with the terms and conditions of the certification.
The certificate of eligibility for exemption shall be presented by the business enterprise to its supplier when making the initial purchase of machinery and equipment for which an exemption is granted by Section 1j of this Act, together with a certification by the business enterprise that such machinery and equipment is exempt from taxation under Section 1j of this Act and by indicating the exempt status of each subsequent purchase on the face of the purchase order.
The certification of eligibility for exemption shall be presented by the business enterprise to its supplier when making the purchase of jet fuel and petroleum products for which an exemption is granted by Section 1j.1 of this Act, together with a certification by the business enterprise that such jet fuel and petroleum product, are exempt from taxation under Section 1j.1 of this Act, and by indicating the exempt status of each subsequent purchase on the face of the purchase order.
The Department of Commerce and Community Affairs shall determine the period during which such exemption from the taxes imposed under this Act will remain in effect.
(Source: P.A. 90‑42, eff. 1‑1‑98.)
(35 ILCS 120/1j) (from Ch. 120, par. 440j)
Sec. 1j. Exemption ‑ Machinery or Equipment used in the operation of high impact service facilities. Subject to the provisions of Section 1i of this Act, machinery or equipment used in the operation of a high impact service facility, as defined in Section 1i of this Act, located within an enterprise zone established pursuant to the Illinois Enterprise Zone Act shall be exempt from the tax imposed by this Act. Machinery and equipment, new and replacement, shall include, but not be limited to: (i) motor driven heavy equipment not considered rolling stock which is used for the purpose of transporting parcels, machinery, or equipment, or trailers used for the shipment of parcels, and equipment used to maintain and provide in‑house services, within the confines of the facility, and (ii) automated machinery and equipment used for the purposes of transporting parcels within the facility, along with all components, parts, pieces, and computer software or hardware contained in the electronic control systems related thereto. The Department of Revenue shall promulgate such rules and regulations as necessary to further define machinery and equipment eligible for exemption in a high impact service facility.
(Source: P.A. 85‑1409.)
(35 ILCS 120/1j.1)
Sec. 1j.1. Exemption; jet fuel used in the operation of high impact service facilities. Subject to the provisions of Section 1i of this Act, jet fuel and petroleum products sold to and used in the conduct of its business of sorting, handling and redistribution of mail, freight, cargo or other parcels in the operation of a high impact service facility, as defined in Section 1i of this Act, located within an enterprise zone established pursuant to the Illinois Enterprise Zone Act shall be exempt from the tax imposed by this Act, provided that the business enterprise has waived its right to a tax exemption of the charges imposed under Section 9‑222.1 of the Public Utilities Act. The Department of Commerce and Community Affairs shall promulgate rules necessary to further define jet fuel and petroleum products sold to, used, and eligible for exemption in a high impact service facility. The minimum period for which an exemption from taxes is granted by this Section is 10 years, regardless of the duration of the enterprise zone in which the project is located.
(Source: P.A. 90‑42, eff. 1‑1‑98.)
(35 ILCS 120/1j.2)
Sec. 1j.2. Exceptions. High impact service facilities qualifying under this Act and seeking the exemption under 1j.1 shall be ineligible for the exemptions of taxes imposed under Section 9‑222.1 of the Public Utilities Act. High impact service facilities qualifying under this Act and seeking the exemption under Section 9‑222.1 of the Public Utilities Act shall be ineligible for the exemptions of taxes as described in Section 1j.1.
(Source: P.A. 90‑42, eff. 1‑1‑98.)
(35 ILCS 120/1k) (from Ch. 120, par. 440k)
Sec. 1k. Aircraft maintenance facility means a facility operated by an interstate carrier for hire that is used primarily for the maintenance, rebuilding or repair of aircraft, aircraft parts and auxiliary equipment owned or leased by that carrier and used by that carrier as rolling stock moving in interstate commerce, and which: (1) will make an investment by the interstate carrier for hire of $400,000,000 or more in an enterprise zone; (2) will cause the creation of at least 5,000 full‑time jobs in that enterprise zone; (3) is located in a county with population not less than 150,000 and not more than 200,000 and that contains 3 enterprise zones as of December 31, 1990; (4) enters into a legally binding agreement with the Department of Commerce and Community Affairs to comply with clauses (1) and (2) of this paragraph within a time period specified in the rules and regulations promulgated pursuant to this Section; and (5) is certified by the Department of Commerce and Community Affairs to be in compliance with clauses (1), (2), (3) and (4) of this Section. Any aircraft maintenance facility applying for the exemption stated in this Section shall make application to the Department of Commerce and Community Affairs in such form and providing such information as may be prescribed by the Department of Commerce and Community Affairs.
The Department of Commerce and Community Affairs shall determine whether the facility meets the criteria prescribed in this Section. If the Department of Commerce and Community Affairs determines that the facility meets the criteria, it shall issue a certificate of eligibility for exemption in the form prescribed by the Department of Revenue to the business enterprise operating the facility. The Department of Commerce and Community Affairs shall act upon certification request within 60 days after receipt of application, and shall file with the Department of Revenue a copy of each certificate of eligibility for exemption.
The Department of Commerce and Community Affairs shall promulgate rules and regulations to carry out the provisions of this Section, and to require that any business enterprise that is granted a tax exemption pay the exempted tax to the Department of Revenue if the business enterprise fails to comply with the terms and conditions of the certification, and pay all penalties and interest on that exempted tax as determined by the Department of Revenue.
The certificate of eligibility for exemption shall be presented by the business enterprise to its supplier when making the initial purchase of machinery and equipment for which an exemption is granted by Section 1m or Section 1n of this Act, or both, together with a certification by the business enterprise that the machinery and equipment is exempt from taxation under Section 1m or 1n of this Act. The exempt status, if any, of each subsequent purchase shall be indicated on the face of the purchase order.
(Source: P.A. 86‑1490.)
(35 ILCS 120/1m) (from Ch. 120, par. 440m)
Sec. 1m. Subject to the provisions of Section 1k of this Act, machinery and equipment used in the operation of an aircraft maintenance facility as defined in Section 1k, located within an enterprise zone shall be exempt from the tax imposed by this Act. The machinery and equipment exempted by this Section is limited to machinery and equipment used primarily to maintain, rebuild or repair aircraft used as rolling stock moving in interstate commerce for hire by the operator of the facility. The Department of Revenue shall promulgate any rules and regulations necessary to further define machinery and equipment eligible for exemption in an aircraft maintenance facility.
(Source: P.A. 86‑1490.)
(35 ILCS 120/1n) (from Ch. 120, par. 440n)
Sec. 1n. Subject to the provisions of Section 1k, all tangible personal property to be used or consumed, within an enterprise zone established pursuant to the Illinois Enterprise Zone Act, by any aircraft maintenance facility, directly in the process of maintaining, rebuilding or repairing aircraft is exempt from the tax imposed by this Act. The exemption includes repair and replacement parts for machinery and equipment used primarily in the process of maintaining, rebuilding or repairing aircraft, and also includes equipment, fuels, material and supplies for the maintenance, repair or operation of such machinery or equipment.
(Source: P.A. 86‑1490.)
(35 ILCS 120/1o)
Sec. 1o. Aircraft support center exemption.
(a) For the purposes of this Act, "aircraft support center" means a support center operated by a carrier for hire that is used primarily for the maintenance, rebuilding, or repair of aircraft, aircraft parts, and auxiliary equipment, and which carrier:
(1) will make an investment of $30,000,000 or more
The Department of Commerce and Community Affairs shall promulgate rules and regulations to carry out the provisions of this subsection and to require that any business operating an aircraft support center that is granted a tax exemption pay the exempted tax to the Department of Revenue if the business fails to comply with the terms and conditions of the certification and pay all penalties and interest on that exempted tax as determined by the Department of Revenue.
The certificate of eligibility for exemption shall be presented by the carrier operating an aircraft support center to its supplier when making the initial purchase of items for which an exemption is granted by this Section together with a certification by the business that the items are exempt from taxation under this Act. The exempt status, if any, of each subsequent purchase shall be indicated on the face of the purchase order.
(b) Subject to the provisions of this subsection, jet fuel and petroleum products used or consumed by any aircraft support center directly in the process of maintaining, rebuilding, or repairing aircraft is exempt from the tax imposed by this Act. The Department of Revenue shall promulgate any rules necessary to further define the items eligible for exemption.
(c) This Section is exempt from the provisions of Section 2‑70.
(Source: P.A. 90‑792, eff. 1‑1‑99.)
(35 ILCS 120/1p)
Sec. 1p. Building materials exemption; intermodal terminal facility areas. Each retailer that makes a qualified sale of building materials to be incorporated into real estate in a redevelopment project area within an intermodal terminal facility area in accordance with Section 11‑74.4‑3.1 of the Illinois Municipal Code by remodeling, rehabilitating, or new construction may deduct receipts from those sales when calculating the tax imposed by this Act. For purposes of this Section, "qualified sale" means a sale of building materials that will be incorporated into real estate as part of an industrial or commercial project for which a Certificate of Eligibility for Sales Tax Exemption has been issued by the corporate authorities of the municipality in which the building project is located. To document the exemption allowed under this Section, the retailer must obtain from the purchaser a copy of the Certificate of Eligibility for Sales Tax Exemption issued by the corporate authorities of the municipality in which the real estate into which the building materials will be incorporated is located. The Certificate of Eligibility for Sales Tax Exemption must contain all of the following:
(1) A statement that the commercial or industrial
(3) The signature of the chief executive officer of
The provisions of this Section are exempt from Section
(35 ILCS 120/2) (from Ch. 120, par. 441)
Sec. 2. Tax imposed. A tax is imposed upon persons engaged in the business of selling at retail tangible personal property, including computer software, and including photographs, negatives, and positives that are the product of photoprocessing, but not including products of photoprocessing produced for use in motion pictures for public commercial exhibition. Beginning January 1, 2001, prepaid telephone calling arrangements shall be considered tangible personal property subject to the tax imposed under this Act regardless of the form in which those arrangements may be embodied, transmitted, or fixed by any method now known or hereafter developed.
(Source: P.A. 91‑51, eff. 6‑30‑99; 91‑870, eff. 6‑22‑00.)
(35 ILCS 120/2‑5) (from Ch. 120, par. 441‑5)
Sec. 2‑5. Exemptions. Gross receipts from proceeds from the sale of the following tangible personal property are exempt from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used, including that manufactured on special order, certified by the purchaser to be used primarily for production agriculture or State or federal agricultural programs, including individual replacement parts for the machinery and equipment, including machinery and equipment purchased for lease, and including implements of husbandry defined in Section 1‑130 of the Illinois Vehicle Code, farm machinery and agricultural chemical and fertilizer spreaders, and nurse wagons required to be registered under Section 3‑809 of the Illinois Vehicle Code, but excluding other motor vehicles required to be registered under the Illinois Vehicle Code. Horticultural polyhouses or hoop houses used for propagating, growing, or overwintering plants shall be considered farm machinery and equipment under this item (2). Agricultural chemical tender tanks and dry boxes shall include units sold separately from a motor vehicle required to be licensed and units sold mounted on a motor vehicle required to be licensed, if the selling price of the tender is separately stated.
Farm machinery and equipment shall include precision farming equipment that is installed or purchased to be installed on farm machinery and equipment including, but not limited to, tractors, harvesters, sprayers, planters, seeders, or spreaders. Precision farming equipment includes, but is not limited to, soil testing sensors, computers, monitors, software, global positioning and mapping systems, and other such equipment.
Farm machinery and equipment also includes computers, sensors, software, and related equipment used primarily in the computer‑assisted operation of production agriculture facilities, equipment, and activities such as, but not limited to, the collection, monitoring, and correlation of animal and crop data for the purpose of formulating animal diets and agricultural chemicals. This item (7) is exempt from the provisions of Section 2‑70.
(3) Until July 1, 2003, distillation machinery and equipment, sold as a unit or kit, assembled or installed by the retailer, certified by the user to be used only for the production of ethyl alcohol that will be used for consumption as motor fuel or as a component of motor fuel for the personal use of the user, and not subject to sale or resale.
(4) Until July 1, 2003 and beginning again September 1, 2004, graphic arts machinery and equipment, including repair and replacement parts, both new and used, and including that manufactured on special order or purchased for lease, certified by the purchaser to be used primarily for graphic arts production. Equipment includes chemicals or chemicals acting as catalysts but only if the chemicals or chemicals acting as catalysts effect a direct and immediate change upon a graphic arts product.
(5) A motor vehicle of the first division, a motor vehicle of the second division that is a self‑contained motor vehicle designed or permanently converted to provide living quarters for recreational, camping, or travel use, with direct walk through access to the living quarters from the driver's seat, or a motor vehicle of the second division that is of the van configuration designed for the transportation of not less than 7 nor more than 16 passengers, as defined in Section 1‑146 of the Illinois Vehicle Code, that is used for automobile renting, as defined in the Automobile Renting Occupation and Use Tax Act.
(6) Personal property sold by a teacher‑sponsored student organization affiliated with an elementary or secondary school located in Illinois.
(7) Until July 1, 2003, proceeds of that portion of the selling price of a passenger car the sale of which is subject to the Replacement Vehicle Tax.
(8) Personal property sold to an Illinois county fair association for use in conducting, operating, or promoting the county fair.
(9) Personal property sold to a not‑for‑profit arts or cultural organization that establishes, by proof required by the Department by rule, that it has received an exemption under Section 501(c)(3) of the Internal Revenue Code and that is organized and operated primarily for the presentation or support of arts or cultural programming, activities, or services. These organizations include, but are not limited to, music and dramatic arts organizations such as symphony orchestras and theatrical groups, arts and cultural service organizations, local arts councils, visual arts organizations, and media arts organizations. On and after the effective date of this amendatory Act of the 92nd General Assembly, however, an entity otherwise eligible for this exemption shall not make tax‑free purchases unless it has an active identification number issued by the Department.
(10) Personal property sold by a corporation, society, association, foundation, institution, or organization, other than a limited liability company, that is organized and operated as a not‑for‑profit service enterprise for the benefit of persons 65 years of age or older if the personal property was not purchased by the enterprise for the purpose of resale by the enterprise.
(11) Personal property sold to a governmental body, to a corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes, or to a not‑for‑profit corporation, society, association, foundation, institution, or organization that has no compensated officers or employees and that is organized and operated primarily for the recreation of persons 55 years of age or older. A limited liability company may qualify for the exemption under this paragraph only if the limited liability company is organized and operated exclusively for educational purposes. On and after July 1, 1987, however, no entity otherwise eligible for this exemption shall make tax‑free purchases unless it has an active identification number issued by the Department.
(12) Tangible personal property sold to interstate carriers for hire for use as rolling stock moving in interstate commerce or to lessors under leases of one year or longer executed or in effect at the time of purchase by interstate carriers for hire for use as rolling stock moving in interstate commerce and equipment operated by a telecommunications provider, licensed as a common carrier by the Federal Communications Commission, which is permanently installed in or affixed to aircraft moving in interstate commerce.
(12‑5) On and after July 1, 2003 and through June 30, 2004, motor vehicles of the second division with a gross vehicle weight in excess of 8,000 pounds that are subject to the commercial distribution fee imposed under Section 3‑815.1 of the Illinois Vehicle Code. Beginning on July 1, 2004 and through June 30, 2005, the use in this State of motor vehicles of the second division: (i) with a gross vehicle weight rating in excess of 8,000 pounds; (ii) that are subject to the commercial distribution fee imposed under Section 3‑815.1 of the Illinois Vehicle Code; and (iii) that are primarily used for commercial purposes. Through June 30, 2005, this exemption applies to repair and replacement parts added after the initial purchase of such a motor vehicle if that motor vehicle is used in a manner that would qualify for the rolling stock exemption otherwise provided for in this Act. For purposes of this paragraph, "used for commercial purposes" means the transportation of persons or property in furtherance of any commercial or industrial enterprise whether for‑hire or not.
(13) Proceeds from sales to owners, lessors, or shippers of tangible personal property that is utilized by interstate carriers for hire for use as rolling stock moving in interstate commerce and equipment operated by a telecommunications provider, licensed as a common carrier by the Federal Communications Commission, which is permanently installed in or affixed to aircraft moving in interstate commerce.
(14) Machinery and equipment that will be used by the purchaser, or a lessee of the purchaser, primarily in the process of manufacturing or assembling tangible personal property for wholesale or retail sale or lease, whether the sale or lease is made directly by the manufacturer or by some other person, whether the materials used in the process are owned by the manufacturer or some other person, or whether the sale or lease is made apart from or as an incident to the seller's engaging in the service occupation of producing machines, tools, dies, jigs, patterns, gauges, or other similar items of no commercial value on special order for a particular purchaser.
(15) Proceeds of mandatory service charges separately stated on customers' bills for purchase and consumption of food and beverages, to the extent that the proceeds of the service charge are in fact turned over as tips or as a substitute for tips to the employees who participate directly in preparing, serving, hosting or cleaning up the food or beverage function with respect to which the service charge is imposed.
(16) Petroleum products sold to a purchaser if the seller is prohibited by federal law from charging tax to the purchaser.
(17) Tangible personal property sold to a common carrier by rail or motor that receives the physical possession of the property in Illinois and that transports the property, or shares with another common carrier in the transportation of the property, out of Illinois on a standard uniform bill of lading showing the seller of the property as the shipper or consignor of the property to a destination outside Illinois, for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or silver coinage issued by the State of Illinois, the government of the United States of America, or the government of any foreign country, and bullion.
(19) Until July 1 2003, oil field exploration, drilling, and production equipment, including (i) rigs and parts of rigs, rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and tubular goods, including casing and drill strings, (iii) pumps and pump‑jack units, (iv) storage tanks and flow lines, (v) any individual replacement part for oil field exploration, drilling, and production equipment, and (vi) machinery and equipment purchased for lease; but excluding motor vehicles required to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment, including repair and replacement parts, both new and used, including that manufactured on special order, certified by the purchaser to be used primarily for photoprocessing, and including photoprocessing machinery and equipment purchased for lease.
(21) Until July 1, 2003, coal exploration, mining, offhighway hauling, processing, maintenance, and reclamation equipment, including replacement parts and equipment, and including equipment purchased for lease, but excluding motor vehicles required to be registered under the Illinois Vehicle Code.
(22) Fuel and petroleum products sold to or used by an air carrier, certified by the carrier to be used for consumption, shipment, or storage in the conduct of its business as an air common carrier, for a flight destined for or returning from a location or locations outside the United States without regard to previous or subsequent domestic stopovers.
(23) A transaction in which the purchase order is received by a florist who is located outside Illinois, but who has a florist located in Illinois deliver the property to the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships, barges, or vessels that are used primarily in or for the transportation of property or the conveyance of persons for hire on rivers bordering on this State if the fuel is delivered by the seller to the purchaser's barge, ship, or vessel while it is afloat upon that bordering river.
(25) Except as provided in item (25‑5) of this Section, a motor vehicle sold in this State to a nonresident even though the motor vehicle is delivered to the nonresident in this State, if the motor vehicle is not to be titled in this State, and if a drive‑away permit is issued to the motor vehicle as provided in Section 3‑603 of the Illinois Vehicle Code or if the nonresident purchaser has vehicle registration plates to transfer to the motor vehicle upon returning to his or her home state. The issuance of the drive‑away permit or having the out‑of‑state registration plates to be transferred is prima facie evidence that the motor vehicle will not be titled in this State.
(25‑5) The exemption under item (25) does not apply if the state in which the motor vehicle will be titled does not allow a reciprocal exemption for a motor vehicle sold and delivered in that state to an Illinois resident but titled in Illinois. The tax collected under this Act on the sale of a motor vehicle in this State to a resident of another state that does not allow a reciprocal exemption shall be imposed at a rate equal to the state's rate of tax on taxable property in the state in which the purchaser is a resident, except that the tax shall not exceed the tax that would otherwise be imposed under this Act. At the time of the sale, the purchaser shall execute a statement, signed under penalty of perjury, of his or her intent to title the vehicle in the state in which the purchaser is a resident within 30 days after the sale and of the fact of the payment to the State of Illinois of tax in an amount equivalent to the state's rate of tax on taxable property in his or her state of residence and shall submit the statement to the appropriate tax collection agency in his or her state of residence. In addition, the retailer must retain a signed copy of the statement in his or her records. Nothing in this item shall be construed to require the removal of the vehicle from this state following the filing of an intent to title the vehicle in the purchaser's state of residence if the purchaser titles the vehicle in his or her state of residence within 30 days after the date of sale. The tax collected under this Act in accordance with this item (25‑5) shall be proportionately distributed as if the tax were collected at the 6.25% general rate imposed under this Act.
(26) Semen used for artificial insemination of livestock for direct agricultural production.
(27) Horses, or interests in horses, registered with and meeting the requirements of any of the Arabian Horse Club Registry of America, Appaloosa Horse Club, American Quarter Horse Association, United States Trotting Association, or Jockey Club, as appropriate, used for purposes of breeding or racing for prizes.
(28) Computers and communications equipment utilized for any hospital purpose and equipment used in the diagnosis, analysis, or treatment of hospital patients sold to a lessor who leases the equipment, under a lease of one year or longer executed or in effect at the time of the purchase, to a hospital that has been issued an active tax exemption identification number by the Department under Section 1g of this Act.
(29) Personal property sold to a lessor who leases the property, under a lease of one year or longer executed or in effect at the time of the purchase, to a governmental body that has been issued an active tax exemption identification number by the Department under Section 1g of this Act.
(30) Beginning with taxable years ending on or after December 31, 1995 and ending with taxable years ending on or before December 31, 2004, personal property that is donated for disaster relief to be used in a State or federally declared disaster area in Illinois or bordering Illinois by a manufacturer or retailer that is registered in this State to a corporation, society, association, foundation, or institution that has been issued a sales tax exemption identification number by the Department that assists victims of the disaster who reside within the declared disaster area.
(31) Beginning with taxable years ending on or after December 31, 1995 and ending with taxable years ending on or before December 31, 2004, personal property that is used in the performance of infrastructure repairs in this State, including but not limited to municipal roads and streets, access roads, bridges, sidewalks, waste disposal systems, water and sewer line extensions, water distribution and purification facilities, storm water drainage and retention facilities, and sewage treatment facilities, resulting from a State or federally declared disaster in Illinois or bordering Illinois when such repairs are initiated on facilities located in the declared disaster area within 6 months after the disaster.
(32) Beginning July 1, 1999, game or game birds sold at a "game breeding and hunting preserve area" or an "exotic game hunting area" as those terms are used in the Wildlife Code or at a hunting enclosure approved through rules adopted by the Department of Natural Resources. This paragraph is exempt from the provisions of Section 2‑70.
(33) A motor vehicle, as that term is defined in Section 1‑146 of the Illinois Vehicle Code, that is donated to a corporation, limited liability company, society, association, foundation, or institution that is determined by the Department to be organized and operated exclusively for educational purposes. For purposes of this exemption, "a corporation, limited liability company, society, association, foundation, or institution organized and operated exclusively for educational purposes" means all tax‑supported public schools, private schools that offer systematic instruction in useful branches of learning by methods common to public schools and that compare favorably in their scope and intensity with the course of study presented in tax‑supported schools, and vocational or technical schools or institutes organized and operated exclusively to provide a course of study of not less than 6 weeks duration and designed to prepare individuals to follow a trade or to pursue a manual, technical, mechanical, industrial, business, or commercial occupation.
(34) Beginning January 1, 2000, personal property, including food, purchased through fundraising events for the benefit of a public or private elementary or secondary school, a group of those schools, or one or more school districts if the events are sponsored by an entity recognized by the school district that consists primarily of volunteers and includes parents and teachers of the school children. This paragraph does not apply to fundraising events (i) for the benefit of private home instruction or (ii) for which the fundraising entity purchases the personal property sold at the events from another individual or entity that sold the property for the purpose of resale by the fundraising entity and that profits from the sale to the fundraising entity. This paragraph is exempt from the provisions of Section 2‑70.
(35) Beginning January 1, 2000 and through December 31, 2001, new or used automatic vending machines that prepare and serve hot food and beverages, including coffee, soup, and other items, and replacement parts for these machines. Beginning January 1, 2002 and through June 30, 2003, machines and parts for machines used in commercial, coin‑operated amusement and vending business if a use or occupation tax is paid on the gross receipts derived from the use of the commercial, coin‑operated amusement and vending machines. This paragraph is exempt from the provisions of Section 2‑70.
(35‑5) Food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption) and prescription and nonprescription medicines, drugs, medical appliances, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use, when purchased for use by a person receiving medical assistance under Article 5 of the Illinois Public Aid Code who resides in a licensed long‑term care facility, as defined in the Nursing Home Care Act.
(36) Beginning August 2, 2001, computers and communications equipment utilized for any hospital purpose and equipment used in the diagnosis, analysis, or treatment of hospital patients sold to a lessor who leases the equipment, under a lease of one year or longer executed or in effect at the time of the purchase, to a hospital that has been issued an active tax exemption identification number by the Department under Section 1g of this Act. This paragraph is exempt from the provisions of Section 2‑70.
(37) Beginning August 2, 2001, personal property sold to a lessor who leases the property, under a lease of one year or longer executed or in effect at the time of the purchase, to a governmental body that has been issued an active tax exemption identification number by the Department under Section 1g of this Act. This paragraph is exempt from the provisions of Section 2‑70.
(38) Beginning on January 1, 2002, tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois who will, upon receipt of the property in Illinois, temporarily store the property in Illinois (i) for the purpose of subsequently transporting it outside this State for use or consumption thereafter solely outside this State or (ii) for the purpose of being processed, fabricated, or manufactured into, attached to, or incorporated into other tangible personal property to be transported outside this State and thereafter used or consumed solely outside this State. The Director of Revenue shall, pursuant to rules adopted in accordance with the Illinois Administrative Procedure Act, issue a permit to any taxpayer in good standing with the Department who is eligible for the exemption under this paragraph (38). The permit issued under this paragraph (38) shall authorize the holder, to the extent and in the manner specified in the rules adopted under this Act, to purchase tangible personal property from a retailer exempt from the taxes imposed by this Act. Taxpayers shall maintain all necessary books and records to substantiate the use and consumption of all such tangible personal property outside of the State of Illinois.
(Source: P.A. 92‑16, eff. 6‑28‑01; 92‑35, eff. 7‑1‑01; 92‑227, eff. 8‑2‑01; 92‑337, eff. 8‑10‑01; 92‑484, eff. 8‑23‑01; 92‑488, eff. 8‑23‑01; 92‑651, eff. 7‑11‑02; 92‑680, eff. 7‑16‑02; 93‑23, eff. 6‑20‑03; 93‑24, eff. 6‑20‑03; 93‑840, eff. 7‑30‑04; 93‑1033, eff. 9‑3‑04; 93‑1068, eff. 1‑15‑05.)
(35 ILCS 120/2‑5.5)
Sec. 2‑5.5. Food and drugs sold by not‑for‑profit organizations; exemption. The Department shall not collect the 1% tax imposed on food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption) and prescription and nonprescription medicines, drugs, medical appliances, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use from any not‑for‑profit organization, that sells food in a food distribution program at a price below the retail cost of the food to purchasers who, as a condition of participation in the program, are required to perform community service, located in a county or municipality that notifies the Department, in writing, that the county or municipality does not want the tax to be collected from any of such organizations located in the county or municipality.
(Source: P.A. 88‑374.)
(35 ILCS 120/2‑7)
Sec. 2‑7. Aggregate manufacturing exemption. Through June 30, 2003, gross receipts from proceeds from the sale of aggregate exploration, mining, offhighway hauling, processing, maintenance, and reclamation equipment, including replacement parts and equipment, and including equipment purchased for lease, but excluding motor vehicles required to be registered under the Illinois Vehicle Code, are exempt from the tax imposed by this Act.
(Source: P.A. 92‑603, eff. 6‑28‑02; 93‑24, eff. 6‑20‑03.)
(35 ILCS 120/2‑10) (from Ch. 120, par. 441‑10)
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%.
Within 14 days after the effective date of this amendatory Act of the 91st General Assembly, 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 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 December 31, 2013, and (iii) 100% of the proceeds of sales made thereafter. 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 majority blended ethanol fuel, as defined in the Use Tax Act, 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, 2013 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, 2013 and (ii) 100% of the proceeds of sales made thereafter. 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 100% 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, 2013 but applies to 100% of the proceeds of sales made thereafter.
With respect to food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption) and prescription and nonprescription medicines, drugs, medical appliances, modifications to a motor vehicle for the purpose of rendering it usable by a disabled person, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use, the tax is imposed at the rate of 1%. For the purposes of this Section, 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. "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, "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.
(Source: P.A. 93‑17, eff. 6‑11‑03.)
(35 ILCS 120/2‑10.5)
Sec. 2‑10.5. Direct payment program; purchaser's providing of permit to retailer; retailer relieved of collecting use tax and local retailers' occupation tax reimbursements from purchaser; direct payment of retailers' occupation tax and local retailers' occupation tax by purchaser.
(a) Beginning on July 1, 2001 there is established in this State a Direct Payment Program to be administered by the Department. The Department shall issue a Direct Pay Permit to applicants who have been approved to participate in the Direct Payment Program. Each person applying to participate in the Direct Payment Program must demonstrate (1) the applicant's ability to comply with the retailers' occupation tax laws and the use tax laws in effect in this State and that the applicant's accounting system will reflect the proper amount of tax due, (2) that the applicant has a valid business purpose for participating in the Direct Payment Program, and (3) how the applicant's participation in the Direct Payment Program will benefit tax compliance. Application shall be made on forms provided by the Department and shall contain information as the Department may reasonably require. The Department shall approve or deny an applicant within 90 days after the Department's receipt of the application, unless the Department makes a written request for additional information from the applicant.
(b) A person who has been approved for the Direct Payment Program and who has been issued a Direct Pay Permit by the Department is relieved of paying tax to a retailer when purchasing tangible personal property for use or consumption, except as provided in subsection (d), by providing that retailer a copy of that Direct Pay Permit. A retailer who accepts a copy of a customer's Direct Pay Permit is relieved of the obligation to remit the tax imposed by this Act on the transaction. References in this Section to "the tax imposed by this Act" include any local occupation taxes administered by the Department that would be incurred on the retail sale.
(c) Once the holder of a Direct Pay Permit uses that Permit to relieve the Permit holder from paying tax to a particular retailer, the holder must use its Permit for all purchases, except as provided in subsection (d), from that retailer for so long as the Permit is valid.
(d) Direct Pay Permits are not valid and shall not be used for sales or purchases of:
(1) food or beverage;
(2) tangible personal property required to be titled
(f) A Direct Pay Permit is valid until it is revoked by the Department or until the holder notifies the Department in writing that the holder is withdrawing from the Direct Payment Program. A Direct Pay Permit can be revoked by the Department, after notice and hearing, if the holder violates any provision of this Act, any provision of the Illinois Use Tax Act, or any provision of any Act imposing a local retailers' occupation tax administered by the Department.
(g) The holder of a Direct Pay Permit who has been relieved of paying tax to a retailer on a purchase for use or consumption by representing to that retailer that it would pay all applicable taxes directly to the Department shall pay those taxes to the Department not later than the 20th day of the month following the month in which the purchase was made. Permit holders making such purchases are subject to all provisions of this Act, and the tax must be reported and paid as retailers' occupation tax in the same manner that the retailer from whom the purchases were made would have reported and paid it, including any local retailers' occupation taxes applicable to that retail sale. Notwithstanding any other provision of this Act, Permit holders shall make all payments to the Department through the use of electronic funds transfer.
(Source: P.A. 92‑484, eff. 8‑23‑01.)
(35 ILCS 120/2‑15) (from Ch. 120, par. 441‑15)
Sec. 2‑15. Photoprocessing. For purposes of the tax imposed on photographs, negatives, and positives by this Act, "photoprocessing" includes, but is not limited to, developing films, positives, negatives, and transparencies, and tinting, coloring, making, and enlarging prints. Photoprocessing does not include color separation, typesetting, and platemaking by photographic means in the graphic arts industry and does not include any procedure, process, or activity connected with the creation of the images on the film from which the negatives, positives, or photographs are derived. The charge for in‑house photoprocessing may not be less than the photoprocessor's cost price of materials. In transactions in which products of photoprocessing are sold in conjunction with other services, if a charge for the photoprocessing component is not separately stated, tax is imposed on 50% of the entire selling price unless the sale is made by a professional photographer, in which case tax is imposed on 10% of the entire selling price.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑20) (from Ch. 120, par. 441‑20)
Sec. 2‑20. Bullion. For purposes of this Act, "bullion" means gold, silver, or platinum in a bulk state with a purity of not less than 980 parts per 1,000.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑25) (from Ch. 120, par. 441‑25)
Sec. 2‑25. Computer software. For the purposes of this Act, "computer software" means a set of statements, data, or instructions to be used directly or indirectly in a computer in order to bring about a certain result in any form in which those statements, data, or instructions may be embodied, transmitted, or fixed, by any method now known or hereafter developed, regardless of whether the statements, data, or instructions are capable of being perceived by or communicated to humans, and includes prewritten or canned software that is held for repeated sale or lease, and all associated documentation and materials, if any, whether contained on magnetic tapes, discs, cards, or other devices or media, but does not include software that is adapted to specific individualized requirements of a purchaser, custom‑made and modified software designed for a particular or limited use by a purchaser, or software used to operate exempt machinery and equipment used in the process of manufacturing or assembling tangible personal property for wholesale or retail sale or lease.
For the purposes of this Act, computer software shall be considered to be tangible personal property.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑27)
Sec. 2‑27. Prepaid telephone calling arrangements. "Prepaid telephone calling arrangements" mean the right to exclusively purchase telephone or telecommunications services that must be paid for in advance and enable the origination of one or more intrastate, interstate, or international telephone calls or other telecommunications using an access number, an authorization code, or both, whether manually or electronically dialed, for which payment to a retailer must be made in advance, provided that, unless recharged, no further service is provided once that prepaid amount of service has been consumed. Prepaid telephone calling arrangements include the recharge of a prepaid calling arrangement. For purposes of this Section, "recharge" means the purchase of additional prepaid telephone or telecommunications services whether or not the purchaser acquires a different access number or authorization code. For purposes of this Section, "telecommunications" means that term as defined in Section 2 of the Telecommunications Excise Tax Act. "Prepaid telephone calling arrangement" does not include an arrangement whereby the service provider reflects the amount of the purchase as a credit on an account for a customer under an existing subscription plan.
(Source: P.A. 91‑870, eff. 6‑22‑00.)
(35 ILCS 120/2‑30) (from Ch. 120, par. 441‑30)
Sec. 2‑30. Graphic arts production. For purposes of this Act, "graphic arts production" means printing, including ink jet printing, by one or more of the processes described in Groups 323110 through 323122 of Subsector 323, Groups 511110 through 511199 of Subsector 511, and Group 512230 of Subsector 512 of the North American Industry Classification System published by the U.S. Office of Management and Budget, 1997 edition. Graphic arts production does not include (i) the transfer of images onto paper or other tangible personal property by means of photocopying or (ii) final printed products in electronic or audio form, including the production of software or audio‑books.
(Source: P.A. 91‑51, eff. 6‑30‑99; 91‑541, eff. 8‑13‑99.)
(35 ILCS 120/2‑35) (from Ch. 120, par. 441‑35)
Sec. 2‑35. Production agriculture. For purposes of this Act, "production agriculture" means the raising of or the propagation of livestock; crops for sale for human consumption; crops for livestock consumption; and production seed stock grown for the propagation of feed grains and the husbandry of animals or for the purpose of providing a food product, including the husbandry of blood stock as a main source of providing a food product. "Production agriculture" also means animal husbandry, floriculture, aquaculture, horticulture, and viticulture.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑40) (from Ch. 120, par. 441‑40)
Sec. 2‑40. Purchaser refunds. If a seller collects an amount (however designated) that purports to reimburse the seller for retailers' occupation tax liability measured by receipts that are not subject to retailers' occupation tax, or if a seller, in collecting an amount (however designated) that purports to reimburse the seller for retailers' occupation tax liability measured by receipts that are subject to tax under this Act, collects more from the purchaser than the seller's retailers' occupation tax liability on the transaction, the purchaser shall have a legal right to claim a refund of that amount from the seller. If, however, that amount is not refunded to the purchaser for any reason, the seller is liable to pay that amount to the Department. This paragraph does not apply to an amount collected by the seller as reimbursement for the seller's retailers' occupation tax liability on receipts that are subject to tax under this Act as long as the collection is made in compliance with the tax collection brackets prescribed by the Department in its rules and regulations.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑45) (from Ch. 120, par. 441‑45)
Sec. 2‑45. Manufacturing and assembly exemption. The manufacturing and assembly machinery and equipment exemption includes machinery and equipment that replaces machinery and equipment in an existing manufacturing facility as well as machinery and equipment that are for use in an expanded or new manufacturing facility.
The machinery and equipment exemption also includes machinery and equipment used in the general maintenance or repair of exempt machinery and equipment or for in‑house manufacture of exempt machinery and equipment. For the purposes of this exemption, terms have the following meanings:
(1) "Manufacturing process" means the production of
(Source: P.A. 91‑51, eff. 6‑30‑99; 92‑484, eff. 8‑23‑01.)
(35 ILCS 120/2‑50) (from Ch. 120, par. 441‑50)
Sec. 2‑50. Rolling stock exemption. Except as provided in Section 2‑51 of this Act, the rolling stock exemption applies to rolling stock used by an interstate carrier for hire, even just between points in Illinois, if the rolling stock transports, for hire, persons whose journeys or property whose shipments originate or terminate outside Illinois.
(Source: P.A. 93‑23, eff. 6‑20‑03.)
(35 ILCS 120/2‑51)
Sec. 2‑51. Motor vehicles; trailers; use as rolling stock definition.
(a) Through June 30, 2003, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 means for motor vehicles, as defined in Section 1‑146 of the Illinois Vehicle Code, and trailers, as defined in Section 1‑209 of the Illinois Vehicle Code, when on 15 or more occasions in a 12‑month period the motor vehicle and trailer has carried persons or property for hire in interstate commerce, even just between points in Illinois, if the motor vehicle and trailer transports persons whose journeys or property whose shipments originate or terminate outside Illinois. This definition applies to all property purchased for the purpose of being attached to those motor vehicles or trailers as a part thereof.
(b) On and after July 1, 2003 and through June 30, 2004, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 occurs for motor vehicles, as defined in Section 1‑146 of the Illinois Vehicle Code, when during a 12‑month period the rolling stock has carried persons or property for hire in interstate commerce for 51% of its total trips and transports persons whose journeys or property whose shipments originate or terminate outside Illinois. Trips that are only between points in Illinois shall not be counted as interstate trips when calculating whether the tangible personal property qualifies for the exemption but such trips shall be included in total trips taken.
(c) Beginning July 1, 2004, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 occurs for motor vehicles, as defined in Section 1‑146 of the Illinois Vehicle Code, when during a 12‑month period the rolling stock has carried persons or property for hire in interstate commerce for greater than 50% of its total trips for that period or for greater than 50% of its total miles for that period. The person claiming the exemption shall make an election at the time of purchase to use either the trips or mileage method. Persons who purchased motor vehicles prior to July 1, 2004 shall make an election to use either the trips or mileage method and document that election in their books and records. If no election is made under this subsection to use the trips or mileage method, the person shall be deemed to have chosen the mileage method. Any election to use either the trips or mileage method will remain in effect for that motor vehicle for any period for which the Department may issue a notice of tax liability under this Act.
For purposes of determining qualifying trips or miles, motor vehicles that carry persons or property for hire, even just between points in Illinois, will be considered used for hire in interstate commerce if the motor vehicle transports persons whose journeys or property whose shipments originate or terminate outside Illinois. The exemption for motor vehicles used as rolling stock moving in interstate commerce may be claimed only for motor vehicles whose gross vehicle weight rating exceeds 16,000 pounds. This definition applies to all property purchased for the purpose of being attached to those motor vehicles as a part thereof.
(d) Beginning July 1, 2004, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 occurs for trailers, as defined in Section 1‑209 of the Illinois Vehicle Code, semitrailers as defined in Section 1‑187 of the Illinois Vehicle Code, and pole trailers as defined in Section 1‑161 of the Illinois Vehicle Code, when during a 12‑month period the rolling stock has carried persons or property for hire in interstate commerce for greater than 50% of its total trips for that period or for greater than 50% of its total miles for that period. The person claiming the exemption for a trailer or trailers that will not be dedicated to a motor vehicle or group of motor vehicles shall make an election at the time of purchase to use either the trips or mileage method. Persons who purchased trailers prior to July 1, 2004 that are not dedicated to a motor vehicle or group of motor vehicles shall make an election to use either the trips or mileage method and document that election in their books and records. If no election is made under this subsection to use the trips or mileage method, the person shall be deemed to have chosen the mileage method. Any election to use either the trips or mileage method will remain in effect for that trailer for any period for which the Department may issue a notice of tax liability under this Act.
For purposes of determining qualifying trips or miles, trailers, semitrailers, or pole trailers that carry property for hire, even just between points in Illinois, will be considered used for hire in interstate commerce if the trailers, semitrailers, or pole trailers transport property whose shipments originate or terminate outside Illinois. This definition applies to all property purchased for the purpose of being attached to those trailers, semitrailers, or pole trailers as a part thereof. In lieu of a person providing documentation regarding the qualifying use of each individual trailer, semitrailer, or pole trailer, that person may document such qualifying use by providing documentation of the following:
(1) If a trailer, semitrailer, or pole trailer is
(35 ILCS 120/2‑55) (from Ch. 120, par. 441‑55)
Sec. 2‑55. Serviceman transfer. Tangible personal property purchased by a serviceman, as defined in Section 2 of the Service Occupation Tax Act, is subject to the tax imposed by this Act when purchased for transfer by the serviceman incidental to completion of a maintenance agreement.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑60) (from Ch. 120, par. 441‑60)
Sec. 2‑60. Interstate commerce exemption. No tax is imposed under this Act upon the privilege of engaging in a business in interstate commerce or otherwise, when the business may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑65) (from Ch. 120, par. 441‑65)
Sec. 2‑65. Liability because of amendatory Act. Revisions in Section 2 (now Sections 2 through 2‑65) by Public Act 85‑1135 do not affect tax liability that arose before January 1, 1990.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑70)
Sec. 2‑70. Sunset of exemptions, credits, and deductions. The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this amendatory Act of 1994 shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.
(Source: P.A. 88‑660, eff. 9‑16‑94.)
(35 ILCS 120/2a) (from Ch. 120, par. 441a)
Sec. 2a. It is unlawful for any person to engage in the business of selling tangible personal property at retail in this State without a certificate of registration from the Department. Application for a certificate of registration shall be made to the Department upon forms furnished by it. Each such application shall be signed and verified and shall state: (1) the name and social security number of the applicant; (2) the address of his principal place of business; (3) the address of the principal place of business from which he engages in the business of selling tangible personal property at retail in this State and the addresses of all other places of business, if any (enumerating such addresses, if any, in a separate list attached to and made a part of the application), from which he engages in the business of selling tangible personal property at retail in this State; (4) the name and address of the person or persons who will be responsible for filing returns and payment of taxes due under this Act; (5) in the case of a corporation, the name, title, and social security number of each corporate officer; (6) in the case of a limited liability company, the name, social security number, and FEIN number of each manager and member; and (7) such other information as the Department may reasonably require. The application shall contain an acceptance of responsibility signed by the person or persons who will be responsible for filing returns and payment of the taxes due under this Act. If the applicant will sell tangible personal property at retail through vending machines, his application to register shall indicate the number of vending machines to be so operated; and thereafter, he shall notify the Department by January 31 of the number of vending machines which such person was using in his business of selling tangible personal property at retail on the preceding December 31.
The Department may deny a certificate of registration to any applicant if the owner, any partner, any manager or member of a limited liability company, or a corporate officer of the applicant, is or has been the owner, a partner, a manager or member of a limited liability company, or a corporate officer, of another retailer that is in default for moneys due under this Act.
Every applicant for a certificate of registration hereunder shall, at the time of filing such application, furnish a bond from a surety company authorized to do business in the State of Illinois, or an irrevocable bank letter of credit or a bond signed by 2 personal sureties who have filed, with the Department, sworn statements disclosing net assets equal to at least 3 times the amount of the bond to be required of such applicant, or a bond secured by an assignment of a bank account or certificate of deposit, stocks or bonds, conditioned upon the applicant paying to the State of Illinois all moneys becoming due under this Act and under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution. The Department shall fix the amount of such security in each case, taking into consideration the amount of money expected to become due from the applicant under this Act and under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution. The amount of security required by the Department shall be such as, in its opinion, will protect the State of Illinois against failure to pay the amount which may become due from the applicant under this Act and under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution, but the amount of the security required by the Department shall not exceed three times the amount of the applicant's average monthly tax liability, or $50,000.00, whichever amount is lower.
No certificate of registration under this Act shall be issued by the Department until the applicant provides the Department with satisfactory security as herein provided for.
Upon receipt of the application for certificate of registration in proper form, and upon approval by the Department of the security furnished by the applicant, the Department shall issue to such applicant a certificate of registration which shall permit the person to whom it is issued to engage in the business of selling tangible personal property at retail in this State. The certificate of registration shall be conspicuously displayed at the place of business which the person so registered states in his application to be the principal place of business from which he engages in the business of selling tangible personal property at retail in this State.
No certificate of registration issued to a taxpayer who files returns required by this Act on a monthly basis shall be valid after the expiration of 5 years from the date of its issuance or last renewal. The expiration date of a sub‑certificate of registration shall be that of the certificate of registration to which the sub‑certificate relates. A certificate of registration shall automatically be renewed, subject to revocation as provided by this Act, for an additional 5 years from the date of its expiration unless otherwise notified by the Department as provided by this paragraph. Where a taxpayer to whom a certificate of registration is issued under this Act is in default to the State of Illinois for delinquent returns or for moneys due under this Act or any other State tax law or municipal or county ordinance administered or enforced by the Department, the Department shall, not less than 120 days before the expiration date of such certificate of registration, give notice to the taxpayer to whom the certificate was issued of the account period of the delinquent returns, the amount of tax, penalty and interest due and owing from the taxpayer, and that the certificate of registration shall not be automatically renewed upon its expiration date unless the taxpayer, on or before the date of expiration, has filed and paid the delinquent returns or paid the defaulted amount in full. A taxpayer to whom such a notice is issued shall be deemed an applicant for renewal. The Department shall promulgate regulations establishing procedures for taxpayers who file returns on a monthly basis but desire and qualify to change to a quarterly or yearly filing basis and will no longer be subject to renewal under this Section, and for taxpayers who file returns on a yearly or quarterly basis but who desire or are required to change to a monthly filing basis and will be subject to renewal under this Section.
The Department may in its discretion approve renewal by an applicant who is in default if, at the time of application for renewal, the applicant files all of the delinquent returns or pays to the Department such percentage of the defaulted amount as may be determined by the Department and agrees in writing to waive all limitations upon the Department for collection of the remaining defaulted amount to the Department over a period not to exceed 5 years from the date of renewal of the certificate; however, no renewal application submitted by an applicant who is in default shall be approved if the immediately preceding renewal by the applicant was conditioned upon the installment payment agreement described in this Section. The payment agreement herein provided for shall be in addition to and not in lieu of the security required by this Section of a taxpayer who is no longer considered a prior continuous compliance taxpayer. The execution of the payment agreement as provided in this Act shall not toll the accrual of interest at the statutory rate.
A certificate of registration issued under this Act more than 5 years before the effective date of this amendatory Act of 1989 shall expire and be subject to the renewal provisions of this Section on the next anniversary of the date of issuance of such certificate which occurs more than 6 months after the effective date of this amendatory Act of 1989. A certificate of registration issued less than 5 years before the effective date of this amendatory Act of 1989 shall expire and be subject to the renewal provisions of this Section on the 5th anniversary of the issuance of the certificate.
If the person so registered states that he operates other places of business from which he engages in the business of selling tangible personal property at retail in this State, the Department shall furnish him with a sub‑certificate of registration for each such place of business, and the applicant shall display the appropriate sub‑certificate of registration at each such place of business. All sub‑certificates of registration shall bear the same registration number as that appearing upon the certificate of registration to which such sub‑certificates relate.
If the applicant will sell tangible personal property at retail through vending machines, the Department shall furnish him with a sub‑certificate of registration for each such vending machine, and the applicant shall display the appropriate sub‑certificate of registration on each such vending machine by attaching the sub‑certificate of registration to a conspicuous part of such vending machine.
Where the same person engages in 2 or more businesses of selling tangible personal property at retail in this State, which businesses are substantially different in character or engaged in under different trade names or engaged in under other substantially dissimilar circumstances (so that it is more practicable, from an accounting, auditing or bookkeeping standpoint, for such businesses to be separately registered), the Department may require or permit such person (subject to the same requirements concerning the furnishing of security as those that are provided for hereinbefore in this Section as to each application for a certificate of registration) to apply for and obtain a separate certificate of registration for each such business or for any of such businesses, under a single certificate of registration supplemented by related sub‑certificates of registration.
Any person who is registered under the "Retailers' Occupation Tax Act" as of March 8, 1963, and who, during the 3‑year period immediately prior to March 8, 1963, or during a continuous 3‑year period part of which passed immediately before and the remainder of which passes immediately after March 8, 1963, has been so registered continuously and who is determined by the Department not to have been either delinquent or deficient in the payment of tax liability during that period under this Act or under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the registrant under this Act will permit the registrant to engage in business without registering separately under such other law, ordinance or resolution, shall be considered to be a Prior Continuous Compliance taxpayer. Also any taxpayer who has, as verified by the Department, faithfully and continuously complied with the condition of his bond or other security under the provisions of this Act for a period of 3 consecutive years shall be considered to be a Prior Continuous Compliance taxpayer.
Every Prior Continuous Compliance taxpayer shall be exempt from all requirements under this Act concerning the furnishing of security as a condition precedent to his being authorized to engage in the business of selling tangible personal property at retail in this State. This exemption shall continue for each such taxpayer until such time as he may be determined by the Department to be delinquent in the filing of any returns, or is determined by the Department (either through the Department's issuance of a final assessment which has become final under the Act, or by the taxpayer's filing of a return which admits tax that is not paid to be due) to be delinquent or deficient in the paying of any tax under this Act or under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the registrant under this Act will permit the registrant to engage in business without registering separately under such other law, ordinance or resolution, at which time that taxpayer shall become subject to all the financial responsibility requirements of this Act and, as a condition of being allowed to continue to engage in the business of selling tangible personal property at retail, shall be required to post bond or other acceptable security with the Department covering liability which such taxpayer may thereafter incur. Any taxpayer who fails to pay an admitted or established liability under this Act may also be required to post bond or other acceptable security with this Department guaranteeing the payment of such admitted or established liability.
No certificate of registration shall be issued to any person who is in default to the State of Illinois for moneys due under this Act or under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution.
Any person aggrieved by any decision of the Department under this Section may, within 20 days after notice of such decision, protest and request a hearing, whereupon the Department shall give notice to such person of the time and place fixed for such hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to such person. In the absence of such a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.
With respect to security other than bonds (upon which the Department may sue in the event of a forfeiture), if the taxpayer fails to pay, when due, any amount whose payment such security guarantees, the Department shall, after such liability is admitted by the taxpayer or established by the Department through the issuance of a final assessment that has become final under the law, convert the security which that taxpayer has furnished into money for the State, after first giving the taxpayer at least 10 days' written notice, by registered or certified mail, to pay the liability or forfeit such security to the Department. If the security consists of stocks or bonds or other securities which are listed on a public exchange, the Department shall sell such securities through such public exchange. If the security consists of an irrevocable bank letter of credit, the Department shall convert the security in the manner provided for in the Uniform Commercial Code. If the security consists of a bank certificate of deposit, the Department shall convert the security into money by demanding and collecting the amount of such bank certificate of deposit from the bank which issued such certificate. If the security consists of a type of stocks or other securities which are not listed on a public exchange, the Department shall sell such security to the highest and best bidder after giving at least 10 days' notice of the date, time and place of the intended sale by publication in the "State Official Newspaper". If the Department realizes more than the amount of such liability from the security, plus the expenses incurred by the Department in converting the security into money, the Department shall pay such excess to the taxpayer who furnished such security, and the balance shall be paid into the State Treasury.
The Department shall discharge any surety and shall release and return any security deposited, assigned, pledged or otherwise provided to it by a taxpayer under this Section within 30 days after:
(1) such taxpayer becomes a Prior Continuous
(35 ILCS 120/2b) (from Ch. 120, par. 441b)
Sec. 2b. The Department may, after notice and a hearing as provided herein, revoke the certificate of registration of any person who violates any of the provisions of this Act. Before revocation of a certificate of registration the Department shall, within 90 days after non‑compliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of such 90 day period shall not preclude the Department from conducting revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director of Revenue or by any officer or employee of the Department designated, in writing, by the Director of Revenue.
Upon the hearing of any such proceeding, the Director of Revenue, or any officer or employee of the Department designated, in writing, by the Director of Revenue, may administer oaths and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order duly entered, require the attendance
REVENUE
(35 ILCS 120/) Retailers' Occupation Tax Act.
(35 ILCS 120/1) (from Ch. 120, par. 440)
Sec. 1. Definitions. "Sale at retail" means any transfer of the ownership of or title to tangible personal property to a purchaser, for the purpose of use or consumption, and not for the purpose of resale in any form as tangible personal property to the extent not first subjected to a use for which it was purchased, for a valuable consideration: Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing. For this purpose, slag produced as an incident to manufacturing pig iron or steel and sold is considered to be an intentionally produced byproduct of manufacturing. Transactions whereby the possession of the property is transferred but the seller retains the title as security for payment of the selling price shall be deemed to be sales.
"Sale at retail" shall be construed to include any transfer of the ownership of or title to tangible personal property to a purchaser, for use or consumption by any other person to whom such purchaser may transfer the tangible personal property without a valuable consideration, and to include any transfer, whether made for or without a valuable consideration, for resale in any form as tangible personal property unless made in compliance with Section 2c of this Act.
Sales of tangible personal property, which property, to the extent not first subjected to a use for which it was purchased, as an ingredient or constituent, goes into and forms a part of tangible personal property subsequently the subject of a "Sale at retail", are not sales at retail as defined in this Act: Provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing.
"Sale at retail" shall be construed to include any Illinois florist's sales transaction in which the purchase order is received in Illinois by a florist and the sale is for use or consumption, but the Illinois florist has a florist in another state deliver the property to the purchaser or the purchaser's donee in such other state.
Nonreusable tangible personal property that is used by persons engaged in the business of operating a restaurant, cafeteria, or drive‑in is a sale for resale when it is transferred to customers in the ordinary course of business as part of the sale of food or beverages and is used to deliver, package, or consume food or beverages, regardless of where consumption of the food or beverages occurs. Examples of those items include, but are not limited to nonreusable, paper and plastic cups, plates, baskets, boxes, sleeves, buckets or other containers, utensils, straws, placemats, napkins, doggie bags, and wrapping or packaging materials that are transferred to customers as part of the sale of food or beverages in the ordinary course of business.
The purchase, employment and transfer of such tangible personal property as newsprint and ink for the primary purpose of conveying news (with or without other information) is not a purchase, use or sale of tangible personal property.
A person whose activities are organized and conducted primarily as a not‑for‑profit service enterprise, and who engages in selling tangible personal property at retail (whether to the public or merely to members and their guests) is engaged in the business of selling tangible personal property at retail with respect to such transactions, excepting only a person organized and operated exclusively for charitable, religious or educational purposes either (1), to the extent of sales by such person to its members, students, patients or inmates of tangible personal property to be used primarily for the purposes of such person, or (2), to the extent of sales by such person of tangible personal property which is not sold or offered for sale by persons organized for profit. The selling of school books and school supplies by schools at retail to students is not "primarily for the purposes of" the school which does such selling. The provisions of this paragraph shall not apply to nor subject to taxation occasional dinners, socials or similar activities of a person organized and operated exclusively for charitable, religious or educational purposes, whether or not such activities are open to the public.
A person who is the recipient of a grant or contract under Title VII of the Older Americans Act of 1965 (P.L. 92‑258) and serves meals to participants in the federal Nutrition Program for the Elderly in return for contributions established in amount by the individual participant pursuant to a schedule of suggested fees as provided for in the federal Act is not engaged in the business of selling tangible personal property at retail with respect to such transactions.
"Purchaser" means anyone who, through a sale at retail, acquires the ownership of or title to tangible personal property for a valuable consideration.
"Reseller of motor fuel" means any person engaged in the business of selling or delivering or transferring title of motor fuel to another person other than for use or consumption. No person shall act as a reseller of motor fuel within this State without first being registered as a reseller pursuant to Section 2c or a retailer pursuant to Section 2a.
"Selling price" or the "amount of sale" means the consideration for a sale valued in money whether received in money or otherwise, including cash, credits, property, other than as hereinafter provided, and services, but not including the value of or credit given for traded‑in tangible personal property where the item that is traded‑in is of like kind and character as that which is being sold, and shall be determined without any deduction on account of the cost of the property sold, the cost of materials used, labor or service cost or any other expense whatsoever, but does not include charges that are added to prices by sellers on account of the seller's tax liability under this Act, or on account of the seller's duty to collect, from the purchaser, the tax that is imposed by the Use Tax Act, or on account of the seller's tax liability under Section 8‑11‑1 of the Illinois Municipal Code, as heretofore and hereafter amended, or on account of the seller's tax liability under the County Retailers' Occupation Tax Act, or on account of the seller's tax liability under the Home Rule Municipal Soft Drink Retailers' Occupation Tax, or on account of the seller's tax liability under any tax imposed under the "Regional Transportation Authority Act", approved December 12, 1973. Effective December 1, 1985, "selling price" shall include charges that are added to prices by sellers on account of the seller's tax liability under the Cigarette Tax Act, on account of the sellers' duty to collect, from the purchaser, the tax imposed under the Cigarette Use Tax Act, and on account of the seller's duty to collect, from the purchaser, any cigarette tax imposed by a home rule unit.
The phrase "like kind and character" shall be liberally construed (including but not limited to any form of motor vehicle for any form of motor vehicle, or any kind of farm or agricultural implement for any other kind of farm or agricultural implement), while not including a kind of item which, if sold at retail by that retailer, would be exempt from retailers' occupation tax and use tax as an isolated or occasional sale.
"Gross receipts" from the sales of tangible personal property at retail means the total selling price or the amount of such sales, as hereinbefore defined. In the case of charge and time sales, the amount thereof shall be included only as and when payments are received by the seller. Receipts or other consideration derived by a seller from the sale, transfer or assignment of accounts receivable to a wholly owned subsidiary will not be deemed payments prior to the time the purchaser makes payment on such accounts.
"Department" means the Department of Revenue.
"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, guardian or other representative appointed by order of any court.
The isolated or occasional sale of tangible personal property at retail by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling such tangible personal property at retail, or a sale through a bulk vending machine, does not constitute engaging in a business of selling such tangible personal property at retail within the meaning of this Act; provided that any person who is engaged in a business which is not subject to the tax imposed by this Act because of involving the sale of or a contract to sell real estate or a construction contract to improve real estate or a construction contract to engineer, install, and maintain an integrated system of products, but who, in the course of conducting such business, transfers tangible personal property to users or consumers in the finished form in which it was purchased, and which does not become real estate or was not engineered and installed, under any provision of a construction contract or real estate sale or real estate sales agreement entered into with some other person arising out of or because of such nontaxable business, is engaged in the business of selling tangible personal property at retail to the extent of the value of the tangible personal property so transferred. If, in such a transaction, a separate charge is made for the tangible personal property so transferred, the value of such property, for the purpose of this Act, shall be the amount so separately charged, but not less than the cost of such property to the transferor; if no separate charge is made, the value of such property, for the purposes of this Act, is the cost to the transferor of such tangible personal property. Construction contracts for the improvement of real estate consisting of engineering, installation, and maintenance of voice, data, video, security, and all telecommunication systems do not constitute engaging in a business of selling tangible personal property at retail within the meaning of this Act if they are sold at one specified contract price.
A person who holds himself or herself out as being engaged (or who habitually engages) in selling tangible personal property at retail is a person engaged in the business of selling tangible personal property at retail hereunder with respect to such sales (and not primarily in a service occupation) notwithstanding the fact that such person designs and produces such tangible personal property on special order for the purchaser and in such a way as to render the property of value only to such purchaser, if such tangible personal property so produced on special order serves substantially the same function as stock or standard items of tangible personal property that are sold at retail.
Persons who engage in the business of transferring tangible personal property upon the redemption of trading stamps are engaged in the business of selling such property at retail and shall be liable for and shall pay the tax imposed by this Act on the basis of the retail value of the property transferred upon redemption of such stamps.
"Bulk vending machine" means a vending machine, containing unsorted confections, nuts, toys, or other items designed primarily to be used or played with by children which, when a coin or coins of a denomination not larger than $0.50 are inserted, are dispensed in equal portions, at random and without selection by the customer.
(Source: P.A. 92‑213, eff. 1‑1‑02.)
(35 ILCS 120/1a) (from Ch. 120, par. 440a)
Sec. 1a. "Pollution control facilities" means any system, method, construction, device or appliance appurtenant thereto sold or used or intended for the primary purpose of eliminating, preventing, or reducing air and water pollution as the term "air pollution" or "water pollution" is defined in the "Environmental Protection Act", enacted by the 76th General Assembly, or for the primary purpose of treating, pretreating, modifying or disposing of any potential solid, liquid or gaseous pollutant which if released without such treatment, pretreatment, modification or disposal might be harmful, detrimental or offensive to human, plant or animal life, or to property.
Until July 1, 2003, the purchase, employment and transfer of such tangible personal property as pollution control facilities is not a purchase, use or sale of tangible personal property.
(Source: P.A. 93‑24, eff. 6‑20‑03.)
(35 ILCS 120/1a‑1) (from Ch. 120, par. 440a‑1)
Sec. 1a‑1. "Low sulfur dioxide emission coal fueled devices" means any device sold or used or intended for the purpose of burning, combusting or converting locally available coal in a manner which eliminates or significantly reduces the need for additional sulfur dioxide abatement that would otherwise be required under State or Federal air emission standards. Such device includes all machinery, equipment, structures and all related apparatus of a coal gasification facility, including coal feeding equipment, designed to convert locally available coal into a low sulfur gaseous fuel and to manage all waste and byproduct streams.
The purchase, employment and transfer of such tangible personal property as low sulfur dioxide emission coal fueled devices is not a purchase, use or sale of tangible personal property.
This amendatory Act of 1981 is not intended to nor does it make any change in the meaning of any provision in this Section but is intended to remove possible ambiguities, thereby confirming the existing meaning of this Section in effect prior to the effective date of this amendatory Act of 1981.
(Source: P.A. 82‑672.)
(35 ILCS 120/1c) (from Ch. 120, par. 440c)
Sec. 1c. A person who is engaged in the business of leasing or renting motor vehicles or, beginning July 1, 2003, aircraft or, beginning September 1, 2004, watercraft to others and who, in connection with such business sells any used motor vehicle, aircraft, or watercraft to a purchaser for his use and not for the purpose of resale, is a retailer engaged in the business of selling tangible personal property at retail under this Act to the extent of the value of the motor vehicle, aircraft, or watercraft sold. For the purpose of this Section "motor vehicle" has the meaning prescribed in Section 1‑157 of the Illinois Vehicle Code, as now or hereafter amended. For the purpose of this Section "aircraft" has the meaning prescribed in Section 3 of the Illinois Aeronautics Act. For the purpose of this Section, "watercraft" has the meaning prescribed in Section 5‑5 of the Watercraft Use Tax Law. (Nothing provided herein shall affect liability incurred under this Act because of the sale at retail of such motor vehicles, aircraft, or watercraft to a lessor.)
(Source: P.A. 93‑24, eff. 6‑20‑03; 93‑840, eff. 7‑30‑04.)
(35 ILCS 120/1d) (from Ch. 120, par. 440d)
Sec. 1d. Subject to the provisions of Section 1f, all tangible personal property to be used or consumed within an enterprise zone established pursuant to the "Illinois Enterprise Zone Act", as amended, or subject to the provisions of Section 5.5 of the Illinois Enterprise Zone Act, all tangible personal property to be used or consumed by any High Impact Business, in the process of the manufacturing or assembly of tangible personal property for wholesale or retail sale or lease or in the process of graphic arts production if used or consumed at a facility which is a Department of Commerce and Community Affairs certified business and located in a county of more than 4,000 persons and less than 45,000 persons is exempt from the tax imposed by this Act. This exemption includes repair and replacement parts for machinery and equipment used primarily in the process of manufacturing or assembling tangible personal property or in the process of graphic arts production if used or consumed at a facility which is a Department of Commerce and Community Affairs certified business and located in a county of more than 4,000 persons and less than 45,000 persons for wholesale or retail sale, or lease, and equipment, manufacturing or graphic arts fuels, material and supplies for the maintenance, repair or operation of such manufacturing or assembling or graphic arts machinery or equipment.
(Source: P.A. 85‑1182; 86‑1456.)
(35 ILCS 120/1e) (from Ch. 120, par. 440e)
Sec. 1e. Subject to the provisions of Section 1f, or subject to the provisions of Section 5.5 of the Illinois Enterprise Zone Act, all tangible personal property to be used or consumed in the operation of pollution control facilities, as defined in Section 1a of this Act, within an enterprise zone established pursuant to the "Illinois Enterprise Zone Act", as amended, shall be exempt from the tax imposed by this Act.
(Source: P.A. 85‑1182.)
(35 ILCS 120/1f) (from Ch. 120, par. 440f)
Sec. 1f. Except for High Impact Businesses, the exemption stated in Sections 1d and 1e of this Act shall only apply to business enterprises which:
(1) either (i) make investments which cause the
The Department of Commerce and Community Affairs shall determine whether the business enterprise meets the criteria prescribed in this Section. If the Department of Commerce and Community Affairs determines that such business enterprise meets the criteria, it shall issue a certificate of eligibility for exemption to the business enterprise in such form as is prescribed by the Department of Revenue. The Department of Commerce and Community Affairs shall act upon such certification requests within 60 days after receipt of the application, and shall file with the Department of Revenue a copy of each certificate of eligibility for exemption.
The Department of Commerce and Community Affairs shall have the power to promulgate rules and regulations to carry out the provisions of this Section including the power to define the amounts and types of eligible investments not specified in this Section which business enterprises must make in order to receive the exemptions stated in Sections 1d and 1e of this Act; and to require that any business enterprise that is granted a tax exemption repay the exempted tax if the business enterprise fails to comply with the terms and conditions of the certification.
Such certificate of eligibility for exemption shall be presented by the business enterprise to its supplier when making the initial purchase of tangible personal property for which an exemption is granted by Section 1d or Section 1e, or both, together with a certification by the business enterprise that such tangible personal property is exempt from taxation under Section 1d or Section 1e and by indicating the exempt status of each subsequent purchase on the face of the purchase order.
The Department of Commerce and Community Affairs shall determine the period during which such exemption from the taxes imposed under this Act is in effect which shall not exceed 20 years.
(Source: P.A. 86‑44; 86‑1456.)
(35 ILCS 120/1g) (from Ch. 120, par. 440g)
Sec. 1g. Application for exemption identification number. On or before December 31, 1986, except as hereinafter provided, each entity otherwise eligible under exemption (11) of Section 2‑5 of this Act and on and after the effective date of this amendatory Act of the 92nd General Assembly each entity otherwise eligible under exemption (9) of Section 2‑5 of this Act shall make application to the Department for an exemption identification number. In the case of a corporation, society, association, foundation, or institution organized and operated exclusively for charitable purposes and that has more than 50 subsidiary organizations in Illinois, the Department, in its sole discretion, may issue one exemption identification number to be used by the parent organization and each subsidiary organization.
Each exemption identification number or renewal number shall be valid for 5 years after the first day of the month following the month of issuance. Not less than 3 months before the expiration date, an application for renewal shall be filed.
Each application for an exemption identification number or a renewal number shall contain information and be accompanied by documentation as shall be requested by the Department.
(Source: P.A. 92‑35, eff. 7‑1‑01.)
(35 ILCS 120/1h) (from Ch. 120, par. 440h)
Sec. 1h. Upon request made on or after July 1, 1987, the Department shall furnish to any county or municipality a list containing the name of each corporation, society, association, foundation or institution organized and operated exclusively for charitable, religious or educational purposes, and each not‑for‑profit corporation, society, association, foundation, institution or organization which has no compensated officers or employees and which is organized and operated primarily for the recreation of persons 55 years of age or older, which had a valid exemption identification number on the first day of January or July, as the case may be, proceeding the date on which such request is received and which is located within the corporate limits of such municipality or the unincorporated territory of such county, except that the list need not include subsidiary organizations using an exemption identification number issued to its parent organization as provided by Section 1d of this Act.
(Source: P.A. 85‑293.)
(35 ILCS 120/1i) (from Ch. 120, par. 440i)
Sec. 1i. High Impact Service Facility means a facility used primarily for the sorting, handling and redistribution of mail, freight, cargo, or other parcels received from agents or employees of the handler or shipper for processing at a common location and redistribution to other employees or agents for delivery to an ultimate destination on an item‑by‑item basis, and which: (1) will make an investment in a business enterprise project of $100,000,000 dollars or more; (2) will cause the creation of at least 750 to 1,000 jobs or more in an enterprise zone established pursuant to the Illinois Enterprise Zone Act; and (3) is certified by the Department of Commerce and Community Affairs as contractually obligated to meet the requirements specified in divisions (1) and (2) of this paragraph within the time period as specified by the certification. Any business enterprise project applying for the exemption stated in this Section shall make application to the Department of Commerce and Community Affairs in such form and providing such information as may be prescribed by the Department of Commerce and Community Affairs.
The Department of Commerce and Community Affairs shall determine whether the business enterprise project meets the criteria prescribed in this Section. If the Department of Commerce and Community Affairs determines that such business enterprise project meets the criteria, it shall issue a certificate of eligibility for exemption to the business enterprise in such form as is prescribed by the Department of Revenue. The Department of Commerce and Community Affairs shall act upon such certification requests within 60 days after receipt of the application, and shall file with the Department of Revenue a copy of each certificate of eligibility for exemption.
The Department of Commerce and Community Affairs shall have the power to promulgate rules and regulations to carry out the provisions of this Section and to require that any business enterprise that is granted a tax exemption repay the exempted tax if the business enterprise fails to comply with the terms and conditions of the certification.
The certificate of eligibility for exemption shall be presented by the business enterprise to its supplier when making the initial purchase of machinery and equipment for which an exemption is granted by Section 1j of this Act, together with a certification by the business enterprise that such machinery and equipment is exempt from taxation under Section 1j of this Act and by indicating the exempt status of each subsequent purchase on the face of the purchase order.
The certification of eligibility for exemption shall be presented by the business enterprise to its supplier when making the purchase of jet fuel and petroleum products for which an exemption is granted by Section 1j.1 of this Act, together with a certification by the business enterprise that such jet fuel and petroleum product, are exempt from taxation under Section 1j.1 of this Act, and by indicating the exempt status of each subsequent purchase on the face of the purchase order.
The Department of Commerce and Community Affairs shall determine the period during which such exemption from the taxes imposed under this Act will remain in effect.
(Source: P.A. 90‑42, eff. 1‑1‑98.)
(35 ILCS 120/1j) (from Ch. 120, par. 440j)
Sec. 1j. Exemption ‑ Machinery or Equipment used in the operation of high impact service facilities. Subject to the provisions of Section 1i of this Act, machinery or equipment used in the operation of a high impact service facility, as defined in Section 1i of this Act, located within an enterprise zone established pursuant to the Illinois Enterprise Zone Act shall be exempt from the tax imposed by this Act. Machinery and equipment, new and replacement, shall include, but not be limited to: (i) motor driven heavy equipment not considered rolling stock which is used for the purpose of transporting parcels, machinery, or equipment, or trailers used for the shipment of parcels, and equipment used to maintain and provide in‑house services, within the confines of the facility, and (ii) automated machinery and equipment used for the purposes of transporting parcels within the facility, along with all components, parts, pieces, and computer software or hardware contained in the electronic control systems related thereto. The Department of Revenue shall promulgate such rules and regulations as necessary to further define machinery and equipment eligible for exemption in a high impact service facility.
(Source: P.A. 85‑1409.)
(35 ILCS 120/1j.1)
Sec. 1j.1. Exemption; jet fuel used in the operation of high impact service facilities. Subject to the provisions of Section 1i of this Act, jet fuel and petroleum products sold to and used in the conduct of its business of sorting, handling and redistribution of mail, freight, cargo or other parcels in the operation of a high impact service facility, as defined in Section 1i of this Act, located within an enterprise zone established pursuant to the Illinois Enterprise Zone Act shall be exempt from the tax imposed by this Act, provided that the business enterprise has waived its right to a tax exemption of the charges imposed under Section 9‑222.1 of the Public Utilities Act. The Department of Commerce and Community Affairs shall promulgate rules necessary to further define jet fuel and petroleum products sold to, used, and eligible for exemption in a high impact service facility. The minimum period for which an exemption from taxes is granted by this Section is 10 years, regardless of the duration of the enterprise zone in which the project is located.
(Source: P.A. 90‑42, eff. 1‑1‑98.)
(35 ILCS 120/1j.2)
Sec. 1j.2. Exceptions. High impact service facilities qualifying under this Act and seeking the exemption under 1j.1 shall be ineligible for the exemptions of taxes imposed under Section 9‑222.1 of the Public Utilities Act. High impact service facilities qualifying under this Act and seeking the exemption under Section 9‑222.1 of the Public Utilities Act shall be ineligible for the exemptions of taxes as described in Section 1j.1.
(Source: P.A. 90‑42, eff. 1‑1‑98.)
(35 ILCS 120/1k) (from Ch. 120, par. 440k)
Sec. 1k. Aircraft maintenance facility means a facility operated by an interstate carrier for hire that is used primarily for the maintenance, rebuilding or repair of aircraft, aircraft parts and auxiliary equipment owned or leased by that carrier and used by that carrier as rolling stock moving in interstate commerce, and which: (1) will make an investment by the interstate carrier for hire of $400,000,000 or more in an enterprise zone; (2) will cause the creation of at least 5,000 full‑time jobs in that enterprise zone; (3) is located in a county with population not less than 150,000 and not more than 200,000 and that contains 3 enterprise zones as of December 31, 1990; (4) enters into a legally binding agreement with the Department of Commerce and Community Affairs to comply with clauses (1) and (2) of this paragraph within a time period specified in the rules and regulations promulgated pursuant to this Section; and (5) is certified by the Department of Commerce and Community Affairs to be in compliance with clauses (1), (2), (3) and (4) of this Section. Any aircraft maintenance facility applying for the exemption stated in this Section shall make application to the Department of Commerce and Community Affairs in such form and providing such information as may be prescribed by the Department of Commerce and Community Affairs.
The Department of Commerce and Community Affairs shall determine whether the facility meets the criteria prescribed in this Section. If the Department of Commerce and Community Affairs determines that the facility meets the criteria, it shall issue a certificate of eligibility for exemption in the form prescribed by the Department of Revenue to the business enterprise operating the facility. The Department of Commerce and Community Affairs shall act upon certification request within 60 days after receipt of application, and shall file with the Department of Revenue a copy of each certificate of eligibility for exemption.
The Department of Commerce and Community Affairs shall promulgate rules and regulations to carry out the provisions of this Section, and to require that any business enterprise that is granted a tax exemption pay the exempted tax to the Department of Revenue if the business enterprise fails to comply with the terms and conditions of the certification, and pay all penalties and interest on that exempted tax as determined by the Department of Revenue.
The certificate of eligibility for exemption shall be presented by the business enterprise to its supplier when making the initial purchase of machinery and equipment for which an exemption is granted by Section 1m or Section 1n of this Act, or both, together with a certification by the business enterprise that the machinery and equipment is exempt from taxation under Section 1m or 1n of this Act. The exempt status, if any, of each subsequent purchase shall be indicated on the face of the purchase order.
(Source: P.A. 86‑1490.)
(35 ILCS 120/1m) (from Ch. 120, par. 440m)
Sec. 1m. Subject to the provisions of Section 1k of this Act, machinery and equipment used in the operation of an aircraft maintenance facility as defined in Section 1k, located within an enterprise zone shall be exempt from the tax imposed by this Act. The machinery and equipment exempted by this Section is limited to machinery and equipment used primarily to maintain, rebuild or repair aircraft used as rolling stock moving in interstate commerce for hire by the operator of the facility. The Department of Revenue shall promulgate any rules and regulations necessary to further define machinery and equipment eligible for exemption in an aircraft maintenance facility.
(Source: P.A. 86‑1490.)
(35 ILCS 120/1n) (from Ch. 120, par. 440n)
Sec. 1n. Subject to the provisions of Section 1k, all tangible personal property to be used or consumed, within an enterprise zone established pursuant to the Illinois Enterprise Zone Act, by any aircraft maintenance facility, directly in the process of maintaining, rebuilding or repairing aircraft is exempt from the tax imposed by this Act. The exemption includes repair and replacement parts for machinery and equipment used primarily in the process of maintaining, rebuilding or repairing aircraft, and also includes equipment, fuels, material and supplies for the maintenance, repair or operation of such machinery or equipment.
(Source: P.A. 86‑1490.)
(35 ILCS 120/1o)
Sec. 1o. Aircraft support center exemption.
(a) For the purposes of this Act, "aircraft support center" means a support center operated by a carrier for hire that is used primarily for the maintenance, rebuilding, or repair of aircraft, aircraft parts, and auxiliary equipment, and which carrier:
(1) will make an investment of $30,000,000 or more
The Department of Commerce and Community Affairs shall promulgate rules and regulations to carry out the provisions of this subsection and to require that any business operating an aircraft support center that is granted a tax exemption pay the exempted tax to the Department of Revenue if the business fails to comply with the terms and conditions of the certification and pay all penalties and interest on that exempted tax as determined by the Department of Revenue.
The certificate of eligibility for exemption shall be presented by the carrier operating an aircraft support center to its supplier when making the initial purchase of items for which an exemption is granted by this Section together with a certification by the business that the items are exempt from taxation under this Act. The exempt status, if any, of each subsequent purchase shall be indicated on the face of the purchase order.
(b) Subject to the provisions of this subsection, jet fuel and petroleum products used or consumed by any aircraft support center directly in the process of maintaining, rebuilding, or repairing aircraft is exempt from the tax imposed by this Act. The Department of Revenue shall promulgate any rules necessary to further define the items eligible for exemption.
(c) This Section is exempt from the provisions of Section 2‑70.
(Source: P.A. 90‑792, eff. 1‑1‑99.)
(35 ILCS 120/1p)
Sec. 1p. Building materials exemption; intermodal terminal facility areas. Each retailer that makes a qualified sale of building materials to be incorporated into real estate in a redevelopment project area within an intermodal terminal facility area in accordance with Section 11‑74.4‑3.1 of the Illinois Municipal Code by remodeling, rehabilitating, or new construction may deduct receipts from those sales when calculating the tax imposed by this Act. For purposes of this Section, "qualified sale" means a sale of building materials that will be incorporated into real estate as part of an industrial or commercial project for which a Certificate of Eligibility for Sales Tax Exemption has been issued by the corporate authorities of the municipality in which the building project is located. To document the exemption allowed under this Section, the retailer must obtain from the purchaser a copy of the Certificate of Eligibility for Sales Tax Exemption issued by the corporate authorities of the municipality in which the real estate into which the building materials will be incorporated is located. The Certificate of Eligibility for Sales Tax Exemption must contain all of the following:
(1) A statement that the commercial or industrial
(3) The signature of the chief executive officer of
The provisions of this Section are exempt from Section
(35 ILCS 120/2) (from Ch. 120, par. 441)
Sec. 2. Tax imposed. A tax is imposed upon persons engaged in the business of selling at retail tangible personal property, including computer software, and including photographs, negatives, and positives that are the product of photoprocessing, but not including products of photoprocessing produced for use in motion pictures for public commercial exhibition. Beginning January 1, 2001, prepaid telephone calling arrangements shall be considered tangible personal property subject to the tax imposed under this Act regardless of the form in which those arrangements may be embodied, transmitted, or fixed by any method now known or hereafter developed.
(Source: P.A. 91‑51, eff. 6‑30‑99; 91‑870, eff. 6‑22‑00.)
(35 ILCS 120/2‑5) (from Ch. 120, par. 441‑5)
Sec. 2‑5. Exemptions. Gross receipts from proceeds from the sale of the following tangible personal property are exempt from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used, including that manufactured on special order, certified by the purchaser to be used primarily for production agriculture or State or federal agricultural programs, including individual replacement parts for the machinery and equipment, including machinery and equipment purchased for lease, and including implements of husbandry defined in Section 1‑130 of the Illinois Vehicle Code, farm machinery and agricultural chemical and fertilizer spreaders, and nurse wagons required to be registered under Section 3‑809 of the Illinois Vehicle Code, but excluding other motor vehicles required to be registered under the Illinois Vehicle Code. Horticultural polyhouses or hoop houses used for propagating, growing, or overwintering plants shall be considered farm machinery and equipment under this item (2). Agricultural chemical tender tanks and dry boxes shall include units sold separately from a motor vehicle required to be licensed and units sold mounted on a motor vehicle required to be licensed, if the selling price of the tender is separately stated.
Farm machinery and equipment shall include precision farming equipment that is installed or purchased to be installed on farm machinery and equipment including, but not limited to, tractors, harvesters, sprayers, planters, seeders, or spreaders. Precision farming equipment includes, but is not limited to, soil testing sensors, computers, monitors, software, global positioning and mapping systems, and other such equipment.
Farm machinery and equipment also includes computers, sensors, software, and related equipment used primarily in the computer‑assisted operation of production agriculture facilities, equipment, and activities such as, but not limited to, the collection, monitoring, and correlation of animal and crop data for the purpose of formulating animal diets and agricultural chemicals. This item (7) is exempt from the provisions of Section 2‑70.
(3) Until July 1, 2003, distillation machinery and equipment, sold as a unit or kit, assembled or installed by the retailer, certified by the user to be used only for the production of ethyl alcohol that will be used for consumption as motor fuel or as a component of motor fuel for the personal use of the user, and not subject to sale or resale.
(4) Until July 1, 2003 and beginning again September 1, 2004, graphic arts machinery and equipment, including repair and replacement parts, both new and used, and including that manufactured on special order or purchased for lease, certified by the purchaser to be used primarily for graphic arts production. Equipment includes chemicals or chemicals acting as catalysts but only if the chemicals or chemicals acting as catalysts effect a direct and immediate change upon a graphic arts product.
(5) A motor vehicle of the first division, a motor vehicle of the second division that is a self‑contained motor vehicle designed or permanently converted to provide living quarters for recreational, camping, or travel use, with direct walk through access to the living quarters from the driver's seat, or a motor vehicle of the second division that is of the van configuration designed for the transportation of not less than 7 nor more than 16 passengers, as defined in Section 1‑146 of the Illinois Vehicle Code, that is used for automobile renting, as defined in the Automobile Renting Occupation and Use Tax Act.
(6) Personal property sold by a teacher‑sponsored student organization affiliated with an elementary or secondary school located in Illinois.
(7) Until July 1, 2003, proceeds of that portion of the selling price of a passenger car the sale of which is subject to the Replacement Vehicle Tax.
(8) Personal property sold to an Illinois county fair association for use in conducting, operating, or promoting the county fair.
(9) Personal property sold to a not‑for‑profit arts or cultural organization that establishes, by proof required by the Department by rule, that it has received an exemption under Section 501(c)(3) of the Internal Revenue Code and that is organized and operated primarily for the presentation or support of arts or cultural programming, activities, or services. These organizations include, but are not limited to, music and dramatic arts organizations such as symphony orchestras and theatrical groups, arts and cultural service organizations, local arts councils, visual arts organizations, and media arts organizations. On and after the effective date of this amendatory Act of the 92nd General Assembly, however, an entity otherwise eligible for this exemption shall not make tax‑free purchases unless it has an active identification number issued by the Department.
(10) Personal property sold by a corporation, society, association, foundation, institution, or organization, other than a limited liability company, that is organized and operated as a not‑for‑profit service enterprise for the benefit of persons 65 years of age or older if the personal property was not purchased by the enterprise for the purpose of resale by the enterprise.
(11) Personal property sold to a governmental body, to a corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes, or to a not‑for‑profit corporation, society, association, foundation, institution, or organization that has no compensated officers or employees and that is organized and operated primarily for the recreation of persons 55 years of age or older. A limited liability company may qualify for the exemption under this paragraph only if the limited liability company is organized and operated exclusively for educational purposes. On and after July 1, 1987, however, no entity otherwise eligible for this exemption shall make tax‑free purchases unless it has an active identification number issued by the Department.
(12) Tangible personal property sold to interstate carriers for hire for use as rolling stock moving in interstate commerce or to lessors under leases of one year or longer executed or in effect at the time of purchase by interstate carriers for hire for use as rolling stock moving in interstate commerce and equipment operated by a telecommunications provider, licensed as a common carrier by the Federal Communications Commission, which is permanently installed in or affixed to aircraft moving in interstate commerce.
(12‑5) On and after July 1, 2003 and through June 30, 2004, motor vehicles of the second division with a gross vehicle weight in excess of 8,000 pounds that are subject to the commercial distribution fee imposed under Section 3‑815.1 of the Illinois Vehicle Code. Beginning on July 1, 2004 and through June 30, 2005, the use in this State of motor vehicles of the second division: (i) with a gross vehicle weight rating in excess of 8,000 pounds; (ii) that are subject to the commercial distribution fee imposed under Section 3‑815.1 of the Illinois Vehicle Code; and (iii) that are primarily used for commercial purposes. Through June 30, 2005, this exemption applies to repair and replacement parts added after the initial purchase of such a motor vehicle if that motor vehicle is used in a manner that would qualify for the rolling stock exemption otherwise provided for in this Act. For purposes of this paragraph, "used for commercial purposes" means the transportation of persons or property in furtherance of any commercial or industrial enterprise whether for‑hire or not.
(13) Proceeds from sales to owners, lessors, or shippers of tangible personal property that is utilized by interstate carriers for hire for use as rolling stock moving in interstate commerce and equipment operated by a telecommunications provider, licensed as a common carrier by the Federal Communications Commission, which is permanently installed in or affixed to aircraft moving in interstate commerce.
(14) Machinery and equipment that will be used by the purchaser, or a lessee of the purchaser, primarily in the process of manufacturing or assembling tangible personal property for wholesale or retail sale or lease, whether the sale or lease is made directly by the manufacturer or by some other person, whether the materials used in the process are owned by the manufacturer or some other person, or whether the sale or lease is made apart from or as an incident to the seller's engaging in the service occupation of producing machines, tools, dies, jigs, patterns, gauges, or other similar items of no commercial value on special order for a particular purchaser.
(15) Proceeds of mandatory service charges separately stated on customers' bills for purchase and consumption of food and beverages, to the extent that the proceeds of the service charge are in fact turned over as tips or as a substitute for tips to the employees who participate directly in preparing, serving, hosting or cleaning up the food or beverage function with respect to which the service charge is imposed.
(16) Petroleum products sold to a purchaser if the seller is prohibited by federal law from charging tax to the purchaser.
(17) Tangible personal property sold to a common carrier by rail or motor that receives the physical possession of the property in Illinois and that transports the property, or shares with another common carrier in the transportation of the property, out of Illinois on a standard uniform bill of lading showing the seller of the property as the shipper or consignor of the property to a destination outside Illinois, for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or silver coinage issued by the State of Illinois, the government of the United States of America, or the government of any foreign country, and bullion.
(19) Until July 1 2003, oil field exploration, drilling, and production equipment, including (i) rigs and parts of rigs, rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and tubular goods, including casing and drill strings, (iii) pumps and pump‑jack units, (iv) storage tanks and flow lines, (v) any individual replacement part for oil field exploration, drilling, and production equipment, and (vi) machinery and equipment purchased for lease; but excluding motor vehicles required to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment, including repair and replacement parts, both new and used, including that manufactured on special order, certified by the purchaser to be used primarily for photoprocessing, and including photoprocessing machinery and equipment purchased for lease.
(21) Until July 1, 2003, coal exploration, mining, offhighway hauling, processing, maintenance, and reclamation equipment, including replacement parts and equipment, and including equipment purchased for lease, but excluding motor vehicles required to be registered under the Illinois Vehicle Code.
(22) Fuel and petroleum products sold to or used by an air carrier, certified by the carrier to be used for consumption, shipment, or storage in the conduct of its business as an air common carrier, for a flight destined for or returning from a location or locations outside the United States without regard to previous or subsequent domestic stopovers.
(23) A transaction in which the purchase order is received by a florist who is located outside Illinois, but who has a florist located in Illinois deliver the property to the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships, barges, or vessels that are used primarily in or for the transportation of property or the conveyance of persons for hire on rivers bordering on this State if the fuel is delivered by the seller to the purchaser's barge, ship, or vessel while it is afloat upon that bordering river.
(25) Except as provided in item (25‑5) of this Section, a motor vehicle sold in this State to a nonresident even though the motor vehicle is delivered to the nonresident in this State, if the motor vehicle is not to be titled in this State, and if a drive‑away permit is issued to the motor vehicle as provided in Section 3‑603 of the Illinois Vehicle Code or if the nonresident purchaser has vehicle registration plates to transfer to the motor vehicle upon returning to his or her home state. The issuance of the drive‑away permit or having the out‑of‑state registration plates to be transferred is prima facie evidence that the motor vehicle will not be titled in this State.
(25‑5) The exemption under item (25) does not apply if the state in which the motor vehicle will be titled does not allow a reciprocal exemption for a motor vehicle sold and delivered in that state to an Illinois resident but titled in Illinois. The tax collected under this Act on the sale of a motor vehicle in this State to a resident of another state that does not allow a reciprocal exemption shall be imposed at a rate equal to the state's rate of tax on taxable property in the state in which the purchaser is a resident, except that the tax shall not exceed the tax that would otherwise be imposed under this Act. At the time of the sale, the purchaser shall execute a statement, signed under penalty of perjury, of his or her intent to title the vehicle in the state in which the purchaser is a resident within 30 days after the sale and of the fact of the payment to the State of Illinois of tax in an amount equivalent to the state's rate of tax on taxable property in his or her state of residence and shall submit the statement to the appropriate tax collection agency in his or her state of residence. In addition, the retailer must retain a signed copy of the statement in his or her records. Nothing in this item shall be construed to require the removal of the vehicle from this state following the filing of an intent to title the vehicle in the purchaser's state of residence if the purchaser titles the vehicle in his or her state of residence within 30 days after the date of sale. The tax collected under this Act in accordance with this item (25‑5) shall be proportionately distributed as if the tax were collected at the 6.25% general rate imposed under this Act.
(26) Semen used for artificial insemination of livestock for direct agricultural production.
(27) Horses, or interests in horses, registered with and meeting the requirements of any of the Arabian Horse Club Registry of America, Appaloosa Horse Club, American Quarter Horse Association, United States Trotting Association, or Jockey Club, as appropriate, used for purposes of breeding or racing for prizes.
(28) Computers and communications equipment utilized for any hospital purpose and equipment used in the diagnosis, analysis, or treatment of hospital patients sold to a lessor who leases the equipment, under a lease of one year or longer executed or in effect at the time of the purchase, to a hospital that has been issued an active tax exemption identification number by the Department under Section 1g of this Act.
(29) Personal property sold to a lessor who leases the property, under a lease of one year or longer executed or in effect at the time of the purchase, to a governmental body that has been issued an active tax exemption identification number by the Department under Section 1g of this Act.
(30) Beginning with taxable years ending on or after December 31, 1995 and ending with taxable years ending on or before December 31, 2004, personal property that is donated for disaster relief to be used in a State or federally declared disaster area in Illinois or bordering Illinois by a manufacturer or retailer that is registered in this State to a corporation, society, association, foundation, or institution that has been issued a sales tax exemption identification number by the Department that assists victims of the disaster who reside within the declared disaster area.
(31) Beginning with taxable years ending on or after December 31, 1995 and ending with taxable years ending on or before December 31, 2004, personal property that is used in the performance of infrastructure repairs in this State, including but not limited to municipal roads and streets, access roads, bridges, sidewalks, waste disposal systems, water and sewer line extensions, water distribution and purification facilities, storm water drainage and retention facilities, and sewage treatment facilities, resulting from a State or federally declared disaster in Illinois or bordering Illinois when such repairs are initiated on facilities located in the declared disaster area within 6 months after the disaster.
(32) Beginning July 1, 1999, game or game birds sold at a "game breeding and hunting preserve area" or an "exotic game hunting area" as those terms are used in the Wildlife Code or at a hunting enclosure approved through rules adopted by the Department of Natural Resources. This paragraph is exempt from the provisions of Section 2‑70.
(33) A motor vehicle, as that term is defined in Section 1‑146 of the Illinois Vehicle Code, that is donated to a corporation, limited liability company, society, association, foundation, or institution that is determined by the Department to be organized and operated exclusively for educational purposes. For purposes of this exemption, "a corporation, limited liability company, society, association, foundation, or institution organized and operated exclusively for educational purposes" means all tax‑supported public schools, private schools that offer systematic instruction in useful branches of learning by methods common to public schools and that compare favorably in their scope and intensity with the course of study presented in tax‑supported schools, and vocational or technical schools or institutes organized and operated exclusively to provide a course of study of not less than 6 weeks duration and designed to prepare individuals to follow a trade or to pursue a manual, technical, mechanical, industrial, business, or commercial occupation.
(34) Beginning January 1, 2000, personal property, including food, purchased through fundraising events for the benefit of a public or private elementary or secondary school, a group of those schools, or one or more school districts if the events are sponsored by an entity recognized by the school district that consists primarily of volunteers and includes parents and teachers of the school children. This paragraph does not apply to fundraising events (i) for the benefit of private home instruction or (ii) for which the fundraising entity purchases the personal property sold at the events from another individual or entity that sold the property for the purpose of resale by the fundraising entity and that profits from the sale to the fundraising entity. This paragraph is exempt from the provisions of Section 2‑70.
(35) Beginning January 1, 2000 and through December 31, 2001, new or used automatic vending machines that prepare and serve hot food and beverages, including coffee, soup, and other items, and replacement parts for these machines. Beginning January 1, 2002 and through June 30, 2003, machines and parts for machines used in commercial, coin‑operated amusement and vending business if a use or occupation tax is paid on the gross receipts derived from the use of the commercial, coin‑operated amusement and vending machines. This paragraph is exempt from the provisions of Section 2‑70.
(35‑5) Food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption) and prescription and nonprescription medicines, drugs, medical appliances, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use, when purchased for use by a person receiving medical assistance under Article 5 of the Illinois Public Aid Code who resides in a licensed long‑term care facility, as defined in the Nursing Home Care Act.
(36) Beginning August 2, 2001, computers and communications equipment utilized for any hospital purpose and equipment used in the diagnosis, analysis, or treatment of hospital patients sold to a lessor who leases the equipment, under a lease of one year or longer executed or in effect at the time of the purchase, to a hospital that has been issued an active tax exemption identification number by the Department under Section 1g of this Act. This paragraph is exempt from the provisions of Section 2‑70.
(37) Beginning August 2, 2001, personal property sold to a lessor who leases the property, under a lease of one year or longer executed or in effect at the time of the purchase, to a governmental body that has been issued an active tax exemption identification number by the Department under Section 1g of this Act. This paragraph is exempt from the provisions of Section 2‑70.
(38) Beginning on January 1, 2002, tangible personal property purchased from an Illinois retailer by a taxpayer engaged in centralized purchasing activities in Illinois who will, upon receipt of the property in Illinois, temporarily store the property in Illinois (i) for the purpose of subsequently transporting it outside this State for use or consumption thereafter solely outside this State or (ii) for the purpose of being processed, fabricated, or manufactured into, attached to, or incorporated into other tangible personal property to be transported outside this State and thereafter used or consumed solely outside this State. The Director of Revenue shall, pursuant to rules adopted in accordance with the Illinois Administrative Procedure Act, issue a permit to any taxpayer in good standing with the Department who is eligible for the exemption under this paragraph (38). The permit issued under this paragraph (38) shall authorize the holder, to the extent and in the manner specified in the rules adopted under this Act, to purchase tangible personal property from a retailer exempt from the taxes imposed by this Act. Taxpayers shall maintain all necessary books and records to substantiate the use and consumption of all such tangible personal property outside of the State of Illinois.
(Source: P.A. 92‑16, eff. 6‑28‑01; 92‑35, eff. 7‑1‑01; 92‑227, eff. 8‑2‑01; 92‑337, eff. 8‑10‑01; 92‑484, eff. 8‑23‑01; 92‑488, eff. 8‑23‑01; 92‑651, eff. 7‑11‑02; 92‑680, eff. 7‑16‑02; 93‑23, eff. 6‑20‑03; 93‑24, eff. 6‑20‑03; 93‑840, eff. 7‑30‑04; 93‑1033, eff. 9‑3‑04; 93‑1068, eff. 1‑15‑05.)
(35 ILCS 120/2‑5.5)
Sec. 2‑5.5. Food and drugs sold by not‑for‑profit organizations; exemption. The Department shall not collect the 1% tax imposed on food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption) and prescription and nonprescription medicines, drugs, medical appliances, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use from any not‑for‑profit organization, that sells food in a food distribution program at a price below the retail cost of the food to purchasers who, as a condition of participation in the program, are required to perform community service, located in a county or municipality that notifies the Department, in writing, that the county or municipality does not want the tax to be collected from any of such organizations located in the county or municipality.
(Source: P.A. 88‑374.)
(35 ILCS 120/2‑7)
Sec. 2‑7. Aggregate manufacturing exemption. Through June 30, 2003, gross receipts from proceeds from the sale of aggregate exploration, mining, offhighway hauling, processing, maintenance, and reclamation equipment, including replacement parts and equipment, and including equipment purchased for lease, but excluding motor vehicles required to be registered under the Illinois Vehicle Code, are exempt from the tax imposed by this Act.
(Source: P.A. 92‑603, eff. 6‑28‑02; 93‑24, eff. 6‑20‑03.)
(35 ILCS 120/2‑10) (from Ch. 120, par. 441‑10)
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%.
Within 14 days after the effective date of this amendatory Act of the 91st General Assembly, 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 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 December 31, 2013, and (iii) 100% of the proceeds of sales made thereafter. 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 majority blended ethanol fuel, as defined in the Use Tax Act, 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, 2013 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, 2013 and (ii) 100% of the proceeds of sales made thereafter. 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 100% 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, 2013 but applies to 100% of the proceeds of sales made thereafter.
With respect to food for human consumption that is to be consumed off the premises where it is sold (other than alcoholic beverages, soft drinks, and food that has been prepared for immediate consumption) and prescription and nonprescription medicines, drugs, medical appliances, modifications to a motor vehicle for the purpose of rendering it usable by a disabled person, and insulin, urine testing materials, syringes, and needles used by diabetics, for human use, the tax is imposed at the rate of 1%. For the purposes of this Section, 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. "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, "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.
(Source: P.A. 93‑17, eff. 6‑11‑03.)
(35 ILCS 120/2‑10.5)
Sec. 2‑10.5. Direct payment program; purchaser's providing of permit to retailer; retailer relieved of collecting use tax and local retailers' occupation tax reimbursements from purchaser; direct payment of retailers' occupation tax and local retailers' occupation tax by purchaser.
(a) Beginning on July 1, 2001 there is established in this State a Direct Payment Program to be administered by the Department. The Department shall issue a Direct Pay Permit to applicants who have been approved to participate in the Direct Payment Program. Each person applying to participate in the Direct Payment Program must demonstrate (1) the applicant's ability to comply with the retailers' occupation tax laws and the use tax laws in effect in this State and that the applicant's accounting system will reflect the proper amount of tax due, (2) that the applicant has a valid business purpose for participating in the Direct Payment Program, and (3) how the applicant's participation in the Direct Payment Program will benefit tax compliance. Application shall be made on forms provided by the Department and shall contain information as the Department may reasonably require. The Department shall approve or deny an applicant within 90 days after the Department's receipt of the application, unless the Department makes a written request for additional information from the applicant.
(b) A person who has been approved for the Direct Payment Program and who has been issued a Direct Pay Permit by the Department is relieved of paying tax to a retailer when purchasing tangible personal property for use or consumption, except as provided in subsection (d), by providing that retailer a copy of that Direct Pay Permit. A retailer who accepts a copy of a customer's Direct Pay Permit is relieved of the obligation to remit the tax imposed by this Act on the transaction. References in this Section to "the tax imposed by this Act" include any local occupation taxes administered by the Department that would be incurred on the retail sale.
(c) Once the holder of a Direct Pay Permit uses that Permit to relieve the Permit holder from paying tax to a particular retailer, the holder must use its Permit for all purchases, except as provided in subsection (d), from that retailer for so long as the Permit is valid.
(d) Direct Pay Permits are not valid and shall not be used for sales or purchases of:
(1) food or beverage;
(2) tangible personal property required to be titled
(f) A Direct Pay Permit is valid until it is revoked by the Department or until the holder notifies the Department in writing that the holder is withdrawing from the Direct Payment Program. A Direct Pay Permit can be revoked by the Department, after notice and hearing, if the holder violates any provision of this Act, any provision of the Illinois Use Tax Act, or any provision of any Act imposing a local retailers' occupation tax administered by the Department.
(g) The holder of a Direct Pay Permit who has been relieved of paying tax to a retailer on a purchase for use or consumption by representing to that retailer that it would pay all applicable taxes directly to the Department shall pay those taxes to the Department not later than the 20th day of the month following the month in which the purchase was made. Permit holders making such purchases are subject to all provisions of this Act, and the tax must be reported and paid as retailers' occupation tax in the same manner that the retailer from whom the purchases were made would have reported and paid it, including any local retailers' occupation taxes applicable to that retail sale. Notwithstanding any other provision of this Act, Permit holders shall make all payments to the Department through the use of electronic funds transfer.
(Source: P.A. 92‑484, eff. 8‑23‑01.)
(35 ILCS 120/2‑15) (from Ch. 120, par. 441‑15)
Sec. 2‑15. Photoprocessing. For purposes of the tax imposed on photographs, negatives, and positives by this Act, "photoprocessing" includes, but is not limited to, developing films, positives, negatives, and transparencies, and tinting, coloring, making, and enlarging prints. Photoprocessing does not include color separation, typesetting, and platemaking by photographic means in the graphic arts industry and does not include any procedure, process, or activity connected with the creation of the images on the film from which the negatives, positives, or photographs are derived. The charge for in‑house photoprocessing may not be less than the photoprocessor's cost price of materials. In transactions in which products of photoprocessing are sold in conjunction with other services, if a charge for the photoprocessing component is not separately stated, tax is imposed on 50% of the entire selling price unless the sale is made by a professional photographer, in which case tax is imposed on 10% of the entire selling price.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑20) (from Ch. 120, par. 441‑20)
Sec. 2‑20. Bullion. For purposes of this Act, "bullion" means gold, silver, or platinum in a bulk state with a purity of not less than 980 parts per 1,000.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑25) (from Ch. 120, par. 441‑25)
Sec. 2‑25. Computer software. For the purposes of this Act, "computer software" means a set of statements, data, or instructions to be used directly or indirectly in a computer in order to bring about a certain result in any form in which those statements, data, or instructions may be embodied, transmitted, or fixed, by any method now known or hereafter developed, regardless of whether the statements, data, or instructions are capable of being perceived by or communicated to humans, and includes prewritten or canned software that is held for repeated sale or lease, and all associated documentation and materials, if any, whether contained on magnetic tapes, discs, cards, or other devices or media, but does not include software that is adapted to specific individualized requirements of a purchaser, custom‑made and modified software designed for a particular or limited use by a purchaser, or software used to operate exempt machinery and equipment used in the process of manufacturing or assembling tangible personal property for wholesale or retail sale or lease.
For the purposes of this Act, computer software shall be considered to be tangible personal property.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑27)
Sec. 2‑27. Prepaid telephone calling arrangements. "Prepaid telephone calling arrangements" mean the right to exclusively purchase telephone or telecommunications services that must be paid for in advance and enable the origination of one or more intrastate, interstate, or international telephone calls or other telecommunications using an access number, an authorization code, or both, whether manually or electronically dialed, for which payment to a retailer must be made in advance, provided that, unless recharged, no further service is provided once that prepaid amount of service has been consumed. Prepaid telephone calling arrangements include the recharge of a prepaid calling arrangement. For purposes of this Section, "recharge" means the purchase of additional prepaid telephone or telecommunications services whether or not the purchaser acquires a different access number or authorization code. For purposes of this Section, "telecommunications" means that term as defined in Section 2 of the Telecommunications Excise Tax Act. "Prepaid telephone calling arrangement" does not include an arrangement whereby the service provider reflects the amount of the purchase as a credit on an account for a customer under an existing subscription plan.
(Source: P.A. 91‑870, eff. 6‑22‑00.)
(35 ILCS 120/2‑30) (from Ch. 120, par. 441‑30)
Sec. 2‑30. Graphic arts production. For purposes of this Act, "graphic arts production" means printing, including ink jet printing, by one or more of the processes described in Groups 323110 through 323122 of Subsector 323, Groups 511110 through 511199 of Subsector 511, and Group 512230 of Subsector 512 of the North American Industry Classification System published by the U.S. Office of Management and Budget, 1997 edition. Graphic arts production does not include (i) the transfer of images onto paper or other tangible personal property by means of photocopying or (ii) final printed products in electronic or audio form, including the production of software or audio‑books.
(Source: P.A. 91‑51, eff. 6‑30‑99; 91‑541, eff. 8‑13‑99.)
(35 ILCS 120/2‑35) (from Ch. 120, par. 441‑35)
Sec. 2‑35. Production agriculture. For purposes of this Act, "production agriculture" means the raising of or the propagation of livestock; crops for sale for human consumption; crops for livestock consumption; and production seed stock grown for the propagation of feed grains and the husbandry of animals or for the purpose of providing a food product, including the husbandry of blood stock as a main source of providing a food product. "Production agriculture" also means animal husbandry, floriculture, aquaculture, horticulture, and viticulture.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑40) (from Ch. 120, par. 441‑40)
Sec. 2‑40. Purchaser refunds. If a seller collects an amount (however designated) that purports to reimburse the seller for retailers' occupation tax liability measured by receipts that are not subject to retailers' occupation tax, or if a seller, in collecting an amount (however designated) that purports to reimburse the seller for retailers' occupation tax liability measured by receipts that are subject to tax under this Act, collects more from the purchaser than the seller's retailers' occupation tax liability on the transaction, the purchaser shall have a legal right to claim a refund of that amount from the seller. If, however, that amount is not refunded to the purchaser for any reason, the seller is liable to pay that amount to the Department. This paragraph does not apply to an amount collected by the seller as reimbursement for the seller's retailers' occupation tax liability on receipts that are subject to tax under this Act as long as the collection is made in compliance with the tax collection brackets prescribed by the Department in its rules and regulations.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑45) (from Ch. 120, par. 441‑45)
Sec. 2‑45. Manufacturing and assembly exemption. The manufacturing and assembly machinery and equipment exemption includes machinery and equipment that replaces machinery and equipment in an existing manufacturing facility as well as machinery and equipment that are for use in an expanded or new manufacturing facility.
The machinery and equipment exemption also includes machinery and equipment used in the general maintenance or repair of exempt machinery and equipment or for in‑house manufacture of exempt machinery and equipment. For the purposes of this exemption, terms have the following meanings:
(1) "Manufacturing process" means the production of
(Source: P.A. 91‑51, eff. 6‑30‑99; 92‑484, eff. 8‑23‑01.)
(35 ILCS 120/2‑50) (from Ch. 120, par. 441‑50)
Sec. 2‑50. Rolling stock exemption. Except as provided in Section 2‑51 of this Act, the rolling stock exemption applies to rolling stock used by an interstate carrier for hire, even just between points in Illinois, if the rolling stock transports, for hire, persons whose journeys or property whose shipments originate or terminate outside Illinois.
(Source: P.A. 93‑23, eff. 6‑20‑03.)
(35 ILCS 120/2‑51)
Sec. 2‑51. Motor vehicles; trailers; use as rolling stock definition.
(a) Through June 30, 2003, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 means for motor vehicles, as defined in Section 1‑146 of the Illinois Vehicle Code, and trailers, as defined in Section 1‑209 of the Illinois Vehicle Code, when on 15 or more occasions in a 12‑month period the motor vehicle and trailer has carried persons or property for hire in interstate commerce, even just between points in Illinois, if the motor vehicle and trailer transports persons whose journeys or property whose shipments originate or terminate outside Illinois. This definition applies to all property purchased for the purpose of being attached to those motor vehicles or trailers as a part thereof.
(b) On and after July 1, 2003 and through June 30, 2004, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 occurs for motor vehicles, as defined in Section 1‑146 of the Illinois Vehicle Code, when during a 12‑month period the rolling stock has carried persons or property for hire in interstate commerce for 51% of its total trips and transports persons whose journeys or property whose shipments originate or terminate outside Illinois. Trips that are only between points in Illinois shall not be counted as interstate trips when calculating whether the tangible personal property qualifies for the exemption but such trips shall be included in total trips taken.
(c) Beginning July 1, 2004, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 occurs for motor vehicles, as defined in Section 1‑146 of the Illinois Vehicle Code, when during a 12‑month period the rolling stock has carried persons or property for hire in interstate commerce for greater than 50% of its total trips for that period or for greater than 50% of its total miles for that period. The person claiming the exemption shall make an election at the time of purchase to use either the trips or mileage method. Persons who purchased motor vehicles prior to July 1, 2004 shall make an election to use either the trips or mileage method and document that election in their books and records. If no election is made under this subsection to use the trips or mileage method, the person shall be deemed to have chosen the mileage method. Any election to use either the trips or mileage method will remain in effect for that motor vehicle for any period for which the Department may issue a notice of tax liability under this Act.
For purposes of determining qualifying trips or miles, motor vehicles that carry persons or property for hire, even just between points in Illinois, will be considered used for hire in interstate commerce if the motor vehicle transports persons whose journeys or property whose shipments originate or terminate outside Illinois. The exemption for motor vehicles used as rolling stock moving in interstate commerce may be claimed only for motor vehicles whose gross vehicle weight rating exceeds 16,000 pounds. This definition applies to all property purchased for the purpose of being attached to those motor vehicles as a part thereof.
(d) Beginning July 1, 2004, "use as rolling stock moving in interstate commerce" in paragraphs (12) and (13) of Section 2‑5 occurs for trailers, as defined in Section 1‑209 of the Illinois Vehicle Code, semitrailers as defined in Section 1‑187 of the Illinois Vehicle Code, and pole trailers as defined in Section 1‑161 of the Illinois Vehicle Code, when during a 12‑month period the rolling stock has carried persons or property for hire in interstate commerce for greater than 50% of its total trips for that period or for greater than 50% of its total miles for that period. The person claiming the exemption for a trailer or trailers that will not be dedicated to a motor vehicle or group of motor vehicles shall make an election at the time of purchase to use either the trips or mileage method. Persons who purchased trailers prior to July 1, 2004 that are not dedicated to a motor vehicle or group of motor vehicles shall make an election to use either the trips or mileage method and document that election in their books and records. If no election is made under this subsection to use the trips or mileage method, the person shall be deemed to have chosen the mileage method. Any election to use either the trips or mileage method will remain in effect for that trailer for any period for which the Department may issue a notice of tax liability under this Act.
For purposes of determining qualifying trips or miles, trailers, semitrailers, or pole trailers that carry property for hire, even just between points in Illinois, will be considered used for hire in interstate commerce if the trailers, semitrailers, or pole trailers transport property whose shipments originate or terminate outside Illinois. This definition applies to all property purchased for the purpose of being attached to those trailers, semitrailers, or pole trailers as a part thereof. In lieu of a person providing documentation regarding the qualifying use of each individual trailer, semitrailer, or pole trailer, that person may document such qualifying use by providing documentation of the following:
(1) If a trailer, semitrailer, or pole trailer is
(35 ILCS 120/2‑55) (from Ch. 120, par. 441‑55)
Sec. 2‑55. Serviceman transfer. Tangible personal property purchased by a serviceman, as defined in Section 2 of the Service Occupation Tax Act, is subject to the tax imposed by this Act when purchased for transfer by the serviceman incidental to completion of a maintenance agreement.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑60) (from Ch. 120, par. 441‑60)
Sec. 2‑60. Interstate commerce exemption. No tax is imposed under this Act upon the privilege of engaging in a business in interstate commerce or otherwise, when the business may not, under the Constitution and statutes of the United States, be made the subject of taxation by this State.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑65) (from Ch. 120, par. 441‑65)
Sec. 2‑65. Liability because of amendatory Act. Revisions in Section 2 (now Sections 2 through 2‑65) by Public Act 85‑1135 do not affect tax liability that arose before January 1, 1990.
(Source: P.A. 91‑51, eff. 6‑30‑99.)
(35 ILCS 120/2‑70)
Sec. 2‑70. Sunset of exemptions, credits, and deductions. The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this amendatory Act of 1994 shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.
(Source: P.A. 88‑660, eff. 9‑16‑94.)
(35 ILCS 120/2a) (from Ch. 120, par. 441a)
Sec. 2a. It is unlawful for any person to engage in the business of selling tangible personal property at retail in this State without a certificate of registration from the Department. Application for a certificate of registration shall be made to the Department upon forms furnished by it. Each such application shall be signed and verified and shall state: (1) the name and social security number of the applicant; (2) the address of his principal place of business; (3) the address of the principal place of business from which he engages in the business of selling tangible personal property at retail in this State and the addresses of all other places of business, if any (enumerating such addresses, if any, in a separate list attached to and made a part of the application), from which he engages in the business of selling tangible personal property at retail in this State; (4) the name and address of the person or persons who will be responsible for filing returns and payment of taxes due under this Act; (5) in the case of a corporation, the name, title, and social security number of each corporate officer; (6) in the case of a limited liability company, the name, social security number, and FEIN number of each manager and member; and (7) such other information as the Department may reasonably require. The application shall contain an acceptance of responsibility signed by the person or persons who will be responsible for filing returns and payment of the taxes due under this Act. If the applicant will sell tangible personal property at retail through vending machines, his application to register shall indicate the number of vending machines to be so operated; and thereafter, he shall notify the Department by January 31 of the number of vending machines which such person was using in his business of selling tangible personal property at retail on the preceding December 31.
The Department may deny a certificate of registration to any applicant if the owner, any partner, any manager or member of a limited liability company, or a corporate officer of the applicant, is or has been the owner, a partner, a manager or member of a limited liability company, or a corporate officer, of another retailer that is in default for moneys due under this Act.
Every applicant for a certificate of registration hereunder shall, at the time of filing such application, furnish a bond from a surety company authorized to do business in the State of Illinois, or an irrevocable bank letter of credit or a bond signed by 2 personal sureties who have filed, with the Department, sworn statements disclosing net assets equal to at least 3 times the amount of the bond to be required of such applicant, or a bond secured by an assignment of a bank account or certificate of deposit, stocks or bonds, conditioned upon the applicant paying to the State of Illinois all moneys becoming due under this Act and under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution. The Department shall fix the amount of such security in each case, taking into consideration the amount of money expected to become due from the applicant under this Act and under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution. The amount of security required by the Department shall be such as, in its opinion, will protect the State of Illinois against failure to pay the amount which may become due from the applicant under this Act and under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution, but the amount of the security required by the Department shall not exceed three times the amount of the applicant's average monthly tax liability, or $50,000.00, whichever amount is lower.
No certificate of registration under this Act shall be issued by the Department until the applicant provides the Department with satisfactory security as herein provided for.
Upon receipt of the application for certificate of registration in proper form, and upon approval by the Department of the security furnished by the applicant, the Department shall issue to such applicant a certificate of registration which shall permit the person to whom it is issued to engage in the business of selling tangible personal property at retail in this State. The certificate of registration shall be conspicuously displayed at the place of business which the person so registered states in his application to be the principal place of business from which he engages in the business of selling tangible personal property at retail in this State.
No certificate of registration issued to a taxpayer who files returns required by this Act on a monthly basis shall be valid after the expiration of 5 years from the date of its issuance or last renewal. The expiration date of a sub‑certificate of registration shall be that of the certificate of registration to which the sub‑certificate relates. A certificate of registration shall automatically be renewed, subject to revocation as provided by this Act, for an additional 5 years from the date of its expiration unless otherwise notified by the Department as provided by this paragraph. Where a taxpayer to whom a certificate of registration is issued under this Act is in default to the State of Illinois for delinquent returns or for moneys due under this Act or any other State tax law or municipal or county ordinance administered or enforced by the Department, the Department shall, not less than 120 days before the expiration date of such certificate of registration, give notice to the taxpayer to whom the certificate was issued of the account period of the delinquent returns, the amount of tax, penalty and interest due and owing from the taxpayer, and that the certificate of registration shall not be automatically renewed upon its expiration date unless the taxpayer, on or before the date of expiration, has filed and paid the delinquent returns or paid the defaulted amount in full. A taxpayer to whom such a notice is issued shall be deemed an applicant for renewal. The Department shall promulgate regulations establishing procedures for taxpayers who file returns on a monthly basis but desire and qualify to change to a quarterly or yearly filing basis and will no longer be subject to renewal under this Section, and for taxpayers who file returns on a yearly or quarterly basis but who desire or are required to change to a monthly filing basis and will be subject to renewal under this Section.
The Department may in its discretion approve renewal by an applicant who is in default if, at the time of application for renewal, the applicant files all of the delinquent returns or pays to the Department such percentage of the defaulted amount as may be determined by the Department and agrees in writing to waive all limitations upon the Department for collection of the remaining defaulted amount to the Department over a period not to exceed 5 years from the date of renewal of the certificate; however, no renewal application submitted by an applicant who is in default shall be approved if the immediately preceding renewal by the applicant was conditioned upon the installment payment agreement described in this Section. The payment agreement herein provided for shall be in addition to and not in lieu of the security required by this Section of a taxpayer who is no longer considered a prior continuous compliance taxpayer. The execution of the payment agreement as provided in this Act shall not toll the accrual of interest at the statutory rate.
A certificate of registration issued under this Act more than 5 years before the effective date of this amendatory Act of 1989 shall expire and be subject to the renewal provisions of this Section on the next anniversary of the date of issuance of such certificate which occurs more than 6 months after the effective date of this amendatory Act of 1989. A certificate of registration issued less than 5 years before the effective date of this amendatory Act of 1989 shall expire and be subject to the renewal provisions of this Section on the 5th anniversary of the issuance of the certificate.
If the person so registered states that he operates other places of business from which he engages in the business of selling tangible personal property at retail in this State, the Department shall furnish him with a sub‑certificate of registration for each such place of business, and the applicant shall display the appropriate sub‑certificate of registration at each such place of business. All sub‑certificates of registration shall bear the same registration number as that appearing upon the certificate of registration to which such sub‑certificates relate.
If the applicant will sell tangible personal property at retail through vending machines, the Department shall furnish him with a sub‑certificate of registration for each such vending machine, and the applicant shall display the appropriate sub‑certificate of registration on each such vending machine by attaching the sub‑certificate of registration to a conspicuous part of such vending machine.
Where the same person engages in 2 or more businesses of selling tangible personal property at retail in this State, which businesses are substantially different in character or engaged in under different trade names or engaged in under other substantially dissimilar circumstances (so that it is more practicable, from an accounting, auditing or bookkeeping standpoint, for such businesses to be separately registered), the Department may require or permit such person (subject to the same requirements concerning the furnishing of security as those that are provided for hereinbefore in this Section as to each application for a certificate of registration) to apply for and obtain a separate certificate of registration for each such business or for any of such businesses, under a single certificate of registration supplemented by related sub‑certificates of registration.
Any person who is registered under the "Retailers' Occupation Tax Act" as of March 8, 1963, and who, during the 3‑year period immediately prior to March 8, 1963, or during a continuous 3‑year period part of which passed immediately before and the remainder of which passes immediately after March 8, 1963, has been so registered continuously and who is determined by the Department not to have been either delinquent or deficient in the payment of tax liability during that period under this Act or under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the registrant under this Act will permit the registrant to engage in business without registering separately under such other law, ordinance or resolution, shall be considered to be a Prior Continuous Compliance taxpayer. Also any taxpayer who has, as verified by the Department, faithfully and continuously complied with the condition of his bond or other security under the provisions of this Act for a period of 3 consecutive years shall be considered to be a Prior Continuous Compliance taxpayer.
Every Prior Continuous Compliance taxpayer shall be exempt from all requirements under this Act concerning the furnishing of security as a condition precedent to his being authorized to engage in the business of selling tangible personal property at retail in this State. This exemption shall continue for each such taxpayer until such time as he may be determined by the Department to be delinquent in the filing of any returns, or is determined by the Department (either through the Department's issuance of a final assessment which has become final under the Act, or by the taxpayer's filing of a return which admits tax that is not paid to be due) to be delinquent or deficient in the paying of any tax under this Act or under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the registrant under this Act will permit the registrant to engage in business without registering separately under such other law, ordinance or resolution, at which time that taxpayer shall become subject to all the financial responsibility requirements of this Act and, as a condition of being allowed to continue to engage in the business of selling tangible personal property at retail, shall be required to post bond or other acceptable security with the Department covering liability which such taxpayer may thereafter incur. Any taxpayer who fails to pay an admitted or established liability under this Act may also be required to post bond or other acceptable security with this Department guaranteeing the payment of such admitted or established liability.
No certificate of registration shall be issued to any person who is in default to the State of Illinois for moneys due under this Act or under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution.
Any person aggrieved by any decision of the Department under this Section may, within 20 days after notice of such decision, protest and request a hearing, whereupon the Department shall give notice to such person of the time and place fixed for such hearing and shall hold a hearing in conformity with the provisions of this Act and then issue its final administrative decision in the matter to such person. In the absence of such a protest within 20 days, the Department's decision shall become final without any further determination being made or notice given.
With respect to security other than bonds (upon which the Department may sue in the event of a forfeiture), if the taxpayer fails to pay, when due, any amount whose payment such security guarantees, the Department shall, after such liability is admitted by the taxpayer or established by the Department through the issuance of a final assessment that has become final under the law, convert the security which that taxpayer has furnished into money for the State, after first giving the taxpayer at least 10 days' written notice, by registered or certified mail, to pay the liability or forfeit such security to the Department. If the security consists of stocks or bonds or other securities which are listed on a public exchange, the Department shall sell such securities through such public exchange. If the security consists of an irrevocable bank letter of credit, the Department shall convert the security in the manner provided for in the Uniform Commercial Code. If the security consists of a bank certificate of deposit, the Department shall convert the security into money by demanding and collecting the amount of such bank certificate of deposit from the bank which issued such certificate. If the security consists of a type of stocks or other securities which are not listed on a public exchange, the Department shall sell such security to the highest and best bidder after giving at least 10 days' notice of the date, time and place of the intended sale by publication in the "State Official Newspaper". If the Department realizes more than the amount of such liability from the security, plus the expenses incurred by the Department in converting the security into money, the Department shall pay such excess to the taxpayer who furnished such security, and the balance shall be paid into the State Treasury.
The Department shall discharge any surety and shall release and return any security deposited, assigned, pledged or otherwise provided to it by a taxpayer under this Section within 30 days after:
(1) such taxpayer becomes a Prior Continuous
(35 ILCS 120/2b) (from Ch. 120, par. 441b)
Sec. 2b. The Department may, after notice and a hearing as provided herein, revoke the certificate of registration of any person who violates any of the provisions of this Act. Before revocation of a certificate of registration the Department shall, within 90 days after non‑compliance and at least 7 days prior to the date of the hearing, give the person so accused notice in writing of the charge against him or her, and on the date designated shall conduct a hearing upon this matter. The lapse of such 90 day period shall not preclude the Department from conducting revocation proceedings at a later date if necessary. Any hearing held under this Section shall be conducted by the Director of Revenue or by any officer or employee of the Department designated, in writing, by the Director of Revenue.
Upon the hearing of any such proceeding, the Director of Revenue, or any officer or employee of the Department designated, in writing, by the Director of Revenue, may administer oaths and the Department may procure by its subpoena the attendance of witnesses and, by its subpoena duces tecum, the production of relevant books and papers. Any circuit court, upon application either of the accused or of the Department, may, by order duly entered, require the attendance