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1		AN ACT concerning revenue.
2		WHEREAS, the changes made by this Act are made under
3		subsection (a) of Section 3 of Article IX of the Illinois
4		Constitution. If there are future changes made to subsection
5		(a) of Section 3 of Article IX of the Illinois Constitution,
6		then it may result in evaluating the taxes on income imposed by
7		this Act; therefore
8		Be it enacted by the People of the State of Illinois,
9		represented in the General Assembly:
10		ARTICLE 5. BUDGET ECONOMIC STABILIZATION FUND ACT
11		Section 5-1. Short title. This Act may be cited as the
12		Budget Economic Stabilization Fund Act.
13		Section 5-5. Legislative intent.
14		The General Assembly finds that, in order to restore
15		Illinois' fiscal health, retaining a share of above-trend State
16		revenues for future needs and for reducing the need for new
17		taxes or increasing any rate of tax or otherwise modifying the
18		tax structure, including the elimination or modification of
19		deductions, exclusions, or exemptions, is a priority.
20		Section 5-10. Definitions. As used in this Act:

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1		"Above-trend revenues" means general funds revenue
2		collections that exceed 2.4% of the prior fiscal year's general
3		funds revenue collections.
4		"General funds" means the General Revenue Fund, the Common
5		School Fund, the Education Assistance Fund, and the General
6		Revenue Common School Special Account Fund.
7		"General funds revenue collections" means, for each fiscal
8		year, all gross personal and corporate income taxes, other
9		taxes, fees, and other revenues expected to be deposited into
10		the State's general funds and recurring transfers into general
11		funds from the State Lottery and gaming, but does not include
12		other transfers and federal funds.
13		"Unpaid bills" means: pending vouchers approved for
14		payment but not paid as of December 31st for each fiscal year
15		by the Office of the Comptroller; pending transfers required by
16		State statute that have been recorded but have not been paid
17		from the General Revenue Fund, Common School Fund, or Education
18		Assistance Fund; and all vouchers for invoices that have been
19		certified as a proper bill, as defined by the State Prompt
20		Payment Act, by the Departments of Healthcare and Family
21		Services, Central Management Services, Human Services,
22		Revenue, and Aging but not yet approved by the Comptroller as
23		of December 31st of each fiscal year from the General Revenue
24		Fund, Common School Fund, Education Assistance Fund, Health
25		Insurance Fund, Income Tax Refund Fund, and Healthcare Provider
26		Relief Fund.

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1		Section 5-15. Certification of the backlog of bills. The
2		amount of unpaid bills shall be reported by the Comptroller and
3		the Departments of Healthcare and Family Services, Central
4		Management Services, Human Services, Revenue, and Aging to the
5		Governor's Office of Management and Budget no later than
6		January 10th of each year. By January 15th of each year, the
7		Governor's Office of Management and Budget shall notify the
8		Comptroller, Treasurer, the Speaker and Minority Leader of the
9		House, and the President and Minority Leader of the Senate of
10		the total amount of unpaid bills as of the preceding December
11		31st.
12		Section 5-20. Payment of unpaid bills. If unpaid bills
13		total more than $1,000,000,000, the Governor shall include in
14		his or her budget for the next fiscal year an amount to pay
15		unpaid bills equal to the lesser of (i) 50% of above-trend
16		revenues that the Governor projects to be received by the State
17		in the next fiscal year or (ii) the amount of above-trend
18		revenues needed to reduce the unpaid bills to $1,000,000,000.
19		This amount to pay off unpaid bills shall be included in the
20		Governor's budget as an appropriation to the Bill Backlog
21		Payment Fund from the General Revenue Fund. Nothing in this Act
22		prohibits the Governor from including in his or her budget, or
23		the General Assembly from appropriating, additional moneys for
24		the payment of unpaid bills. If for any reason the

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1		appropriations enacted are insufficient to meet the payment of
2		unpaid bills required to be included in the Governor's budget
3		under this Section, then there is hereby appropriated, on a
4		continuing annual basis in each fiscal year, from the General
5		Revenue Fund, the amounts necessary for this payment.
6		Section 5-25. Transfers into the Budget Economic
7		Stabilization Fund.
8		(a) If unpaid bills total less than $1,000,000,000 the
9		Governor shall include in his or her budget for the next fiscal
10		year at least 50% of any above-trend revenues that the Governor
11		projects to be received in the next fiscal year for deposit to
12		the Budget Economic Stabilization Fund as an appropriation from
13		the General Revenue Fund. Except as provided in subsection (b)
14		of this Section, if for any reason the appropriations enacted
15		are insufficient to make the deposit required by this Section,
16		then this Section shall constitute a continuing appropriation
17		from the General Revenue Fund of all amounts necessary for this
18		deposit.
19		(b) If the balance of the Budget Economic Stabilization
20		Fund at the beginning of the next fiscal year is projected by
21		the Governor to exceed 5% of the general funds revenue
22		collections estimated for the next fiscal year, transfers into
23		the Budget Economic Stabilization Fund are not required for
24		that fiscal year.

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1		Section 5-30. Withdrawal from Budget Economic
2		Stabilization Fund.
3		(a) Upon the direction of the Governor at any time within a
4		fiscal year and within the limitations set forth in this
5		Section, the Comptroller and the Treasurer shall transfer the
6		amounts designated by the Governor from the Budget Economic
7		Stabilization Fund to general funds as specified by the
8		Governor. The transfer shall be made as soon as practicable on
9		or after the 30th day after the Governor has provided written
10		notice of his or her direction to transfer to the Clerk of the
11		House of Representatives, the Secretary of the Senate, and the
12		Index Department of the Office of the Secretary of State, with
13		copies of the notice provided to the Comptroller and Treasurer.
14		The notice shall be published on the website of the Governor's
15		Office of Management and Budget. The amount directed to be
16		transferred may not exceed the limits set forth in subsection
17		(c) of this Section. The Governor may direct a transfer from
18		the Budget Economic Stabilization Fund to any of the general
19		funds only if: he or she estimates that general funds revenue
20		collections for the current fiscal year will be less than the
21		general funds revenue collections as estimated at the time of
22		enactment of appropriations for the current fiscal year; the
23		transfer is necessary to provide for the health, safety, and
24		welfare of the people of the State of Illinois; and the funds
25		transferred are to be spent within previously enacted
26		appropriations.

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1		(b) In addition to transfers directed by the Governor
2		within a fiscal year, transfers or appropriations from the
3		Budget Economic Stabilization Fund for the current or next
4		fiscal year may be made by vote of the General Assembly if:
5		(1) the General Assembly projects that general funds
6		revenue collections for the current or next fiscal year are
7		less than the general funds revenue collections as
8		estimated at the time of enactment of appropriations for
9		the current fiscal year for the preceding year;
10		(2) the General Assembly finds that general funds
11		revenue collections have remained stagnant or dropped
12		during 2 consecutive fiscal quarters within the preceding
13		12 months as compared to the corresponding 2 fiscal
14		quarters of the prior fiscal year; or
15		(3) that the State Coincident Index for the State of
16		Illinois has remained stagnant or dropped over 2
17		consecutive quarters within the preceding 12 months, as
18		published in the Federal Reserve Bank of Philadelphia's
19		publication entitled "State Coincident Indexes" or its
20		successor publication.
21		(c) Transfers or appropriations from the Budget Economic
22		Stabilization Fund may not, during any fiscal year, exceed the
23		lesser of:
24		(1) 50% of the Budget Economic Stabilization Fund's
25		balance;
26		(2) in the case of appropriation enacted by the General

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1		Assembly, 50% of the difference between (i) general funds
2		revenue collections, as projected by the Commission on
3		Government Forecasting and Accountability to be received
4		in the next fiscal year, and (ii) a revised general fund
5		revenue collections projection for the current fiscal year
6		presented to the General Assembly by the Commission on
7		Government Forecasting and Accountability; or
8		(3) in the case of transfers to be directed by the
9		Governor within a fiscal year, 50% of the difference
10		between (i) general funds revenue collections, to be
11		received in the next fiscal year as projected by the
12		Governor, and (ii) a revised general fund revenue
13		collections projection for the current fiscal year as
14		projected by the Governor.
15		Section 5-35. Fund creation.
16		(a) There is created the Budget Economic Stabilization Fund
17		as a special fund in the State Treasury consisting of moneys
18		appropriated or transferred to that Fund as provided in Section
19		5-30 of this Act and as otherwise provided by law. All earnings
20		on Budget Economic Stabilization Fund investments shall be
21		deposited into that Fund.
22		(b) There is created the Bill Backlog Payment Fund as a
23		special fund in the State Treasury consisting of moneys
24		appropriated or transferred to that Fund as provided in Section -
25		25 of this Act and as otherwise provided by law. All earnings

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1		on Bill Backlog Payment Fund investments shall be deposited
2		into that Fund.
3		ARTICLE 10. VIDEO SERVICE TAX MODERNIZATION
4		Section 10-1. Short title. This Act may be cited as the
5		Video Service Tax Modernization Act.
6		Section 10-5. Application. This Act applies to the
7		provision of direct-to-home satellite service, direct
8		broadcast satellite service, and digital audio-visual works on
9		or after the effective date of this Act.
10		This Act does not apply to: (1) satellite radio service or
11		subscription radio service whereby a digital radio signal is
12		broadcast without any corresponding or related video
13		programming or services; or (2) a satellite television
14		transmission of simulcast horse races broadcast from or
15		received at locations operated by an organization licensee, an
16		inter-track wagering licensee, or an inter-track wagering
17		location licensee licensed under the Illinois Horse Racing Act
18		of 1975.
19		Section 10-10. Definitions. As used in this Act:
20		"Department" means the Department of Revenue.
21		"Digital audio-visual works" means a series of related
22		images that, when shown in succession, impart an impression of

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1		motion, together with accompanying sounds, if any, sold to an
2		end user with rights of less than permanent use. "Digital
3		audio-visual works" does not include cable service provided by
4		a cable operator, as those terms are defined in 47 U.S.C. 522,
5		and does not include video service provided by a holder, as
6		those terms are defined in Article 21 of the Public Utilities
7		Act.
8		"Direct broadcast satellite service" means video services
9		transmitted or broadcast by satellite directly to the
10		subscriber's premises with the use of or accompanied by ground
11		receiving or distribution equipment, including, but not
12		limited to, infrastructure to provide Internet access used in
13		the transmission or broadcast of such video services, at the
14		subscriber's premises, but not in the uplink process to the
15		satellite, and includes, but is not limited to, the
16		retransmission of local broadcast television, the provision of
17		premium channels, other recurring monthly services, service
18		and pay-per-view, video-on-demand, and other event-based
19		services.
20		"Direct-to-home satellite service" has the meaning given
21		to that term in Public Law No. 104-104, Title VI, Section
22		602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
23		152).
24		"End user" means any person other than a person who
25		receives by contract a product transferred electronically for
26		further commercial broadcast, rebroadcast, transmission,

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1		retransmission, licensing, relicensing, distribution,
2		redistribution, or exhibition of the product, in whole or in
3		part, to another person or persons.
4		"Gross revenue" means all consideration of any kind or
5		nature received by a provider, or an affiliate of the provider,
6		in connection with the provision of direct-to-home satellite
7		service, direct broadcast satellite service, or digital
8		audio-visual works to subscribers. "Gross revenue" does not
9		include:
10		(1) charges for the rental of equipment related to the
11		provision of direct-to-home satellite service, direct
12		broadcast satellite service, or digital audiovisual works;
13		(2) activation, installation, repair, or maintenance
14		charges or similar service charges related to the provision
15		of direct-to-home satellite service, direct broadcast
16		satellite service, or digital audio-visual works;
17		(3) service order charges, service termination
18		charges, or any other administrative charges related to the
19		provision of direct-to-home satellite service, direct
20		broadcast satellite service, or digital audiovisual works;
21		(4) revenue not actually received, regardless of
22		whether it is billed, including, but not limited to, bad
23		debts;
24		(5) revenue received by an affiliate or other person in
25		exchange for supplying goods and services used by a
26		provider;

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1		(6) the amount of any refunds, rebates, or discounts
2		made to subscribers, advertisers, or other persons;
3		(7) revenue from any service that is subject to tax
4		under the Service Occupation Tax Act, Retailers'
5		Occupation Tax Act, Service Use Tax Act, or Use Tax Act;
6		(8) the tax imposed by this Act or any other tax of
7		general applicability imposed on a provider or a purchaser
8		of direct-to-home satellite service, direct broadcast
9		satellite service, or digital audio-visual works by a
10		federal, State, or local governmental entity and required
11		to be collected by a person and remitted to the taxing
12		entity;
13		(9) late payment fees collected from subscribers;
14		(10) charges, other than those charges specifically
15		described in this Act, that are aggregated or bundled with
16		such specifically-described charges on a subscriber's
17		bill, if the provider can reasonably identify the charges
18		in its books and records kept in the regular course of
19		business;
20		(11) revenue from advertising services; or
21		(12) charges that may not be taxed pursuant to the
22		federal Internet Tax Freedom Act.
23		"Permanent" means perpetual or for an indefinite or
24		unspecified length of time.
25		"Person" means a natural individual, firm, trust, estate,
26		partnership, association, joint stock company, joint venture,

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1		corporation, or limited liability company, or a receiver,
2		trustee, guardian, or other representative appointed by order
3		of any court, and includes the federal and State governments,
4		including State universities created by statute, and
5		municipalities, counties, and other political subdivisions of
6		this State.
7		"Premises" means a residence or place of business of a
8		subscriber in this State.
9		"Provider" means a person who transmits, broadcasts,
10		sells, or distributes direct-to-home satellite service, direct
11		broadcast satellite service, or digital audio-visual works to
12		subscribers in the State.
13		"Subscriber" means a member of the general public who
14		receives direct-to-home satellite service, direct broadcast
15		satellite service, or digital audio-visual works from a
16		provider and does not further distribute the service in the
17		ordinary course of business.
18		Section 10-15. Imposition of tax.
19		(a) A tax is imposed upon the act or privilege of providing
20		direct-to-home satellite service, direct broadcast satellite
21		service, or digital audio-visual works to a subscriber in this
22		State by any provider at the rate of 5% of the provider's gross
23		revenues derived from or attributable to that subscriber.
24		(b) For purposes of the tax imposed by subsection (a), a
25		subscriber is in this State if the subscriber's street address

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1		representative of where the subscriber's use or access of the
2		direct-to-home satellite service, direct broadcast satellite
3		service, or digital audio visual work primarily occurs, which
4		must be the street address of the subscriber based on such
5		other information kept by the provider in the regular course of
6		its business.
7		(c) The tax imposed by subsection (a) may be passed through
8		to, and collected from, the provider's subscribers in Illinois.
9		To the extent allowed under federal or State law, a provider
10		may identify as a separate line item on each regular bill
11		issued to a subscriber the amount of the total bill assessed as
12		a tax under this Act.
13		(d) To prevent actual multi-state taxation upon the act or
14		privilege that is subject to taxation under this Act, any
15		taxpayer, upon proof that that taxpayer has paid a tax in
16		another state on such event, shall be allowed a credit against
17		the tax imposed in this Act to the extent of the amount of such
18		tax properly due and paid in such other state. However, such
19		tax is not imposed on the act or privilege to the extent such
20		act or privilege may not, under the Constitution and statutes
21		of the United States, be made the subject of taxation by the
22		State.
23		Section 10-20. Remittances.
24		(a) On or before the twentieth day of each calendar month,
25		every provider of direct-to-home satellite service, direct

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1		broadcast satellite service, or digital audio-visual works
2		that provides such service or services to a subscriber in this
3		State during the preceding calendar month shall file a return
4		with the Department, in a form prescribed by the Department,
5		stating:
6		(1) the name of the provider;
7		(2) the address of the provider's principal place of
8		business;
9		(3) the total amount of gross revenues received by the
10		provider during the preceding calendar month, quarter, or
11		year, as the case may be, from the provision of
12		direct-to-home satellite service, direct broadcast
13		satellite service, or digital audio-visual works during
14		that preceding calendar month, quarter, or year and upon
15		the basis of which the tax is imposed;
16		(4) the amount of tax due;
17		(5) the signature of the taxpayer; and
18		(6) such other reasonable information as the
19		Department may require.
20		(b) If a taxpayer fails to sign a return within 30 days
21		after the proper notice and demand for signature by the
22		Department is received by the taxpayer, then the return shall
23		be considered valid and any amount shown to be due on the
24		return shall be deemed assessed.
25		(c) If the provider is otherwise required to file a monthly
26		return, and if the provider's average monthly tax liability to

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1		the Department under this Act does not exceed $200, the
2		Department may authorize the provider's returns to be filed on
3		a quarter annual basis, with the return for January, February,
4		and March of a given year being due by April 20 of that year;
5		with the return for April, May, and June of a given year being
6		due by July 20 of that year; with the return for July, August,
7		and September of a given year being due by October 20 of that
8		year, and with the return for October, November, and December
9		of a given year being due by January 20 of the following year.
10		(d) If the provider is otherwise required to file a monthly
11		or quarterly return, and if the provider's average monthly tax
12		liability with the Department under this Act does not exceed
13		$50, the Department may authorize the provider's returns to be
14		filed on an annual basis, with the return for a given year
15		being due by January 20 of the following year.
16		(e) Those quarterly and annual returns shall be subject to
17		the same requirements as to form and substance as monthly
18		returns.
19		(f) A taxpayer who has an annual tax liability in the
20		amount set forth in subsection (b) of Section 2505-210 of the
21		Department of Revenue Law shall make all payments required by
22		rules of the Department by electronic funds transfer.
23		Any taxpayer not required to make payments by electronic
24		funds transfer may make payments by electronic funds transfer
25		with the permission of the Department.
26		All taxpayers required to make payment by electronic funds

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1		transfer and any taxpayers authorized to voluntarily make
2		payments by electronic funds transfer shall make those payments
3		in the manner authorized by the Department.
4		Section 10-25. Records.
5		(a) A provider on whom the tax is imposed by this Act shall
6		maintain the necessary records, and any other information
7		required by the Department, to determine the amount of the tax
8		that the provider is required to remit and any credit that the
9		provider is entitled to claim under this Act.
10		(b) The records shall be open at all times to inspection by
11		the Department.
12		Section 10-30. Rules. The Department is authorized to adopt
13		and enforce any reasonable rules and to prescribe such forms
14		relating to the administration and enforcement of this Act as
15		it may deem appropriate.
16		Section 10-35. Incorporation of Retailers' Occupation Tax
17		Act and Uniform Penalty and Interest Act. All of the provisions
18		of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
19		Retailers' Occupation Tax Act, which are not inconsistent with
20		this Act, and the Uniform Penalty and Interest Act, shall
21		apply, as far as practicable, to the subject matter of this Act
22		to the same extent as if such provisions were included herein.
23		References in those incorporated Sections to taxpayers and to

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1		persons engaged in the business of selling tangible personal
2		property at retail mean providers of direct-to-home satellite
3		service, direct broadcast satellite service, or digital
4		audio-visual works when used in this Act.
5		ARTICLE 15. ENTERTAINMENT TAX FAIRNESS ACT
6		Section 15-1. Short title. This Act may be cited as the
7		Entertainment Tax Fairness Act.
8		Section 15-5. Application. This Act applies to all
9		subscribers of entertainment in this State for the privilege to
10		witness, view, or otherwise enjoy the entertainment.
11		This Act does not apply to: (1) satellite radio service or
12		subscription radio service whereby a digital radio signal is
13		broadcast without any corresponding or related video
14		programming or services; or (2) a satellite television
15		transmission of simulcast horse races broadcast from or
16		received at locations operated by an organization licensee, an
17		inter-track wagering licensee, or an inter-track wagering
18		location licensee licensed under the Illinois Horse Racing Act
19		of 1975.
20		Section 15-10. Definitions. As used in this Act:
21		"Cable service" has the meaning given to that term in item
22		(6) of 47 U.S.C. 522.

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1		"Department" means the Department of Revenue.
2		"Digital audio-visual works service" means the
3		transmission of a series of related images that, when shown in
4		succession, impart an impression of motion, together with
5		accompanying sounds, if any, sold to an end user with rights of
6		less than permanent use. "Digital audio-visual works service"
7		does not include cable service or video service.
8		"Direct broadcast satellite service" means video services
9		transmitted or broadcast by satellite directly to the
10		subscriber's premises with the use of or accompanied by ground
11		receiving or distribution equipment, including, but not
12		limited to, infrastructure to provide Internet access used in
13		the transmission or broadcast of such video services, at the
14		subscriber's premises, but not in the uplink process to the
15		satellite, and includes, but is not limited to, the
16		retransmission of local broadcast television, the provision of
17		premium channels, other recurring monthly services, service
18		and pay-per-view, video-on-demand, and other event-based
19		services.
20		"Direct-to-home satellite service" has the meaning given
21		to that term in Public Law No. 104-104, Title VI, Section
22		602(a), February 8, 1996, 110 Stat. 144 (reprinted at 47 U.S.C.
23		152).
24		"End user" means any person other than a person who
25		receives by contract a product transferred electronically for
26		further commercial broadcast, rebroadcast, transmission,

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1		retransmission, licensing, relicensing, distribution,
2		redistribution, or exhibition of the product, in whole or in
3		part, to another person or persons.
4		"Entertainment" means any paid video programming whether
5		transmitted by cable service, direct-to-home satellite
6		service, direct broadcast satellite service, digital
7		audio-visual works service, or video service to a subscriber in
8		this State.
9		"Permanent" means perpetual or for an indefinite or
10		unspecified length of time.
11		"Provider" means a person who transmits, broadcasts,
12		sells, or distributes cable service, direct-to-home satellite
13		service, direct broadcast satellite service, digital
14		audio-visual works service, or video service to subscribers in
15		the State.
16		"Subscriber" means a member of the general public who
17		receives cable service, direct-to-home satellite service,
18		direct broadcast satellite service, or digital audio-visual
19		works service, or video service from a provider and does not
20		further distribute the service in the ordinary course of
21		business.
22		"Video service" has the meaning given to that term in the
23		Cable and Video Competition Law of 2007 of the Public Utilities
24		Act.
25		Section 15-15. Imposition of tax.

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1		(a) A tax is imposed upon the subscribers of entertainment
2		in this State at the rate of 1% of the charges paid for the
3		privilege to witness, view, or otherwise enjoy the
4		entertainment.
5		(b) For purposes of the tax imposed by subsection (a), a
6		subscriber is in this State if the subscriber's street address
7		is representative of where the subscriber's use or access of
8		the entertainment primarily occurs, which must be the street
9		address of the subscriber based on such other information kept
10		by the provider in the regular course of its business.
11		(c) The provider of the entertainment shall collect and
12		secure from each subscriber the tax imposed by this Act and
13		remit the tax to the Department as set forth in Section 15-20
14		of this Act.
15		Section 15-20. Remittances.
16		(a) On or before the twentieth day of each calendar month,
17		every provider shall file a return with the Department, in a
18		form prescribed by the Department, stating:
19		(1) the name of the provider;
20		(2) the address of the provider's principal place of
21		business;
22		(3) the total amount of tax revenues collected by the
23		provider under this Act during the preceding calendar
24		month, quarter, or year, as the case may be, during that
25		preceding calendar month, quarter, or year and upon the

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1		basis of which the tax is imposed;
2		(4) the amount of tax due;
3		(5) the signature of the provider; and
4		(6) such other reasonable information as the
5		Department may require.
6		(b) If a provider fails to sign a return within 30 days
7		after the proper notice and demand for signature by the
8		Department is received by the provider, then the return shall
9		be considered valid and any amount shown to be due on the
10		return shall be deemed assessed.
11		(c) If the provider is otherwise required to file a monthly
12		return, and if the amount collected by the provider under this
13		Act does not exceed $200, the Department may authorize the
14		provider's returns to be filed on a quarter annual basis, with
15		the return for January, February, and March of a given year
16		being due by April 20 of that year; with the return for April,
17		May, and June of a given year being due by July 20 of that year;
18		with the return for July, August, and September of a given year
19		being due by October 20 of that year, and with the return for
20		October, November, and December of a given year being due by
21		January 20 of the following year.
22		(d) If the provider is otherwise required to file a monthly
23		or quarterly return, and if the amount collected by the
24		provider under this Act does not exceed $50, the Department may
25		authorize the provider's returns to be filed on an annual
26		basis, with the return for a given year being due by January 20

SB0009 Engrossed - 22 - LRB100 06347 HLH 16385 b
1		of the following year.
2		(e) Those quarterly and annual returns shall be subject to
3		the same requirements as to form and substance as monthly
4		returns.
5		(f) A provider responsible for collecting and remitting the
6		amount set forth in subsection (b) of Section 2505-210 of the
7		Department of Revenue Law shall make all payments required by
8		rules of the Department by electronic funds transfer.
9		Any provider not required to make payments by electronic
10		funds transfer may make payments by electronic funds transfer
11		with the permission of the Department.
12		All providers required to make payment by electronic funds
13		transfer and any taxpayers authorized to voluntarily make
14		payments by electronic funds transfer shall make those payments
15		in the manner authorized by the Department.
16		Section 15-25. Records.
17		(a) A provider subject to this Act shall maintain the
18		necessary records, and any other information required by the
19		Department, to determine the amount of the tax that the
20		provider is required to collect and remit and any credit that
21		the provider is entitled to claim under this Act.
22		(b) The records shall be open at all times to inspection by
23		the Department.
24		Section 15-30. Rules. The Department is authorized to adopt

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1		and enforce any reasonable rules and to prescribe such forms
2		relating to the administration and enforcement of this Act as
3		it may deem appropriate.
4		Section 15-35. Incorporation of Retailers' Occupation Tax
5		Act and Uniform Penalty and Interest Act. All of the provisions
6		of Sections 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, and 5j of the
7		Retailers' Occupation Tax Act, which are not inconsistent with
8		this Act, and the Uniform Penalty and Interest Act, shall
9		apply, as far as practicable, to the subject matter of this Act
10		to the same extent as if such provisions were included herein.
11		References in those incorporated Sections to taxpayers and to
12		persons engaged in the business of selling tangible personal
13		property at retail mean providers of direct-to-home satellite
14		service, direct broadcast satellite service, or digital
15		audio-visual works service when used in this Act.
16		ARTICLE 30. AMENDATORY PROVISIONS
17		Section 30-5. The State Finance Act is amended by changing
18		Section 6z-51 and by adding Sections 5.878 and 5.879 as
19		follows:
20		(30 ILCS 105/5.878 new)
21		Sec. 5.878. The Budget Economic Stabilization Fund.

SB0009 Engrossed - 24 - LRB100 06347 HLH 16385 b
1		(30 ILCS 105/5.879 new)
2		Sec. 5.879. The Bill Backlog Payment Fund.
3		(30 ILCS 105/6z-51)
4		Sec. 6z-51. Budget Stabilization Fund.
5		(a) The Budget Stabilization Fund, a special fund in the
6		State Treasury, shall consist of moneys appropriated or
7		transferred to that Fund, as provided in Section 6z-43 and as
8		otherwise provided by law. All earnings on Budget Stabilization
9		Fund investments shall be deposited into that Fund.
10		(b) Until an initial transfer has been made to the Budget
11		Economic Stabilization Fund under Section 5-30 of the Budget
12		Economic Stabilization Fund Act, the The State Comptroller may
13		direct the State Treasurer to transfer moneys from the Budget
14		Stabilization Fund to the General Revenue Fund in order to meet
15		cash flow deficits resulting from timing variations between
16		disbursements and the receipt of funds within a fiscal year.
17		Any moneys so borrowed in any fiscal year other than Fiscal
18		Year 2011 shall be repaid by June 30 of the fiscal year in
19		which they were borrowed. Any moneys so borrowed in Fiscal Year
20		2011 shall be repaid no later than July 15, 2011.
21		(c) During Fiscal Year 2017 only, amounts may be expended
22		from the Budget Stabilization Fund only pursuant to specific
23		authorization by appropriation. Any moneys expended pursuant
24		to appropriation shall not be subject to repayment.
25		(Source: P.A. 99-523, eff. 6-30-16.)

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1		Section 30-10. The Illinois Income Tax Act is amended by
2		changing Sections 201, 203, 204, 208, 212, 222, 804, 901, and
3		1501 and by adding Section 225 as follows:
4		(35 ILCS 5/201) (from Ch. 120, par. 2-201)
5		Sec. 201. Tax Imposed.
6		(a) In general. A tax measured by net income is hereby
7		imposed on every individual, corporation, trust and estate for
8		each taxable year ending after July 31, 1969 on the privilege
9		of earning or receiving income in or as a resident of this
10		State. Such tax shall be in addition to all other occupation or
11		privilege taxes imposed by this State or by any municipal
12		corporation or political subdivision thereof.
13		(b) Rates. The tax imposed by subsection (a) of this
14		Section shall be determined as follows, except as adjusted by
15		subsection (d-1):
16		(1) In the case of an individual, trust or estate, for
17		taxable years ending prior to July 1, 1989, an amount equal
18		to 2 1/2% of the taxpayer's net income for the taxable
19		year.
20		(2) In the case of an individual, trust or estate, for
21		taxable years beginning prior to July 1, 1989 and ending
22		after June 30, 1989, an amount equal to the sum of (i) 2
23		1/2% of the taxpayer's net income for the period prior to
24		July 1, 1989, as calculated under Section 202.3, and (ii)

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1		3% of the taxpayer's net income for the period after June
2		30, 1989, as calculated under Section 202.3.
3		(3) In the case of an individual, trust or estate, for
4		taxable years beginning after June 30, 1989, and ending
5		prior to January 1, 2011, an amount equal to 3% of the
6		taxpayer's net income for the taxable year.
7		(4) In the case of an individual, trust, or estate, for
8		taxable years beginning prior to January 1, 2011, and
9		ending after December 31, 2010, an amount equal to the sum
10		of (i) 3% of the taxpayer's net income for the period prior
11		to January 1, 2011, as calculated under Section 202.5, and
12		(ii) 5% of the taxpayer's net income for the period after
13		December 31, 2010, as calculated under Section 202.5.
14		(5) In the case of an individual, trust, or estate, for
15		taxable years beginning on or after January 1, 2011, and
16		ending prior to January 1, 2015, an amount equal to 5% of
17		the taxpayer's net income for the taxable year.
18		(5.1) In the case of an individual, trust, or estate,
19		for taxable years beginning prior to January 1, 2015, and
20		ending after December 31, 2014, an amount equal to the sum
21		of (i) 5% of the taxpayer's net income for the period prior
22		to January 1, 2015, as calculated under Section 202.5, and
23		(ii) 3.75% of the taxpayer's net income for the period
24		after December 31, 2014, as calculated under Section 202.5.
25		(5.2) In the case of an individual, trust, or estate,
26		for taxable years beginning on or after January 1, 2015,

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1		and ending prior to January 1, 2017 January 1, 2025, an
2		amount equal to 3.75% of the taxpayer's net income for the
3		taxable year.
4		(5.3) In the case of an individual, trust, or estate,
5		for taxable years beginning prior to January 1, 2017
6		January 1, 2025, and ending after December 31, 2016
7		December 31, 2024, an amount equal to the sum of (i) 3.75%
8		of the taxpayer's net income for the period prior to
9		January 1, 2017 January 1, 2025, as calculated under
10		Section 202.5, and (ii) 4.95% 3.25% of the taxpayer's net
11		income for the period after December 31, 2016 December 31,
12		2024, as calculated under Section 202.5.
13		(5.4) In the case of an individual, trust, or estate,
14		for taxable years beginning on or after January 1, 2017
15		January 1, 2025, an amount equal to 4.95% 3.25% of the
16		taxpayer's net income for the taxable year.
17		(6) In the case of a corporation, for taxable years
18		ending prior to July 1, 1989, an amount equal to 4% of the
19		taxpayer's net income for the taxable year.
20		(7) In the case of a corporation, for taxable years
21		beginning prior to July 1, 1989 and ending after June 30,
22		1989, an amount equal to the sum of (i) 4% of the
23		taxpayer's net income for the period prior to July 1, 1989,
24		as calculated under Section 202.3, and (ii) 4.8% of the
25		taxpayer's net income for the period after June 30, 1989,
26		as calculated under Section 202.3.

SB0009 Engrossed - 28 - LRB100 06347 HLH 16385 b
1		(8) In the case of a corporation, for taxable years
2		beginning after June 30, 1989, and ending prior to January
3		1, 2011, an amount equal to 4.8% of the taxpayer's net
4		income for the taxable year.
5		(9) In the case of a corporation, for taxable years
6		beginning prior to January 1, 2011, and ending after
7		December 31, 2010, an amount equal to the sum of (i) 4.8%
8		of the taxpayer's net income for the period prior to
9		January 1, 2011, as calculated under Section 202.5, and
10		(ii) 7% of the taxpayer's net income for the period after
11		December 31, 2010, as calculated under Section 202.5.
12		(10) In the case of a corporation, for taxable years
13		beginning on or after January 1, 2011, and ending prior to
14		January 1, 2015, an amount equal to 7% of the taxpayer's
15		net income for the taxable year.
16		(11) In the case of a corporation, for taxable years
17		beginning prior to January 1, 2015, and ending after
18		December 31, 2014, an amount equal to the sum of (i) 7% of
19		the taxpayer's net income for the period prior to January
20		1, 2015, as calculated under Section 202.5, and (ii) 5.25%
21		of the taxpayer's net income for the period after December
22		31, 2014, as calculated under Section 202.5.
23		(12) In the case of a corporation, for taxable years
24		beginning on or after January 1, 2015, and ending prior to
25		January 1, 2017 January 1, 2025, an amount equal to 5.25%
26		of the taxpayer's net income for the taxable year.

SB0009 Engrossed - 29 - LRB100 06347 HLH 16385 b
1		(13) In the case of a corporation, for taxable years
2		beginning prior to January 1, 2017 January 1, 2025, and
3		ending after December 31, 2016 December 31, 2024, an amount
4		equal to the sum of (i) 5.25% of the taxpayer's net income
5		for the period prior to January 1, 2017 January 1, 2025, as
6		calculated under Section 202.5, and (ii) 7% 4.8% of the
7		taxpayer's net income for the period after December 31,
8		2016 December 31, 2024, as calculated under Section 202.5.
9		(14) In the case of a corporation, for taxable years
10		beginning on or after January 1, 2017 January 1, 2025, an
11		amount equal to 7% 4.8% of the taxpayer's net income for
12		the taxable year.
13		The rates under this subsection (b) are subject to the
14		provisions of Section 201.5.
15		(c) Personal Property Tax Replacement Income Tax.
16		Beginning on July 1, 1979 and thereafter, in addition to such
17		income tax, there is also hereby imposed the Personal Property
18		Tax Replacement Income Tax measured by net income on every
19		corporation (including Subchapter S corporations), partnership
20		and trust, for each taxable year ending after June 30, 1979.
21		Such taxes are imposed on the privilege of earning or receiving
22		income in or as a resident of this State. The Personal Property
23		Tax Replacement Income Tax shall be in addition to the income
24		tax imposed by subsections (a) and (b) of this Section and in
25		addition to all other occupation or privilege taxes imposed by
26		this State or by any municipal corporation or political

SB0009 Engrossed - 30 - LRB100 06347 HLH 16385 b
1		subdivision thereof.
2		(d) Additional Personal Property Tax Replacement Income
3		Tax Rates. The personal property tax replacement income tax
4		imposed by this subsection and subsection (c) of this Section
5		in the case of a corporation, other than a Subchapter S
6		corporation and except as adjusted by subsection (d-1), shall
7		be an additional amount equal to 2.85% of such taxpayer's net
8		income for the taxable year, except that beginning on January
9		1, 1981, and thereafter, the rate of 2.85% specified in this
10		subsection shall be reduced to 2.5%, and in the case of a
11		partnership, trust or a Subchapter S corporation shall be an
12		additional amount equal to 1.5% of such taxpayer's net income
13		for the taxable year.
14		(d-1) Rate reduction for certain foreign insurers. In the
15		case of a foreign insurer, as defined by Section 35A-5 of the
16		Illinois Insurance Code, whose state or country of domicile
17		imposes on insurers domiciled in Illinois a retaliatory tax
18		(excluding any insurer whose premiums from reinsurance assumed
19		are 50% or more of its total insurance premiums as determined
20		under paragraph (2) of subsection (b) of Section 304, except
21		that for purposes of this determination premiums from
22		reinsurance do not include premiums from inter-affiliate
23		reinsurance arrangements), beginning with taxable years ending
24		on or after December 31, 1999, the sum of the rates of tax
25		imposed by subsections (b) and (d) shall be reduced (but not
26		increased) to the rate at which the total amount of tax imposed

SB0009 Engrossed - 31 - LRB100 06347 HLH 16385 b
1		under this Act, net of all credits allowed under this Act,
2		shall equal (i) the total amount of tax that would be imposed
3		on the foreign insurer's net income allocable to Illinois for
4		the taxable year by such foreign insurer's state or country of
5		domicile if that net income were subject to all income taxes
6		and taxes measured by net income imposed by such foreign
7		insurer's state or country of domicile, net of all credits
8		allowed or (ii) a rate of zero if no such tax is imposed on such
9		income by the foreign insurer's state of domicile. For the
10		purposes of this subsection (d-1), an inter-affiliate includes
11		a mutual insurer under common management.
12		(1) For the purposes of subsection (d-1), in no event
13		shall the sum of the rates of tax imposed by subsections
14		(b) and (d) be reduced below the rate at which the sum of:
15		(A) the total amount of tax imposed on such foreign
16		insurer under this Act for a taxable year, net of all
17		credits allowed under this Act, plus
18		(B) the privilege tax imposed by Section 409 of the
19		Illinois Insurance Code, the fire insurance company
20		tax imposed by Section 12 of the Fire Investigation
21		Act, and the fire department taxes imposed under
22		Section 11-10-1 of the Illinois Municipal Code,
23		equals 1.25% for taxable years ending prior to December 31,
24		2003, or 1.75% for taxable years ending on or after
25		December 31, 2003, of the net taxable premiums written for
26		the taxable year, as described by subsection (1) of Section

SB0009 Engrossed - 32 - LRB100 06347 HLH 16385 b
1		409 of the Illinois Insurance Code. This paragraph will in
2		no event increase the rates imposed under subsections (b)
3		and (d).
4		(2) Any reduction in the rates of tax imposed by this
5		subsection shall be applied first against the rates imposed
6		by subsection (b) and only after the tax imposed by
7		subsection (a) net of all credits allowed under this
8		Section other than the credit allowed under subsection (i)
9		has been reduced to zero, against the rates imposed by
10		subsection (d).
11		This subsection (d-1) is exempt from the provisions of
12		Section 250.
13		(e) Investment credit. A taxpayer shall be allowed a credit
14		against the Personal Property Tax Replacement Income Tax for
15		investment in qualified property.
16		(1) A taxpayer shall be allowed a credit equal to .5%
17		of the basis of qualified property placed in service during
18		the taxable year, provided such property is placed in
19		service on or after July 1, 1984. There shall be allowed an
20		additional credit equal to .5% of the basis of qualified
21		property placed in service during the taxable year,
22		provided such property is placed in service on or after
23		July 1, 1986, and the taxpayer's base employment within
24		Illinois has increased by 1% or more over the preceding
25		year as determined by the taxpayer's employment records
26		filed with the Illinois Department of Employment Security.

SB0009 Engrossed - 33 - LRB100 06347 HLH 16385 b
1		Taxpayers who are new to Illinois shall be deemed to have
2		met the 1% growth in base employment for the first year in
3		which they file employment records with the Illinois
4		Department of Employment Security. The provisions added to
5		this Section by Public Act 85-1200 (and restored by Public
6		Act 87-895) shall be construed as declaratory of existing
7		law and not as a new enactment. If, in any year, the
8		increase in base employment within Illinois over the
9		preceding year is less than 1%, the additional credit shall
10		be limited to that percentage times a fraction, the
11		numerator of which is .5% and the denominator of which is
12		1%, but shall not exceed .5%. The investment credit shall
13		not be allowed to the extent that it would reduce a
14		taxpayer's liability in any tax year below zero, nor may
15		any credit for qualified property be allowed for any year
16		other than the year in which the property was placed in
17		service in Illinois. For tax years ending on or after
18		December 31, 1987, and on or before December 31, 1988, the
19		credit shall be allowed for the tax year in which the
20		property is placed in service, or, if the amount of the
21		credit exceeds the tax liability for that year, whether it
22		exceeds the original liability or the liability as later
23		amended, such excess may be carried forward and applied to
24		the tax liability of the 5 taxable years following the
25		excess credit years if the taxpayer (i) makes investments
26		which cause the creation of a minimum of 2,000 full-time

SB0009 Engrossed - 34 - LRB100 06347 HLH 16385 b
1		equivalent jobs in Illinois, (ii) is located in an
2		enterprise zone established pursuant to the Illinois
3		Enterprise Zone Act and (iii) is certified by the
4		Department of Commerce and Community Affairs (now
5		Department of Commerce and Economic Opportunity) as
6		complying with the requirements specified in clause (i) and
7		(ii) by July 1, 1986. The Department of Commerce and
8		Community Affairs (now Department of Commerce and Economic
9		Opportunity) shall notify the Department of Revenue of all
10		such certifications immediately. For tax years ending
11		after December 31, 1988, the credit shall be allowed for
12		the tax year in which the property is placed in service,
13		or, if the amount of the credit exceeds the tax liability
14		for that year, whether it exceeds the original liability or
15		the liability as later amended, such excess may be carried
16		forward and applied to the tax liability of the 5 taxable
17		years following the excess credit years. The credit shall
18		be applied to the earliest year for which there is a
19		liability. If there is credit from more than one tax year
20		that is available to offset a liability, earlier credit
21		shall be applied first.
22		(2) The term "qualified property" means property
23		which:
24		(A) is tangible, whether new or used, including
25		buildings and structural components of buildings and
26		signs that are real property, but not including land or

SB0009 Engrossed - 35 - LRB100 06347 HLH 16385 b
1		improvements to real property that are not a structural
2		component of a building such as landscaping, sewer
3		lines, local access roads, fencing, parking lots, and
4		other appurtenances;
5		(B) is depreciable pursuant to Section 167 of the
6		Internal Revenue Code, except that "3-year property"
7		as defined in Section 168(c)(2)(A) of that Code is not
8		eligible for the credit provided by this subsection
9		(e);
10		(C) is acquired by purchase as defined in Section
11		179(d) of the Internal Revenue Code;
12		(D) is used in Illinois by a taxpayer who is
13		primarily engaged in manufacturing, or in mining coal
14		or fluorite, or in retailing, or was placed in service
15		on or after July 1, 2006 in a River Edge Redevelopment
16		Zone established pursuant to the River Edge
17		Redevelopment Zone Act; and
18		(E) has not previously been used in Illinois in
19		such a manner and by such a person as would qualify for
20		the credit provided by this subsection (e) or
21		subsection (f).
22		(3) For purposes of this subsection (e),
23		"manufacturing" means the material staging and production
24		of tangible personal property by procedures commonly
25		regarded as manufacturing, processing, fabrication, or
26		assembling which changes some existing material into new

SB0009 Engrossed - 36 - LRB100 06347 HLH 16385 b
1		shapes, new qualities, or new combinations. For purposes of
2		this subsection (e) the term "mining" shall have the same
3		meaning as the term "mining" in Section 613(c) of the
4		Internal Revenue Code. For purposes of this subsection (e),
5		the term "retailing" means the sale of tangible personal
6		property for use or consumption and not for resale, or
7		services rendered in conjunction with the sale of tangible
8		personal property for use or consumption and not for
9		resale. For purposes of this subsection (e), "tangible
10		personal property" has the same meaning as when that term
11		is used in the Retailers' Occupation Tax Act, and, for
12		taxable years ending after December 31, 2008, does not
13		include the generation, transmission, or distribution of
14		electricity.
15		(4) The basis of qualified property shall be the basis
16		used to compute the depreciation deduction for federal
17		income tax purposes.
18		(5) If the basis of the property for federal income tax
19		depreciation purposes is increased after it has been placed
20		in service in Illinois by the taxpayer, the amount of such
21		increase shall be deemed property placed in service on the
22		date of such increase in basis.
23		(6) The term "placed in service" shall have the same
24		meaning as under Section 46 of the Internal Revenue Code.
25		(7) If during any taxable year, any property ceases to
26		be qualified property in the hands of the taxpayer within

SB0009 Engrossed - 37 - LRB100 06347 HLH 16385 b
1		48 months after being placed in service, or the situs of
2		any qualified property is moved outside Illinois within 48
3		months after being placed in service, the Personal Property
4		Tax Replacement Income Tax for such taxable year shall be
5		increased. Such increase shall be determined by (i)
6		recomputing the investment credit which would have been
7		allowed for the year in which credit for such property was
8		originally allowed by eliminating such property from such
9		computation and, (ii) subtracting such recomputed credit
10		from the amount of credit previously allowed. For the
11		purposes of this paragraph (7), a reduction of the basis of
12		qualified property resulting from a redetermination of the
13		purchase price shall be deemed a disposition of qualified
14		property to the extent of such reduction.
15		(8) Unless the investment credit is extended by law,
16		the basis of qualified property shall not include costs
17		incurred after December 31, 2018, except for costs incurred
18		pursuant to a binding contract entered into on or before
19		December 31, 2018.
20		(9) Each taxable year ending before December 31, 2000,
21		a partnership may elect to pass through to its partners the
22		credits to which the partnership is entitled under this
23		subsection (e) for the taxable year. A partner may use the
24		credit allocated to him or her under this paragraph only
25		against the tax imposed in subsections (c) and (d) of this
26		Section. If the partnership makes that election, those

SB0009 Engrossed - 38 - LRB100 06347 HLH 16385 b
1		credits shall be allocated among the partners in the
2		partnership in accordance with the rules set forth in
3		Section 704(b) of the Internal Revenue Code, and the rules
4		promulgated under that Section, and the allocated amount of
5		the credits shall be allowed to the partners for that
6		taxable year. The partnership shall make this election on
7		its Personal Property Tax Replacement Income Tax return for
8		that taxable year. The election to pass through the credits
9		shall be irrevocable.
10		For taxable years ending on or after December 31, 2000,
11		a partner that qualifies its partnership for a subtraction
12		under subparagraph (I) of paragraph (2) of subsection (d)
13		of Section 203 or a shareholder that qualifies a Subchapter
14		S corporation for a subtraction under subparagraph (S) of
15		paragraph (2) of subsection (b) of Section 203 shall be
16		allowed a credit under this subsection (e) equal to its
17		share of the credit earned under this subsection (e) during
18		the taxable year by the partnership or Subchapter S
19		corporation, determined in accordance with the
20		determination of income and distributive share of income
21		under Sections 702 and 704 and Subchapter S of the Internal
22		Revenue Code. This paragraph is exempt from the provisions
23		of Section 250.
24		(f) Investment credit; Enterprise Zone; River Edge
25		Redevelopment Zone.
26		(1) A taxpayer shall be allowed a credit against the

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1		tax imposed by subsections (a) and (b) of this Section for
2		investment in qualified property which is placed in service
3		in an Enterprise Zone created pursuant to the Illinois
4		Enterprise Zone Act or, for property placed in service on
5		or after July 1, 2006, a River Edge Redevelopment Zone
6		established pursuant to the River Edge Redevelopment Zone
7		Act. For partners, shareholders of Subchapter S
8		corporations, and owners of limited liability companies,
9		if the liability company is treated as a partnership for
10		purposes of federal and State income taxation, there shall
11		be allowed a credit under this subsection (f) to be
12		determined in accordance with the determination of income
13		and distributive share of income under Sections 702 and 704
14		and Subchapter S of the Internal Revenue Code. The credit
15		shall be .5% of the basis for such property. The credit
16		shall be available only in the taxable year in which the
17		property is placed in service in the Enterprise Zone or
18		River Edge Redevelopment Zone and shall not be allowed to
19		the extent that it would reduce a taxpayer's liability for
20		the tax imposed by subsections (a) and (b) of this Section
21		to below zero. For tax years ending on or after December
22		31, 1985, the credit shall be allowed for the tax year in
23		which the property is placed in service, or, if the amount
24		of the credit exceeds the tax liability for that year,
25		whether it exceeds the original liability or the liability
26		as later amended, such excess may be carried forward and

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1		applied to the tax liability of the 5 taxable years
2		following the excess credit year. The credit shall be
3		applied to the earliest year for which there is a
4		liability. If there is credit from more than one tax year
5		that is available to offset a liability, the credit
6		accruing first in time shall be applied first.
7		(2) The term qualified property means property which:
8		(A) is tangible, whether new or used, including
9		buildings and structural components of buildings;
10		(B) is depreciable pursuant to Section 167 of the
11		Internal Revenue Code, except that "3-year property"
12		as defined in Section 168(c)(2)(A) of that Code is not
13		eligible for the credit provided by this subsection
14		(f);
15		(C) is acquired by purchase as defined in Section
16		179(d) of the Internal Revenue Code;
17		(D) is used in the Enterprise Zone or River Edge
18		Redevelopment Zone by the taxpayer; and
19		(E) has not been previously used in Illinois in
20		such a manner and by such a person as would qualify for
21		the credit provided by this subsection (f) or
22		subsection (e).
23		(3) The basis of qualified property shall be the basis
24		used to compute the depreciation deduction for federal
25		income tax purposes.
26		(4) If the basis of the property for federal income tax

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1		depreciation purposes is increased after it has been placed
2		in service in the Enterprise Zone or River Edge
3		Redevelopment Zone by the taxpayer, the amount of such
4		increase shall be deemed property placed in service on the
5		date of such increase in basis.
6		(5) The term "placed in service" shall have the same
7		meaning as under Section 46 of the Internal Revenue Code.
8		(6) If during any taxable year, any property ceases to
9		be qualified property in the hands of the taxpayer within
10		48 months after being placed in service, or the situs of
11		any qualified property is moved outside the Enterprise Zone
12		or River Edge Redevelopment Zone within 48 months after
13		being placed in service, the tax imposed under subsections
14		(a) and (b) of this Section for such taxable year shall be
15		increased. Such increase shall be determined by (i)
16		recomputing the investment credit which would have been
17		allowed for the year in which credit for such property was
18		originally allowed by eliminating such property from such
19		computation, and (ii) subtracting such recomputed credit
20		from the amount of credit previously allowed. For the
21		purposes of this paragraph (6), a reduction of the basis of
22		qualified property resulting from a redetermination of the
23		purchase price shall be deemed a disposition of qualified
24		property to the extent of such reduction.
25		(7) There shall be allowed an additional credit equal
26		to 0.5% of the basis of qualified property placed in

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1		service during the taxable year in a River Edge
2		Redevelopment Zone, provided such property is placed in
3		service on or after July 1, 2006, and the taxpayer's base
4		employment within Illinois has increased by 1% or more over
5		the preceding year as determined by the taxpayer's
6		employment records filed with the Illinois Department of
7		Employment Security. Taxpayers who are new to Illinois
8		shall be deemed to have met the 1% growth in base
9		employment for the first year in which they file employment
10		records with the Illinois Department of Employment
11		Security. If, in any year, the increase in base employment
12		within Illinois over the preceding year is less than 1%,
13		the additional credit shall be limited to that percentage
14		times a fraction, the numerator of which is 0.5% and the
15		denominator of which is 1%, but shall not exceed 0.5%.
16		(g) (Blank).
17		(h) Investment credit; High Impact Business.
18		(1) Subject to subsections (b) and (b-5) of Section 5.5
19		of the Illinois Enterprise Zone Act, a taxpayer shall be
20		allowed a credit against the tax imposed by subsections (a)
21		and (b) of this Section for investment in qualified
22		property which is placed in service by a Department of
23		Commerce and Economic Opportunity designated High Impact
24		Business. The credit shall be .5% of the basis for such
25		property. The credit shall not be available (i) until the
26		minimum investments in qualified property set forth in

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1		subdivision (a)(3)(A) of Section 5.5 of the Illinois
2		Enterprise Zone Act have been satisfied or (ii) until the
3		time authorized in subsection (b-5) of the Illinois
4		Enterprise Zone Act for entities designated as High Impact
5		Businesses under subdivisions (a)(3)(B), (a)(3)(C), and
6		(a)(3)(D) of Section 5.5 of the Illinois Enterprise Zone
7		Act, and shall not be allowed to the extent that it would
8		reduce a taxpayer's liability for the tax imposed by
9		subsections (a) and (b) of this Section to below zero. The
10		credit applicable to such investments shall be taken in the
11		taxable year in which such investments have been completed.
12		The credit for additional investments beyond the minimum
13		investment by a designated high impact business authorized
14		under subdivision (a)(3)(A) of Section 5.5 of the Illinois
15		Enterprise Zone Act shall be available only in the taxable
16		year in which the property is placed in service and shall
17		not be allowed to the extent that it would reduce a
18		taxpayer's liability for the tax imposed by subsections (a)
19		and (b) of this Section to below zero. For tax years ending
20		on or after December 31, 1987, the credit shall be allowed
21		for the tax year in which the property is placed in
22		service, or, if the amount of the credit exceeds the tax
23		liability for that year, whether it exceeds the original
24		liability or the liability as later amended, such excess
25		may be carried forward and applied to the tax liability of
26		the 5 taxable years following the excess credit year. The

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1		credit shall be applied to the earliest year for which
2		there is a liability. If there is credit from more than one
3		tax year that is available to offset a liability, the
4		credit accruing first in time shall be applied first.
5		Changes made in this subdivision (h)(1) by Public Act
6		88-670 restore changes made by Public Act 85-1182 and
7		reflect existing law.
8		(2) The term qualified property means property which:
9		(A) is tangible, whether new or used, including
10		buildings and structural components of buildings;
11		(B) is depreciable pursuant to Section 167 of the
12		Internal Revenue Code, except that "3-year property"
13		as defined in Section 168(c)(2)(A) of that Code is not
14		eligible for the credit provided by this subsection
15		(h);
16		(C) is acquired by purchase as defined in Section
17		179(d) of the Internal Revenue Code; and
18		(D) is not eligible for the Enterprise Zone
19		Investment Credit provided by subsection (f) of this
20		Section.
21		(3) The basis of qualified property shall be the basis
22		used to compute the depreciation deduction for federal
23		income tax purposes.
24		(4) If the basis of the property for federal income tax
25		depreciation purposes is increased after it has been placed
26		in service in a federally designated Foreign Trade Zone or

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1		Sub-Zone located in Illinois by the taxpayer, the amount of
2		such increase shall be deemed property placed in service on
3		the date of such increase in basis.
4		(5) The term "placed in service" shall have the same
5		meaning as under Section 46 of the Internal Revenue Code.
6		(6) If during any taxable year ending on or before
7		December 31, 1996, any property ceases to be qualified
8		property in the hands of the taxpayer within 48 months
9		after being placed in service, or the situs of any
10		qualified property is moved outside Illinois within 48
11		months after being placed in service, the tax imposed under
12		subsections (a) and (b) of this Section for such taxable
13		year shall be increased. Such increase shall be determined
14		by (i) recomputing the investment credit which would have
15		been allowed for the year in which credit for such property
16		was originally allowed by eliminating such property from
17		such computation, and (ii) subtracting such recomputed
18		credit from the amount of credit previously allowed. For
19		the purposes of this paragraph (6), a reduction of the
20		basis of qualified property resulting from a
21		redetermination of the purchase price shall be deemed a
22		disposition of qualified property to the extent of such
23		reduction.
24		(7) Beginning with tax years ending after December 31,
25		1996, if a taxpayer qualifies for the credit under this
26		subsection (h) and thereby is granted a tax abatement and

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1		the taxpayer relocates its entire facility in violation of
2		the explicit terms and length of the contract under Section
3		18-183 of the Property Tax Code, the tax imposed under
4		subsections (a) and (b) of this Section shall be increased
5		for the taxable year in which the taxpayer relocated its
6		facility by an amount equal to the amount of credit
7		received by the taxpayer under this subsection (h).
8		(i) Credit for Personal Property Tax Replacement Income
9		Tax. For tax years ending prior to December 31, 2003, a credit
10		shall be allowed against the tax imposed by subsections (a) and
11		(b) of this Section for the tax imposed by subsections (c) and
12		(d) of this Section. This credit shall be computed by
13		multiplying the tax imposed by subsections (c) and (d) of this
14		Section by a fraction, the numerator of which is base income
15		allocable to Illinois and the denominator of which is Illinois
16		base income, and further multiplying the product by the tax
17		rate imposed by subsections (a) and (b) of this Section.
18		Any credit earned on or after December 31, 1986 under this
19		subsection which is unused in the year the credit is computed
20		because it exceeds the tax liability imposed by subsections (a)
21		and (b) for that year (whether it exceeds the original
22		liability or the liability as later amended) may be carried
23		forward and applied to the tax liability imposed by subsections
24		(a) and (b) of the 5 taxable years following the excess credit
25		year, provided that no credit may be carried forward to any
26		year ending on or after December 31, 2003. This credit shall be

SB0009 Engrossed - 47 - LRB100 06347 HLH 16385 b
1		applied first to the earliest year for which there is a
2		liability. If there is a credit under this subsection from more
3		than one tax year that is available to offset a liability the
4		earliest credit arising under this subsection shall be applied
5		first.
6		If, during any taxable year ending on or after December 31,
7		1986, the tax imposed by subsections (c) and (d) of this
8		Section for which a taxpayer has claimed a credit under this
9		subsection (i) is reduced, the amount of credit for such tax
10		shall also be reduced. Such reduction shall be determined by
11		recomputing the credit to take into account the reduced tax
12		imposed by subsections (c) and (d). If any portion of the
13		reduced amount of credit has been carried to a different
14		taxable year, an amended return shall be filed for such taxable
15		year to reduce the amount of credit claimed.
16		(j) Training expense credit. Beginning with tax years
17		ending on or after December 31, 1986 and prior to December 31,
18		2003, a taxpayer shall be allowed a credit against the tax
19		imposed by subsections (a) and (b) under this Section for all
20		amounts paid or accrued, on behalf of all persons employed by
21		the taxpayer in Illinois or Illinois residents employed outside
22		of Illinois by a taxpayer, for educational or vocational
23		training in semi-technical or technical fields or semi-skilled
24		or skilled fields, which were deducted from gross income in the
25		computation of taxable income. The credit against the tax
26		imposed by subsections (a) and (b) shall be 1.6% of such

SB0009 Engrossed - 48 - LRB100 06347 HLH 16385 b
1		training expenses. For partners, shareholders of subchapter S
2		corporations, and owners of limited liability companies, if the
3		liability company is treated as a partnership for purposes of
4		federal and State income taxation, there shall be allowed a
5		credit under this subsection (j) to be determined in accordance
6		with the determination of income and distributive share of
7		income under Sections 702 and 704 and subchapter S of the
8		Internal Revenue Code.
9		Any credit allowed under this subsection which is unused in
10		the year the credit is earned may be carried forward to each of
11		the 5 taxable years following the year for which the credit is
12		first computed until it is used. This credit shall be applied
13		first to the earliest year for which there is a liability. If
14		there is a credit under this subsection from more than one tax
15		year that is available to offset a liability the earliest
16		credit arising under this subsection shall be applied first. No
17		carryforward credit may be claimed in any tax year ending on or
18		after December 31, 2003.
19		(k) Research and development credit. For tax years ending
20		after July 1, 1990 and prior to December 31, 2003, and
21		beginning again for tax years ending on or after December 31,
22		2004, and ending prior to January 1, 2016, a taxpayer shall be
23		allowed a credit against the tax imposed by subsections (a) and
24		(b) of this Section for increasing research activities in this
25		State. The credit allowed against the tax imposed by
26		subsections (a) and (b) shall be equal to 6 1/2% of the

SB0009 Engrossed - 49 - LRB100 06347 HLH 16385 b
1		qualifying expenditures for increasing research activities in
2		this State. For partners, shareholders of subchapter S
3		corporations, and owners of limited liability companies, if the
4		liability company is treated as a partnership for purposes of
5		federal and State income taxation, there shall be allowed a
6		credit under this subsection to be determined in accordance
7		with the determination of income and distributive share of
8		income under Sections 702 and 704 and subchapter S of the
9		Internal Revenue Code.
10		For purposes of this subsection, "qualifying expenditures"
11		means the qualifying expenditures as defined for the federal
12		credit for increasing research activities which would be
13		allowable under Section 41 of the Internal Revenue Code and
14		which are conducted in this State, "qualifying expenditures for
15		increasing research activities in this State" means the excess
16		of qualifying expenditures for the taxable year in which
17		incurred over qualifying expenditures for the base period,
18		"qualifying expenditures for the base period" means (i) for tax
19		years ending prior to December 31, 2017, the average of the
20		qualifying expenditures for each year in the base period; and
21		(2) for tax years ending on or after December 31, 2017, 50% of
22		the average of the qualifying expenditures for each year in the
23		base period, and "base period" means the 3 taxable years
24		immediately preceding the taxable year for which the
25		determination is being made.
26		Any credit in excess of the tax liability for the taxable

SB0009 Engrossed - 50 - LRB100 06347 HLH 16385 b
1		year may be carried forward. A taxpayer may elect to have the
2		unused credit shown on its final completed return carried over
3		as a credit against the tax liability for the following 5
4		taxable years or until it has been fully used, whichever occurs
5		first; provided that no credit earned in a tax year ending
6		prior to December 31, 2003 may be carried forward to any year
7		ending on or after December 31, 2003.
8		If an unused credit is carried forward to a given year from
9		2 or more earlier years, that credit arising in the earliest
10		year will be applied first against the tax liability for the
11		given year. If a tax liability for the given year still
12		remains, the credit from the next earliest year will then be
13		applied, and so on, until all credits have been used or no tax
14		liability for the given year remains. Any remaining unused
15		credit or credits then will be carried forward to the next
16		following year in which a tax liability is incurred, except
17		that no credit can be carried forward to a year which is more
18		than 5 years after the year in which the expense for which the
19		credit is given was incurred.
20		No inference shall be drawn from this amendatory Act of the
21		91st General Assembly in construing this Section for taxable
22		years beginning before January 1, 1999.
23		This subsection (k) is exempt from the provisions of
24		Section 250.
25		It is the intent of the General Assembly that the research
26		and development credit under this subsection (k) shall apply

SB0009 Engrossed - 51 - LRB100 06347 HLH 16385 b
1		continuously for all tax years ending on or after December 31,
2		2004, including, but not limited to, the period beginning on
3		January 1, 2016 and ending on the effective date of this
4		amendatory Act of the 100th General Assembly. All actions taken
5		in reliance on the continuation of the credit under this
6		subsection (k) by any taxpayer are hereby validated.
7		(l) Environmental Remediation Tax Credit.
8		(i) For tax years ending after December 31, 1997 and on
9		or before December 31, 2001, a taxpayer shall be allowed a
10		credit against the tax imposed by subsections (a) and (b)
11		of this Section for certain amounts paid for unreimbursed
12		eligible remediation costs, as specified in this
13		subsection. For purposes of this Section, "unreimbursed
14		eligible remediation costs" means costs approved by the
15		Illinois Environmental Protection Agency ("Agency") under
16		Section 58.14 of the Environmental Protection Act that were
17		paid in performing environmental remediation at a site for
18		which a No Further Remediation Letter was issued by the
19		Agency and recorded under Section 58.10 of the
20		Environmental Protection Act. The credit must be claimed
21		for the taxable year in which Agency approval of the
22		eligible remediation costs is granted. The credit is not
23		available to any taxpayer if the taxpayer or any related
24		party caused or contributed to, in any material respect, a
25		release of regulated substances on, in, or under the site
26		that was identified and addressed by the remedial action

SB0009 Engrossed - 52 - LRB100 06347 HLH 16385 b
1		pursuant to the Site Remediation Program of the
2		Environmental Protection Act. After the Pollution Control
3		Board rules are adopted pursuant to the Illinois
4		Administrative Procedure Act for the administration and
5		enforcement of Section 58.9 of the Environmental
6		Protection Act, determinations as to credit availability
7		for purposes of this Section shall be made consistent with
8		those rules. For purposes of this Section, "taxpayer"
9		includes a person whose tax attributes the taxpayer has
10		succeeded to under Section 381 of the Internal Revenue Code
11		and "related party" includes the persons disallowed a
12		deduction for losses by paragraphs (b), (c), and (f)(1) of
13		Section 267 of the Internal Revenue Code by virtue of being
14		a related taxpayer, as well as any of its partners. The
15		credit allowed against the tax imposed by subsections (a)
16		and (b) shall be equal to 25% of the unreimbursed eligible
17		remediation costs in excess of $100,000 per site, except
18		that the $100,000 threshold shall not apply to any site
19		contained in an enterprise zone as determined by the
20		Department of Commerce and Community Affairs (now
21		Department of Commerce and Economic Opportunity). The
22		total credit allowed shall not exceed $40,000 per year with
23		a maximum total of $150,000 per site. For partners and
24		shareholders of subchapter S corporations, there shall be
25		allowed a credit under this subsection to be determined in
26		accordance with the determination of income and

SB0009 Engrossed - 53 - LRB100 06347 HLH 16385 b
1		distributive share of income under Sections 702 and 704 and
2		subchapter S of the Internal Revenue Code.
3		(ii) A credit allowed under this subsection that is
4		unused in the year the credit is earned may be carried
5		forward to each of the 5 taxable years following the year
6		for which the credit is first earned until it is used. The
7		term "unused credit" does not include any amounts of
8		unreimbursed eligible remediation costs in excess of the
9		maximum credit per site authorized under paragraph (i).
10		This credit shall be applied first to the earliest year for
11		which there is a liability. If there is a credit under this
12		subsection from more than one tax year that is available to
13		offset a liability, the earliest credit arising under this
14		subsection shall be applied first. A credit allowed under
15		this subsection may be sold to a buyer as part of a sale of
16		all or part of the remediation site for which the credit
17		was granted. The purchaser of a remediation site and the
18		tax credit shall succeed to the unused credit and remaining
19		carry-forward period of the seller. To perfect the
20		transfer, the assignor shall record the transfer in the
21		chain of title for the site and provide written notice to
22		the Director of the Illinois Department of Revenue of the
23		assignor's intent to sell the remediation site and the
24		amount of the tax credit to be transferred as a portion of
25		the sale. In no event may a credit be transferred to any
26		taxpayer if the taxpayer or a related party would not be

SB0009 Engrossed - 54 - LRB100 06347 HLH 16385 b
1		eligible under the provisions of subsection (i).
2		(iii) For purposes of this Section, the term "site"
3		shall have the same meaning as under Section 58.2 of the
4		Environmental Protection Act.
5		(m) Education expense credit. Beginning with tax years
6		ending after December 31, 1999, a taxpayer who is the custodian
7		of one or more qualifying pupils shall be allowed a credit
8		against the tax imposed by subsections (a) and (b) of this
9		Section for qualified education expenses incurred on behalf of
10		the qualifying pupils. The credit shall be equal to 25% of
11		qualified education expenses, but in no event may the total
12		credit under this subsection claimed by a family that is the
13		custodian of qualifying pupils exceed (i) $500 for tax years
14		ending prior to December 31, 2017, and (ii) $750 for tax years
15		ending on or after December 31, 2017. In no event shall a
16		credit under this subsection reduce the taxpayer's liability
17		under this Act to less than zero. Notwithstanding any other
18		provision of law, for taxable years beginning on or after
19		January 1, 2018, no taxpayer may claim a credit under this
20		subsection (m) if the taxpayer's adjusted gross income for the
21		taxable year exceeds (i) $500,000, in the case of spouses
22		filing a joint federal tax return or (ii) $250,000, in the case
23		of all other taxpayers. This subsection is exempt from the
24		provisions of Section 250 of this Act.
25		For purposes of this subsection:
26		"Qualifying pupils" means individuals who (i) are

SB0009 Engrossed - 55 - LRB100 06347 HLH 16385 b
1		residents of the State of Illinois, (ii) are under the age of
2		21 at the close of the school year for which a credit is
3		sought, and (iii) during the school year for which a credit is
4		sought were full-time pupils enrolled in a kindergarten through
5		twelfth grade education program at any school, as defined in
6		this subsection.
7		"Qualified education expense" means the amount incurred on
8		behalf of a qualifying pupil in excess of $250 for tuition,
9		book fees, and lab fees at the school in which the pupil is
10		enrolled during the regular school year.
11		"School" means any public or nonpublic elementary or
12		secondary school in Illinois that is in compliance with Title
13		VI of the Civil Rights Act of 1964 and attendance at which
14		satisfies the requirements of Section 26-1 of the School Code,
15		except that nothing shall be construed to require a child to
16		attend any particular public or nonpublic school to qualify for
17		the credit under this Section.
18		"Custodian" means, with respect to qualifying pupils, an
19		Illinois resident who is a parent, the parents, a legal
20		guardian, or the legal guardians of the qualifying pupils.
21		(n) River Edge Redevelopment Zone site remediation tax
22		credit.
23		(i) For tax years ending on or after December 31, 2006,
24		a taxpayer shall be allowed a credit against the tax
25		imposed by subsections (a) and (b) of this Section for
26		certain amounts paid for unreimbursed eligible remediation

SB0009 Engrossed - 56 - LRB100 06347 HLH 16385 b
1		costs, as specified in this subsection. For purposes of
2		this Section, "unreimbursed eligible remediation costs"
3		means costs approved by the Illinois Environmental
4		Protection Agency ("Agency") under Section 58.14a of the
5		Environmental Protection Act that were paid in performing
6		environmental remediation at a site within a River Edge
7		Redevelopment Zone for which a No Further Remediation
8		Letter was issued by the Agency and recorded under Section
9		58.10 of the Environmental Protection Act. The credit must
10		be claimed for the taxable year in which Agency approval of
11		the eligible remediation costs is granted. The credit is
12		not available to any taxpayer if the taxpayer or any
13		related party caused or contributed to, in any material
14		respect, a release of regulated substances on, in, or under
15		the site that was identified and addressed by the remedial
16		action pursuant to the Site Remediation Program of the
17		Environmental Protection Act. Determinations as to credit
18		availability for purposes of this Section shall be made
19		consistent with rules adopted by the Pollution Control
20		Board pursuant to the Illinois Administrative Procedure
21		Act for the administration and enforcement of Section 58.9
22		of the Environmental Protection Act. For purposes of this
23		Section, "taxpayer" includes a person whose tax attributes
24		the taxpayer has succeeded to under Section 381 of the
25		Internal Revenue Code and "related party" includes the
26		persons disallowed a deduction for losses by paragraphs

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1		(b), (c), and (f)(1) of Section 267 of the Internal Revenue
2		Code by virtue of being a related taxpayer, as well as any
3		of its partners. The credit allowed against the tax imposed
4		by subsections (a) and (b) shall be equal to 25% of the
5		unreimbursed eligible remediation costs in excess of
6		$100,000 per site.
7		(ii) A credit allowed under this subsection that is
8		unused in the year the credit is earned may be carried
9		forward to each of the 5 taxable years following the year
10		for which the credit is first earned until it is used. This
11		credit shall be applied first to the earliest year for
12		which there is a liability. If there is a credit under this
13		subsection from more than one tax year that is available to
14		offset a liability, the earliest credit arising under this
15		subsection shall be applied first. A credit allowed under
16		this subsection may be sold to a buyer as part of a sale of
17		all or part of the remediation site for which the credit
18		was granted. The purchaser of a remediation site and the
19		tax credit shall succeed to the unused credit and remaining
20		carry-forward period of the seller. To perfect the
21		transfer, the assignor shall record the transfer in the
22		chain of title for the site and provide written notice to
23		the Director of the Illinois Department of Revenue of the
24		assignor's intent to sell the remediation site and the
25		amount of the tax credit to be transferred as a portion of
26		the sale. In no event may a credit be transferred to any

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1		taxpayer if the taxpayer or a related party would not be
2		eligible under the provisions of subsection (i).
3		(iii) For purposes of this Section, the term "site"
4		shall have the same meaning as under Section 58.2 of the
5		Environmental Protection Act.
6		(o) For each of taxable years during the Compassionate Use
7		of Medical Cannabis Pilot Program, a surcharge is imposed on
8		all taxpayers on income arising from the sale or exchange of
9		capital assets, depreciable business property, real property
10		used in the trade or business, and Section 197 intangibles of
11		an organization registrant under the Compassionate Use of
12		Medical Cannabis Pilot Program Act. The amount of the surcharge
13		is equal to the amount of federal income tax liability for the
14		taxable year attributable to those sales and exchanges. The
15		surcharge imposed does not apply if:
16		(1) the medical cannabis cultivation center
17		registration, medical cannabis dispensary registration, or
18		the property of a registration is transferred as a result
19		of any of the following:
20		(A) bankruptcy, a receivership, or a debt
21		adjustment initiated by or against the initial
22		registration or the substantial owners of the initial
23		registration;
24		(B) cancellation, revocation, or termination of
25		any registration by the Illinois Department of Public
26		Health;

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1		(C) a determination by the Illinois Department of
2		Public Health that transfer of the registration is in
3		the best interests of Illinois qualifying patients as
4		defined by the Compassionate Use of Medical Cannabis
5		Pilot Program Act;
6		(D) the death of an owner of the equity interest in
7		a registrant;
8		(E) the acquisition of a controlling interest in
9		the stock or substantially all of the assets of a
10		publicly traded company;
11		(F) a transfer by a parent company to a wholly
12		owned subsidiary; or
13		(G) the transfer or sale to or by one person to
14		another person where both persons were initial owners
15		of the registration when the registration was issued;
16		or
17		(2) the cannabis cultivation center registration,
18		medical cannabis dispensary registration, or the
19		controlling interest in a registrant's property is
20		transferred in a transaction to lineal descendants in which
21		no gain or loss is recognized or as a result of a
22		transaction in accordance with Section 351 of the Internal
23		Revenue Code in which no gain or loss is recognized.
24		(Source: P.A. 97-2, eff. 5-6-11; 97-636, eff. 6-1-12; 97-905,
25		eff. 8-7-12; 98-109, eff. 7-25-13; 98-122, eff. 1-1-14; 98-756,
26		eff. 7-16-14.)

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1		(35 ILCS 5/203) (from Ch. 120, par. 2-203)
2		Sec. 203. Base income defined.
3		(a) Individuals.
4		(1) In general. In the case of an individual, base
5		income means an amount equal to the taxpayer's adjusted
6		gross income for the taxable year as modified by paragraph
7		(2).
8		(2) Modifications. The adjusted gross income referred
9		to in paragraph (1) shall be modified by adding thereto the
10		sum of the following amounts:
11		(A) An amount equal to all amounts paid or accrued
12		to the taxpayer as interest or dividends during the
13		taxable year to the extent excluded from gross income
14		in the computation of adjusted gross income, except
15		stock dividends of qualified public utilities
16		described in Section 305(e) of the Internal Revenue
17		Code;
18		(B) An amount equal to the amount of tax imposed by
19		this Act to the extent deducted from gross income in
20		the computation of adjusted gross income for the
21		taxable year;
22		(C) An amount equal to the amount received during
23		the taxable year as a recovery or refund of real
24		property taxes paid with respect to the taxpayer's
25		principal residence under the Revenue Act of 1939 and

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1		for which a deduction was previously taken under
2		subparagraph (L) of this paragraph (2) prior to July 1,
3		1991, the retrospective application date of Article 4
4		of Public Act 87-17. In the case of multi-unit or
5		multi-use structures and farm dwellings, the taxes on
6		the taxpayer's principal residence shall be that
7		portion of the total taxes for the entire property
8		which is attributable to such principal residence;
9		(D) An amount equal to the amount of the capital
10		gain deduction allowable under the Internal Revenue
11		Code, to the extent deducted from gross income in the
12		computation of adjusted gross income;
13		(D-5) An amount, to the extent not included in
14		adjusted gross income, equal to the amount of money
15		withdrawn by the taxpayer in the taxable year from a
16		medical care savings account and the interest earned on
17		the account in the taxable year of a withdrawal
18		pursuant to subsection (b) of Section 20 of the Medical
19		Care Savings Account Act or subsection (b) of Section
20		20 of the Medical Care Savings Account Act of 2000;
21		(D-10) For taxable years ending after December 31,
22		1997, an amount equal to any eligible remediation costs
23		that the individual deducted in computing adjusted
24		gross income and for which the individual claims a
25		credit under subsection (l) of Section 201;
26		(D-15) For taxable years 2001 and thereafter, an

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1		amount equal to the bonus depreciation deduction taken
2		on the taxpayer's federal income tax return for the
3		taxable year under subsection (k) of Section 168 of the
4		Internal Revenue Code;
5		(D-16) If the taxpayer sells, transfers, abandons,
6		or otherwise disposes of property for which the
7		taxpayer was required in any taxable year to make an
8		addition modification under subparagraph (D-15), then
9		an amount equal to the aggregate amount of the
10		deductions taken in all taxable years under
11		subparagraph (Z) with respect to that property.
12		If the taxpayer continues to own property through
13		the last day of the last tax year for which the
14		taxpayer may claim a depreciation deduction for
15		federal income tax purposes and for which the taxpayer
16		was allowed in any taxable year to make a subtraction
17		modification under subparagraph (Z), then an amount
18		equal to that subtraction modification.
19		The taxpayer is required to make the addition
20		modification under this subparagraph only once with
21		respect to any one piece of property;
22		(D-17) An amount equal to the amount otherwise
23		allowed as a deduction in computing base income for
24		interest paid, accrued, or incurred, directly or
25		indirectly, (i) for taxable years ending on or after
26		December 31, 2004, to a foreign person who would be a

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1		member of the same unitary business group but for the
2		fact that foreign person's business activity outside
3		the United States is 80% or more of the foreign
4		person's total business activity and (ii) for taxable
5		years ending on or after December 31, 2008, to a person
6		who would be a member of the same unitary business
7		group but for the fact that the person is prohibited
8		under Section 1501(a)(27) from being included in the
9		unitary business group because he or she is ordinarily
10		required to apportion business income under different
11		subsections of Section 304. The addition modification
12		required by this subparagraph shall be reduced to the
13		extent that dividends were included in base income of
14		the unitary group for the same taxable year and
15		received by the taxpayer or by a member of the
16		taxpayer's unitary business group (including amounts
17		included in gross income under Sections 951 through 964
18		of the Internal Revenue Code and amounts included in
19		gross income under Section 78 of the Internal Revenue
20		Code) with respect to the stock of the same person to
21		whom the interest was paid, accrued, or incurred.
22		This paragraph shall not apply to the following:
23		(i) an item of interest paid, accrued, or
24		incurred, directly or indirectly, to a person who
25		is subject in a foreign country or state, other
26		than a state which requires mandatory unitary

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1		reporting, to a tax on or measured by net income
2		with respect to such interest; or
3		(ii) an item of interest paid, accrued, or
4		incurred, directly or indirectly, to a person if
5		the taxpayer can establish, based on a
6		preponderance of the evidence, both of the
7		following:
8		(a) the person, during the same taxable
9		year, paid, accrued, or incurred, the interest
10		to a person that is not a related member, and
11		(b) the transaction giving rise to the
12		interest expense between the taxpayer and the
13		person did not have as a principal purpose the
14		avoidance of Illinois income tax, and is paid
15		pursuant to a contract or agreement that
16		reflects an arm's-length interest rate and
17		terms; or
18		(iii) the taxpayer can establish, based on
19		clear and convincing evidence, that the interest
20		paid, accrued, or incurred relates to a contract or
21		agreement entered into at arm's-length rates and
22		terms and the principal purpose for the payment is
23		not federal or Illinois tax avoidance; or
24		(iv) an item of interest paid, accrued, or
25		incurred, directly or indirectly, to a person if
26		the taxpayer establishes by clear and convincing

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1		evidence that the adjustments are unreasonable; or
2		if the taxpayer and the Director agree in writing
3		to the application or use of an alternative method
4		of apportionment under Section 304(f).
5		Nothing in this subsection shall preclude the
6		Director from making any other adjustment
7		otherwise allowed under Section 404 of this Act for
8		any tax year beginning after the effective date of
9		this amendment provided such adjustment is made
10		pursuant to regulation adopted by the Department
11		and such regulations provide methods and standards
12		by which the Department will utilize its authority
13		under Section 404 of this Act;
14		(D-18) An amount equal to the amount of intangible
15		expenses and costs otherwise allowed as a deduction in
16		computing base income, and that were paid, accrued, or
17		incurred, directly or indirectly, (i) for taxable
18		years ending on or after December 31, 2004, to a
19		foreign person who would be a member of the same
20		unitary business group but for the fact that the
21		foreign person's business activity outside the United
22		States is 80% or more of that person's total business
23		activity and (ii) for taxable years ending on or after
24		December 31, 2008, to a person who would be a member of
25		the same unitary business group but for the fact that
26		the person is prohibited under Section 1501(a)(27)

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1		from being included in the unitary business group
2		because he or she is ordinarily required to apportion
3		business income under different subsections of Section
4		304. The addition modification required by this
5		subparagraph shall be reduced to the extent that
6		dividends were included in base income of the unitary
7		group for the same taxable year and received by the
8		taxpayer or by a member of the taxpayer's unitary
9		business group (including amounts included in gross
10		income under Sections 951 through 964 of the Internal
11		Revenue Code and amounts included in gross income under
12		Section 78 of the Internal Revenue Code) with respect
13		to the stock of the same person to whom the intangible
14		expenses and costs were directly or indirectly paid,
15		incurred, or accrued. The preceding sentence does not
16		apply to the extent that the same dividends caused a
17		reduction to the addition modification required under
18		Section 203(a)(2)(D-17) of this Act. As used in this
19		subparagraph, the term "intangible expenses and costs"
20		includes (1) expenses, losses, and costs for, or
21		related to, the direct or indirect acquisition, use,
22		maintenance or management, ownership, sale, exchange,
23		or any other disposition of intangible property; (2)
24		losses incurred, directly or indirectly, from
25		factoring transactions or discounting transactions;
26		(3) royalty, patent, technical, and copyright fees;

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1		(4) licensing fees; and (5) other similar expenses and
2		costs. For purposes of this subparagraph, "intangible
3		property" includes patents, patent applications, trade
4		names, trademarks, service marks, copyrights, mask
5		works, trade secrets, and similar types of intangible
6		assets.
7		This paragraph shall not apply to the following:
8		(i) any item of intangible expenses or costs
9		paid, accrued, or incurred, directly or
10		indirectly, from a transaction with a person who is
11		subject in a foreign country or state, other than a
12		state which requires mandatory unitary reporting,
13		to a tax on or measured by net income with respect
14		to such item; or
15		(ii) any item of intangible expense or cost
16		paid, accrued, or incurred, directly or
17		indirectly, if the taxpayer can establish, based
18		on a preponderance of the evidence, both of the
19		following:
20		(a) the person during the same taxable
21		year paid, accrued, or incurred, the
22		intangible expense or cost to a person that is
23		not a related member, and
24		(b) the transaction giving rise to the
25		intangible expense or cost between the
26		taxpayer and the person did not have as a

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1		principal purpose the avoidance of Illinois
2		income tax, and is paid pursuant to a contract
3		or agreement that reflects arm's-length terms;
4		or
5		(iii) any item of intangible expense or cost
6		paid, accrued, or incurred, directly or
7		indirectly, from a transaction with a person if the
8		taxpayer establishes by clear and convincing
9		evidence, that the adjustments are unreasonable;
10		or if the taxpayer and the Director agree in
11		writing to the application or use of an alternative
12		method of apportionment under Section 304(f);
13		Nothing in this subsection shall preclude the
14		Director from making any other adjustment
15		otherwise allowed under Section 404 of this Act for
16		any tax year beginning after the effective date of
17		this amendment provided such adjustment is made
18		pursuant to regulation adopted by the Department
19		and such regulations provide methods and standards
20		by which the Department will utilize its authority
21		under Section 404 of this Act;
22		(D-19) For taxable years ending on or after
23		December 31, 2008, an amount equal to the amount of
24		insurance premium expenses and costs otherwise allowed
25		as a deduction in computing base income, and that were
26		paid, accrued, or incurred, directly or indirectly, to

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1		a person who would be a member of the same unitary
2		business group but for the fact that the person is
3		prohibited under Section 1501(a)(27) from being
4		included in the unitary business group because he or
5		she is ordinarily required to apportion business
6		income under different subsections of Section 304. The
7		addition modification required by this subparagraph
8		shall be reduced to the extent that dividends were
9		included in base income of the unitary group for the
10		same taxable year and received by the taxpayer or by a
11		member of the taxpayer's unitary business group
12		(including amounts included in gross income under
13		Sections 951 through 964 of the Internal Revenue Code
14		and amounts included in gross income under Section 78
15		of the Internal Revenue Code) with respect to the stock
16		of the same person to whom the premiums and costs were
17		directly or indirectly paid, incurred, or accrued. The
18		preceding sentence does not apply to the extent that
19		the same dividends caused a reduction to the addition
20		modification required under Section 203(a)(2)(D-17) or
21		Section 203(a)(2)(D-18) of this Act.
22		(D-20) For taxable years beginning on or after
23		January 1, 2002 and ending on or before December 31,
24		2006, in the case of a distribution from a qualified
25		tuition program under Section 529 of the Internal
26		Revenue Code, other than (i) a distribution from a

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1		College Savings Pool created under Section 16.5 of the
2		State Treasurer Act or (ii) a distribution from the
3		Illinois Prepaid Tuition Trust Fund, an amount equal to
4		the amount excluded from gross income under Section
5		529(c)(3)(B). For taxable years beginning on or after
6		January 1, 2007, in the case of a distribution from a
7		qualified tuition program under Section 529 of the
8		Internal Revenue Code, other than (i) a distribution
9		from a College Savings Pool created under Section 16.5
10		of the State Treasurer Act, (ii) a distribution from
11		the Illinois Prepaid Tuition Trust Fund, or (iii) a
12		distribution from a qualified tuition program under
13		Section 529 of the Internal Revenue Code that (I)
14		adopts and determines that its offering materials
15		comply with the College Savings Plans Network's
16		disclosure principles and (II) has made reasonable
17		efforts to inform in-state residents of the existence
18		of in-state qualified tuition programs by informing
19		Illinois residents directly and, where applicable, to
20		inform financial intermediaries distributing the
21		program to inform in-state residents of the existence
22		of in-state qualified tuition programs at least
23		annually, an amount equal to the amount excluded from
24		gross income under Section 529(c)(3)(B).
25		For the purposes of this subparagraph (D-20), a
26		qualified tuition program has made reasonable efforts

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1		if it makes disclosures (which may use the term
2		"in-state program" or "in-state plan" and need not
3		specifically refer to Illinois or its qualified
4		programs by name) (i) directly to prospective
5		participants in its offering materials or makes a
6		public disclosure, such as a website posting; and (ii)
7		where applicable, to intermediaries selling the
8		out-of-state program in the same manner that the
9		out-of-state program distributes its offering
10		materials;
11		(D-21) For taxable years beginning on or after
12		January 1, 2007, in the case of transfer of moneys from
13		a qualified tuition program under Section 529 of the
14		Internal Revenue Code that is administered by the State
15		to an out-of-state program, an amount equal to the
16		amount of moneys previously deducted from base income
17		under subsection (a)(2)(Y) of this Section;
18		(D-22) For taxable years beginning on or after
19		January 1, 2009, in the case of a nonqualified
20		withdrawal or refund of moneys from a qualified tuition
21		program under Section 529 of the Internal Revenue Code
22		administered by the State that is not used for
23		qualified expenses at an eligible education
24		institution, an amount equal to the contribution
25		component of the nonqualified withdrawal or refund
26		that was previously deducted from base income under

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1		subsection (a)(2)(y) of this Section, provided that
2		the withdrawal or refund did not result from the
3		beneficiary's death or disability;
4		(D-23) An amount equal to the credit allowable to
5		the taxpayer under Section 218(a) of this Act,
6		determined without regard to Section 218(c) of this
7		Act;
8		(D-24) For taxable years beginning on or after
9		January 1, 2017, an amount equal to the deduction
10		allowed under Section 199 of the Internal Revenue Code
11		for the taxable year;
12		and by deducting from the total so obtained the sum of the
13		following amounts:
14		(E) For taxable years ending before December 31,
15		2001, any amount included in such total in respect of
16		any compensation (including but not limited to any
17		compensation paid or accrued to a serviceman while a
18		prisoner of war or missing in action) paid to a
19		resident by reason of being on active duty in the Armed
20		Forces of the United States and in respect of any
21		compensation paid or accrued to a resident who as a
22		governmental employee was a prisoner of war or missing
23		in action, and in respect of any compensation paid to a
24		resident in 1971 or thereafter for annual training
25		performed pursuant to Sections 502 and 503, Title 32,
26		United States Code as a member of the Illinois National

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1		Guard or, beginning with taxable years ending on or
2		after December 31, 2007, the National Guard of any
3		other state. For taxable years ending on or after
4		December 31, 2001, any amount included in such total in
5		respect of any compensation (including but not limited
6		to any compensation paid or accrued to a serviceman
7		while a prisoner of war or missing in action) paid to a
8		resident by reason of being a member of any component
9		of the Armed Forces of the United States and in respect
10		of any compensation paid or accrued to a resident who
11		as a governmental employee was a prisoner of war or
12		missing in action, and in respect of any compensation
13		paid to a resident in 2001 or thereafter by reason of
14		being a member of the Illinois National Guard or,
15		beginning with taxable years ending on or after
16		December 31, 2007, the National Guard of any other
17		state. The provisions of this subparagraph (E) are
18		exempt from the provisions of Section 250;
19		(F) An amount equal to all amounts included in such
20		total pursuant to the provisions of Sections 402(a),
21		402(c), 403(a), 403(b), 406(a), 407(a), and 408 of the
22		Internal Revenue Code, or included in such total as
23		distributions under the provisions of any retirement
24		or disability plan for employees of any governmental
25		agency or unit, or retirement payments to retired
26		partners, which payments are excluded in computing net

SB0009 Engrossed - 74 - LRB100 06347 HLH 16385 b
1		earnings from self employment by Section 1402 of the
2		Internal Revenue Code and regulations adopted pursuant
3		thereto;
4		(G) The valuation limitation amount;
5		(H) An amount equal to the amount of any tax
6		imposed by this Act which was refunded to the taxpayer
7		and included in such total for the taxable year;
8		(I) An amount equal to all amounts included in such
9		total pursuant to the provisions of Section 111 of the
10		Internal Revenue Code as a recovery of items previously
11		deducted from adjusted gross income in the computation
12		of taxable income;
13		(J) An amount equal to those dividends included in
14		such total which were paid by a corporation which
15		conducts business operations in a River Edge
16		Redevelopment Zone or zones created under the River
17		Edge Redevelopment Zone Act, and conducts
18		substantially all of its operations in a River Edge
19		Redevelopment Zone or zones. This subparagraph (J) is
20		exempt from the provisions of Section 250;
21		(K) An amount equal to those dividends included in
22		such total that were paid by a corporation that
23		conducts business operations in a federally designated
24		Foreign Trade Zone or Sub-Zone and that is designated a
25		High Impact Business located in Illinois; provided
26		that dividends eligible for the deduction provided in

SB0009 Engrossed - 75 - LRB100 06347 HLH 16385 b
1		subparagraph (J) of paragraph (2) of this subsection
2		shall not be eligible for the deduction provided under
3		this subparagraph (K);
4		(L) For taxable years ending after December 31,
5		1983, an amount equal to all social security benefits
6		and railroad retirement benefits included in such
7		total pursuant to Sections 72(r) and 86 of the Internal
8		Revenue Code;
9		(M) With the exception of any amounts subtracted
10		under subparagraph (N), an amount equal to the sum of
11		all amounts disallowed as deductions by (i) Sections
12		171(a) (2), and 265(2) of the Internal Revenue Code,
13		and all amounts of expenses allocable to interest and
14		disallowed as deductions by Section 265(1) of the
15		Internal Revenue Code; and (ii) for taxable years
16		ending on or after August 13, 1999, Sections 171(a)(2),
17		265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
18		Code, plus, for taxable years ending on or after
19		December 31, 2011, Section 45G(e)(3) of the Internal
20		Revenue Code and, for taxable years ending on or after
21		December 31, 2008, any amount included in gross income
22		under Section 87 of the Internal Revenue Code; the
23		provisions of this subparagraph are exempt from the
24		provisions of Section 250;
25		(N) An amount equal to all amounts included in such
26		total which are exempt from taxation by this State

SB0009 Engrossed - 76 - LRB100 06347 HLH 16385 b
1		either by reason of its statutes or Constitution or by
2		reason of the Constitution, treaties or statutes of the
3		United States; provided that, in the case of any
4		statute of this State that exempts income derived from
5		bonds or other obligations from the tax imposed under
6		this Act, the amount exempted shall be the interest net
7		of bond premium amortization;
8		(O) An amount equal to any contribution made to a
9		job training project established pursuant to the Tax
10		Increment Allocation Redevelopment Act;
11		(P) An amount equal to the amount of the deduction
12		used to compute the federal income tax credit for
13		restoration of substantial amounts held under claim of
14		right for the taxable year pursuant to Section 1341 of
15		the Internal Revenue Code or of any itemized deduction
16		taken from adjusted gross income in the computation of
17		taxable income for restoration of substantial amounts
18		held under claim of right for the taxable year;
19		(Q) An amount equal to any amounts included in such
20		total, received by the taxpayer as an acceleration in
21		the payment of life, endowment or annuity benefits in
22		advance of the time they would otherwise be payable as
23		an indemnity for a terminal illness;
24		(R) An amount equal to the amount of any federal or
25		State bonus paid to veterans of the Persian Gulf War;
26		(S) An amount, to the extent included in adjusted

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1		gross income, equal to the amount of a contribution
2		made in the taxable year on behalf of the taxpayer to a
3		medical care savings account established under the
4		Medical Care Savings Account Act or the Medical Care
5		Savings Account Act of 2000 to the extent the
6		contribution is accepted by the account administrator
7		as provided in that Act;
8		(T) An amount, to the extent included in adjusted
9		gross income, equal to the amount of interest earned in
10		the taxable year on a medical care savings account
11		established under the Medical Care Savings Account Act
12		or the Medical Care Savings Account Act of 2000 on
13		behalf of the taxpayer, other than interest added
14		pursuant to item (D-5) of this paragraph (2);
15		(U) For one taxable year beginning on or after
16		January 1, 1994, an amount equal to the total amount of
17		tax imposed and paid under subsections (a) and (b) of
18		Section 201 of this Act on grant amounts received by
19		the taxpayer under the Nursing Home Grant Assistance
20		Act during the taxpayer's taxable years 1992 and 1993;
21		(V) Beginning with tax years ending on or after
22		December 31, 1995 and ending with tax years ending on
23		or before December 31, 2004, an amount equal to the
24		amount paid by a taxpayer who is a self-employed
25		taxpayer, a partner of a partnership, or a shareholder
26		in a Subchapter S corporation for health insurance or

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1		long-term care insurance for that taxpayer or that
2		taxpayer's spouse or dependents, to the extent that the
3		amount paid for that health insurance or long-term care
4		insurance may be deducted under Section 213 of the
5		Internal Revenue Code, has not been deducted on the
6		federal income tax return of the taxpayer, and does not
7		exceed the taxable income attributable to that
8		taxpayer's income, self-employment income, or
9		Subchapter S corporation income; except that no
10		deduction shall be allowed under this item (V) if the
11		taxpayer is eligible to participate in any health
12		insurance or long-term care insurance plan of an
13		employer of the taxpayer or the taxpayer's spouse. The
14		amount of the health insurance and long-term care
15		insurance subtracted under this item (V) shall be
16		determined by multiplying total health insurance and
17		long-term care insurance premiums paid by the taxpayer
18		times a number that represents the fractional
19		percentage of eligible medical expenses under Section
20		213 of the Internal Revenue Code of 1986 not actually
21		deducted on the taxpayer's federal income tax return;
22		(W) For taxable years beginning on or after January
23		1, 1998, all amounts included in the taxpayer's federal
24		gross income in the taxable year from amounts converted
25		from a regular IRA to a Roth IRA. This paragraph is
26		exempt from the provisions of Section 250;

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1		(X) For taxable year 1999 and thereafter, an amount
2		equal to the amount of any (i) distributions, to the
3		extent includible in gross income for federal income
4		tax purposes, made to the taxpayer because of his or
5		her status as a victim of persecution for racial or
6		religious reasons by Nazi Germany or any other Axis
7		regime or as an heir of the victim and (ii) items of
8		income, to the extent includible in gross income for
9		federal income tax purposes, attributable to, derived
10		from or in any way related to assets stolen from,
11		hidden from, or otherwise lost to a victim of
12		persecution for racial or religious reasons by Nazi
13		Germany or any other Axis regime immediately prior to,
14		during, and immediately after World War II, including,
15		but not limited to, interest on the proceeds receivable
16		as insurance under policies issued to a victim of
17		persecution for racial or religious reasons by Nazi
18		Germany or any other Axis regime by European insurance
19		companies immediately prior to and during World War II;
20		provided, however, this subtraction from federal
21		adjusted gross income does not apply to assets acquired
22		with such assets or with the proceeds from the sale of
23		such assets; provided, further, this paragraph shall
24		only apply to a taxpayer who was the first recipient of
25		such assets after their recovery and who is a victim of
26		persecution for racial or religious reasons by Nazi

SB0009 Engrossed - 80 - LRB100 06347 HLH 16385 b
1		Germany or any other Axis regime or as an heir of the
2		victim. The amount of and the eligibility for any
3		public assistance, benefit, or similar entitlement is
4		not affected by the inclusion of items (i) and (ii) of
5		this paragraph in gross income for federal income tax
6		purposes. This paragraph is exempt from the provisions
7		of Section 250;
8		(Y) For taxable years beginning on or after January
9		1, 2002 and ending on or before December 31, 2004,
10		moneys contributed in the taxable year to a College
11		Savings Pool account under Section 16.5 of the State
12		Treasurer Act, except that amounts excluded from gross
13		income under Section 529(c)(3)(C)(i) of the Internal
14		Revenue Code shall not be considered moneys
15		contributed under this subparagraph (Y). For taxable
16		years beginning on or after January 1, 2005, a maximum
17		of $10,000 contributed in the taxable year to (i) a
18		College Savings Pool account under Section 16.5 of the
19		State Treasurer Act or (ii) the Illinois Prepaid
20		Tuition Trust Fund, except that amounts excluded from
21		gross income under Section 529(c)(3)(C)(i) of the
22		Internal Revenue Code shall not be considered moneys
23		contributed under this subparagraph (Y). For purposes
24		of this subparagraph, contributions made by an
25		employer on behalf of an employee, or matching
26		contributions made by an employee, shall be treated as

SB0009 Engrossed - 81 - LRB100 06347 HLH 16385 b
1		made by the employee. This subparagraph (Y) is exempt
2		from the provisions of Section 250;
3		(Z) For taxable years 2001 and thereafter, for the
4		taxable year in which the bonus depreciation deduction
5		is taken on the taxpayer's federal income tax return
6		under subsection (k) of Section 168 of the Internal
7		Revenue Code and for each applicable taxable year
8		thereafter, an amount equal to "x", where:
9		(1) "y" equals the amount of the depreciation
10		deduction taken for the taxable year on the
11		taxpayer's federal income tax return on property
12		for which the bonus depreciation deduction was
13		taken in any year under subsection (k) of Section
14		168 of the Internal Revenue Code, but not including
15		the bonus depreciation deduction;
16		(2) for taxable years ending on or before
17		December 31, 2005, "x" equals "y" multiplied by 30
18		and then divided by 70 (or "y" multiplied by
19		0.429); and
20		(3) for taxable years ending after December
21		31, 2005:
22		(i) for property on which a bonus
23		depreciation deduction of 30% of the adjusted
24		basis was taken, "x" equals "y" multiplied by
25		30 and then divided by 70 (or "y" multiplied by
26		0.429); and

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1		(ii) for property on which a bonus
2		depreciation deduction of 50% of the adjusted
3		basis was taken, "x" equals "y" multiplied by
4		1.0.
5		The aggregate amount deducted under this
6		subparagraph in all taxable years for any one piece of
7		property may not exceed the amount of the bonus
8		depreciation deduction taken on that property on the
9		taxpayer's federal income tax return under subsection
10		(k) of Section 168 of the Internal Revenue Code. This
11		subparagraph (Z) is exempt from the provisions of
12		Section 250;
13		(AA) If the taxpayer sells, transfers, abandons,
14		or otherwise disposes of property for which the
15		taxpayer was required in any taxable year to make an
16		addition modification under subparagraph (D-15), then
17		an amount equal to that addition modification.
18		If the taxpayer continues to own property through
19		the last day of the last tax year for which the
20		taxpayer may claim a depreciation deduction for
21		federal income tax purposes and for which the taxpayer
22		was required in any taxable year to make an addition
23		modification under subparagraph (D-15), then an amount
24		equal to that addition modification.
25		The taxpayer is allowed to take the deduction under
26		this subparagraph only once with respect to any one

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1		piece of property.
2		This subparagraph (AA) is exempt from the
3		provisions of Section 250;
4		(BB) Any amount included in adjusted gross income,
5		other than salary, received by a driver in a
6		ridesharing arrangement using a motor vehicle;
7		(CC) The amount of (i) any interest income (net of
8		the deductions allocable thereto) taken into account
9		for the taxable year with respect to a transaction with
10		a taxpayer that is required to make an addition
11		modification with respect to such transaction under
12		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
13		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
14		the amount of that addition modification, and (ii) any
15		income from intangible property (net of the deductions
16		allocable thereto) taken into account for the taxable
17		year with respect to a transaction with a taxpayer that
18		is required to make an addition modification with
19		respect to such transaction under Section
20		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
21		203(d)(2)(D-8), but not to exceed the amount of that
22		addition modification. This subparagraph (CC) is
23		exempt from the provisions of Section 250;
24		(DD) An amount equal to the interest income taken
25		into account for the taxable year (net of the
26		deductions allocable thereto) with respect to

SB0009 Engrossed - 84 - LRB100 06347 HLH 16385 b
1		transactions with (i) a foreign person who would be a
2		member of the taxpayer's unitary business group but for
3		the fact that the foreign person's business activity
4		outside the United States is 80% or more of that
5		person's total business activity and (ii) for taxable
6		years ending on or after December 31, 2008, to a person
7		who would be a member of the same unitary business
8		group but for the fact that the person is prohibited
9		under Section 1501(a)(27) from being included in the
10		unitary business group because he or she is ordinarily
11		required to apportion business income under different
12		subsections of Section 304, but not to exceed the
13		addition modification required to be made for the same
14		taxable year under Section 203(a)(2)(D-17) for
15		interest paid, accrued, or incurred, directly or
16		indirectly, to the same person. This subparagraph (DD)
17		is exempt from the provisions of Section 250;
18		(EE) An amount equal to the income from intangible
19		property taken into account for the taxable year (net
20		of the deductions allocable thereto) with respect to
21		transactions with (i) a foreign person who would be a
22		member of the taxpayer's unitary business group but for
23		the fact that the foreign person's business activity
24		outside the United States is 80% or more of that
25		person's total business activity and (ii) for taxable
26		years ending on or after December 31, 2008, to a person

SB0009 Engrossed - 85 - LRB100 06347 HLH 16385 b
1		who would be a member of the same unitary business
2		group but for the fact that the person is prohibited
3		under Section 1501(a)(27) from being included in the
4		unitary business group because he or she is ordinarily
5		required to apportion business income under different
6		subsections of Section 304, but not to exceed the
7		addition modification required to be made for the same
8		taxable year under Section 203(a)(2)(D-18) for
9		intangible expenses and costs paid, accrued, or
10		incurred, directly or indirectly, to the same foreign
11		person. This subparagraph (EE) is exempt from the
12		provisions of Section 250;
13		(FF) An amount equal to any amount awarded to the
14		taxpayer during the taxable year by the Court of Claims
15		under subsection (c) of Section 8 of the Court of
16		Claims Act for time unjustly served in a State prison.
17		This subparagraph (FF) is exempt from the provisions of
18		Section 250; and
19		(GG) For taxable years ending on or after December
20		31, 2011, in the case of a taxpayer who was required to
21		add back any insurance premiums under Section
22		203(a)(2)(D-19), such taxpayer may elect to subtract
23		that part of a reimbursement received from the
24		insurance company equal to the amount of the expense or
25		loss (including expenses incurred by the insurance
26		company) that would have been taken into account as a

SB0009 Engrossed - 86 - LRB100 06347 HLH 16385 b
1		deduction for federal income tax purposes if the
2		expense or loss had been uninsured. If a taxpayer makes
3		the election provided for by this subparagraph (GG),
4		the insurer to which the premiums were paid must add
5		back to income the amount subtracted by the taxpayer
6		pursuant to this subparagraph (GG). This subparagraph
7		(GG) is exempt from the provisions of Section 250.
8		(b) Corporations.
9		(1) In general. In the case of a corporation, base
10		income means an amount equal to the taxpayer's taxable
11		income for the taxable year as modified by paragraph (2).
12		(2) Modifications. The taxable income referred to in
13		paragraph (1) shall be modified by adding thereto the sum
14		of the following amounts:
15		(A) An amount equal to all amounts paid or accrued
16		to the taxpayer as interest and all distributions
17		received from regulated investment companies during
18		the taxable year to the extent excluded from gross
19		income in the computation of taxable income;
20		(B) An amount equal to the amount of tax imposed by
21		this Act to the extent deducted from gross income in
22		the computation of taxable income for the taxable year;
23		(C) In the case of a regulated investment company,
24		an amount equal to the excess of (i) the net long-term
25		capital gain for the taxable year, over (ii) the amount

SB0009 Engrossed - 87 - LRB100 06347 HLH 16385 b
1		of the capital gain dividends designated as such in
2		accordance with Section 852(b)(3)(C) of the Internal
3		Revenue Code and any amount designated under Section
4		852(b)(3)(D) of the Internal Revenue Code,
5		attributable to the taxable year (this amendatory Act
6		of 1995 (Public Act 89-89) is declarative of existing
7		law and is not a new enactment);
8		(D) The amount of any net operating loss deduction
9		taken in arriving at taxable income, other than a net
10		operating loss carried forward from a taxable year
11		ending prior to December 31, 1986;
12		(E) For taxable years in which a net operating loss
13		carryback or carryforward from a taxable year ending
14		prior to December 31, 1986 is an element of taxable
15		income under paragraph (1) of subsection (e) or
16		subparagraph (E) of paragraph (2) of subsection (e),
17		the amount by which addition modifications other than
18		those provided by this subparagraph (E) exceeded
19		subtraction modifications in such earlier taxable
20		year, with the following limitations applied in the
21		order that they are listed:
22		(i) the addition modification relating to the
23		net operating loss carried back or forward to the
24		taxable year from any taxable year ending prior to
25		December 31, 1986 shall be reduced by the amount of
26		addition modification under this subparagraph (E)

SB0009 Engrossed - 88 - LRB100 06347 HLH 16385 b
1		which related to that net operating loss and which
2		was taken into account in calculating the base
3		income of an earlier taxable year, and
4		(ii) the addition modification relating to the
5		net operating loss carried back or forward to the
6		taxable year from any taxable year ending prior to
7		December 31, 1986 shall not exceed the amount of
8		such carryback or carryforward;
9		For taxable years in which there is a net operating
10		loss carryback or carryforward from more than one other
11		taxable year ending prior to December 31, 1986, the
12		addition modification provided in this subparagraph
13		(E) shall be the sum of the amounts computed
14		independently under the preceding provisions of this
15		subparagraph (E) for each such taxable year;
16		(E-5) For taxable years ending after December 31,
17		1997, an amount equal to any eligible remediation costs
18		that the corporation deducted in computing adjusted
19		gross income and for which the corporation claims a
20		credit under subsection (l) of Section 201;
21		(E-10) For taxable years 2001 and thereafter, an
22		amount equal to the bonus depreciation deduction taken
23		on the taxpayer's federal income tax return for the
24		taxable year under subsection (k) of Section 168 of the
25		Internal Revenue Code;
26		(E-11) If the taxpayer sells, transfers, abandons,

SB0009 Engrossed - 89 - LRB100 06347 HLH 16385 b
1		or otherwise disposes of property for which the
2		taxpayer was required in any taxable year to make an
3		addition modification under subparagraph (E-10), then
4		an amount equal to the aggregate amount of the
5		deductions taken in all taxable years under
6		subparagraph (T) with respect to that property.
7		If the taxpayer continues to own property through
8		the last day of the last tax year for which the
9		taxpayer may claim a depreciation deduction for
10		federal income tax purposes and for which the taxpayer
11		was allowed in any taxable year to make a subtraction
12		modification under subparagraph (T), then an amount
13		equal to that subtraction modification.
14		The taxpayer is required to make the addition
15		modification under this subparagraph only once with
16		respect to any one piece of property;
17		(E-12) An amount equal to the amount otherwise
18		allowed as a deduction in computing base income for
19		interest paid, accrued, or incurred, directly or
20		indirectly, (i) for taxable years ending on or after
21		December 31, 2004, to a foreign person who would be a
22		member of the same unitary business group but for the
23		fact the foreign person's business activity outside
24		the United States is 80% or more of the foreign
25		person's total business activity and (ii) for taxable
26		years ending on or after December 31, 2008, to a person

SB0009 Engrossed - 90 - LRB100 06347 HLH 16385 b
1		who would be a member of the same unitary business
2		group but for the fact that the person is prohibited
3		under Section 1501(a)(27) from being included in the
4		unitary business group because he or she is ordinarily
5		required to apportion business income under different
6		subsections of Section 304. The addition modification
7		required by this subparagraph shall be reduced to the
8		extent that dividends were included in base income of
9		the unitary group for the same taxable year and
10		received by the taxpayer or by a member of the
11		taxpayer's unitary business group (including amounts
12		included in gross income pursuant to Sections 951
13		through 964 of the Internal Revenue Code and amounts
14		included in gross income under Section 78 of the
15		Internal Revenue Code) with respect to the stock of the
16		same person to whom the interest was paid, accrued, or
17		incurred.
18		This paragraph shall not apply to the following:
19		(i) an item of interest paid, accrued, or
20		incurred, directly or indirectly, to a person who
21		is subject in a foreign country or state, other
22		than a state which requires mandatory unitary
23		reporting, to a tax on or measured by net income
24		with respect to such interest; or
25		(ii) an item of interest paid, accrued, or
26		incurred, directly or indirectly, to a person if

SB0009 Engrossed - 91 - LRB100 06347 HLH 16385 b
1		the taxpayer can establish, based on a
2		preponderance of the evidence, both of the
3		following:
4		(a) the person, during the same taxable
5		year, paid, accrued, or incurred, the interest
6		to a person that is not a related member, and
7		(b) the transaction giving rise to the
8		interest expense between the taxpayer and the
9		person did not have as a principal purpose the
10		avoidance of Illinois income tax, and is paid
11		pursuant to a contract or agreement that
12		reflects an arm's-length interest rate and
13		terms; or
14		(iii) the taxpayer can establish, based on
15		clear and convincing evidence, that the interest
16		paid, accrued, or incurred relates to a contract or
17		agreement entered into at arm's-length rates and
18		terms and the principal purpose for the payment is
19		not federal or Illinois tax avoidance; or
20		(iv) an item of interest paid, accrued, or
21		incurred, directly or indirectly, to a person if
22		the taxpayer establishes by clear and convincing
23		evidence that the adjustments are unreasonable; or
24		if the taxpayer and the Director agree in writing
25		to the application or use of an alternative method
26		of apportionment under Section 304(f).

SB0009 Engrossed - 92 - LRB100 06347 HLH 16385 b
1		Nothing in this subsection shall preclude the
2		Director from making any other adjustment
3		otherwise allowed under Section 404 of this Act for
4		any tax year beginning after the effective date of
5		this amendment provided such adjustment is made
6		pursuant to regulation adopted by the Department
7		and such regulations provide methods and standards
8		by which the Department will utilize its authority
9		under Section 404 of this Act;
10		(E-13) An amount equal to the amount of intangible
11		expenses and costs otherwise allowed as a deduction in
12		computing base income, and that were paid, accrued, or
13		incurred, directly or indirectly, (i) for taxable
14		years ending on or after December 31, 2004, to a
15		foreign person who would be a member of the same
16		unitary business group but for the fact that the
17		foreign person's business activity outside the United
18		States is 80% or more of that person's total business
19		activity and (ii) for taxable years ending on or after
20		December 31, 2008, to a person who would be a member of
21		the same unitary business group but for the fact that
22		the person is prohibited under Section 1501(a)(27)
23		from being included in the unitary business group
24		because he or she is ordinarily required to apportion
25		business income under different subsections of Section
26		304. The addition modification required by this

SB0009 Engrossed - 93 - LRB100 06347 HLH 16385 b
1		subparagraph shall be reduced to the extent that
2		dividends were included in base income of the unitary
3		group for the same taxable year and received by the
4		taxpayer or by a member of the taxpayer's unitary
5		business group (including amounts included in gross
6		income pursuant to Sections 951 through 964 of the
7		Internal Revenue Code and amounts included in gross
8		income under Section 78 of the Internal Revenue Code)
9		with respect to the stock of the same person to whom
10		the intangible expenses and costs were directly or
11		indirectly paid, incurred, or accrued. The preceding
12		sentence shall not apply to the extent that the same
13		dividends caused a reduction to the addition
14		modification required under Section 203(b)(2)(E-12) of
15		this Act. As used in this subparagraph, the term
16		"intangible expenses and costs" includes (1) expenses,
17		losses, and costs for, or related to, the direct or
18		indirect acquisition, use, maintenance or management,
19		ownership, sale, exchange, or any other disposition of
20		intangible property; (2) losses incurred, directly or
21		indirectly, from factoring transactions or discounting
22		transactions; (3) royalty, patent, technical, and
23		copyright fees; (4) licensing fees; and (5) other
24		similar expenses and costs. For purposes of this
25		subparagraph, "intangible property" includes patents,
26		patent applications, trade names, trademarks, service

SB0009 Engrossed - 94 - LRB100 06347 HLH 16385 b
1		marks, copyrights, mask works, trade secrets, and
2		similar types of intangible assets.
3		This paragraph shall not apply to the following:
4		(i) any item of intangible expenses or costs
5		paid, accrued, or incurred, directly or
6		indirectly, from a transaction with a person who is
7		subject in a foreign country or state, other than a
8		state which requires mandatory unitary reporting,
9		to a tax on or measured by net income with respect
10		to such item; or
11		(ii) any item of intangible expense or cost
12		paid, accrued, or incurred, directly or
13		indirectly, if the taxpayer can establish, based
14		on a preponderance of the evidence, both of the
15		following:
16		(a) the person during the same taxable
17		year paid, accrued, or incurred, the
18		intangible expense or cost to a person that is
19		not a related member, and
20		(b) the transaction giving rise to the
21		intangible expense or cost between the
22		taxpayer and the person did not have as a
23		principal purpose the avoidance of Illinois
24		income tax, and is paid pursuant to a contract
25		or agreement that reflects arm's-length terms;
26		or

SB0009 Engrossed - 95 - LRB100 06347 HLH 16385 b
1		(iii) any item of intangible expense or cost
2		paid, accrued, or incurred, directly or
3		indirectly, from a transaction with a person if the
4		taxpayer establishes by clear and convincing
5		evidence, that the adjustments are unreasonable;
6		or if the taxpayer and the Director agree in
7		writing to the application or use of an alternative
8		method of apportionment under Section 304(f);
9		Nothing in this subsection shall preclude the
10		Director from making any other adjustment
11		otherwise allowed under Section 404 of this Act for
12		any tax year beginning after the effective date of
13		this amendment provided such adjustment is made
14		pursuant to regulation adopted by the Department
15		and such regulations provide methods and standards
16		by which the Department will utilize its authority
17		under Section 404 of this Act;
18		(E-14) For taxable years ending on or after
19		December 31, 2008, an amount equal to the amount of
20		insurance premium expenses and costs otherwise allowed
21		as a deduction in computing base income, and that were
22		paid, accrued, or incurred, directly or indirectly, to
23		a person who would be a member of the same unitary
24		business group but for the fact that the person is
25		prohibited under Section 1501(a)(27) from being
26		included in the unitary business group because he or

SB0009 Engrossed - 96 - LRB100 06347 HLH 16385 b
1		she is ordinarily required to apportion business
2		income under different subsections of Section 304. The
3		addition modification required by this subparagraph
4		shall be reduced to the extent that dividends were
5		included in base income of the unitary group for the
6		same taxable year and received by the taxpayer or by a
7		member of the taxpayer's unitary business group
8		(including amounts included in gross income under
9		Sections 951 through 964 of the Internal Revenue Code
10		and amounts included in gross income under Section 78
11		of the Internal Revenue Code) with respect to the stock
12		of the same person to whom the premiums and costs were
13		directly or indirectly paid, incurred, or accrued. The
14		preceding sentence does not apply to the extent that
15		the same dividends caused a reduction to the addition
16		modification required under Section 203(b)(2)(E-12) or
17		Section 203(b)(2)(E-13) of this Act;
18		(E-15) For taxable years beginning after December
19		31, 2008, any deduction for dividends paid by a captive
20		real estate investment trust that is allowed to a real
21		estate investment trust under Section 857(b)(2)(B) of
22		the Internal Revenue Code for dividends paid;
23		(E-16) An amount equal to the credit allowable to
24		the taxpayer under Section 218(a) of this Act,
25		determined without regard to Section 218(c) of this
26		Act;

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1		(E-17) For taxable years beginning on or after
2		January 1, 2017, an amount equal to the deduction
3		allowed under Section 199 of the Internal Revenue Code
4		for the taxable year;
5		and by deducting from the total so obtained the sum of the
6		following amounts:
7		(F) An amount equal to the amount of any tax
8		imposed by this Act which was refunded to the taxpayer
9		and included in such total for the taxable year;
10		(G) An amount equal to any amount included in such
11		total under Section 78 of the Internal Revenue Code;
12		(H) In the case of a regulated investment company,
13		an amount equal to the amount of exempt interest
14		dividends as defined in subsection (b) (5) of Section
15		852 of the Internal Revenue Code, paid to shareholders
16		for the taxable year;
17		(I) With the exception of any amounts subtracted
18		under subparagraph (J), an amount equal to the sum of
19		all amounts disallowed as deductions by (i) Sections
20		171(a) (2), and 265(a)(2) and amounts disallowed as
21		interest expense by Section 291(a)(3) of the Internal
22		Revenue Code, and all amounts of expenses allocable to
23		interest and disallowed as deductions by Section
24		265(a)(1) of the Internal Revenue Code; and (ii) for
25		taxable years ending on or after August 13, 1999,
26		Sections 171(a)(2), 265, 280C, 291(a)(3), and

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1		832(b)(5)(B)(i) of the Internal Revenue Code, plus,
2		for tax years ending on or after December 31, 2011,
3		amounts disallowed as deductions by Section 45G(e)(3)
4		of the Internal Revenue Code and, for taxable years
5		ending on or after December 31, 2008, any amount
6		included in gross income under Section 87 of the
7		Internal Revenue Code and the policyholders' share of
8		tax-exempt interest of a life insurance company under
9		Section 807(a)(2)(B) of the Internal Revenue Code (in
10		the case of a life insurance company with gross income
11		from a decrease in reserves for the tax year) or
12		Section 807(b)(1)(B) of the Internal Revenue Code (in
13		the case of a life insurance company allowed a
14		deduction for an increase in reserves for the tax
15		year); the provisions of this subparagraph are exempt
16		from the provisions of Section 250;
17		(J) An amount equal to all amounts included in such
18		total which are exempt from taxation by this State
19		either by reason of its statutes or Constitution or by
20		reason of the Constitution, treaties or statutes of the
21		United States; provided that, in the case of any
22		statute of this State that exempts income derived from
23		bonds or other obligations from the tax imposed under
24		this Act, the amount exempted shall be the interest net
25		of bond premium amortization;
26		(K) An amount equal to those dividends included in

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1		such total which were paid by a corporation which
2		conducts business operations in a River Edge
3		Redevelopment Zone or zones created under the River
4		Edge Redevelopment Zone Act and conducts substantially
5		all of its operations in a River Edge Redevelopment
6		Zone or zones. This subparagraph (K) is exempt from the
7		provisions of Section 250;
8		(L) An amount equal to those dividends included in
9		such total that were paid by a corporation that
10		conducts business operations in a federally designated
11		Foreign Trade Zone or Sub-Zone and that is designated a
12		High Impact Business located in Illinois; provided
13		that dividends eligible for the deduction provided in
14		subparagraph (K) of paragraph 2 of this subsection
15		shall not be eligible for the deduction provided under
16		this subparagraph (L);
17		(M) For any taxpayer that is a financial
18		organization within the meaning of Section 304(c) of
19		this Act, an amount included in such total as interest
20		income from a loan or loans made by such taxpayer to a
21		borrower, to the extent that such a loan is secured by
22		property which is eligible for the River Edge
23		Redevelopment Zone Investment Credit. To determine the
24		portion of a loan or loans that is secured by property
25		eligible for a Section 201(f) investment credit to the
26		borrower, the entire principal amount of the loan or

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1		loans between the taxpayer and the borrower should be
2		divided into the basis of the Section 201(f) investment
3		credit property which secures the loan or loans, using
4		for this purpose the original basis of such property on
5		the date that it was placed in service in the River
6		Edge Redevelopment Zone. The subtraction modification
7		available to taxpayer in any year under this subsection
8		shall be that portion of the total interest paid by the
9		borrower with respect to such loan attributable to the
10		eligible property as calculated under the previous
11		sentence. This subparagraph (M) is exempt from the
12		provisions of Section 250;
13		(M-1) For any taxpayer that is a financial
14		organization within the meaning of Section 304(c) of
15		this Act, an amount included in such total as interest
16		income from a loan or loans made by such taxpayer to a
17		borrower, to the extent that such a loan is secured by
18		property which is eligible for the High Impact Business
19		Investment Credit. To determine the portion of a loan
20		or loans that is secured by property eligible for a
21		Section 201(h) investment credit to the borrower, the
22		entire principal amount of the loan or loans between
23		the taxpayer and the borrower should be divided into
24		the basis of the Section 201(h) investment credit
25		property which secures the loan or loans, using for
26		this purpose the original basis of such property on the

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1		date that it was placed in service in a federally
2		designated Foreign Trade Zone or Sub-Zone located in
3		Illinois. No taxpayer that is eligible for the
4		deduction provided in subparagraph (M) of paragraph
5		(2) of this subsection shall be eligible for the
6		deduction provided under this subparagraph (M-1). The
7		subtraction modification available to taxpayers in any
8		year under this subsection shall be that portion of the
9		total interest paid by the borrower with respect to
10		such loan attributable to the eligible property as
11		calculated under the previous sentence;
12		(N) Two times any contribution made during the
13		taxable year to a designated zone organization to the
14		extent that the contribution (i) qualifies as a
15		charitable contribution under subsection (c) of
16		Section 170 of the Internal Revenue Code and (ii) must,
17		by its terms, be used for a project approved by the
18		Department of Commerce and Economic Opportunity under
19		Section 11 of the Illinois Enterprise Zone Act or under
20		Section 10-10 of the River Edge Redevelopment Zone Act.
21		This subparagraph (N) is exempt from the provisions of
22		Section 250;
23		(O) An amount equal to: (i) 85% for taxable years
24		ending on or before December 31, 1992, or, a percentage
25		equal to the percentage allowable under Section
26		243(a)(1) of the Internal Revenue Code of 1986 for

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1		taxable years ending after December 31, 1992, of the
2		amount by which dividends included in taxable income
3		and received from a corporation that is not created or
4		organized under the laws of the United States or any
5		state or political subdivision thereof, including, for
6		taxable years ending on or after December 31, 1988,
7		dividends received or deemed received or paid or deemed
8		paid under Sections 951 through 965 of the Internal
9		Revenue Code, exceed the amount of the modification
10		provided under subparagraph (G) of paragraph (2) of
11		this subsection (b) which is related to such dividends,
12		and including, for taxable years ending on or after
13		December 31, 2008, dividends received from a captive
14		real estate investment trust; plus (ii) 100% of the
15		amount by which dividends, included in taxable income
16		and received, including, for taxable years ending on or
17		after December 31, 1988, dividends received or deemed
18		received or paid or deemed paid under Sections 951
19		through 964 of the Internal Revenue Code and including,
20		for taxable years ending on or after December 31, 2008,
21		dividends received from a captive real estate
22		investment trust, from any such corporation specified
23		in clause (i) that would but for the provisions of
24		Section 1504 (b) (3) of the Internal Revenue Code be
25		treated as a member of the affiliated group which
26		includes the dividend recipient, exceed the amount of

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1		the modification provided under subparagraph (G) of
2		paragraph (2) of this subsection (b) which is related
3		to such dividends. This subparagraph (O) is exempt from
4		the provisions of Section 250 of this Act;
5		(P) An amount equal to any contribution made to a
6		job training project established pursuant to the Tax
7		Increment Allocation Redevelopment Act;
8		(Q) An amount equal to the amount of the deduction
9		used to compute the federal income tax credit for
10		restoration of substantial amounts held under claim of
11		right for the taxable year pursuant to Section 1341 of
12		the Internal Revenue Code;
13		(R) On and after July 20, 1999, in the case of an
14		attorney-in-fact with respect to whom an interinsurer
15		or a reciprocal insurer has made the election under
16		Section 835 of the Internal Revenue Code, 26 U.S.C.
17		835, an amount equal to the excess, if any, of the
18		amounts paid or incurred by that interinsurer or
19		reciprocal insurer in the taxable year to the
20		attorney-in-fact over the deduction allowed to that
21		interinsurer or reciprocal insurer with respect to the
22		attorney-in-fact under Section 835(b) of the Internal
23		Revenue Code for the taxable year; the provisions of
24		this subparagraph are exempt from the provisions of
25		Section 250;
26		(S) For taxable years ending on or after December

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1		31, 1997, in the case of a Subchapter S corporation, an
2		amount equal to all amounts of income allocable to a
3		shareholder subject to the Personal Property Tax
4		Replacement Income Tax imposed by subsections (c) and
5		(d) of Section 201 of this Act, including amounts
6		allocable to organizations exempt from federal income
7		tax by reason of Section 501(a) of the Internal Revenue
8		Code. This subparagraph (S) is exempt from the
9		provisions of Section 250;
10		(T) For taxable years 2001 and thereafter, for the
11		taxable year in which the bonus depreciation deduction
12		is taken on the taxpayer's federal income tax return
13		under subsection (k) of Section 168 of the Internal
14		Revenue Code and for each applicable taxable year
15		thereafter, an amount equal to "x", where:
16		(1) "y" equals the amount of the depreciation
17		deduction taken for the taxable year on the
18		taxpayer's federal income tax return on property
19		for which the bonus depreciation deduction was
20		taken in any year under subsection (k) of Section
21		168 of the Internal Revenue Code, but not including
22		the bonus depreciation deduction;
23		(2) for taxable years ending on or before
24		December 31, 2005, "x" equals "y" multiplied by 30
25		and then divided by 70 (or "y" multiplied by
26		0.429); and

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1		(3) for taxable years ending after December
2		31, 2005:
3		(i) for property on which a bonus
4		depreciation deduction of 30% of the adjusted
5		basis was taken, "x" equals "y" multiplied by
6		30 and then divided by 70 (or "y" multiplied by
7		0.429); and
8		(ii) for property on which a bonus
9		depreciation deduction of 50% of the adjusted
10		basis was taken, "x" equals "y" multiplied by
11		1.0.
12		The aggregate amount deducted under this
13		subparagraph in all taxable years for any one piece of
14		property may not exceed the amount of the bonus
15		depreciation deduction taken on that property on the
16		taxpayer's federal income tax return under subsection
17		(k) of Section 168 of the Internal Revenue Code. This
18		subparagraph (T) is exempt from the provisions of
19		Section 250;
20		(U) If the taxpayer sells, transfers, abandons, or
21		otherwise disposes of property for which the taxpayer
22		was required in any taxable year to make an addition
23		modification under subparagraph (E-10), then an amount
24		equal to that addition modification.
25		If the taxpayer continues to own property through
26		the last day of the last tax year for which the

SB0009 Engrossed - 106 - LRB100 06347 HLH 16385 b
1		taxpayer may claim a depreciation deduction for
2		federal income tax purposes and for which the taxpayer
3		was required in any taxable year to make an addition
4		modification under subparagraph (E-10), then an amount
5		equal to that addition modification.
6		The taxpayer is allowed to take the deduction under
7		this subparagraph only once with respect to any one
8		piece of property.
9		This subparagraph (U) is exempt from the
10		provisions of Section 250;
11		(V) The amount of: (i) any interest income (net of
12		the deductions allocable thereto) taken into account
13		for the taxable year with respect to a transaction with
14		a taxpayer that is required to make an addition
15		modification with respect to such transaction under
16		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
17		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
18		the amount of such addition modification, (ii) any
19		income from intangible property (net of the deductions
20		allocable thereto) taken into account for the taxable
21		year with respect to a transaction with a taxpayer that
22		is required to make an addition modification with
23		respect to such transaction under Section
24		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
25		203(d)(2)(D-8), but not to exceed the amount of such
26		addition modification, and (iii) any insurance premium

SB0009 Engrossed - 107 - LRB100 06347 HLH 16385 b
1		income (net of deductions allocable thereto) taken
2		into account for the taxable year with respect to a
3		transaction with a taxpayer that is required to make an
4		addition modification with respect to such transaction
5		under Section 203(a)(2)(D-19), Section
6		203(b)(2)(E-14), Section 203(c)(2)(G-14), or Section
7		203(d)(2)(D-9), but not to exceed the amount of that
8		addition modification. This subparagraph (V) is exempt
9		from the provisions of Section 250;
10		(W) An amount equal to the interest income taken
11		into account for the taxable year (net of the
12		deductions allocable thereto) with respect to
13		transactions with (i) a foreign person who would be a
14		member of the taxpayer's unitary business group but for
15		the fact that the foreign person's business activity
16		outside the United States is 80% or more of that
17		person's total business activity and (ii) for taxable
18		years ending on or after December 31, 2008, to a person
19		who would be a member of the same unitary business
20		group but for the fact that the person is prohibited
21		under Section 1501(a)(27) from being included in the
22		unitary business group because he or she is ordinarily
23		required to apportion business income under different
24		subsections of Section 304, but not to exceed the
25		addition modification required to be made for the same
26		taxable year under Section 203(b)(2)(E-12) for

SB0009 Engrossed - 108 - LRB100 06347 HLH 16385 b
1		interest paid, accrued, or incurred, directly or
2		indirectly, to the same person. This subparagraph (W)
3		is exempt from the provisions of Section 250;
4		(X) An amount equal to the income from intangible
5		property taken into account for the taxable year (net
6		of the deductions allocable thereto) with respect to
7		transactions with (i) a foreign person who would be a
8		member of the taxpayer's unitary business group but for
9		the fact that the foreign person's business activity
10		outside the United States is 80% or more of that
11		person's total business activity and (ii) for taxable
12		years ending on or after December 31, 2008, to a person
13		who would be a member of the same unitary business
14		group but for the fact that the person is prohibited
15		under Section 1501(a)(27) from being included in the
16		unitary business group because he or she is ordinarily
17		required to apportion business income under different
18		subsections of Section 304, but not to exceed the
19		addition modification required to be made for the same
20		taxable year under Section 203(b)(2)(E-13) for
21		intangible expenses and costs paid, accrued, or
22		incurred, directly or indirectly, to the same foreign
23		person. This subparagraph (X) is exempt from the
24		provisions of Section 250;
25		(Y) For taxable years ending on or after December
26		31, 2011, in the case of a taxpayer who was required to

SB0009 Engrossed - 109 - LRB100 06347 HLH 16385 b
1		add back any insurance premiums under Section
2		203(b)(2)(E-14), such taxpayer may elect to subtract
3		that part of a reimbursement received from the
4		insurance company equal to the amount of the expense or
5		loss (including expenses incurred by the insurance
6		company) that would have been taken into account as a
7		deduction for federal income tax purposes if the
8		expense or loss had been uninsured. If a taxpayer makes
9		the election provided for by this subparagraph (Y), the
10		insurer to which the premiums were paid must add back
11		to income the amount subtracted by the taxpayer
12		pursuant to this subparagraph (Y). This subparagraph
13		(Y) is exempt from the provisions of Section 250; and
14		(Z) The difference between the nondeductible
15		controlled foreign corporation dividends under Section
16		965(e)(3) of the Internal Revenue Code over the taxable
17		income of the taxpayer, computed without regard to
18		Section 965(e)(2)(A) of the Internal Revenue Code, and
19		without regard to any net operating loss deduction.
20		This subparagraph (Z) is exempt from the provisions of
21		Section 250.
22		(3) Special rule. For purposes of paragraph (2) (A),
23		"gross income" in the case of a life insurance company, for
24		tax years ending on and after December 31, 1994, and prior
25		to December 31, 2011, shall mean the gross investment
26		income for the taxable year and, for tax years ending on or

SB0009 Engrossed - 110 - LRB100 06347 HLH 16385 b
1		after December 31, 2011, shall mean all amounts included in
2		life insurance gross income under Section 803(a)(3) of the
3		Internal Revenue Code.
4		(c) Trusts and estates.
5		(1) In general. In the case of a trust or estate, base
6		income means an amount equal to the taxpayer's taxable
7		income for the taxable year as modified by paragraph (2).
8		(2) Modifications. Subject to the provisions of
9		paragraph (3), the taxable income referred to in paragraph
10		(1) shall be modified by adding thereto the sum of the
11		following amounts:
12		(A) An amount equal to all amounts paid or accrued
13		to the taxpayer as interest or dividends during the
14		taxable year to the extent excluded from gross income
15		in the computation of taxable income;
16		(B) In the case of (i) an estate, $600; (ii) a
17		trust which, under its governing instrument, is
18		required to distribute all of its income currently,
19		$300; and (iii) any other trust, $100, but in each such
20		case, only to the extent such amount was deducted in
21		the computation of taxable income;
22		(C) An amount equal to the amount of tax imposed by
23		this Act to the extent deducted from gross income in
24		the computation of taxable income for the taxable year;
25		(D) The amount of any net operating loss deduction

SB0009 Engrossed - 111 - LRB100 06347 HLH 16385 b
1		taken in arriving at taxable income, other than a net
2		operating loss carried forward from a taxable year
3		ending prior to December 31, 1986;
4		(E) For taxable years in which a net operating loss
5		carryback or carryforward from a taxable year ending
6		prior to December 31, 1986 is an element of taxable
7		income under paragraph (1) of subsection (e) or
8		subparagraph (E) of paragraph (2) of subsection (e),
9		the amount by which addition modifications other than
10		those provided by this subparagraph (E) exceeded
11		subtraction modifications in such taxable year, with
12		the following limitations applied in the order that
13		they are listed:
14		(i) the addition modification relating to the
15		net operating loss carried back or forward to the
16		taxable year from any taxable year ending prior to
17		December 31, 1986 shall be reduced by the amount of
18		addition modification under this subparagraph (E)
19		which related to that net operating loss and which
20		was taken into account in calculating the base
21		income of an earlier taxable year, and
22		(ii) the addition modification relating to the
23		net operating loss carried back or forward to the
24		taxable year from any taxable year ending prior to
25		December 31, 1986 shall not exceed the amount of
26		such carryback or carryforward;

SB0009 Engrossed - 112 - LRB100 06347 HLH 16385 b
1		For taxable years in which there is a net operating
2		loss carryback or carryforward from more than one other
3		taxable year ending prior to December 31, 1986, the
4		addition modification provided in this subparagraph
5		(E) shall be the sum of the amounts computed
6		independently under the preceding provisions of this
7		subparagraph (E) for each such taxable year;
8		(F) For taxable years ending on or after January 1,
9		1989, an amount equal to the tax deducted pursuant to
10		Section 164 of the Internal Revenue Code if the trust
11		or estate is claiming the same tax for purposes of the
12		Illinois foreign tax credit under Section 601 of this
13		Act;
14		(G) An amount equal to the amount of the capital
15		gain deduction allowable under the Internal Revenue
16		Code, to the extent deducted from gross income in the
17		computation of taxable income;
18		(G-5) For taxable years ending after December 31,
19		1997, an amount equal to any eligible remediation costs
20		that the trust or estate deducted in computing adjusted
21		gross income and for which the trust or estate claims a
22		credit under subsection (l) of Section 201;
23		(G-10) For taxable years 2001 and thereafter, an
24		amount equal to the bonus depreciation deduction taken
25		on the taxpayer's federal income tax return for the
26		taxable year under subsection (k) of Section 168 of the

SB0009 Engrossed - 113 - LRB100 06347 HLH 16385 b
1		Internal Revenue Code; and
2		(G-11) If the taxpayer sells, transfers, abandons,
3		or otherwise disposes of property for which the
4		taxpayer was required in any taxable year to make an
5		addition modification under subparagraph (G-10), then
6		an amount equal to the aggregate amount of the
7		deductions taken in all taxable years under
8		subparagraph (R) with respect to that property.
9		If the taxpayer continues to own property through
10		the last day of the last tax year for which the
11		taxpayer may claim a depreciation deduction for
12		federal income tax purposes and for which the taxpayer
13		was allowed in any taxable year to make a subtraction
14		modification under subparagraph (R), then an amount
15		equal to that subtraction modification.
16		The taxpayer is required to make the addition
17		modification under this subparagraph only once with
18		respect to any one piece of property;
19		(G-12) An amount equal to the amount otherwise
20		allowed as a deduction in computing base income for
21		interest paid, accrued, or incurred, directly or
22		indirectly, (i) for taxable years ending on or after
23		December 31, 2004, to a foreign person who would be a
24		member of the same unitary business group but for the
25		fact that the foreign person's business activity
26		outside the United States is 80% or more of the foreign

SB0009 Engrossed - 114 - LRB100 06347 HLH 16385 b
1		person's total business activity and (ii) for taxable
2		years ending on or after December 31, 2008, to a person
3		who would be a member of the same unitary business
4		group but for the fact that the person is prohibited
5		under Section 1501(a)(27) from being included in the
6		unitary business group because he or she is ordinarily
7		required to apportion business income under different
8		subsections of Section 304. The addition modification
9		required by this subparagraph shall be reduced to the
10		extent that dividends were included in base income of
11		the unitary group for the same taxable year and
12		received by the taxpayer or by a member of the
13		taxpayer's unitary business group (including amounts
14		included in gross income pursuant to Sections 951
15		through 964 of the Internal Revenue Code and amounts
16		included in gross income under Section 78 of the
17		Internal Revenue Code) with respect to the stock of the
18		same person to whom the interest was paid, accrued, or
19		incurred.
20		This paragraph shall not apply to the following:
21		(i) an item of interest paid, accrued, or
22		incurred, directly or indirectly, to a person who
23		is subject in a foreign country or state, other
24		than a state which requires mandatory unitary
25		reporting, to a tax on or measured by net income
26		with respect to such interest; or

SB0009 Engrossed - 115 - LRB100 06347 HLH 16385 b
1		(ii) an item of interest paid, accrued, or
2		incurred, directly or indirectly, to a person if
3		the taxpayer can establish, based on a
4		preponderance of the evidence, both of the
5		following:
6		(a) the person, during the same taxable
7		year, paid, accrued, or incurred, the interest
8		to a person that is not a related member, and
9		(b) the transaction giving rise to the
10		interest expense between the taxpayer and the
11		person did not have as a principal purpose the
12		avoidance of Illinois income tax, and is paid
13		pursuant to a contract or agreement that
14		reflects an arm's-length interest rate and
15		terms; or
16		(iii) the taxpayer can establish, based on
17		clear and convincing evidence, that the interest
18		paid, accrued, or incurred relates to a contract or
19		agreement entered into at arm's-length rates and
20		terms and the principal purpose for the payment is
21		not federal or Illinois tax avoidance; or
22		(iv) an item of interest paid, accrued, or
23		incurred, directly or indirectly, to a person if
24		the taxpayer establishes by clear and convincing
25		evidence that the adjustments are unreasonable; or
26		if the taxpayer and the Director agree in writing

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1		to the application or use of an alternative method
2		of apportionment under Section 304(f).
3		Nothing in this subsection shall preclude the
4		Director from making any other adjustment
5		otherwise allowed under Section 404 of this Act for
6		any tax year beginning after the effective date of
7		this amendment provided such adjustment is made
8		pursuant to regulation adopted by the Department
9		and such regulations provide methods and standards
10		by which the Department will utilize its authority
11		under Section 404 of this Act;
12		(G-13) An amount equal to the amount of intangible
13		expenses and costs otherwise allowed as a deduction in
14		computing base income, and that were paid, accrued, or
15		incurred, directly or indirectly, (i) for taxable
16		years ending on or after December 31, 2004, to a
17		foreign person who would be a member of the same
18		unitary business group but for the fact that the
19		foreign person's business activity outside the United
20		States is 80% or more of that person's total business
21		activity and (ii) for taxable years ending on or after
22		December 31, 2008, to a person who would be a member of
23		the same unitary business group but for the fact that
24		the person is prohibited under Section 1501(a)(27)
25		from being included in the unitary business group
26		because he or she is ordinarily required to apportion

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1		business income under different subsections of Section
2		304. The addition modification required by this
3		subparagraph shall be reduced to the extent that
4		dividends were included in base income of the unitary
5		group for the same taxable year and received by the
6		taxpayer or by a member of the taxpayer's unitary
7		business group (including amounts included in gross
8		income pursuant to Sections 951 through 964 of the
9		Internal Revenue Code and amounts included in gross
10		income under Section 78 of the Internal Revenue Code)
11		with respect to the stock of the same person to whom
12		the intangible expenses and costs were directly or
13		indirectly paid, incurred, or accrued. The preceding
14		sentence shall not apply to the extent that the same
15		dividends caused a reduction to the addition
16		modification required under Section 203(c)(2)(G-12) of
17		this Act. As used in this subparagraph, the term
18		"intangible expenses and costs" includes: (1)
19		expenses, losses, and costs for or related to the
20		direct or indirect acquisition, use, maintenance or
21		management, ownership, sale, exchange, or any other
22		disposition of intangible property; (2) losses
23		incurred, directly or indirectly, from factoring
24		transactions or discounting transactions; (3) royalty,
25		patent, technical, and copyright fees; (4) licensing
26		fees; and (5) other similar expenses and costs. For

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1		purposes of this subparagraph, "intangible property"
2		includes patents, patent applications, trade names,
3		trademarks, service marks, copyrights, mask works,
4		trade secrets, and similar types of intangible assets.
5		This paragraph shall not apply to the following:
6		(i) any item of intangible expenses or costs
7		paid, accrued, or incurred, directly or
8		indirectly, from a transaction with a person who is
9		subject in a foreign country or state, other than a
10		state which requires mandatory unitary reporting,
11		to a tax on or measured by net income with respect
12		to such item; or
13		(ii) any item of intangible expense or cost
14		paid, accrued, or incurred, directly or
15		indirectly, if the taxpayer can establish, based
16		on a preponderance of the evidence, both of the
17		following:
18		(a) the person during the same taxable
19		year paid, accrued, or incurred, the
20		intangible expense or cost to a person that is
21		not a related member, and
22		(b) the transaction giving rise to the
23		intangible expense or cost between the
24		taxpayer and the person did not have as a
25		principal purpose the avoidance of Illinois
26		income tax, and is paid pursuant to a contract

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1		or agreement that reflects arm's-length terms;
2		or
3		(iii) any item of intangible expense or cost
4		paid, accrued, or incurred, directly or
5		indirectly, from a transaction with a person if the
6		taxpayer establishes by clear and convincing
7		evidence, that the adjustments are unreasonable;
8		or if the taxpayer and the Director agree in
9		writing to the application or use of an alternative
10		method of apportionment under Section 304(f);
11		Nothing in this subsection shall preclude the
12		Director from making any other adjustment
13		otherwise allowed under Section 404 of this Act for
14		any tax year beginning after the effective date of
15		this amendment provided such adjustment is made
16		pursuant to regulation adopted by the Department
17		and such regulations provide methods and standards
18		by which the Department will utilize its authority
19		under Section 404 of this Act;
20		(G-14) For taxable years ending on or after
21		December 31, 2008, an amount equal to the amount of
22		insurance premium expenses and costs otherwise allowed
23		as a deduction in computing base income, and that were
24		paid, accrued, or incurred, directly or indirectly, to
25		a person who would be a member of the same unitary
26		business group but for the fact that the person is

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1		prohibited under Section 1501(a)(27) from being
2		included in the unitary business group because he or
3		she is ordinarily required to apportion business
4		income under different subsections of Section 304. The
5		addition modification required by this subparagraph
6		shall be reduced to the extent that dividends were
7		included in base income of the unitary group for the
8		same taxable year and received by the taxpayer or by a
9		member of the taxpayer's unitary business group
10		(including amounts included in gross income under
11		Sections 951 through 964 of the Internal Revenue Code
12		and amounts included in gross income under Section 78
13		of the Internal Revenue Code) with respect to the stock
14		of the same person to whom the premiums and costs were
15		directly or indirectly paid, incurred, or accrued. The
16		preceding sentence does not apply to the extent that
17		the same dividends caused a reduction to the addition
18		modification required under Section 203(c)(2)(G-12) or
19		Section 203(c)(2)(G-13) of this Act;
20		(G-15) An amount equal to the credit allowable to
21		the taxpayer under Section 218(a) of this Act,
22		determined without regard to Section 218(c) of this
23		Act;
24		(G-16) For taxable years beginning on or after
25		January 1, 2017, an amount equal to the deduction
26		allowed under Section 199 of the Internal Revenue Code

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1		for the taxable year;
2		and by deducting from the total so obtained the sum of the
3		following amounts:
4		(H) An amount equal to all amounts included in such
5		total pursuant to the provisions of Sections 402(a),
6		402(c), 403(a), 403(b), 406(a), 407(a) and 408 of the
7		Internal Revenue Code or included in such total as
8		distributions under the provisions of any retirement
9		or disability plan for employees of any governmental
10		agency or unit, or retirement payments to retired
11		partners, which payments are excluded in computing net
12		earnings from self employment by Section 1402 of the
13		Internal Revenue Code and regulations adopted pursuant
14		thereto;
15		(I) The valuation limitation amount;
16		(J) An amount equal to the amount of any tax
17		imposed by this Act which was refunded to the taxpayer
18		and included in such total for the taxable year;
19		(K) An amount equal to all amounts included in
20		taxable income as modified by subparagraphs (A), (B),
21		(C), (D), (E), (F) and (G) which are exempt from
22		taxation by this State either by reason of its statutes
23		or Constitution or by reason of the Constitution,
24		treaties or statutes of the United States; provided
25		that, in the case of any statute of this State that
26		exempts income derived from bonds or other obligations

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1		from the tax imposed under this Act, the amount
2		exempted shall be the interest net of bond premium
3		amortization;
4		(L) With the exception of any amounts subtracted
5		under subparagraph (K), an amount equal to the sum of
6		all amounts disallowed as deductions by (i) Sections
7		171(a) (2) and 265(a)(2) of the Internal Revenue Code,
8		and all amounts of expenses allocable to interest and
9		disallowed as deductions by Section 265(1) of the
10		Internal Revenue Code; and (ii) for taxable years
11		ending on or after August 13, 1999, Sections 171(a)(2),
12		265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
13		Code, plus, (iii) for taxable years ending on or after
14		December 31, 2011, Section 45G(e)(3) of the Internal
15		Revenue Code and, for taxable years ending on or after
16		December 31, 2008, any amount included in gross income
17		under Section 87 of the Internal Revenue Code; the
18		provisions of this subparagraph are exempt from the
19		provisions of Section 250;
20		(M) An amount equal to those dividends included in
21		such total which were paid by a corporation which
22		conducts business operations in a River Edge
23		Redevelopment Zone or zones created under the River
24		Edge Redevelopment Zone Act and conducts substantially
25		all of its operations in a River Edge Redevelopment
26		Zone or zones. This subparagraph (M) is exempt from the

SB0009 Engrossed - 123 - LRB100 06347 HLH 16385 b
1		provisions of Section 250;
2		(N) An amount equal to any contribution made to a
3		job training project established pursuant to the Tax
4		Increment Allocation Redevelopment Act;
5		(O) An amount equal to those dividends included in
6		such total that were paid by a corporation that
7		conducts business operations in a federally designated
8		Foreign Trade Zone or Sub-Zone and that is designated a
9		High Impact Business located in Illinois; provided
10		that dividends eligible for the deduction provided in
11		subparagraph (M) of paragraph (2) of this subsection
12		shall not be eligible for the deduction provided under
13		this subparagraph (O);
14		(P) An amount equal to the amount of the deduction
15		used to compute the federal income tax credit for
16		restoration of substantial amounts held under claim of
17		right for the taxable year pursuant to Section 1341 of
18		the Internal Revenue Code;
19		(Q) For taxable year 1999 and thereafter, an amount
20		equal to the amount of any (i) distributions, to the
21		extent includible in gross income for federal income
22		tax purposes, made to the taxpayer because of his or
23		her status as a victim of persecution for racial or
24		religious reasons by Nazi Germany or any other Axis
25		regime or as an heir of the victim and (ii) items of
26		income, to the extent includible in gross income for

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1		federal income tax purposes, attributable to, derived
2		from or in any way related to assets stolen from,
3		hidden from, or otherwise lost to a victim of
4		persecution for racial or religious reasons by Nazi
5		Germany or any other Axis regime immediately prior to,
6		during, and immediately after World War II, including,
7		but not limited to, interest on the proceeds receivable
8		as insurance under policies issued to a victim of
9		persecution for racial or religious reasons by Nazi
10		Germany or any other Axis regime by European insurance
11		companies immediately prior to and during World War II;
12		provided, however, this subtraction from federal
13		adjusted gross income does not apply to assets acquired
14		with such assets or with the proceeds from the sale of
15		such assets; provided, further, this paragraph shall
16		only apply to a taxpayer who was the first recipient of
17		such assets after their recovery and who is a victim of
18		persecution for racial or religious reasons by Nazi
19		Germany or any other Axis regime or as an heir of the
20		victim. The amount of and the eligibility for any
21		public assistance, benefit, or similar entitlement is
22		not affected by the inclusion of items (i) and (ii) of
23		this paragraph in gross income for federal income tax
24		purposes. This paragraph is exempt from the provisions
25		of Section 250;
26		(R) For taxable years 2001 and thereafter, for the

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1		taxable year in which the bonus depreciation deduction
2		is taken on the taxpayer's federal income tax return
3		under subsection (k) of Section 168 of the Internal
4		Revenue Code and for each applicable taxable year
5		thereafter, an amount equal to "x", where:
6		(1) "y" equals the amount of the depreciation
7		deduction taken for the taxable year on the
8		taxpayer's federal income tax return on property
9		for which the bonus depreciation deduction was
10		taken in any year under subsection (k) of Section
11		168 of the Internal Revenue Code, but not including
12		the bonus depreciation deduction;
13		(2) for taxable years ending on or before
14		December 31, 2005, "x" equals "y" multiplied by 30
15		and then divided by 70 (or "y" multiplied by
16		0.429); and
17		(3) for taxable years ending after December
18		31, 2005:
19		(i) for property on which a bonus
20		depreciation deduction of 30% of the adjusted
21		basis was taken, "x" equals "y" multiplied by
22		30 and then divided by 70 (or "y" multiplied by
23		0.429); and
24		(ii) for property on which a bonus
25		depreciation deduction of 50% of the adjusted
26		basis was taken, "x" equals "y" multiplied by

SB0009 Engrossed - 126 - LRB100 06347 HLH 16385 b
1		1.0.
2		The aggregate amount deducted under this
3		subparagraph in all taxable years for any one piece of
4		property may not exceed the amount of the bonus
5		depreciation deduction taken on that property on the
6		taxpayer's federal income tax return under subsection
7		(k) of Section 168 of the Internal Revenue Code. This
8		subparagraph (R) is exempt from the provisions of
9		Section 250;
10		(S) If the taxpayer sells, transfers, abandons, or
11		otherwise disposes of property for which the taxpayer
12		was required in any taxable year to make an addition
13		modification under subparagraph (G-10), then an amount
14		equal to that addition modification.
15		If the taxpayer continues to own property through
16		the last day of the last tax year for which the
17		taxpayer may claim a depreciation deduction for
18		federal income tax purposes and for which the taxpayer
19		was required in any taxable year to make an addition
20		modification under subparagraph (G-10), then an amount
21		equal to that addition modification.
22		The taxpayer is allowed to take the deduction under
23		this subparagraph only once with respect to any one
24		piece of property.
25		This subparagraph (S) is exempt from the
26		provisions of Section 250;

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1		(T) The amount of (i) any interest income (net of
2		the deductions allocable thereto) taken into account
3		for the taxable year with respect to a transaction with
4		a taxpayer that is required to make an addition
5		modification with respect to such transaction under
6		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
7		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
8		the amount of such addition modification and (ii) any
9		income from intangible property (net of the deductions
10		allocable thereto) taken into account for the taxable
11		year with respect to a transaction with a taxpayer that
12		is required to make an addition modification with
13		respect to such transaction under Section
14		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
15		203(d)(2)(D-8), but not to exceed the amount of such
16		addition modification. This subparagraph (T) is exempt
17		from the provisions of Section 250;
18		(U) An amount equal to the interest income taken
19		into account for the taxable year (net of the
20		deductions allocable thereto) with respect to
21		transactions with (i) a foreign person who would be a
22		member of the taxpayer's unitary business group but for
23		the fact the foreign person's business activity
24		outside the United States is 80% or more of that
25		person's total business activity and (ii) for taxable
26		years ending on or after December 31, 2008, to a person

SB0009 Engrossed - 128 - LRB100 06347 HLH 16385 b
1		who would be a member of the same unitary business
2		group but for the fact that the person is prohibited
3		under Section 1501(a)(27) from being included in the
4		unitary business group because he or she is ordinarily
5		required to apportion business income under different
6		subsections of Section 304, but not to exceed the
7		addition modification required to be made for the same
8		taxable year under Section 203(c)(2)(G-12) for
9		interest paid, accrued, or incurred, directly or
10		indirectly, to the same person. This subparagraph (U)
11		is exempt from the provisions of Section 250;
12		(V) An amount equal to the income from intangible
13		property taken into account for the taxable year (net
14		of the deductions allocable thereto) with respect to
15		transactions with (i) a foreign person who would be a
16		member of the taxpayer's unitary business group but for
17		the fact that the foreign person's business activity
18		outside the United States is 80% or more of that
19		person's total business activity and (ii) for taxable
20		years ending on or after December 31, 2008, to a person
21		who would be a member of the same unitary business
22		group but for the fact that the person is prohibited
23		under Section 1501(a)(27) from being included in the
24		unitary business group because he or she is ordinarily
25		required to apportion business income under different
26		subsections of Section 304, but not to exceed the

SB0009 Engrossed - 129 - LRB100 06347 HLH 16385 b
1		addition modification required to be made for the same
2		taxable year under Section 203(c)(2)(G-13) for
3		intangible expenses and costs paid, accrued, or
4		incurred, directly or indirectly, to the same foreign
5		person. This subparagraph (V) is exempt from the
6		provisions of Section 250;
7		(W) in the case of an estate, an amount equal to
8		all amounts included in such total pursuant to the
9		provisions of Section 111 of the Internal Revenue Code
10		as a recovery of items previously deducted by the
11		decedent from adjusted gross income in the computation
12		of taxable income. This subparagraph (W) is exempt from
13		Section 250;
14		(X) an amount equal to the refund included in such
15		total of any tax deducted for federal income tax
16		purposes, to the extent that deduction was added back
17		under subparagraph (F). This subparagraph (X) is
18		exempt from the provisions of Section 250; and
19		(Y) For taxable years ending on or after December
20		31, 2011, in the case of a taxpayer who was required to
21		add back any insurance premiums under Section
22		203(c)(2)(G-14), such taxpayer may elect to subtract
23		that part of a reimbursement received from the
24		insurance company equal to the amount of the expense or
25		loss (including expenses incurred by the insurance
26		company) that would have been taken into account as a

SB0009 Engrossed - 130 - LRB100 06347 HLH 16385 b
1		deduction for federal income tax purposes if the
2		expense or loss had been uninsured. If a taxpayer makes
3		the election provided for by this subparagraph (Y), the
4		insurer to which the premiums were paid must add back
5		to income the amount subtracted by the taxpayer
6		pursuant to this subparagraph (Y). This subparagraph
7		(Y) is exempt from the provisions of Section 250.
8		(3) Limitation. The amount of any modification
9		otherwise required under this subsection shall, under
10		regulations prescribed by the Department, be adjusted by
11		any amounts included therein which were properly paid,
12		credited, or required to be distributed, or permanently set
13		aside for charitable purposes pursuant to Internal Revenue
14		Code Section 642(c) during the taxable year.
15		(d) Partnerships.
16		(1) In general. In the case of a partnership, base
17		income means an amount equal to the taxpayer's taxable
18		income for the taxable year as modified by paragraph (2).
19		(2) Modifications. The taxable income referred to in
20		paragraph (1) shall be modified by adding thereto the sum
21		of the following amounts:
22		(A) An amount equal to all amounts paid or accrued
23		to the taxpayer as interest or dividends during the
24		taxable year to the extent excluded from gross income
25		in the computation of taxable income;

SB0009 Engrossed - 131 - LRB100 06347 HLH 16385 b
1		(B) An amount equal to the amount of tax imposed by
2		this Act to the extent deducted from gross income for
3		the taxable year;
4		(C) The amount of deductions allowed to the
5		partnership pursuant to Section 707 (c) of the Internal
6		Revenue Code in calculating its taxable income;
7		(D) An amount equal to the amount of the capital
8		gain deduction allowable under the Internal Revenue
9		Code, to the extent deducted from gross income in the
10		computation of taxable income;
11		(D-5) For taxable years 2001 and thereafter, an
12		amount equal to the bonus depreciation deduction taken
13		on the taxpayer's federal income tax return for the
14		taxable year under subsection (k) of Section 168 of the
15		Internal Revenue Code;
16		(D-6) If the taxpayer sells, transfers, abandons,
17		or otherwise disposes of property for which the
18		taxpayer was required in any taxable year to make an
19		addition modification under subparagraph (D-5), then
20		an amount equal to the aggregate amount of the
21		deductions taken in all taxable years under
22		subparagraph (O) with respect to that property.
23		If the taxpayer continues to own property through
24		the last day of the last tax year for which the
25		taxpayer may claim a depreciation deduction for
26		federal income tax purposes and for which the taxpayer

SB0009 Engrossed - 132 - LRB100 06347 HLH 16385 b
1		was allowed in any taxable year to make a subtraction
2		modification under subparagraph (O), then an amount
3		equal to that subtraction modification.
4		The taxpayer is required to make the addition
5		modification under this subparagraph only once with
6		respect to any one piece of property;
7		(D-7) An amount equal to the amount otherwise
8		allowed as a deduction in computing base income for
9		interest paid, accrued, or incurred, directly or
10		indirectly, (i) for taxable years ending on or after
11		December 31, 2004, to a foreign person who would be a
12		member of the same unitary business group but for the
13		fact the foreign person's business activity outside
14		the United States is 80% or more of the foreign
15		person's total business activity and (ii) for taxable
16		years ending on or after December 31, 2008, to a person
17		who would be a member of the same unitary business
18		group but for the fact that the person is prohibited
19		under Section 1501(a)(27) from being included in the
20		unitary business group because he or she is ordinarily
21		required to apportion business income under different
22		subsections of Section 304. The addition modification
23		required by this subparagraph shall be reduced to the
24		extent that dividends were included in base income of
25		the unitary group for the same taxable year and
26		received by the taxpayer or by a member of the

SB0009 Engrossed - 133 - LRB100 06347 HLH 16385 b
1		taxpayer's unitary business group (including amounts
2		included in gross income pursuant to Sections 951
3		through 964 of the Internal Revenue Code and amounts
4		included in gross income under Section 78 of the
5		Internal Revenue Code) with respect to the stock of the
6		same person to whom the interest was paid, accrued, or
7		incurred.
8		This paragraph shall not apply to the following:
9		(i) an item of interest paid, accrued, or
10		incurred, directly or indirectly, to a person who
11		is subject in a foreign country or state, other
12		than a state which requires mandatory unitary
13		reporting, to a tax on or measured by net income
14		with respect to such interest; or
15		(ii) an item of interest paid, accrued, or
16		incurred, directly or indirectly, to a person if
17		the taxpayer can establish, based on a
18		preponderance of the evidence, both of the
19		following:
20		(a) the person, during the same taxable
21		year, paid, accrued, or incurred, the interest
22		to a person that is not a related member, and
23		(b) the transaction giving rise to the
24		interest expense between the taxpayer and the
25		person did not have as a principal purpose the
26		avoidance of Illinois income tax, and is paid

SB0009 Engrossed - 134 - LRB100 06347 HLH 16385 b
1		pursuant to a contract or agreement that
2		reflects an arm's-length interest rate and
3		terms; or
4		(iii) the taxpayer can establish, based on
5		clear and convincing evidence, that the interest
6		paid, accrued, or incurred relates to a contract or
7		agreement entered into at arm's-length rates and
8		terms and the principal purpose for the payment is
9		not federal or Illinois tax avoidance; or
10		(iv) an item of interest paid, accrued, or
11		incurred, directly or indirectly, to a person if
12		the taxpayer establishes by clear and convincing
13		evidence that the adjustments are unreasonable; or
14		if the taxpayer and the Director agree in writing
15		to the application or use of an alternative method
16		of apportionment under Section 304(f).
17		Nothing in this subsection shall preclude the
18		Director from making any other adjustment
19		otherwise allowed under Section 404 of this Act for
20		any tax year beginning after the effective date of
21		this amendment provided such adjustment is made
22		pursuant to regulation adopted by the Department
23		and such regulations provide methods and standards
24		by which the Department will utilize its authority
25		under Section 404 of this Act; and
26		(D-8) An amount equal to the amount of intangible

SB0009 Engrossed - 135 - LRB100 06347 HLH 16385 b
1		expenses and costs otherwise allowed as a deduction in
2		computing base income, and that were paid, accrued, or
3		incurred, directly or indirectly, (i) for taxable
4		years ending on or after December 31, 2004, to a
5		foreign person who would be a member of the same
6		unitary business group but for the fact that the
7		foreign person's business activity outside the United
8		States is 80% or more of that person's total business
9		activity and (ii) for taxable years ending on or after
10		December 31, 2008, to a person who would be a member of
11		the same unitary business group but for the fact that
12		the person is prohibited under Section 1501(a)(27)
13		from being included in the unitary business group
14		because he or she is ordinarily required to apportion
15		business income under different subsections of Section
16		304. The addition modification required by this
17		subparagraph shall be reduced to the extent that
18		dividends were included in base income of the unitary
19		group for the same taxable year and received by the
20		taxpayer or by a member of the taxpayer's unitary
21		business group (including amounts included in gross
22		income pursuant to Sections 951 through 964 of the
23		Internal Revenue Code and amounts included in gross
24		income under Section 78 of the Internal Revenue Code)
25		with respect to the stock of the same person to whom
26		the intangible expenses and costs were directly or

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1		indirectly paid, incurred or accrued. The preceding
2		sentence shall not apply to the extent that the same
3		dividends caused a reduction to the addition
4		modification required under Section 203(d)(2)(D-7) of
5		this Act. As used in this subparagraph, the term
6		"intangible expenses and costs" includes (1) expenses,
7		losses, and costs for, or related to, the direct or
8		indirect acquisition, use, maintenance or management,
9		ownership, sale, exchange, or any other disposition of
10		intangible property; (2) losses incurred, directly or
11		indirectly, from factoring transactions or discounting
12		transactions; (3) royalty, patent, technical, and
13		copyright fees; (4) licensing fees; and (5) other
14		similar expenses and costs. For purposes of this
15		subparagraph, "intangible property" includes patents,
16		patent applications, trade names, trademarks, service
17		marks, copyrights, mask works, trade secrets, and
18		similar types of intangible assets;
19		This paragraph shall not apply to the following:
20		(i) any item of intangible expenses or costs
21		paid, accrued, or incurred, directly or
22		indirectly, from a transaction with a person who is
23		subject in a foreign country or state, other than a
24		state which requires mandatory unitary reporting,
25		to a tax on or measured by net income with respect
26		to such item; or

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1		(ii) any item of intangible expense or cost
2		paid, accrued, or incurred, directly or
3		indirectly, if the taxpayer can establish, based
4		on a preponderance of the evidence, both of the
5		following:
6		(a) the person during the same taxable
7		year paid, accrued, or incurred, the
8		intangible expense or cost to a person that is
9		not a related member, and
10		(b) the transaction giving rise to the
11		intangible expense or cost between the
12		taxpayer and the person did not have as a
13		principal purpose the avoidance of Illinois
14		income tax, and is paid pursuant to a contract
15		or agreement that reflects arm's-length terms;
16		or
17		(iii) any item of intangible expense or cost
18		paid, accrued, or incurred, directly or
19		indirectly, from a transaction with a person if the
20		taxpayer establishes by clear and convincing
21		evidence, that the adjustments are unreasonable;
22		or if the taxpayer and the Director agree in
23		writing to the application or use of an alternative
24		method of apportionment under Section 304(f);
25		Nothing in this subsection shall preclude the
26		Director from making any other adjustment

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1		otherwise allowed under Section 404 of this Act for
2		any tax year beginning after the effective date of
3		this amendment provided such adjustment is made
4		pursuant to regulation adopted by the Department
5		and such regulations provide methods and standards
6		by which the Department will utilize its authority
7		under Section 404 of this Act;
8		(D-9) For taxable years ending on or after December
9		31, 2008, an amount equal to the amount of insurance
10		premium expenses and costs otherwise allowed as a
11		deduction in computing base income, and that were paid,
12		accrued, or incurred, directly or indirectly, to a
13		person who would be a member of the same unitary
14		business group but for the fact that the person is
15		prohibited under Section 1501(a)(27) from being
16		included in the unitary business group because he or
17		she is ordinarily required to apportion business
18		income under different subsections of Section 304. The
19		addition modification required by this subparagraph
20		shall be reduced to the extent that dividends were
21		included in base income of the unitary group for the
22		same taxable year and received by the taxpayer or by a
23		member of the taxpayer's unitary business group
24		(including amounts included in gross income under
25		Sections 951 through 964 of the Internal Revenue Code
26		and amounts included in gross income under Section 78

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1		of the Internal Revenue Code) with respect to the stock
2		of the same person to whom the premiums and costs were
3		directly or indirectly paid, incurred, or accrued. The
4		preceding sentence does not apply to the extent that
5		the same dividends caused a reduction to the addition
6		modification required under Section 203(d)(2)(D-7) or
7		Section 203(d)(2)(D-8) of this Act;
8		(D-10) An amount equal to the credit allowable to
9		the taxpayer under Section 218(a) of this Act,
10		determined without regard to Section 218(c) of this
11		Act;
12		(D-11) For taxable years beginning on or after
13		January 1, 2017, an amount equal to the deduction
14		allowed under Section 199 of the Internal Revenue Code
15		for the taxable year;
16		and by deducting from the total so obtained the following
17		amounts:
18		(E) The valuation limitation amount;
19		(F) An amount equal to the amount of any tax
20		imposed by this Act which was refunded to the taxpayer
21		and included in such total for the taxable year;
22		(G) An amount equal to all amounts included in
23		taxable income as modified by subparagraphs (A), (B),
24		(C) and (D) which are exempt from taxation by this
25		State either by reason of its statutes or Constitution
26		or by reason of the Constitution, treaties or statutes

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1		of the United States; provided that, in the case of any
2		statute of this State that exempts income derived from
3		bonds or other obligations from the tax imposed under
4		this Act, the amount exempted shall be the interest net
5		of bond premium amortization;
6		(H) Any income of the partnership which
7		constitutes personal service income as defined in
8		Section 1348 (b) (1) of the Internal Revenue Code (as
9		in effect December 31, 1981) or a reasonable allowance
10		for compensation paid or accrued for services rendered
11		by partners to the partnership, whichever is greater;
12		this subparagraph (H) is exempt from the provisions of
13		Section 250;
14		(I) An amount equal to all amounts of income
15		distributable to an entity subject to the Personal
16		Property Tax Replacement Income Tax imposed by
17		subsections (c) and (d) of Section 201 of this Act
18		including amounts distributable to organizations
19		exempt from federal income tax by reason of Section
20		501(a) of the Internal Revenue Code; this subparagraph
21		(I) is exempt from the provisions of Section 250;
22		(J) With the exception of any amounts subtracted
23		under subparagraph (G), an amount equal to the sum of
24		all amounts disallowed as deductions by (i) Sections
25		171(a) (2), and 265(2) of the Internal Revenue Code,
26		and all amounts of expenses allocable to interest and

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1		disallowed as deductions by Section 265(1) of the
2		Internal Revenue Code; and (ii) for taxable years
3		ending on or after August 13, 1999, Sections 171(a)(2),
4		265, 280C, and 832(b)(5)(B)(i) of the Internal Revenue
5		Code, plus, (iii) for taxable years ending on or after
6		December 31, 2011, Section 45G(e)(3) of the Internal
7		Revenue Code and, for taxable years ending on or after
8		December 31, 2008, any amount included in gross income
9		under Section 87 of the Internal Revenue Code; the
10		provisions of this subparagraph are exempt from the
11		provisions of Section 250;
12		(K) An amount equal to those dividends included in
13		such total which were paid by a corporation which
14		conducts business operations in a River Edge
15		Redevelopment Zone or zones created under the River
16		Edge Redevelopment Zone Act and conducts substantially
17		all of its operations from a River Edge Redevelopment
18		Zone or zones. This subparagraph (K) is exempt from the
19		provisions of Section 250;
20		(L) An amount equal to any contribution made to a
21		job training project established pursuant to the Real
22		Property Tax Increment Allocation Redevelopment Act;
23		(M) An amount equal to those dividends included in
24		such total that were paid by a corporation that
25		conducts business operations in a federally designated
26		Foreign Trade Zone or Sub-Zone and that is designated a

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1		High Impact Business located in Illinois; provided
2		that dividends eligible for the deduction provided in
3		subparagraph (K) of paragraph (2) of this subsection
4		shall not be eligible for the deduction provided under
5		this subparagraph (M);
6		(N) An amount equal to the amount of the deduction
7		used to compute the federal income tax credit for
8		restoration of substantial amounts held under claim of
9		right for the taxable year pursuant to Section 1341 of
10		the Internal Revenue Code;
11		(O) For taxable years 2001 and thereafter, for the
12		taxable year in which the bonus depreciation deduction
13		is taken on the taxpayer's federal income tax return
14		under subsection (k) of Section 168 of the Internal
15		Revenue Code and for each applicable taxable year
16		thereafter, an amount equal to "x", where:
17		(1) "y" equals the amount of the depreciation
18		deduction taken for the taxable year on the
19		taxpayer's federal income tax return on property
20		for which the bonus depreciation deduction was
21		taken in any year under subsection (k) of Section
22		168 of the Internal Revenue Code, but not including
23		the bonus depreciation deduction;
24		(2) for taxable years ending on or before
25		December 31, 2005, "x" equals "y" multiplied by 30
26		and then divided by 70 (or "y" multiplied by

SB0009 Engrossed - 143 - LRB100 06347 HLH 16385 b
1		0.429); and
2		(3) for taxable years ending after December
3		31, 2005:
4		(i) for property on which a bonus
5		depreciation deduction of 30% of the adjusted
6		basis was taken, "x" equals "y" multiplied by
7		30 and then divided by 70 (or "y" multiplied by
8		0.429); and
9		(ii) for property on which a bonus
10		depreciation deduction of 50% of the adjusted
11		basis was taken, "x" equals "y" multiplied by
12		1.0.
13		The aggregate amount deducted under this
14		subparagraph in all taxable years for any one piece of
15		property may not exceed the amount of the bonus
16		depreciation deduction taken on that property on the
17		taxpayer's federal income tax return under subsection
18		(k) of Section 168 of the Internal Revenue Code. This
19		subparagraph (O) is exempt from the provisions of
20		Section 250;
21		(P) If the taxpayer sells, transfers, abandons, or
22		otherwise disposes of property for which the taxpayer
23		was required in any taxable year to make an addition
24		modification under subparagraph (D-5), then an amount
25		equal to that addition modification.
26		If the taxpayer continues to own property through

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1		the last day of the last tax year for which the
2		taxpayer may claim a depreciation deduction for
3		federal income tax purposes and for which the taxpayer
4		was required in any taxable year to make an addition
5		modification under subparagraph (D-5), then an amount
6		equal to that addition modification.
7		The taxpayer is allowed to take the deduction under
8		this subparagraph only once with respect to any one
9		piece of property.
10		This subparagraph (P) is exempt from the
11		provisions of Section 250;
12		(Q) The amount of (i) any interest income (net of
13		the deductions allocable thereto) taken into account
14		for the taxable year with respect to a transaction with
15		a taxpayer that is required to make an addition
16		modification with respect to such transaction under
17		Section 203(a)(2)(D-17), 203(b)(2)(E-12),
18		203(c)(2)(G-12), or 203(d)(2)(D-7), but not to exceed
19		the amount of such addition modification and (ii) any
20		income from intangible property (net of the deductions
21		allocable thereto) taken into account for the taxable
22		year with respect to a transaction with a taxpayer that
23		is required to make an addition modification with
24		respect to such transaction under Section
25		203(a)(2)(D-18), 203(b)(2)(E-13), 203(c)(2)(G-13), or
26		203(d)(2)(D-8), but not to exceed the amount of such

SB0009 Engrossed - 145 - LRB100 06347 HLH 16385 b
1		addition modification. This subparagraph (Q) is exempt
2		from Section 250;
3		(R) An amount equal to the interest income taken
4		into account for the taxable year (net of the
5		deductions allocable thereto) with respect to
6		transactions with (i) a foreign person who would be a
7		member of the taxpayer's unitary business group but for
8		the fact that the foreign person's business activity
9		outside the United States is 80% or more of that
10		person's total business activity and (ii) for taxable
11		years ending on or after December 31, 2008, to a person
12		who would be a member of the same unitary business
13		group but for the fact that the person is prohibited
14		under Section 1501(a)(27) from being included in the
15		unitary business group because he or she is ordinarily
16		required to apportion business income under different
17		subsections of Section 304, but not to exceed the
18		addition modification required to be made for the same
19		taxable year under Section 203(d)(2)(D-7) for interest
20		paid, accrued, or incurred, directly or indirectly, to
21		the same person. This subparagraph (R) is exempt from
22		Section 250;
23		(S) An amount equal to the income from intangible
24		property taken into account for the taxable year (net
25		of the deductions allocable thereto) with respect to
26		transactions with (i) a foreign person who would be a

SB0009 Engrossed - 146 - LRB100 06347 HLH 16385 b
1		member of the taxpayer's unitary business group but for
2		the fact that the foreign person's business activity
3		outside the United States is 80% or more of that
4		person's total business activity and (ii) for taxable
5		years ending on or after December 31, 2008, to a person
6		who would be a member of the same unitary business
7		group but for the fact that the person is prohibited
8		under Section 1501(a)(27) from being included in the
9		unitary business group because he or she is ordinarily
10		required to apportion business income under different
11		subsections of Section 304, but not to exceed the
12		addition modification required to be made for the same
13		taxable year under Section 203(d)(2)(D-8) for
14		intangible expenses and costs paid, accrued, or
15		incurred, directly or indirectly, to the same person.
16		This subparagraph (S) is exempt from Section 250; and
17		(T) For taxable years ending on or after December
18		31, 2011, in the case of a taxpayer who was required to
19		add back any insurance premiums under Section
20		203(d)(2)(D-9), such taxpayer may elect to subtract
21		that part of a reimbursement received from the
22		insurance company equal to the amount of the expense or
23		loss (including expenses incurred by the insurance
24		company) that would have been taken into account as a
25		deduction for federal income tax purposes if the
26		expense or loss had been uninsured. If a taxpayer makes

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1		the election provided for by this subparagraph (T), the
2		insurer to which the premiums were paid must add back
3		to income the amount subtracted by the taxpayer
4		pursuant to this subparagraph (T). This subparagraph
5		(T) is exempt from the provisions of Section 250.
6		(e) Gross income; adjusted gross income; taxable income.
7		(1) In general. Subject to the provisions of paragraph
8		(2) and subsection (b) (3), for purposes of this Section
9		and Section 803(e), a taxpayer's gross income, adjusted
10		gross income, or taxable income for the taxable year shall
11		mean the amount of gross income, adjusted gross income or
12		taxable income properly reportable for federal income tax
13		purposes for the taxable year under the provisions of the
14		Internal Revenue Code. Taxable income may be less than
15		zero. However, for taxable years ending on or after
16		December 31, 1986, net operating loss carryforwards from
17		taxable years ending prior to December 31, 1986, may not
18		exceed the sum of federal taxable income for the taxable
19		year before net operating loss deduction, plus the excess
20		of addition modifications over subtraction modifications
21		for the taxable year. For taxable years ending prior to
22		December 31, 1986, taxable income may never be an amount in
23		excess of the net operating loss for the taxable year as
24		defined in subsections (c) and (d) of Section 172 of the
25		Internal Revenue Code, provided that when taxable income of

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1		a corporation (other than a Subchapter S corporation),
2		trust, or estate is less than zero and addition
3		modifications, other than those provided by subparagraph
4		(E) of paragraph (2) of subsection (b) for corporations or
5		subparagraph (E) of paragraph (2) of subsection (c) for
6		trusts and estates, exceed subtraction modifications, an
7		addition modification must be made under those
8		subparagraphs for any other taxable year to which the
9		taxable income less than zero (net operating loss) is
10		applied under Section 172 of the Internal Revenue Code or
11		under subparagraph (E) of paragraph (2) of this subsection
12		(e) applied in conjunction with Section 172 of the Internal
13		Revenue Code.
14		(2) Special rule. For purposes of paragraph (1) of this
15		subsection, the taxable income properly reportable for
16		federal income tax purposes shall mean:
17		(A) Certain life insurance companies. In the case
18		of a life insurance company subject to the tax imposed
19		by Section 801 of the Internal Revenue Code, life
20		insurance company taxable income, plus the amount of
21		distribution from pre-1984 policyholder surplus
22		accounts as calculated under Section 815a of the
23		Internal Revenue Code;
24		(B) Certain other insurance companies. In the case
25		of mutual insurance companies subject to the tax
26		imposed by Section 831 of the Internal Revenue Code,

SB0009 Engrossed - 149 - LRB100 06347 HLH 16385 b
1		insurance company taxable income;
2		(C) Regulated investment companies. In the case of
3		a regulated investment company subject to the tax
4		imposed by Section 852 of the Internal Revenue Code,
5		investment company taxable income;
6		(D) Real estate investment trusts. In the case of a
7		real estate investment trust subject to the tax imposed
8		by Section 857 of the Internal Revenue Code, real
9		estate investment trust taxable income;
10		(E) Consolidated corporations. In the case of a
11		corporation which is a member of an affiliated group of
12		corporations filing a consolidated income tax return
13		for the taxable year for federal income tax purposes,
14		taxable income determined as if such corporation had
15		filed a separate return for federal income tax purposes
16		for the taxable year and each preceding taxable year
17		for which it was a member of an affiliated group. For
18		purposes of this subparagraph, the taxpayer's separate
19		taxable income shall be determined as if the election
20		provided by Section 243(b) (2) of the Internal Revenue
21		Code had been in effect for all such years;
22		(F) Cooperatives. In the case of a cooperative
23		corporation or association, the taxable income of such
24		organization determined in accordance with the
25		provisions of Section 1381 through 1388 of the Internal
26		Revenue Code, but without regard to the prohibition

SB0009 Engrossed - 150 - LRB100 06347 HLH 16385 b
1		against offsetting losses from patronage activities
2		against income from nonpatronage activities; except
3		that a cooperative corporation or association may make
4		an election to follow its federal income tax treatment
5		of patronage losses and nonpatronage losses. In the
6		event such election is made, such losses shall be
7		computed and carried over in a manner consistent with
8		subsection (a) of Section 207 of this Act and
9		apportioned by the apportionment factor reported by
10		the cooperative on its Illinois income tax return filed
11		for the taxable year in which the losses are incurred.
12		The election shall be effective for all taxable years
13		with original returns due on or after the date of the
14		election. In addition, the cooperative may file an
15		amended return or returns, as allowed under this Act,
16		to provide that the election shall be effective for
17		losses incurred or carried forward for taxable years
18		occurring prior to the date of the election. Once made,
19		the election may only be revoked upon approval of the
20		Director. The Department shall adopt rules setting
21		forth requirements for documenting the elections and
22		any resulting Illinois net loss and the standards to be
23		used by the Director in evaluating requests to revoke
24		elections. Public Act 96-932 is declaratory of
25		existing law;
26		(G) Subchapter S corporations. In the case of: (i)

SB0009 Engrossed - 151 - LRB100 06347 HLH 16385 b
1		a Subchapter S corporation for which there is in effect
2		an election for the taxable year under Section 1362 of
3		the Internal Revenue Code, the taxable income of such
4		corporation determined in accordance with Section
5		1363(b) of the Internal Revenue Code, except that
6		taxable income shall take into account those items
7		which are required by Section 1363(b)(1) of the
8		Internal Revenue Code to be separately stated; and (ii)
9		a Subchapter S corporation for which there is in effect
10		a federal election to opt out of the provisions of the
11		Subchapter S Revision Act of 1982 and have applied
12		instead the prior federal Subchapter S rules as in
13		effect on July 1, 1982, the taxable income of such
14		corporation determined in accordance with the federal
15		Subchapter S rules as in effect on July 1, 1982; and
16		(H) Partnerships. In the case of a partnership,
17		taxable income determined in accordance with Section
18		703 of the Internal Revenue Code, except that taxable
19		income shall take into account those items which are
20		required by Section 703(a)(1) to be separately stated
21		but which would be taken into account by an individual
22		in calculating his taxable income.
23		(3) Recapture of business expenses on disposition of
24		asset or business. Notwithstanding any other law to the
25		contrary, if in prior years income from an asset or
26		business has been classified as business income and in a

SB0009 Engrossed - 152 - LRB100 06347 HLH 16385 b
1		later year is demonstrated to be non-business income, then
2		all expenses, without limitation, deducted in such later
3		year and in the 2 immediately preceding taxable years
4		related to that asset or business that generated the
5		non-business income shall be added back and recaptured as
6		business income in the year of the disposition of the asset
7		or business. Such amount shall be apportioned to Illinois
8		using the greater of the apportionment fraction computed
9		for the business under Section 304 of this Act for the
10		taxable year or the average of the apportionment fractions
11		computed for the business under Section 304 of this Act for
12		the taxable year and for the 2 immediately preceding
13		taxable years.
14		(f) Valuation limitation amount.
15		(1) In general. The valuation limitation amount
16		referred to in subsections (a) (2) (G), (c) (2) (I) and
17		(d)(2) (E) is an amount equal to:
18		(A) The sum of the pre-August 1, 1969 appreciation
19		amounts (to the extent consisting of gain reportable
20		under the provisions of Section 1245 or 1250 of the
21		Internal Revenue Code) for all property in respect of
22		which such gain was reported for the taxable year; plus
23		(B) The lesser of (i) the sum of the pre-August 1,
24		1969 appreciation amounts (to the extent consisting of
25		capital gain) for all property in respect of which such

SB0009 Engrossed - 153 - LRB100 06347 HLH 16385 b
1		gain was reported for federal income tax purposes for
2		the taxable year, or (ii) the net capital gain for the
3		taxable year, reduced in either case by any amount of
4		such gain included in the amount determined under
5		subsection (a) (2) (F) or (c) (2) (H).
6		(2) Pre-August 1, 1969 appreciation amount.
7		(A) If the fair market value of property referred
8		to in paragraph (1) was readily ascertainable on August
9		1, 1969, the pre-August 1, 1969 appreciation amount for
10		such property is the lesser of (i) the excess of such
11		fair market value over the taxpayer's basis (for
12		determining gain) for such property on that date
13		(determined under the Internal Revenue Code as in
14		effect on that date), or (ii) the total gain realized
15		and reportable for federal income tax purposes in
16		respect of the sale, exchange or other disposition of
17		such property.
18		(B) If the fair market value of property referred
19		to in paragraph (1) was not readily ascertainable on
20		August 1, 1969, the pre-August 1, 1969 appreciation
21		amount for such property is that amount which bears the
22		same ratio to the total gain reported in respect of the
23		property for federal income tax purposes for the
24		taxable year, as the number of full calendar months in
25		that part of the taxpayer's holding period for the
26		property ending July 31, 1969 bears to the number of

SB0009 Engrossed - 154 - LRB100 06347 HLH 16385 b
1		full calendar months in the taxpayer's entire holding
2		period for the property.
3		(C) The Department shall prescribe such
4		regulations as may be necessary to carry out the
5		purposes of this paragraph.
6		(g) Double deductions. Unless specifically provided
7		otherwise, nothing in this Section shall permit the same item
8		to be deducted more than once.
9		(h) Legislative intention. Except as expressly provided by
10		this Section there shall be no modifications or limitations on
11		the amounts of income, gain, loss or deduction taken into
12		account in determining gross income, adjusted gross income or
13		taxable income for federal income tax purposes for the taxable
14		year, or in the amount of such items entering into the
15		computation of base income and net income under this Act for
16		such taxable year, whether in respect of property values as of
17		August 1, 1969 or otherwise.
18		(Source: P.A. 96-45, eff. 7-15-09; 96-120, eff. 8-4-09; 96-198,
19		eff. 8-10-09; 96-328, eff. 8-11-09; 96-520, eff. 8-14-09;
20		96-835, eff. 12-16-09; 96-932, eff. 1-1-11; 96-935, eff.
21		6-21-10; 96-1214, eff. 7-22-10; 97-333, eff. 8-12-11; 97-507,
22		eff. 8-23-11; 97-905, eff. 8-7-12.)
23		(35 ILCS 5/204) (from Ch. 120, par. 2-204)

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1		Sec. 204. Standard Exemption.
2		(a) Allowance of exemption. In computing net income under
3		this Act, there shall be allowed as an exemption the sum of the
4		amounts determined under subsections (b), (c) and (d),
5		multiplied by a fraction the numerator of which is the amount
6		of the taxpayer's base income allocable to this State for the
7		taxable year and the denominator of which is the taxpayer's
8		total base income for the taxable year.
9		(b) Basic amount. For the purpose of subsection (a) of this
10		Section, except as provided by subsection (a) of Section 205
11		and in this subsection, each taxpayer shall be allowed a basic
12		amount of $1000, except that for corporations the basic amount
13		shall be zero for tax years ending on or after December 31,
14		2003, and for individuals the basic amount shall be:
15		(1) for taxable years ending on or after December 31,
16		1998 and prior to December 31, 1999, $1,300;
17		(2) for taxable years ending on or after December 31,
18		1999 and prior to December 31, 2000, $1,650;
19		(3) for taxable years ending on or after December 31,
20		2000 and prior to December 31, 2012, $2,000;
21		(4) for taxable years ending on or after December 31,
22		2012 and prior to December 31, 2013, $2,050;
23		(5) for taxable years ending on or after December 31,
24		2013, $2,050 plus the cost-of-living adjustment under
25		subsection (d-5).
26		For taxable years ending on or after December 31, 1992, a

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1		taxpayer whose Illinois base income exceeds the basic amount
2		and who is claimed as a dependent on another person's tax
3		return under the Internal Revenue Code shall not be allowed any
4		basic amount under this subsection.
5		(c) Additional amount for individuals. In the case of an
6		individual taxpayer, there shall be allowed for the purpose of
7		subsection (a), in addition to the basic amount provided by
8		subsection (b), an additional exemption equal to the basic
9		amount for each exemption in excess of one allowable to such
10		individual taxpayer for the taxable year under Section 151 of
11		the Internal Revenue Code.
12		(d) Additional exemptions for an individual taxpayer and
13		his or her spouse. In the case of an individual taxpayer and
14		his or her spouse, he or she shall each be allowed additional
15		exemptions as follows:
16		(1) Additional exemption for taxpayer or spouse 65
17		years of age or older.
18		(A) For taxpayer. An additional exemption of
19		$1,000 for the taxpayer if he or she has attained the
20		age of 65 before the end of the taxable year.
21		(B) For spouse when a joint return is not filed. An
22		additional exemption of $1,000 for the spouse of the
23		taxpayer if a joint return is not made by the taxpayer
24		and his spouse, and if the spouse has attained the age
25		of 65 before the end of such taxable year, and, for the
26		calendar year in which the taxable year of the taxpayer

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1		begins, has no gross income and is not the dependent of
2		another taxpayer.
3		(2) Additional exemption for blindness of taxpayer or
4		spouse.
5		(A) For taxpayer. An additional exemption of
6		$1,000 for the taxpayer if he or she is blind at the
7		end of the taxable year.
8		(B) For spouse when a joint return is not filed. An
9		additional exemption of $1,000 for the spouse of the
10		taxpayer if a separate return is made by the taxpayer,
11		and if the spouse is blind and, for the calendar year
12		in which the taxable year of the taxpayer begins, has
13		no gross income and is not the dependent of another
14		taxpayer. For purposes of this paragraph, the
15		determination of whether the spouse is blind shall be
16		made as of the end of the taxable year of the taxpayer;
17		except that if the spouse dies during such taxable year
18		such determination shall be made as of the time of such
19		death.
20		(C) Blindness defined. For purposes of this
21		subsection, an individual is blind only if his or her
22		central visual acuity does not exceed 20/200 in the
23		better eye with correcting lenses, or if his or her
24		visual acuity is greater than 20/200 but is accompanied
25		by a limitation in the fields of vision such that the
26		widest diameter of the visual fields subtends an angle

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1		no greater than 20 degrees.
2		(d-5) Cost-of-living adjustment. For purposes of item (5)
3		of subsection (b), the cost-of-living adjustment for any
4		calendar year and for taxable years ending prior to the end of
5		the subsequent calendar year is equal to $2,050 times the
6		percentage (if any) by which:
7		(1) the Consumer Price Index for the preceding calendar
8		year, exceeds
9		(2) the Consumer Price Index for the calendar year
10		2011.
11		The Consumer Price Index for any calendar year is the
12		average of the Consumer Price Index as of the close of the
13		12-month period ending on August 31 of that calendar year.
14		The term "Consumer Price Index" means the last Consumer
15		Price Index for All Urban Consumers published by the United
16		States Department of Labor or any successor agency.
17		If any cost-of-living adjustment is not a multiple of $25,
18		that adjustment shall be rounded to the next lowest multiple of
19		$25.
20		(e) Cross reference. See Article 3 for the manner of
21		determining base income allocable to this State.
22		(f) Application of Section 250. Section 250 does not apply
23		to the amendments to this Section made by Public Act 90-613.
24		(g) Notwithstanding any other provision of law, for taxable
25		years beginning on or after January 1, 2018, no taxpayer may
26		claim an exemption under this Section if the taxpayer's

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1		adjusted gross income for the taxable year exceeds (i)
2		$500,000, in the case of spouses filing a joint federal tax
3		return or (ii) $250,000, in the case of all other taxpayers.
4		(Source: P.A. 97-507, eff. 8-23-11; 97-652, eff. 6-1-12.)
5		(35 ILCS 5/208) (from Ch. 120, par. 2-208)
6		Sec. 208. Tax credit for residential real property taxes.
7		Beginning with tax years ending on or after December 31, 1991,
8		every individual taxpayer shall be entitled to a tax credit
9		equal to 5% of real property taxes paid by such taxpayer during
10		the taxable year on the principal residence of the taxpayer. In
11		the case of multi-unit or multi-use structures and farm
12		dwellings, the taxes on the taxpayer's principal residence
13		shall be that portion of the total taxes which is attributable
14		to such principal residence. Notwithstanding any other
15		provision of law, for taxable years beginning on or after
16		January 1, 2018, no taxpayer may claim a credit under this
17		Section if the taxpayer's adjusted gross income for the taxable
18		year exceeds (i) $500,000, in the case of spouses filing a
19		joint federal tax return, or (ii) $250,000, in the case of all
20		other taxpayers.
21		(Source: P.A. 87-17.)
22		(35 ILCS 5/212)
23		Sec. 212. Earned income tax credit.
24		(a) With respect to the federal earned income tax credit

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1		allowed for the taxable year under Section 32 of the federal
2		Internal Revenue Code, 26 U.S.C. 32, each individual taxpayer
3		is entitled to a credit against the tax imposed by subsections
4		(a) and (b) of Section 201 in an amount equal to (i) 5% of the
5		federal tax credit for each taxable year beginning on or after
6		January 1, 2000 and ending prior to December 31, 2012, (ii)
7		7.5% of the federal tax credit for each taxable year beginning
8		on or after January 1, 2012 and ending prior to December 31,
9		2013, and (iii) 10% of the federal tax credit for each taxable
10		year beginning on or after January 1, 2013 and beginning prior
11		to January 1, 2017, and (iv) 15% of the federal tax credit for
12		each taxable year beginning on or after January 1, 2017.
13		For a non-resident or part-year resident, the amount of the
14		credit under this Section shall be in proportion to the amount
15		of income attributable to this State.
16		(b) For taxable years beginning before January 1, 2003, in
17		no event shall a credit under this Section reduce the
18		taxpayer's liability to less than zero. For each taxable year
19		beginning on or after January 1, 2003, if the amount of the
20		credit exceeds the income tax liability for the applicable tax
21		year, then the excess credit shall be refunded to the taxpayer.
22		The amount of a refund shall not be included in the taxpayer's
23		income or resources for the purposes of determining eligibility
24		or benefit level in any means-tested benefit program
25		administered by a governmental entity unless required by
26		federal law.

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1		(c) This Section is exempt from the provisions of Section
2		250.
3		(Source: P.A. 97-652, eff. 6-1-12.)
4		(35 ILCS 5/222)
5		Sec. 222. Live theater production credit.
6		(a) For tax years beginning on or after January 1, 2012 and
7		beginning prior to January 1, 2027, a taxpayer who has received
8		a tax credit award under the Live Theater Production Tax Credit
9		Act is entitled to a credit against the taxes imposed under
10		subsections (a) and (b) of Section 201 of this Act in an amount
11		determined under that Act by the Department of Commerce and
12		Economic Opportunity.
13		(b) If the taxpayer is a partnership, limited liability
14		partnership, limited liability company, or Subchapter S
15		corporation, the tax credit award is allowed to the partners,
16		unit holders, or shareholders in accordance with the
17		determination of income and distributive share of income under
18		Sections 702 and 704 and Subchapter S of the Internal Revenue
19		Code.
20		(c) A sale, assignment, or transfer of the tax credit award
21		may be made by the taxpayer earning the credit within one year
22		after the credit is awarded in accordance with rules adopted by
23		the Department of Commerce and Economic Opportunity.
24		(d) The Department of Revenue, in cooperation with the
25		Department of Commerce and Economic Opportunity, shall adopt

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1		rules to enforce and administer the provisions of this Section.
2		(e) The tax credit award may not be carried back. If the
3		amount of the credit exceeds the tax liability for the year,
4		the excess may be carried forward and applied to the tax
5		liability of the 5 tax years following the excess credit year.
6		The tax credit award shall be applied to the earliest year for
7		which there is a tax liability. If there are credits from more
8		than one tax year that are available to offset liability, the
9		earlier credit shall be applied first. In no event may a credit
10		under this Section reduce the taxpayer's liability to less than
11		zero.
12		(Source: P.A. 97-636, eff. 6-1-12.)
13		(35 ILCS 5/225 new)
14		Sec. 225. Credit for instructional materials and supplies.
15		For taxable years beginning on and after January 1, 2017, a
16		taxpayer shall be allowed a credit in the amount paid by the
17		taxpayer during the taxable year for instructional materials
18		and supplies with respect to classroom based instruction in a
19		qualified school, or $250, whichever is less, provided that the
20		taxpayer is a teacher, instructor, counselor, principal, or
21		aide in a qualified school for at least 900 hours during a
22		school year.
23		The credit may not be carried back and may not reduce the
24		taxpayer's liability to less than zero. If the amount of the
25		credit exceeds the tax liability for the year, the excess may

SB0009 Engrossed - 163 - LRB100 06347 HLH 16385 b
1		be carried forward and applied to the tax liability of the 5
2		taxable years following the excess credit year. The tax credit
3		shall be applied to the earliest year for which there is a tax
4		liability. If there are credits for more than one year that are
5		available to offset a liability, the earlier credit shall be
6		applied first.
7		For purposes of this Section, the term "materials and
8		supplies" means amounts paid for instructional materials or
9		supplies that are designated for classroom use in any qualified
10		school. For purposes of this Section, the term "qualified
11		school" means a public school or non-public school located in
12		Illinois.
13		This Section is exempt from the provisions of Section 250.
14		(35 ILCS 5/804) (from Ch. 120, par. 8-804)
15		Sec. 804. Failure to Pay Estimated Tax.
16		(a) In general. In case of any underpayment of estimated
17		tax by a taxpayer, except as provided in subsection (d) or (e),
18		the taxpayer shall be liable to a penalty in an amount
19		determined at the rate prescribed by Section 3-3 of the Uniform
20		Penalty and Interest Act upon the amount of the underpayment
21		(determined under subsection (b)) for each required
22		installment.
23		(b) Amount of underpayment. For purposes of subsection (a),
24		the amount of the underpayment shall be the excess of:
25		(1) the amount of the installment which would be

SB0009 Engrossed - 164 - LRB100 06347 HLH 16385 b
1		required to be paid under subsection (c), over
2		(2) the amount, if any, of the installment paid on or
3		before the last date prescribed for payment.
4		(c) Amount of Required Installments.
5		(1) Amount.
6		(A) In General. Except as provided in paragraphs
7		(2) and (3), the amount of any required installment
8		shall be 25% of the required annual payment.
9		(B) Required Annual Payment. For purposes of
10		subparagraph (A), the term "required annual payment"
11		means the lesser of:
12		(i) 90% of the tax shown on the return for the
13		taxable year, or if no return is filed, 90% of the
14		tax for such year;
15		(ii) for installments due prior to February 1,
16		2011, and after January 31, 2012, 100% of the tax
17		shown on the return of the taxpayer for the
18		preceding taxable year if a return showing a
19		liability for tax was filed by the taxpayer for the
20		preceding taxable year and such preceding year was
21		a taxable year of 12 months; or
22		(iii) for installments due after January 31,
23		2011, and prior to February 1, 2012, 150% of the
24		tax shown on the return of the taxpayer for the
25		preceding taxable year if a return showing a
26		liability for tax was filed by the taxpayer for the

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1		preceding taxable year and such preceding year was
2		a taxable year of 12 months.
3		(2) Lower Required Installment where Annualized Income
4		Installment is Less Than Amount Determined Under Paragraph
5		(1).
6		(A) In General. In the case of any required
7		installment if a taxpayer establishes that the
8		annualized income installment is less than the amount
9		determined under paragraph (1),
10		(i) the amount of such required installment
11		shall be the annualized income installment, and
12		(ii) any reduction in a required installment
13		resulting from the application of this
14		subparagraph shall be recaptured by increasing the
15		amount of the next required installment determined
16		under paragraph (1) by the amount of such
17		reduction, and by increasing subsequent required
18		installments to the extent that the reduction has
19		not previously been recaptured under this clause.
20		(B) Determination of Annualized Income
21		Installment. In the case of any required installment,
22		the annualized income installment is the excess, if
23		any, of:
24		(i) an amount equal to the applicable
25		percentage of the tax for the taxable year computed
26		by placing on an annualized basis the net income

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1		for months in the taxable year ending before the
2		due date for the installment, over
3		(ii) the aggregate amount of any prior
4		required installments for the taxable year.
5		(C) Applicable Percentage.
6 In the case of the following The applicable 7 required installments: percentage is: 8 1st ............................... 22.5% 9 2nd ............................... 45% 10 3rd ............................... 67.5% 11 4th ............................... 90%
12		(D) Annualized Net Income; Individuals. For
13		individuals, net income shall be placed on an
14		annualized basis by:
15		(i) multiplying by 12, or in the case of a
16		taxable year of less than 12 months, by the number
17		of months in the taxable year, the net income
18		computed without regard to the standard exemption
19		for the months in the taxable year ending before
20		the month in which the installment is required to
21		be paid;
22		(ii) dividing the resulting amount by the
23		number of months in the taxable year ending before
24		the month in which such installment date falls; and
25		(iii) deducting from such amount the standard
26		exemption allowable for the taxable year, such

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1		standard exemption being determined as of the last
2		date prescribed for payment of the installment.
3		(E) Annualized Net Income; Corporations. For
4		corporations, net income shall be placed on an
5		annualized basis by multiplying by 12 the taxable
6		income
7		(i) for the first 3 months of the taxable year,
8		in the case of the installment required to be paid
9		in the 4th month,
10		(ii) for the first 3 months or for the first 5
11		months of the taxable year, in the case of the
12		installment required to be paid in the 6th month,
13		(iii) for the first 6 months or for the first 8
14		months of the taxable year, in the case of the
15		installment required to be paid in the 9th month,
16		and
17		(iv) for the first 9 months or for the first 11
18		months of the taxable year, in the case of the
19		installment required to be paid in the 12th month
20		of the taxable year,
21		then dividing the resulting amount by the number of
22		months in the taxable year (3, 5, 6, 8, 9, or 11 as the
23		case may be).
24		(3) Notwithstanding any other provision of this
25		subsection (c), in the case of a federally regulated
26		exchange that elects to apportion its income under Section

SB0009 Engrossed - 168 - LRB100 06347 HLH 16385 b
1		304(c-1) of this Act, the amount of each required
2		installment due prior to June 30 of the first taxable year
3		to which the election applies shall be 25% of the tax that
4		would have been shown on the return for that taxable year
5		if the taxpayer had not made such election.
6		(d) Exceptions. Notwithstanding the provisions of the
7		preceding subsections, the penalty imposed by subsection (a)
8		shall not be imposed if the taxpayer was not required to file
9		an Illinois income tax return for the preceding taxable year,
10		or, for individuals, if the taxpayer had no tax liability for
11		the preceding taxable year and such year was a taxable year of
12		12 months. The penalty imposed by subsection (a) shall also not
13		be imposed on any underpayments of estimated tax due before the
14		effective date of this amendatory Act of 1998 which
15		underpayments are solely attributable to the change in
16		apportionment from subsection (a) to subsection (h) of Section
17		304. The provisions of this amendatory Act of 1998 apply to tax
18		years ending on or after December 31, 1998.
19		(e) The penalty imposed for underpayment of estimated tax
20		by subsection (a) of this Section shall not be imposed to the
21		extent that the Director or his or her designate determines,
22		pursuant to Section 3-8 of the Uniform Penalty and Interest Act
23		that the penalty should not be imposed.
24		(f) Definition of tax. For purposes of subsections (b) and
25		(c), the term "tax" means the excess of the tax imposed under
26		Article 2 of this Act, over the amounts credited against such

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1		tax under Sections 601(b) (3) and (4).
2		(g) Application of Section in case of tax withheld under
3		Article 7. For purposes of applying this Section:
4		(1) tax withheld from compensation for the taxable year
5		shall be deemed a payment of estimated tax, and an equal
6		part of such amount shall be deemed paid on each
7		installment date for such taxable year, unless the taxpayer
8		establishes the dates on which all amounts were actually
9		withheld, in which case the amounts so withheld shall be
10		deemed payments of estimated tax on the dates on which such
11		amounts were actually withheld;
12		(2) amounts timely paid by a partnership, Subchapter S
13		corporation, or trust on behalf of a partner, shareholder,
14		or beneficiary pursuant to subsection (f) of Section 502 or
15		Section 709.5 and claimed as a payment of estimated tax
16		shall be deemed a payment of estimated tax made on the last
17		day of the taxable year of the partnership, Subchapter S
18		corporation, or trust for which the income from the
19		withholding is made was computed; and
20		(3) all other amounts pursuant to Article 7 shall be
21		deemed a payment of estimated tax on the date the payment
22		is made to the taxpayer of the amount from which the tax is
23		withheld.
24		(g-5) Amounts withheld under the State Salary and Annuity
25		Withholding Act. An individual who has amounts withheld under
26		paragraph (10) of Section 4 of the State Salary and Annuity

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1		Withholding Act may elect to have those amounts treated as
2		payments of estimated tax made on the dates on which those
3		amounts are actually withheld.
4		(g-10) Notwithstanding any other provision of law, no
5		penalty shall apply with respect to an underpayment of
6		estimated tax for the first, second, or third quarter of any
7		taxable year beginning on or after January 1, 2017 and
8		beginning prior to January 1, 2018 if (i) the underpayment was
9		due to the changes made by this amendatory Act of the 100th
10		General Assembly, (ii) the payment was otherwise timely made,
11		and (iii) the balance due is included with the taxpayer's
12		estimated tax payment for the fourth quarter.
13		(i) Short taxable year. The application of this Section to
14		taxable years of less than 12 months shall be in accordance
15		with regulations prescribed by the Department.
16		The changes in this Section made by Public Act 84-127 shall
17		apply to taxable years ending on or after January 1, 1986.
18		(Source: P.A. 96-1496, eff. 1-13-11; 97-507, eff. 8-23-11;
19		97-636, eff. 6-1-12.)
20		(35 ILCS 5/901) (from Ch. 120, par. 9-901)
21		Sec. 901. Collection authority.
22		(a) In general.
23		The Department shall collect the taxes imposed by this Act.
24		The Department shall collect certified past due child support
25		amounts under Section 2505-650 of the Department of Revenue Law

SB0009 Engrossed - 171 - LRB100 06347 HLH 16385 b
1		(20 ILCS 2505/2505-650). Except as provided in subsections (c),
2		(e), (f), (g), and (h) of this Section, money collected
3		pursuant to subsections (a) and (b) of Section 201 of this Act
4		shall be paid into the General Revenue Fund in the State
5		treasury; money collected pursuant to subsections (c) and (d)
6		of Section 201 of this Act shall be paid into the Personal
7		Property Tax Replacement Fund, a special fund in the State
8		Treasury; and money collected under Section 2505-650 of the
9		Department of Revenue Law (20 ILCS 2505/2505-650) shall be paid
10		into the Child Support Enforcement Trust Fund, a special fund
11		outside the State Treasury, or to the State Disbursement Unit
12		established under Section 10-26 of the Illinois Public Aid
13		Code, as directed by the Department of Healthcare and Family
14		Services.
15		(b) Local Government Distributive Fund.
16		Beginning August 1, 1969, and continuing through June 30,
17		1994, the Treasurer shall transfer each month from the General
18		Revenue Fund to a special fund in the State treasury, to be
19		known as the "Local Government Distributive Fund", an amount
20		equal to 1/12 of the net revenue realized from the tax imposed
21		by subsections (a) and (b) of Section 201 of this Act during
22		the preceding month. Beginning July 1, 1994, and continuing
23		through June 30, 1995, the Treasurer shall transfer each month
24		from the General Revenue Fund to the Local Government
25		Distributive Fund an amount equal to 1/11 of the net revenue
26		realized from the tax imposed by subsections (a) and (b) of

SB0009 Engrossed - 172 - LRB100 06347 HLH 16385 b
1		Section 201 of this Act during the preceding month. Beginning
2		July 1, 1995 and continuing through January 31, 2011, the
3		Treasurer shall transfer each month from the General Revenue
4		Fund to the Local Government Distributive Fund an amount equal
5		to the net of (i) 1/10 of the net revenue realized from the tax
6		imposed by subsections (a) and (b) of Section 201 of the
7		Illinois Income Tax Act during the preceding month (ii) minus,
8		beginning July 1, 2003 and ending June 30, 2004, $6,666,666,
9		and beginning July 1, 2004, zero. Beginning February 1, 2011,
10		and continuing through January 31, 2015, the Treasurer shall
11		transfer each month from the General Revenue Fund to the Local
12		Government Distributive Fund an amount equal to the sum of (i)
13		6% (10% of the ratio of the 3% individual income tax rate prior
14		to 2011 to the 5% individual income tax rate after 2010) of the
15		net revenue realized from the tax imposed by subsections (a)
16		and (b) of Section 201 of this Act upon individuals, trusts,
17		and estates during the preceding month and (ii) 6.86% (10% of
18		the ratio of the 4.8% corporate income tax rate prior to 2011
19		to the 7% corporate income tax rate after 2010) of the net
20		revenue realized from the tax imposed by subsections (a) and
21		(b) of Section 201 of this Act upon corporations during the
22		preceding month. Beginning February 1, 2015 and continuing
23		through January 31, 2017 January 31, 2025, the Treasurer shall
24		transfer each month from the General Revenue Fund to the Local
25		Government Distributive Fund an amount equal to the sum of (i)
26		8% (10% of the ratio of the 3% individual income tax rate prior

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1		to 2011 to the 3.75% individual income tax rate after 2014) of
2		the net revenue realized from the tax imposed by subsections
3		(a) and (b) of Section 201 of this Act upon individuals,
4		trusts, and estates during the preceding month and (ii) 9.14%
5		(10% of the ratio of the 4.8% corporate income tax rate prior
6		to 2011 to the 5.25% corporate income tax rate after 2014) of
7		the net revenue realized from the tax imposed by subsections
8		(a) and (b) of Section 201 of this Act upon corporations during
9		the preceding month. Beginning February 1, 2017 February 1,
10		2025, the Treasurer shall transfer each month from the General
11		Revenue Fund to the Local Government Distributive Fund an
12		amount equal to the sum of (i) 6.06% 9.23% (10% of the ratio of
13		the 3% individual income tax rate prior to 2011 to the 4.95%
14		3.25% individual income tax rate beginning in 2017 after 2024)
15		of the net revenue realized from the tax imposed by subsections
16		(a) and (b) of Section 201 of this Act upon individuals,
17		trusts, and estates during the preceding month and (ii) 6.86%
18		(10% of the ratio of the 4.8% corporate income tax rate prior
19		to 2011 to the 7% corporate income tax rate beginning in 2017)
20		10% of the net revenue realized from the tax imposed by
21		subsections (a) and (b) of Section 201 of this Act upon
22		corporations during the preceding month. Net revenue realized
23		for a month shall be defined as the revenue from the tax
24		imposed by subsections (a) and (b) of Section 201 of this Act
25		which is deposited in the General Revenue Fund, the Education
26		Assistance Fund, the Income Tax Surcharge Local Government

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1		Distributive Fund, the Fund for the Advancement of Education,
2		and the Commitment to Human Services Fund during the month
3		minus the amount paid out of the General Revenue Fund in State
4		warrants during that same month as refunds to taxpayers for
5		overpayment of liability under the tax imposed by subsections
6		(a) and (b) of Section 201 of this Act.
7		Beginning on August 26, 2014 (the effective date of Public
8		Act 98-1052), the Comptroller shall perform the transfers
9		required by this subsection (b) no later than 60 days after he
10		or she receives the certification from the Treasurer as
11		provided in Section 1 of the State Revenue Sharing Act.
12		(c) Deposits Into Income Tax Refund Fund.
13		(1) Beginning on January 1, 1989 and thereafter, the
14		Department shall deposit a percentage of the amounts
15		collected pursuant to subsections (a) and (b)(1), (2), and
16		(3), of Section 201 of this Act into a fund in the State
17		treasury known as the Income Tax Refund Fund. The
18		Department shall deposit 6% of such amounts during the
19		period beginning January 1, 1989 and ending on June 30,
20		1989. Beginning with State fiscal year 1990 and for each
21		fiscal year thereafter, the percentage deposited into the
22		Income Tax Refund Fund during a fiscal year shall be the
23		Annual Percentage. For fiscal years 1999 through 2001, the
24		Annual Percentage shall be 7.1%. For fiscal year 2003, the
25		Annual Percentage shall be 8%. For fiscal year 2004, the
26		Annual Percentage shall be 11.7%. Upon the effective date

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1		of this amendatory Act of the 93rd General Assembly, the
2		Annual Percentage shall be 10% for fiscal year 2005. For
3		fiscal year 2006, the Annual Percentage shall be 9.75%. For
4		fiscal year 2007, the Annual Percentage shall be 9.75%. For
5		fiscal year 2008, the Annual Percentage shall be 7.75%. For
6		fiscal year 2009, the Annual Percentage shall be 9.75%. For
7		fiscal year 2010, the Annual Percentage shall be 9.75%. For
8		fiscal year 2011, the Annual Percentage shall be 8.75%. For
9		fiscal year 2012, the Annual Percentage shall be 8.75%. For
10		fiscal year 2013, the Annual Percentage shall be 9.75%. For
11		fiscal year 2014, the Annual Percentage shall be 9.5%. For
12		fiscal year 2015, the Annual Percentage shall be 10%. For
13		all other fiscal years, the Annual Percentage shall be
14		calculated as a fraction, the numerator of which shall be
15		the amount of refunds approved for payment by the
16		Department during the preceding fiscal year as a result of
17		overpayment of tax liability under subsections (a) and
18		(b)(1), (2), and (3) of Section 201 of this Act plus the
19		amount of such refunds remaining approved but unpaid at the
20		end of the preceding fiscal year, minus the amounts
21		transferred into the Income Tax Refund Fund from the
22		Tobacco Settlement Recovery Fund, and the denominator of
23		which shall be the amounts which will be collected pursuant
24		to subsections (a) and (b)(1), (2), and (3) of Section 201
25		of this Act during the preceding fiscal year; except that
26		in State fiscal year 2002, the Annual Percentage shall in

SB0009 Engrossed - 176 - LRB100 06347 HLH 16385 b
1		no event exceed 7.6%. The Director of Revenue shall certify
2		the Annual Percentage to the Comptroller on the last
3		business day of the fiscal year immediately preceding the
4		fiscal year for which it is to be effective.
5		(2) Beginning on January 1, 1989 and thereafter, the
6		Department shall deposit a percentage of the amounts
7		collected pursuant to subsections (a) and (b)(6), (7), and
8		(8), (c) and (d) of Section 201 of this Act into a fund in
9		the State treasury known as the Income Tax Refund Fund. The
10		Department shall deposit 18% of such amounts during the
11		period beginning January 1, 1989 and ending on June 30,
12		1989. Beginning with State fiscal year 1990 and for each
13		fiscal year thereafter, the percentage deposited into the
14		Income Tax Refund Fund during a fiscal year shall be the
15		Annual Percentage. For fiscal years 1999, 2000, and 2001,
16		the Annual Percentage shall be 19%. For fiscal year 2003,
17		the Annual Percentage shall be 27%. For fiscal year 2004,
18		the Annual Percentage shall be 32%. Upon the effective date
19		of this amendatory Act of the 93rd General Assembly, the
20		Annual Percentage shall be 24% for fiscal year 2005. For
21		fiscal year 2006, the Annual Percentage shall be 20%. For
22		fiscal year 2007, the Annual Percentage shall be 17.5%. For
23		fiscal year 2008, the Annual Percentage shall be 15.5%. For
24		fiscal year 2009, the Annual Percentage shall be 17.5%. For
25		fiscal year 2010, the Annual Percentage shall be 17.5%. For
26		fiscal year 2011, the Annual Percentage shall be 17.5%. For

SB0009 Engrossed - 177 - LRB100 06347 HLH 16385 b
1		fiscal year 2012, the Annual Percentage shall be 17.5%. For
2		fiscal year 2013, the Annual Percentage shall be 14%. For
3		fiscal year 2014, the Annual Percentage shall be 13.4%. For
4		fiscal year 2015, the Annual Percentage shall be 14%. For
5		all other fiscal years, the Annual Percentage shall be
6		calculated as a fraction, the numerator of which shall be
7		the amount of refunds approved for payment by the
8		Department during the preceding fiscal year as a result of
9		overpayment of tax liability under subsections (a) and
10		(b)(6), (7), and (8), (c) and (d) of Section 201 of this
11		Act plus the amount of such refunds remaining approved but
12		unpaid at the end of the preceding fiscal year, and the
13		denominator of which shall be the amounts which will be
14		collected pursuant to subsections (a) and (b)(6), (7), and
15		(8), (c) and (d) of Section 201 of this Act during the
16		preceding fiscal year; except that in State fiscal year
17		2002, the Annual Percentage shall in no event exceed 23%.
18		The Director of Revenue shall certify the Annual Percentage
19		to the Comptroller on the last business day of the fiscal
20		year immediately preceding the fiscal year for which it is
21		to be effective.
22		(3) The Comptroller shall order transferred and the
23		Treasurer shall transfer from the Tobacco Settlement
24		Recovery Fund to the Income Tax Refund Fund (i) $35,000,000
25		in January, 2001, (ii) $35,000,000 in January, 2002, and
26		(iii) $35,000,000 in January, 2003.

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1		(d) Expenditures from Income Tax Refund Fund.
2		(1) Beginning January 1, 1989, money in the Income Tax
3		Refund Fund shall be expended exclusively for the purpose
4		of paying refunds resulting from overpayment of tax
5		liability under Section 201 of this Act, for paying rebates
6		under Section 208.1 in the event that the amounts in the
7		Homeowners' Tax Relief Fund are insufficient for that
8		purpose, and for making transfers pursuant to this
9		subsection (d).
10		(2) The Director shall order payment of refunds
11		resulting from overpayment of tax liability under Section
12		201 of this Act from the Income Tax Refund Fund only to the
13		extent that amounts collected pursuant to Section 201 of
14		this Act and transfers pursuant to this subsection (d) and
15		item (3) of subsection (c) have been deposited and retained
16		in the Fund.
17		(3) As soon as possible after the end of each fiscal
18		year, the Director shall order transferred and the State
19		Treasurer and State Comptroller shall transfer from the
20		Income Tax Refund Fund to the Personal Property Tax
21		Replacement Fund an amount, certified by the Director to
22		the Comptroller, equal to the excess of the amount
23		collected pursuant to subsections (c) and (d) of Section
24		201 of this Act deposited into the Income Tax Refund Fund
25		during the fiscal year over the amount of refunds resulting
26		from overpayment of tax liability under subsections (c) and

SB0009 Engrossed - 179 - LRB100 06347 HLH 16385 b
1		(d) of Section 201 of this Act paid from the Income Tax
2		Refund Fund during the fiscal year.
3		(4) As soon as possible after the end of each fiscal
4		year, the Director shall order transferred and the State
5		Treasurer and State Comptroller shall transfer from the
6		Personal Property Tax Replacement Fund to the Income Tax
7		Refund Fund an amount, certified by the Director to the
8		Comptroller, equal to the excess of the amount of refunds
9		resulting from overpayment of tax liability under
10		subsections (c) and (d) of Section 201 of this Act paid
11		from the Income Tax Refund Fund during the fiscal year over
12		the amount collected pursuant to subsections (c) and (d) of
13		Section 201 of this Act deposited into the Income Tax
14		Refund Fund during the fiscal year.
15		(4.5) As soon as possible after the end of fiscal year
16		1999 and of each fiscal year thereafter, the Director shall
17		order transferred and the State Treasurer and State
18		Comptroller shall transfer from the Income Tax Refund Fund
19		to the General Revenue Fund any surplus remaining in the
20		Income Tax Refund Fund as of the end of such fiscal year;
21		excluding for fiscal years 2000, 2001, and 2002 amounts
22		attributable to transfers under item (3) of subsection (c)
23		less refunds resulting from the earned income tax credit.
24		(5) This Act shall constitute an irrevocable and
25		continuing appropriation from the Income Tax Refund Fund
26		for the purpose of paying refunds upon the order of the

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1		Director in accordance with the provisions of this Section.
2		(e) Deposits into the Education Assistance Fund and the
3		Income Tax Surcharge Local Government Distributive Fund.
4		On July 1, 1991, and thereafter, of the amounts collected
5		pursuant to subsections (a) and (b) of Section 201 of this Act,
6		minus deposits into the Income Tax Refund Fund, the Department
7		shall deposit 7.3% into the Education Assistance Fund in the
8		State Treasury. Beginning July 1, 1991, and continuing through
9		January 31, 1993, of the amounts collected pursuant to
10		subsections (a) and (b) of Section 201 of the Illinois Income
11		Tax Act, minus deposits into the Income Tax Refund Fund, the
12		Department shall deposit 3.0% into the Income Tax Surcharge
13		Local Government Distributive Fund in the State Treasury.
14		Beginning February 1, 1993 and continuing through June 30,
15		1993, of the amounts collected pursuant to subsections (a) and
16		(b) of Section 201 of the Illinois Income Tax Act, minus
17		deposits into the Income Tax Refund Fund, the Department shall
18		deposit 4.4% into the Income Tax Surcharge Local Government
19		Distributive Fund in the State Treasury. Beginning July 1,
20		1993, and continuing through June 30, 1994, of the amounts
21		collected under subsections (a) and (b) of Section 201 of this
22		Act, minus deposits into the Income Tax Refund Fund, the
23		Department shall deposit 1.475% into the Income Tax Surcharge
24		Local Government Distributive Fund in the State Treasury.
25		(f) Deposits into the Fund for the Advancement of
26		Education. Beginning February 1, 2015, the Department shall

SB0009 Engrossed - 181 - LRB100 06347 HLH 16385 b
1		deposit the following portions of the revenue realized from the
2		tax imposed upon individuals, trusts, and estates by
3		subsections (a) and (b) of Section 201 of this Act during the
4		preceding month, minus deposits into the Income Tax Refund
5		Fund, into the Fund for the Advancement of Education:
6		(1) beginning February 1, 2015, and prior to February
7		1, 2025, 1/30; and
8		(2) beginning February 1, 2025, 1/26.
9		If the rate of tax imposed by subsection (a) and (b) of
10		Section 201 is reduced pursuant to Section 201.5 of this Act,
11		the Department shall not make the deposits required by this
12		subsection (f) on or after the effective date of the reduction.
13		(g) Deposits into the Commitment to Human Services Fund.
14		Beginning February 1, 2015, the Department shall deposit the
15		following portions of the revenue realized from the tax imposed
16		upon individuals, trusts, and estates by subsections (a) and
17		(b) of Section 201 of this Act during the preceding month,
18		minus deposits into the Income Tax Refund Fund, into the
19		Commitment to Human Services Fund:
20		(1) beginning February 1, 2015, and prior to February
21		1, 2025, 1/30; and
22		(2) beginning February 1, 2025, 1/26.
23		If the rate of tax imposed by subsection (a) and (b) of
24		Section 201 is reduced pursuant to Section 201.5 of this Act,
25		the Department shall not make the deposits required by this
26		subsection (g) on or after the effective date of the reduction.

SB0009 Engrossed - 182 - LRB100 06347 HLH 16385 b
1		(h) Deposits into the Tax Compliance and Administration
2		Fund. Beginning on the first day of the first calendar month to
3		occur on or after August 26, 2014 (the effective date of Public
4		Act 98-1098), each month the Department shall pay into the Tax
5		Compliance and Administration Fund, to be used, subject to
6		appropriation, to fund additional auditors and compliance
7		personnel at the Department, an amount equal to 1/12 of 5% of
8		the cash receipts collected during the preceding fiscal year by
9		the Audit Bureau of the Department from the tax imposed by
10		subsections (a), (b), (c), and (d) of Section 201 of this Act,
11		net of deposits into the Income Tax Refund Fund made from those
12		cash receipts.
13		(Source: P.A. 98-24, eff. 6-19-13; 98-674, eff. 6-30-14;
14		98-1052, eff. 8-26-14; 98-1098, eff. 8-26-14; 99-78, eff.
15		7-20-15.)
16		(35 ILCS 5/1501) (from Ch. 120, par. 15-1501)
17		Sec. 1501. Definitions.
18		(a) In general. When used in this Act, where not otherwise
19		distinctly expressed or manifestly incompatible with the
20		intent thereof:
21		(1) Business income. The term "business income" means
22		all income that may be treated as apportionable business
23		income under the Constitution of the United States.
24		Business income is net of the deductions allocable thereto.
25		Such term does not include compensation or the deductions

SB0009 Engrossed - 183 - LRB100 06347 HLH 16385 b
1		allocable thereto. For each taxable year beginning on or
2		after January 1, 2003, a taxpayer may elect to treat all
3		income other than compensation as business income. This
4		election shall be made in accordance with rules adopted by
5		the Department and, once made, shall be irrevocable.
6		(1.5) Captive real estate investment trust:
7		(A) The term "captive real estate investment
8		trust" means a corporation, trust, or association:
9		(i) that is considered a real estate
10		investment trust for the taxable year under
11		Section 856 of the Internal Revenue Code;
12		(ii) the certificates of beneficial interest
13		or shares of which are not regularly traded on an
14		established securities market; and
15		(iii) of which more than 50% of the voting
16		power or value of the beneficial interest or
17		shares, at any time during the last half of the
18		taxable year, is owned or controlled, directly,
19		indirectly, or constructively, by a single
20		corporation.
21		(B) The term "captive real estate investment
22		trust" does not include:
23		(i) a real estate investment trust of which
24		more than 50% of the voting power or value of the
25		beneficial interest or shares is owned or
26		controlled, directly, indirectly, or

SB0009 Engrossed - 184 - LRB100 06347 HLH 16385 b
1		constructively, by:
2		(a) a real estate investment trust, other
3		than a captive real estate investment trust;
4		(b) a person who is exempt from taxation
5		under Section 501 of the Internal Revenue Code,
6		and who is not required to treat income
7		received from the real estate investment trust
8		as unrelated business taxable income under
9		Section 512 of the Internal Revenue Code;
10		(c) a listed Australian property trust, if
11		no more than 50% of the voting power or value
12		of the beneficial interest or shares of that
13		trust, at any time during the last half of the
14		taxable year, is owned or controlled, directly
15		or indirectly, by a single person;
16		(d) an entity organized as a trust,
17		provided a listed Australian property trust
18		described in subparagraph (c) owns or
19		controls, directly or indirectly, or
20		constructively, 75% or more of the voting power
21		or value of the beneficial interests or shares
22		of such entity; or
23		(e) an entity that is organized outside of
24		the laws of the United States and that
25		satisfies all of the following criteria:
26		(1) at least 75% of the entity's total

SB0009 Engrossed - 185 - LRB100 06347 HLH 16385 b
1		asset value at the close of its taxable
2		year is represented by real estate assets
3		(as defined in Section 856(c)(5)(B) of the
4		Internal Revenue Code, thereby including
5		shares or certificates of beneficial
6		interest in any real estate investment
7		trust), cash and cash equivalents, and
8		U.S. Government securities;
9		(2) the entity is not subject to tax on
10		amounts that are distributed to its
11		beneficial owners or is exempt from
12		entity-level taxation;
13		(3) the entity distributes at least
14		85% of its taxable income (as computed in
15		the jurisdiction in which it is organized)
16		to the holders of its shares or
17		certificates of beneficial interest on an
18		annual basis;
19		(4) either (i) the shares or
20		beneficial interests of the entity are
21		regularly traded on an established
22		securities market or (ii) not more than 10%
23		of the voting power or value in the entity
24		is held, directly, indirectly, or
25		constructively, by a single entity or
26		individual; and

SB0009 Engrossed - 186 - LRB100 06347 HLH 16385 b
1		(5) the entity is organized in a
2		country that has entered into a tax treaty
3		with the United States; or
4		(ii) during its first taxable year for which it
5		elects to be treated as a real estate investment
6		trust under Section 856(c)(1) of the Internal
7		Revenue Code, a real estate investment trust the
8		certificates of beneficial interest or shares of
9		which are not regularly traded on an established
10		securities market, but only if the certificates of
11		beneficial interest or shares of the real estate
12		investment trust are regularly traded on an
13		established securities market prior to the earlier
14		of the due date (including extensions) for filing
15		its return under this Act for that first taxable
16		year or the date it actually files that return.
17		(C) For the purposes of this subsection (1.5), the
18		constructive ownership rules prescribed under Section
19		318(a) of the Internal Revenue Code, as modified by
20		Section 856(d)(5) of the Internal Revenue Code, apply
21		in determining the ownership of stock, assets, or net
22		profits of any person.
23		(D) For the purposes of this item (1.5), for
24		taxable years ending on or after August 16, 2007, the
25		voting power or value of the beneficial interest or
26		shares of a real estate investment trust does not

SB0009 Engrossed - 187 - LRB100 06347 HLH 16385 b
1		include any voting power or value of beneficial
2		interest or shares in a real estate investment trust
3		held directly or indirectly in a segregated asset
4		account by a life insurance company (as described in
5		Section 817 of the Internal Revenue Code) to the extent
6		such voting power or value is for the benefit of
7		entities or persons who are either immune from taxation
8		or exempt from taxation under subtitle A of the
9		Internal Revenue Code.
10		(2) Commercial domicile. The term "commercial
11		domicile" means the principal place from which the trade or
12		business of the taxpayer is directed or managed.
13		(3) Compensation. The term "compensation" means wages,
14		salaries, commissions and any other form of remuneration
15		paid to employees for personal services.
16		(4) Corporation. The term "corporation" includes
17		associations, joint-stock companies, insurance companies
18		and cooperatives. Any entity, including a limited
19		liability company formed under the Illinois Limited
20		Liability Company Act, shall be treated as a corporation if
21		it is so classified for federal income tax purposes.
22		(5) Department. The term "Department" means the
23		Department of Revenue of this State.
24		(6) Director. The term "Director" means the Director of
25		Revenue of this State.
26		(7) Fiduciary. The term "fiduciary" means a guardian,

SB0009 Engrossed - 188 - LRB100 06347 HLH 16385 b
1		trustee, executor, administrator, receiver, or any person
2		acting in any fiduciary capacity for any person.
3		(8) Financial organization.
4		(A) The term "financial organization" means any
5		bank, bank holding company, trust company, savings
6		bank, industrial bank, land bank, safe deposit
7		company, private banker, savings and loan association,
8		building and loan association, credit union, currency
9		exchange, cooperative bank, small loan company, sales
10		finance company, investment company, or any person
11		which is owned by a bank or bank holding company. For
12		the purpose of this Section a "person" will include
13		only those persons which a bank holding company may
14		acquire and hold an interest in, directly or
15		indirectly, under the provisions of the Bank Holding
16		Company Act of 1956 (12 U.S.C. 1841, et seq.), except
17		where interests in any person must be disposed of
18		within certain required time limits under the Bank
19		Holding Company Act of 1956.
20		(B) For purposes of subparagraph (A) of this
21		paragraph, the term "bank" includes (i) any entity that
22		is regulated by the Comptroller of the Currency under
23		the National Bank Act, or by the Federal Reserve Board,
24		or by the Federal Deposit Insurance Corporation and
25		(ii) any federally or State chartered bank operating as
26		a credit card bank.

SB0009 Engrossed - 189 - LRB100 06347 HLH 16385 b
1		(C) For purposes of subparagraph (A) of this
2		paragraph, the term "sales finance company" has the
3		meaning provided in the following item (i) or (ii):
4		(i) A person primarily engaged in one or more
5		of the following businesses: the business of
6		purchasing customer receivables, the business of
7		making loans upon the security of customer
8		receivables, the business of making loans for the
9		express purpose of funding purchases of tangible
10		personal property or services by the borrower, or
11		the business of finance leasing. For purposes of
12		this item (i), "customer receivable" means:
13		(a) a retail installment contract or
14		retail charge agreement within the meaning of
15		the Sales Finance Agency Act, the Retail
16		Installment Sales Act, or the Motor Vehicle
17		Retail Installment Sales Act;
18		(b) an installment, charge, credit, or
19		similar contract or agreement arising from the
20		sale of tangible personal property or services
21		in a transaction involving a deferred payment
22		price payable in one or more installments
23		subsequent to the sale; or
24		(c) the outstanding balance of a contract
25		or agreement described in provisions (a) or (b)
26		of this item (i).

SB0009 Engrossed - 190 - LRB100 06347 HLH 16385 b
1		A customer receivable need not provide for
2		payment of interest on deferred payments. A sales
3		finance company may purchase a customer receivable
4		from, or make a loan secured by a customer
5		receivable to, the seller in the original
6		transaction or to a person who purchased the
7		customer receivable directly or indirectly from
8		that seller.
9		(ii) A corporation meeting each of the
10		following criteria:
11		(a) the corporation must be a member of an
12		"affiliated group" within the meaning of
13		Section 1504(a) of the Internal Revenue Code,
14		determined without regard to Section 1504(b)
15		of the Internal Revenue Code;
16		(b) more than 50% of the gross income of
17		the corporation for the taxable year must be
18		interest income derived from qualifying loans.
19		A "qualifying loan" is a loan made to a member
20		of the corporation's affiliated group that
21		originates customer receivables (within the
22		meaning of item (i)) or to whom customer
23		receivables originated by a member of the
24		affiliated group have been transferred, to the
25		extent the average outstanding balance of
26		loans from that corporation to members of its

SB0009 Engrossed - 191 - LRB100 06347 HLH 16385 b
1		affiliated group during the taxable year do not
2		exceed the limitation amount for that
3		corporation. The "limitation amount" for a
4		corporation is the average outstanding
5		balances during the taxable year of customer
6		receivables (within the meaning of item (i))
7		originated by all members of the affiliated
8		group. If the average outstanding balances of
9		the loans made by a corporation to members of
10		its affiliated group exceed the limitation
11		amount, the interest income of that
12		corporation from qualifying loans shall be
13		equal to its interest income from loans to
14		members of its affiliated groups times a
15		fraction equal to the limitation amount
16		divided by the average outstanding balances of
17		the loans made by that corporation to members
18		of its affiliated group;
19		(c) the total of all shareholder's equity
20		(including, without limitation, paid-in
21		capital on common and preferred stock and
22		retained earnings) of the corporation plus the
23		total of all of its loans, advances, and other
24		obligations payable or owed to members of its
25		affiliated group may not exceed 20% of the
26		total assets of the corporation at any time

SB0009 Engrossed - 192 - LRB100 06347 HLH 16385 b
1		during the tax year; and
2		(d) more than 50% of all interest-bearing
3		obligations of the affiliated group payable to
4		persons outside the group determined in
5		accordance with generally accepted accounting
6		principles must be obligations of the
7		corporation.
8		This amendatory Act of the 91st General Assembly is
9		declaratory of existing law.
10		(D) Subparagraphs (B) and (C) of this paragraph are
11		declaratory of existing law and apply retroactively,
12		for all tax years beginning on or before December 31,
13		1996, to all original returns, to all amended returns
14		filed no later than 30 days after the effective date of
15		this amendatory Act of 1996, and to all notices issued
16		on or before the effective date of this amendatory Act
17		of 1996 under subsection (a) of Section 903, subsection
18		(a) of Section 904, subsection (e) of Section 909, or
19		Section 912. A taxpayer that is a "financial
20		organization" that engages in any transaction with an
21		affiliate shall be a "financial organization" for all
22		purposes of this Act.
23		(E) For all tax years beginning on or before
24		December 31, 1996, a taxpayer that falls within the
25		definition of a "financial organization" under
26		subparagraphs (B) or (C) of this paragraph, but who

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1		does not fall within the definition of a "financial
2		organization" under the Proposed Regulations issued by
3		the Department of Revenue on July 19, 1996, may
4		irrevocably elect to apply the Proposed Regulations
5		for all of those years as though the Proposed
6		Regulations had been lawfully promulgated, adopted,
7		and in effect for all of those years. For purposes of
8		applying subparagraphs (B) or (C) of this paragraph to
9		all of those years, the election allowed by this
10		subparagraph applies only to the taxpayer making the
11		election and to those members of the taxpayer's unitary
12		business group who are ordinarily required to
13		apportion business income under the same subsection of
14		Section 304 of this Act as the taxpayer making the
15		election. No election allowed by this subparagraph
16		shall be made under a claim filed under subsection (d)
17		of Section 909 more than 30 days after the effective
18		date of this amendatory Act of 1996.
19		(F) Finance Leases. For purposes of this
20		subsection, a finance lease shall be treated as a loan
21		or other extension of credit, rather than as a lease,
22		regardless of how the transaction is characterized for
23		any other purpose, including the purposes of any
24		regulatory agency to which the lessor is subject. A
25		finance lease is any transaction in the form of a lease
26		in which the lessee is treated as the owner of the

SB0009 Engrossed - 194 - LRB100 06347 HLH 16385 b
1		leased asset entitled to any deduction for
2		depreciation allowed under Section 167 of the Internal
3		Revenue Code.
4		(9) Fiscal year. The term "fiscal year" means an
5		accounting period of 12 months ending on the last day of
6		any month other than December.
7		(9.5) Fixed place of business. The term "fixed place of
8		business" has the same meaning as that term is given in
9		Section 864 of the Internal Revenue Code and the related
10		Treasury regulations.
11		(10) Includes and including. The terms "includes" and
12		"including" when used in a definition contained in this Act
13		shall not be deemed to exclude other things otherwise
14		within the meaning of the term defined.
15		(11) Internal Revenue Code. The term "Internal Revenue
16		Code" means the United States Internal Revenue Code of 1954
17		or any successor law or laws relating to federal income
18		taxes in effect for the taxable year.
19		(11.5) Investment partnership.
20		(A) The term "investment partnership" means any
21		entity that is treated as a partnership for federal
22		income tax purposes that meets the following
23		requirements:
24		(i) no less than 90% of the partnership's cost
25		of its total assets consists of qualifying
26		investment securities, deposits at banks or other

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1		financial institutions, and office space and
2		equipment reasonably necessary to carry on its
3		activities as an investment partnership;
4		(ii) no less than 90% of its gross income
5		consists of interest, dividends, and gains from
6		the sale or exchange of qualifying investment
7		securities; and
8		(iii) the partnership is not a dealer in
9		qualifying investment securities.
10		(B) For purposes of this paragraph (11.5), the term
11		"qualifying investment securities" includes all of the
12		following:
13		(i) common stock, including preferred or debt
14		securities convertible into common stock, and
15		preferred stock;
16		(ii) bonds, debentures, and other debt
17		securities;
18		(iii) foreign and domestic currency deposits
19		secured by federal, state, or local governmental
20		agencies;
21		(iv) mortgage or asset-backed securities
22		secured by federal, state, or local governmental
23		agencies;
24		(v) repurchase agreements and loan
25		participations;
26		(vi) foreign currency exchange contracts and

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1		forward and futures contracts on foreign
2		currencies;
3		(vii) stock and bond index securities and
4		futures contracts and other similar financial
5		securities and futures contracts on those
6		securities;
7		(viii) options for the purchase or sale of any
8		of the securities, currencies, contracts, or
9		financial instruments described in items (i) to
10		(vii), inclusive;
11		(ix) regulated futures contracts;
12		(x) commodities (not described in Section
13		1221(a)(1) of the Internal Revenue Code) or
14		futures, forwards, and options with respect to
15		such commodities, provided, however, that any item
16		of a physical commodity to which title is actually
17		acquired in the partnership's capacity as a dealer
18		in such commodity shall not be a qualifying
19		investment security;
20		(xi) derivatives; and
21		(xii) a partnership interest in another
22		partnership that is an investment partnership.
23		(12) Mathematical error. The term "mathematical error"
24		includes the following types of errors, omissions, or
25		defects in a return filed by a taxpayer which prevents
26		acceptance of the return as filed for processing:

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1		(A) arithmetic errors or incorrect computations on
2		the return or supporting schedules;
3		(B) entries on the wrong lines;
4		(C) omission of required supporting forms or
5		schedules or the omission of the information in whole
6		or in part called for thereon; and
7		(D) an attempt to claim, exclude, deduct, or
8		improperly report, in a manner directly contrary to the
9		provisions of the Act and regulations thereunder any
10		item of income, exemption, deduction, or credit.
11		(13) Nonbusiness income. The term "nonbusiness income"
12		means all income other than business income or
13		compensation.
14		(14) Nonresident. The term "nonresident" means a
15		person who is not a resident.
16		(15) Paid, incurred and accrued. The terms "paid",
17		"incurred" and "accrued" shall be construed according to
18		the method of accounting upon the basis of which the
19		person's base income is computed under this Act.
20		(16) Partnership and partner. The term "partnership"
21		includes a syndicate, group, pool, joint venture or other
22		unincorporated organization, through or by means of which
23		any business, financial operation, or venture is carried
24		on, and which is not, within the meaning of this Act, a
25		trust or estate or a corporation; and the term "partner"
26		includes a member in such syndicate, group, pool, joint

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1		venture or organization.
2		The term "partnership" includes any entity, including
3		a limited liability company formed under the Illinois
4		Limited Liability Company Act, classified as a partnership
5		for federal income tax purposes.
6		The term "partnership" does not include a syndicate,
7		group, pool, joint venture, or other unincorporated
8		organization established for the sole purpose of playing
9		the Illinois State Lottery.
10		(17) Part-year resident. The term "part-year resident"
11		means an individual who became a resident during the
12		taxable year or ceased to be a resident during the taxable
13		year. Under Section 1501(a)(20)(A)(i) residence commences
14		with presence in this State for other than a temporary or
15		transitory purpose and ceases with absence from this State
16		for other than a temporary or transitory purpose. Under
17		Section 1501(a)(20)(A)(ii) residence commences with the
18		establishment of domicile in this State and ceases with the
19		establishment of domicile in another State.
20		(18) Person. The term "person" shall be construed to
21		mean and include an individual, a trust, estate,
22		partnership, association, firm, company, corporation,
23		limited liability company, or fiduciary. For purposes of
24		Section 1301 and 1302 of this Act, a "person" means (i) an
25		individual, (ii) a corporation, (iii) an officer, agent, or
26		employee of a corporation, (iv) a member, agent or employee

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1		of a partnership, or (v) a member, manager, employee,
2		officer, director, or agent of a limited liability company
3		who in such capacity commits an offense specified in
4		Section 1301 and 1302.
5		(18A) Records. The term "records" includes all data
6		maintained by the taxpayer, whether on paper, microfilm,
7		microfiche, or any type of machine-sensible data
8		compilation.
9		(19) Regulations. The term "regulations" includes
10		rules promulgated and forms prescribed by the Department.
11		(20) Resident. The term "resident" means:
12		(A) an individual (i) who is in this State for
13		other than a temporary or transitory purpose during the
14		taxable year; or (ii) who is domiciled in this State
15		but is absent from the State for a temporary or
16		transitory purpose during the taxable year;
17		(B) The estate of a decedent who at his or her
18		death was domiciled in this State;
19		(C) A trust created by a will of a decedent who at
20		his death was domiciled in this State; and
21		(D) An irrevocable trust, the grantor of which was
22		domiciled in this State at the time such trust became
23		irrevocable. For purpose of this subparagraph, a trust
24		shall be considered irrevocable to the extent that the
25		grantor is not treated as the owner thereof under
26		Sections 671 through 678 of the Internal Revenue Code.

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1		(21) Sales. The term "sales" means all gross receipts
2		of the taxpayer not allocated under Sections 301, 302 and
3		303.
4		(22) State. The term "state" when applied to a
5		jurisdiction other than this State means any state of the
6		United States, the District of Columbia, the Commonwealth
7		of Puerto Rico, any Territory or Possession of the United
8		States, and any foreign country, or any political
9		subdivision of any of the foregoing. For purposes of the
10		foreign tax credit under Section 601, the term "state"
11		means any state of the United States, the District of
12		Columbia, the Commonwealth of Puerto Rico, and any
13		territory or possession of the United States, or any
14		political subdivision of any of the foregoing, effective
15		for tax years ending on or after December 31, 1989.
16		(23) Taxable year. The term "taxable year" means the
17		calendar year, or the fiscal year ending during such
18		calendar year, upon the basis of which the base income is
19		computed under this Act. "Taxable year" means, in the case
20		of a return made for a fractional part of a year under the
21		provisions of this Act, the period for which such return is
22		made.
23		(24) Taxpayer. The term "taxpayer" means any person
24		subject to the tax imposed by this Act.
25		(25) International banking facility. The term
26		international banking facility shall have the same meaning

SB0009 Engrossed - 201 - LRB100 06347 HLH 16385 b
1		as is set forth in the Illinois Banking Act or as is set
2		forth in the laws of the United States or regulations of
3		the Board of Governors of the Federal Reserve System.
4		(26) Income Tax Return Preparer.
5		(A) The term "income tax return preparer" means any
6		person who prepares for compensation, or who employs
7		one or more persons to prepare for compensation, any
8		return of tax imposed by this Act or any claim for
9		refund of tax imposed by this Act. The preparation of a
10		substantial portion of a return or claim for refund
11		shall be treated as the preparation of that return or
12		claim for refund.
13		(B) A person is not an income tax return preparer
14		if all he or she does is
15		(i) furnish typing, reproducing, or other
16		mechanical assistance;
17		(ii) prepare returns or claims for refunds for
18		the employer by whom he or she is regularly and
19		continuously employed;
20		(iii) prepare as a fiduciary returns or claims
21		for refunds for any person; or
22		(iv) prepare claims for refunds for a taxpayer
23		in response to any notice of deficiency issued to
24		that taxpayer or in response to any waiver of
25		restriction after the commencement of an audit of
26		that taxpayer or of another taxpayer if a

SB0009 Engrossed - 202 - LRB100 06347 HLH 16385 b
1		determination in the audit of the other taxpayer
2		directly or indirectly affects the tax liability
3		of the taxpayer whose claims he or she is
4		preparing.
5		(27) Unitary business group.
6		(A) The term "unitary business group" means a group
7		of persons related through common ownership whose
8		business activities are integrated with, dependent
9		upon and contribute to each other. The group will not
10		include those members whose business activity outside
11		the United States is 80% or more of any such member's
12		total business activity; for purposes of this
13		paragraph and clause (a)(3)(B)(ii) of Section 304,
14		business activity within the United States shall be
15		measured by means of the factors ordinarily applicable
16		under subsections (a), (b), (c), (d), or (h) of Section
17		304 except that, in the case of members ordinarily
18		required to apportion business income by means of the 3
19		factor formula of property, payroll and sales
20		specified in subsection (a) of Section 304, including
21		the formula as weighted in subsection (h) of Section
22		304, such members shall not use the sales factor in the
23		computation and the results of the property and payroll
24		factor computations of subsection (a) of Section 304
25		shall be divided by 2 (by one if either the property or
26		payroll factor has a denominator of zero). The

SB0009 Engrossed - 203 - LRB100 06347 HLH 16385 b
1		computation required by the preceding sentence shall,
2		in each case, involve the division of the member's
3		property, payroll, or revenue miles in the United
4		States, insurance premiums on property or risk in the
5		United States, or financial organization business
6		income from sources within the United States, as the
7		case may be, by the respective worldwide figures for
8		such items. Common ownership in the case of
9		corporations is the direct or indirect control or
10		ownership of more than 50% of the outstanding voting
11		stock of the persons carrying on unitary business
12		activity. Unitary business activity can ordinarily be
13		illustrated where the activities of the members are:
14		(1) in the same general line (such as manufacturing,
15		wholesaling, retailing of tangible personal property,
16		insurance, transportation or finance); or (2) are
17		steps in a vertically structured enterprise or process
18		(such as the steps involved in the production of
19		natural resources, which might include exploration,
20		mining, refining, and marketing); and, in either
21		instance, the members are functionally integrated
22		through the exercise of strong centralized management
23		(where, for example, authority over such matters as
24		purchasing, financing, tax compliance, product line,
25		personnel, marketing and capital investment is not
26		left to each member).

SB0009 Engrossed - 204 - LRB100 06347 HLH 16385 b
1		(B) In no event, for taxable years beginning prior
2		to January 1, 2017, and excepting any unitary business
3		group that apportions business income under Section
4		304(b) of this Act and is subject to the insurance
5		premium tax imposed under the Illinois Insurance Code,
6		shall any unitary business group include members which
7		are ordinarily required to apportion business income
8		under different subsections of Section 304 except that
9		for tax years ending on or after December 31, 1987 this
10		prohibition shall not apply to a holding company that
11		would otherwise be a member of a unitary business group
12		with taxpayers that apportion business income under
13		any of subsections (b), (c), (c-1), or (d) of Section
14		304. If a unitary business group would, but for the
15		preceding sentence, include members that are
16		ordinarily required to apportion business income under
17		different subsections of Section 304, then for each
18		subsection of Section 304 for which there are two or
19		more members, there shall be a separate unitary
20		business group composed of such members. For purposes
21		of the preceding two sentences, a member is "ordinarily
22		required to apportion business income" under a
23		particular subsection of Section 304 if it would be
24		required to use the apportionment method prescribed by
25		such subsection except for the fact that it derives
26		business income solely from Illinois. As used in this

SB0009 Engrossed - 205 - LRB100 06347 HLH 16385 b
1		paragraph, the phrase "United States" means only the 50
2		states and the District of Columbia and , but does not
3		include any territory or possession of the United
4		States, but, for taxable years ending on or after
5		December 31, 2017, does include or any area over which
6		the United States has asserted jurisdiction or claimed
7		exclusive rights with respect to the exploration for or
8		exploitation of natural resources.
9		(C) Holding companies.
10		(i) For purposes of this subparagraph, a
11		"holding company" is a corporation (other than a
12		corporation that is a financial organization under
13		paragraph (8) of this subsection (a) of Section
14		1501 because it is a bank holding company under the
15		provisions of the Bank Holding Company Act of 1956
16		(12 U.S.C. 1841, et seq.) or because it is owned by
17		a bank or a bank holding company) that owns a
18		controlling interest in one or more other
19		taxpayers ("controlled taxpayers"); that, during
20		the period that includes the taxable year and the 2
21		immediately preceding taxable years or, if the
22		corporation was formed during the current or
23		immediately preceding taxable year, the taxable
24		years in which the corporation has been in
25		existence, derived substantially all its gross
26		income from dividends, interest, rents, royalties,

SB0009 Engrossed - 206 - LRB100 06347 HLH 16385 b
1		fees or other charges received from controlled
2		taxpayers for the provision of services, and gains
3		on the sale or other disposition of interests in
4		controlled taxpayers or in property leased or
5		licensed to controlled taxpayers or used by the
6		taxpayer in providing services to controlled
7		taxpayers; and that incurs no substantial expenses
8		other than expenses (including interest and other
9		costs of borrowing) incurred in connection with
10		the acquisition and holding of interests in
11		controlled taxpayers and in the provision of
12		services to controlled taxpayers or in the leasing
13		or licensing of property to controlled taxpayers.
14		(ii) The income of a holding company which is a
15		member of more than one unitary business group
16		shall be included in each unitary business group of
17		which it is a member on a pro rata basis, by
18		including in each unitary business group that
19		portion of the base income of the holding company
20		that bears the same proportion to the total base
21		income of the holding company as the gross receipts
22		of the unitary business group bears to the combined
23		gross receipts of all unitary business groups (in
24		both cases without regard to the holding company)
25		or on any other reasonable basis, consistently
26		applied.

SB0009 Engrossed - 207 - LRB100 06347 HLH 16385 b
1		(iii) A holding company shall apportion its
2		business income under the subsection of Section
3		304 used by the other members of its unitary
4		business group. The apportionment factors of a
5		holding company which would be a member of more
6		than one unitary business group shall be included
7		with the apportionment factors of each unitary
8		business group of which it is a member on a pro
9		rata basis using the same method used in clause
10		(ii).
11		(iv) The provisions of this subparagraph (C)
12		are intended to clarify existing law.
13		(D) If including the base income and factors of a
14		holding company in more than one unitary business group
15		under subparagraph (C) does not fairly reflect the
16		degree of integration between the holding company and
17		one or more of the unitary business groups, the
18		dependence of the holding company and one or more of
19		the unitary business groups upon each other, or the
20		contributions between the holding company and one or
21		more of the unitary business groups, the holding
22		company may petition the Director, under the
23		procedures provided under Section 304(f), for
24		permission to include all base income and factors of
25		the holding company only with members of a unitary
26		business group apportioning their business income

SB0009 Engrossed - 208 - LRB100 06347 HLH 16385 b
1		under one subsection of subsections (a), (b), (c), or
2		(d) of Section 304. If the petition is granted, the
3		holding company shall be included in a unitary business
4		group only with persons apportioning their business
5		income under the selected subsection of Section 304
6		until the Director grants a petition of the holding
7		company either to be included in more than one unitary
8		business group under subparagraph (C) or to include its
9		base income and factors only with members of a unitary
10		business group apportioning their business income
11		under a different subsection of Section 304.
12		(E) If the unitary business group members'
13		accounting periods differ, the common parent's
14		accounting period or, if there is no common parent, the
15		accounting period of the member that is expected to
16		have, on a recurring basis, the greatest Illinois
17		income tax liability must be used to determine whether
18		to use the apportionment method provided in subsection
19		(a) or subsection (h) of Section 304. The prohibition
20		against membership in a unitary business group for
21		taxpayers ordinarily required to apportion income
22		under different subsections of Section 304 does not
23		apply to taxpayers required to apportion income under
24		subsection (a) and subsection (h) of Section 304. The
25		provisions of this amendatory Act of 1998 apply to tax
26		years ending on or after December 31, 1998.

SB0009 Engrossed - 209 - LRB100 06347 HLH 16385 b
1		(28) Subchapter S corporation. The term "Subchapter S
2		corporation" means a corporation for which there is in
3		effect an election under Section 1362 of the Internal
4		Revenue Code, or for which there is a federal election to
5		opt out of the provisions of the Subchapter S Revision Act
6		of 1982 and have applied instead the prior federal
7		Subchapter S rules as in effect on July 1, 1982.
8		(30) Foreign person. The term "foreign person" means
9		any person who is a nonresident alien individual and any
10		nonindividual entity, regardless of where created or
11		organized, whose business activity outside the United
12		States is 80% or more of the entity's total business
13		activity.
14		(b) Other definitions.
15		(1) Words denoting number, gender, and so forth, when
16		used in this Act, where not otherwise distinctly expressed
17		or manifestly incompatible with the intent thereof:
18		(A) Words importing the singular include and apply
19		to several persons, parties or things;
20		(B) Words importing the plural include the
21		singular; and
22		(C) Words importing the masculine gender include
23		the feminine as well.
24		(2) "Company" or "association" as including successors
25		and assigns. The word "company" or "association", when used

SB0009 Engrossed - 210 - LRB100 06347 HLH 16385 b
1		in reference to a corporation, shall be deemed to embrace
2		the words "successors and assigns of such company or
3		association", and in like manner as if these last-named
4		words, or words of similar import, were expressed.
5		(3) Other terms. Any term used in any Section of this
6		Act with respect to the application of, or in connection
7		with, the provisions of any other Section of this Act shall
8		have the same meaning as in such other Section.
9		(Source: P.A. 99-213, eff. 7-31-15.)
10		Section 30-15. The Film Production Services Tax Credit Act
11		of 2008 is amended by changing Section 42 as follows:
12		(35 ILCS 16/42)
13		Sec. 42. Sunset of credits. The application of credits
14		awarded pursuant to this Act shall be limited by a reasonable
15		and appropriate sunset date. A taxpayer shall not be entitled
16		to take a credit awarded pursuant to this Act for tax years
17		beginning on or after January 1, 2027 10 years after the
18		effective date of this amendatory Act of the 97th General
19		Assembly. After the initial 10-year sunset, the General
20		Assembly may extend the sunset date by 5-year intervals.
21		(Source: P.A. 97-2, eff. 5-6-11; 97-3, eff. 5-6-11.)
22		Section 30-20. The Use Tax Act is amended by changing
23		Sections 2, 3, 3-5, 3-10, 3-10.5, 3-45, 3-50, 3-55, 3-65, 3-75,

SB0009 Engrossed - 211 - LRB100 06347 HLH 16385 b
1		3a, 4, 5, 6, 7, 8, 9, 10, and 11 and by adding Section 2a-2 as
2		follows:
3		(35 ILCS 105/2) (from Ch. 120, par. 439.2)
4		Sec. 2. Definitions.
5		"Use" means the exercise by any person of any right or
6		power over tangible personal property incident to the ownership
7		of that property or the exercise by any person of any right or
8		power over, or the enjoyment of, a taxable service, except that
9		it does not include the sale of such property or taxable
10		service in any form as tangible personal property or a taxable
11		service in the regular course of business to the extent that
12		such property or taxable service is not first subjected to a
13		use for which it was purchased, and does not include the use of
14		such property or taxable service by its owner for demonstration
15		purposes: Provided that the property or service purchased is
16		deemed to be purchased for the purpose of resale, despite first
17		being used, to the extent to which it is resold as an
18		ingredient of an intentionally produced product or by-product
19		of manufacturing or is otherwise transferred to the purchaser
20		of tangible personal property or taxable service. "Use" does
21		not mean the demonstration use or interim use of tangible
22		personal property or a taxable service by a retailer before he
23		sells that tangible personal property or taxable service. For
24		watercraft or aircraft, if the period of demonstration use or
25		interim use by the retailer exceeds 18 months, the retailer

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1		shall pay on the retailers' original cost price the tax imposed
2		by this Act, and no credit for that tax is permitted if the
3		watercraft or aircraft is subsequently sold by the retailer.
4		"Use" does not mean the physical incorporation of tangible
5		personal property, to the extent not first subjected to a use
6		for which it was purchased, as an ingredient or constituent,
7		into other tangible personal property (a) which is sold in the
8		regular course of business or (b) which the person
9		incorporating such ingredient or constituent therein has
10		undertaken at the time of such purchase to cause to be
11		transported in interstate commerce to destinations outside the
12		State of Illinois: Provided that the property purchased is
13		deemed to be purchased for the purpose of resale, despite first
14		being used, to the extent to which it is resold as an
15		ingredient of an intentionally produced product or by-product
16		of manufacturing.
17		"Watercraft" means a Class 2, Class 3, or Class 4
18		watercraft as defined in Section 3-2 of the Boat Registration
19		and Safety Act, a personal watercraft, or any boat equipped
20		with an inboard motor.
21		"Purchase at retail" means the acquisition of the ownership
22		of or title to tangible personal property or the acquisition of
23		a taxable service through a sale at retail.
24		"Purchaser" means anyone who, through a sale at retail,
25		acquires a taxable service or the ownership of tangible
26		personal property for a valuable consideration.

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1		"Sale at retail" means any transfer of the ownership of or
2		title to tangible personal property to a purchaser or the
3		performance of a taxable service for a purchaser, for the
4		purpose of use, and not for the purpose of resale in any form
5		as tangible personal property or taxable service to the extent
6		not first subjected to a use for which it was purchased, for a
7		valuable consideration: Provided that the property purchased
8		is deemed to be purchased for the purpose of resale, despite
9		first being used, to the extent to which it is resold as an
10		ingredient of an intentionally produced product or by-product
11		of manufacturing. For this purpose, slag produced as an
12		incident to manufacturing pig iron or steel and sold is
13		considered to be an intentionally produced by-product of
14		manufacturing. "Sale at retail" includes any such transfer made
15		for resale unless made in compliance with Section 2c of the
16		Retailers' Occupation Tax Act, as incorporated by reference
17		into Section 12 of this Act. Transactions whereby the
18		possession of the property is transferred but the seller
19		retains the title as security for payment of the selling price
20		are sales.
21		"Sale at retail" shall also be construed to include any
22		Illinois florist's sales transaction in which the purchase
23		order is received in Illinois by a florist and the sale is for
24		use or consumption, but the Illinois florist has a florist in
25		another state deliver the property to the purchaser or the
26		purchaser's donee in such other state.

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1		Nonreusable tangible personal property that is used by
2		persons engaged in the business of operating a restaurant,
3		cafeteria, or drive-in is a sale for resale when it is
4		transferred to customers in the ordinary course of business as
5		part of the sale of food or beverages and is used to deliver,
6		package, or consume food or beverages, regardless of where
7		consumption of the food or beverages occurs. Examples of those
8		items include, but are not limited to nonreusable, paper and
9		plastic cups, plates, baskets, boxes, sleeves, buckets or other
10		containers, utensils, straws, placemats, napkins, doggie bags,
11		and wrapping or packaging materials that are transferred to
12		customers as part of the sale of food or beverages in the
13		ordinary course of business.
14		The purchase, employment and transfer of such tangible
15		personal property as newsprint and ink for the primary purpose
16		of conveying news (with or without other information) is not a
17		purchase, use or sale of tangible personal property.
18		"Selling price" means the consideration for a sale valued
19		in money whether received in money or otherwise, including
20		cash, credits, property other than as hereinafter provided, and
21		services, but not including the value of or credit given for
22		traded-in tangible personal property where the item that is
23		traded-in is of like kind and character as that which is being
24		sold, and shall be determined without any deduction on account
25		of the cost of the property sold, the cost of materials used,
26		labor or service cost or any other expense whatsoever, but does

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1		not include interest or finance charges which appear as
2		separate items on the bill of sale or sales contract nor
3		charges that are added to prices by sellers on account of the
4		seller's tax liability under the "Retailers' Occupation Tax
5		Act", or on account of the seller's duty to collect, from the
6		purchaser, the tax that is imposed by this Act, or, except as
7		otherwise provided with respect to any cigarette tax imposed by
8		a home rule unit, on account of the seller's tax liability
9		under any local occupation tax administered by the Department,
10		or, except as otherwise provided with respect to any cigarette
11		tax imposed by a home rule unit on account of the seller's duty
12		to collect, from the purchasers, the tax that is imposed under
13		any local use tax administered by the Department. Effective
14		December 1, 1985, "selling price" shall include charges that
15		are added to prices by sellers on account of the seller's tax
16		liability under the Cigarette Tax Act, on account of the
17		seller's duty to collect, from the purchaser, the tax imposed
18		under the Cigarette Use Tax Act, and on account of the seller's
19		duty to collect, from the purchaser, any cigarette tax imposed
20		by a home rule unit.
21		Notwithstanding any law to the contrary, for any motor
22		vehicle, as defined in Section 1-146 of the Vehicle Code, that
23		is sold on or after January 1, 2015 for the purpose of leasing
24		the vehicle for a defined period that is longer than one year
25		and (1) is a motor vehicle of the second division that: (A) is
26		a self-contained motor vehicle designed or permanently

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1		converted to provide living quarters for recreational,
2		camping, or travel use, with direct walk through access to the
3		living quarters from the driver's seat; (B) is of the van
4		configuration designed for the transportation of not less than
5		7 nor more than 16 passengers; or (C) has a gross vehicle
6		weight rating of 8,000 pounds or less or (2) is a motor vehicle
7		of the first division, "selling price" or "amount of sale"
8		means the consideration received by the lessor pursuant to the
9		lease contract, including amounts due at lease signing and all
10		monthly or other regular payments charged over the term of the
11		lease. Also included in the selling price is any amount
12		received by the lessor from the lessee for the leased vehicle
13		that is not calculated at the time the lease is executed,
14		including, but not limited to, excess mileage charges and
15		charges for excess wear and tear. For sales that occur in
16		Illinois, with respect to any amount received by the lessor
17		from the lessee for the leased vehicle that is not calculated
18		at the time the lease is executed, the lessor who purchased the
19		motor vehicle does not incur the tax imposed by the Use Tax Act
20		on those amounts, and the retailer who makes the retail sale of
21		the motor vehicle to the lessor is not required to collect the
22		tax imposed by this Act or to pay the tax imposed by the
23		Retailers' Occupation Tax Act on those amounts. However, the
24		lessor who purchased the motor vehicle assumes the liability
25		for reporting and paying the tax on those amounts directly to
26		the Department in the same form (Illinois Retailers' Occupation

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1		Tax, and local retailers' occupation taxes, if applicable) in
2		which the retailer would have reported and paid such tax if the
3		retailer had accounted for the tax to the Department. For
4		amounts received by the lessor from the lessee that are not
5		calculated at the time the lease is executed, the lessor must
6		file the return and pay the tax to the Department by the due
7		date otherwise required by this Act for returns other than
8		transaction returns. If the retailer is entitled under this Act
9		to a discount for collecting and remitting the tax imposed
10		under this Act to the Department with respect to the sale of
11		the motor vehicle to the lessor, then the right to the discount
12		provided in this Act shall be transferred to the lessor with
13		respect to the tax paid by the lessor for any amount received
14		by the lessor from the lessee for the leased vehicle that is
15		not calculated at the time the lease is executed; provided that
16		the discount is only allowed if the return is timely filed and
17		for amounts timely paid. The "selling price" of a motor vehicle
18		that is sold on or after January 1, 2015 for the purpose of
19		leasing for a defined period of longer than one year shall not
20		be reduced by the value of or credit given for traded-in
21		tangible personal property owned by the lessor, nor shall it be
22		reduced by the value of or credit given for traded-in tangible
23		personal property owned by the lessee, regardless of whether
24		the trade-in value thereof is assigned by the lessee to the
25		lessor. In the case of a motor vehicle that is sold for the
26		purpose of leasing for a defined period of longer than one

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1		year, the sale occurs at the time of the delivery of the
2		vehicle, regardless of the due date of any lease payments. A
3		lessor who incurs a Retailers' Occupation Tax liability on the
4		sale of a motor vehicle coming off lease may not take a credit
5		against that liability for the Use Tax the lessor paid upon the
6		purchase of the motor vehicle (or for any tax the lessor paid
7		with respect to any amount received by the lessor from the
8		lessee for the leased vehicle that was not calculated at the
9		time the lease was executed) if the selling price of the motor
10		vehicle at the time of purchase was calculated using the
11		definition of "selling price" as defined in this paragraph.
12		Notwithstanding any other provision of this Act to the
13		contrary, lessors shall file all returns and make all payments
14		required under this paragraph to the Department by electronic
15		means in the manner and form as required by the Department.
16		This paragraph does not apply to leases of motor vehicles for
17		which, at the time the lease is entered into, the term of the
18		lease is not a defined period, including leases with a defined
19		initial period with the option to continue the lease on a
20		month-to-month or other basis beyond the initial defined
21		period.
22		The phrase "like kind and character" shall be liberally
23		construed (including but not limited to any form of motor
24		vehicle for any form of motor vehicle, or any kind of farm or
25		agricultural implement for any other kind of farm or
26		agricultural implement), while not including a kind of item

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1		which, if sold at retail by that retailer, would be exempt from
2		retailers' occupation tax and use tax as an isolated or
3		occasional sale.
4		"Department" means the Department of Revenue.
5		"Person" means any natural individual, firm, partnership,
6		association, joint stock company, joint adventure, public or
7		private corporation, limited liability company, or a receiver,
8		executor, trustee, guardian or other representative appointed
9		by order of any court.
10		"Retailer" means and includes every person engaged in the
11		business of making sales at retail as defined in this Section.
12		A person who holds himself or herself out as being engaged
13		(or who habitually engages) in selling tangible personal
14		property or taxable services at retail is a retailer hereunder
15		with respect to such sales (and not primarily in a nontaxable
16		service occupation) notwithstanding the fact that such person
17		designs and produces such tangible personal property or taxable
18		service on special order for the purchaser and in such a way as
19		to render the property or service of value only to such
20		purchaser, if such tangible personal property or taxable
21		service so produced on special order serves substantially the
22		same function as stock or standard items of tangible personal
23		property or taxable service that are sold at retail.
24		A person whose activities are organized and conducted
25		primarily as a not-for-profit service enterprise, and who
26		engages in selling tangible personal property or taxable

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1		services at retail (whether to the public or merely to members
2		and their guests) is a retailer with respect to such
3		transactions, excepting only a person organized and operated
4		exclusively for charitable, religious or educational purposes
5		either (1), to the extent of sales by such person to its
6		members, students, patients or inmates of tangible personal
7		property to be used primarily for the purposes of such person,
8		or (2), to the extent of sales by such person of tangible
9		personal property or taxable services which are is not sold or
10		offered for sale by persons organized for profit. The selling
11		of school books and school supplies by schools at retail to
12		students is not "primarily for the purposes of" the school
13		which does such selling. This paragraph does not apply to nor
14		subject to taxation occasional dinners, social or similar
15		activities of a person organized and operated exclusively for
16		charitable, religious or educational purposes, whether or not
17		such activities are open to the public.
18		A person who is the recipient of a grant or contract under
19		Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
20		serves meals to participants in the federal Nutrition Program
21		for the Elderly in return for contributions established in
22		amount by the individual participant pursuant to a schedule of
23		suggested fees as provided for in the federal Act is not a
24		retailer under this Act with respect to such transactions.
25		Persons who engage in the business of transferring tangible
26		personal property or taxable services upon the redemption of

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1		trading stamps are retailers hereunder when engaged in such
2		business.
3		The isolated or occasional sale of tangible personal
4		property or taxable services at retail by a person who does not
5		hold himself out as being engaged (or who does not habitually
6		engage) in selling such tangible personal property or taxable
7		services at retail or a sale through a bulk vending machine
8		does not make such person a retailer hereunder. However, any
9		person who is engaged in a business which is not subject to the
10		tax imposed by the "Retailers' Occupation Tax Act" because of
11		involving the sale of or a contract to sell real estate or a
12		construction contract to improve real estate, but who, in the
13		course of conducting such business, transfers tangible
14		personal property to users or consumers in the finished form in
15		which it was purchased, and which does not become real estate,
16		under any provision of a construction contract or real estate
17		sale or real estate sales agreement entered into with some
18		other person arising out of or because of such nontaxable
19		business, is a retailer to the extent of the value of the
20		tangible personal property so transferred. If, in such
21		transaction, a separate charge is made for the tangible
22		personal property so transferred, the value of such property,
23		for the purposes of this Act, is the amount so separately
24		charged, but not less than the cost of such property to the
25		transferor; if no separate charge is made, the value of such
26		property, for the purposes of this Act, is the cost to the

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1		transferor of such tangible personal property.
2		"Retailer maintaining a place of business in this State",
3		or any like term, means and includes any of the following
4		retailers:
5		1. A retailer having or maintaining within this State,
6		directly or by a subsidiary, an office, distribution house,
7		sales house, warehouse or other place of business, or any
8		agent or other representative operating within this State
9		under the authority of the retailer or its subsidiary,
10		irrespective of whether such place of business or agent or
11		other representative is located here permanently or
12		temporarily, or whether such retailer or subsidiary is
13		licensed to do business in this State. However, the
14		ownership of property that is located at the premises of a
15		printer with which the retailer has contracted for printing
16		and that consists of the final printed product, property
17		that becomes a part of the final printed product, or copy
18		from which the printed product is produced shall not result
19		in the retailer being deemed to have or maintain an office,
20		distribution house, sales house, warehouse, or other place
21		of business within this State.
22		1.1. A retailer having a contract with a person located
23		in this State under which the person, for a commission or
24		other consideration based upon the sale of tangible
25		personal property or taxable services by the retailer,
26		directly or indirectly refers potential customers to the

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1		retailer by providing to the potential customers a
2		promotional code or other mechanism that allows the
3		retailer to track purchases referred by such persons.
4		Examples of mechanisms that allow the retailer to track
5		purchases referred by such persons include but are not
6		limited to the use of a link on the person's Internet
7		website, promotional codes distributed through the
8		person's hand-delivered or mailed material, and
9		promotional codes distributed by the person through radio
10		or other broadcast media. The provisions of this paragraph
11		1.1 shall apply only if the cumulative gross receipts from
12		sales of tangible personal property or taxable service by
13		the retailer to customers who are referred to the retailer
14		by all persons in this State under such contracts exceed
15		$10,000 during the preceding 4 quarterly periods ending on
16		the last day of March, June, September, and December. A
17		retailer meeting the requirements of this paragraph 1.1
18		shall be presumed to be maintaining a place of business in
19		this State but may rebut this presumption by submitting
20		proof that the referrals or other activities pursued within
21		this State by such persons were not sufficient to meet the
22		nexus standards of the United States Constitution during
23		the preceding 4 quarterly periods.
24		1.2. Beginning July 1, 2011, a retailer having a
25		contract with a person located in this State under which:
26		A. the retailer sells the same or substantially

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1		similar line of products or taxable services as the
2		person located in this State and does so using an
3		identical or substantially similar name, trade name,
4		or trademark as the person located in this State; and
5		B. the retailer provides a commission or other
6		consideration to the person located in this State based
7		upon the sale of tangible personal property or taxable
8		service by the retailer.
9		The provisions of this paragraph 1.2 shall apply only if
10		the cumulative gross receipts from sales of tangible
11		personal property or taxable service by the retailer to
12		customers in this State under all such contracts exceed
13		$10,000 during the preceding 4 quarterly periods ending on
14		the last day of March, June, September, and December.
15		2. A retailer soliciting orders for tangible personal
16		property or taxable service by means of a telecommunication
17		or television shopping system (which utilizes toll free
18		numbers) which is intended by the retailer to be broadcast
19		by cable television or other means of broadcasting, to
20		consumers located in this State.
21		3. A retailer, pursuant to a contract with a
22		broadcaster or publisher located in this State, soliciting
23		orders for tangible personal property or taxable service by
24		means of advertising which is disseminated primarily to
25		consumers located in this State and only secondarily to
26		bordering jurisdictions.

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1		4. A retailer soliciting orders for tangible personal
2		property or taxable service by mail if the solicitations
3		are substantial and recurring and if the retailer benefits
4		from any banking, financing, debt collection,
5		telecommunication, or marketing activities occurring in
6		this State or benefits from the location in this State of
7		authorized installation, servicing, or repair facilities.
8		5. A retailer that is owned or controlled by the same
9		interests that own or control any retailer engaging in
10		business in the same or similar line of business in this
11		State.
12		6. A retailer having a franchisee or licensee operating
13		under its trade name if the franchisee or licensee is
14		required to collect the tax under this Section.
15		7. A retailer, pursuant to a contract with a cable
16		television operator located in this State, soliciting
17		orders for tangible personal property or taxable service by
18		means of advertising which is transmitted or distributed
19		over a cable television system in this State.
20		8. A retailer engaging in activities in Illinois, which
21		activities in the state in which the retail business
22		engaging in such activities is located would constitute
23		maintaining a place of business in that state.
24		"Bulk vending machine" means a vending machine, containing
25		unsorted confections, nuts, toys, or other items designed
26		primarily to be used or played with by children which, when a

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1		coin or coins of a denomination not larger than $0.50 are
2		inserted, are dispensed in equal portions, at random and
3		without selection by the customer.
4		(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14;
5		98-1089, eff. 1-1-15; 99-78, eff. 7-20-15.)
6		(35 ILCS 105/2a-2 new)
7		Sec. 2a-2. Taxable services. Beginning January 1, 2018,
8		"taxable service" means any of the following services:
9		(1) Providing space for storage.
10		(A) "Storage" means the retaining or keeping of
11		tangible personal property in this State for any
12		purpose. For purposes of this Section, tangible
13		personal property, does not include "grain" as defined
14		in the Public Grain Warehouse and Warehouse Receipts
15		Act.
16		(B) "Space for storage" means (i) secure areas,
17		such as rooms, units, compartments or containers,
18		whether accessible from outside or from within a
19		building, that are designated for the use of a
20		purchaser, where the purchaser can store and retrieve
21		property, including self-storage units, mini-storage
22		units, and areas by any other name; (ii) any parking
23		lot, ramp, or parking garage for a vehicle, whether the
24		vehicle is parked by the operator of the vehicle or by
25		an attendant; (iii) any aircraft parking area, ramp, or

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1		hanger; (iv) any boat slip, dock, or dry dock; (v) any
2		recreational vehicle parking area or garage; and (vi)
3		any other areas for storage or parking of tangible
4		personal property.
5		(C) "Self-storage or mini-storage" includes
6		storage lockers or storage units in apartment
7		complexes (if the locker or unit is utilized at the
8		tenant's option and includes payment of a fee in
9		addition to apartment rental), and in amusement parks,
10		water parks, recreational facilities, and other
11		locations where lockers are rented for self-storage.
12		(2) Laundry, drycleaning, cloth pressing, dyeing, or
13		linen service, except when the service is performed by the
14		purchaser through the use of coin-operated, self-service
15		machines.
16		(3) Private detective, private alarm, and private
17		security service for which the provider of the service is
18		required to be licensed pursuant to the Private Detective,
19		Private Alarm, Private Security, Fingerprint Vendor, and
20		Locksmith Act of 2004, or would be required to be so
21		licensed in performing those services in this State.
22		(4) Structural pest control services. "Structural pest
23		control services" means use of any device or the
24		application of any substance to prevent, repel, mitigate,
25		curb, control, or eradicate any structural pest in, on,
26		under, or around a structure, or within a part of, or

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1		materials used in building, a structure; the use of any
2		pesticide, including insecticides, fungicides and other
3		wood treatment products, attractants, repellents,
4		rodenticides, fumigants, or mechanical devices for
5		preventing, controlling, eradicating, identifying,
6		mitigating, diminishing, or curbing insects, vermin, rats,
7		mice, or other pests in, on, under, or around a structure,
8		or within a part of, or materials used in building, a
9		structure; vault fumigation and fumigation of box cars,
10		trucks, ships, airplanes, docks, warehouses, and common
11		carriers or soliciting to perform any of the foregoing
12		functions.
13		(5) Tattooing and body piercing.
14		(35 ILCS 105/3) (from Ch. 120, par. 439.3)
15		Sec. 3. Tax imposed. A tax is imposed upon the privilege of
16		using in this State a taxable service or tangible personal
17		property purchased at retail from a retailer, including
18		computer software, and including photographs, negatives, and
19		positives that are the product of photoprocessing, but not
20		including products of photoprocessing produced for use in
21		motion pictures for commercial exhibition. Beginning January
22		1, 2001, prepaid telephone calling arrangements shall be
23		considered tangible personal property subject to the tax
24		imposed under this Act regardless of the form in which those
25		arrangements may be embodied, transmitted, or fixed by any

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1		method now known or hereafter developed. Purchases of (1)
2		electricity delivered to customers by wire; (2) natural or
3		artificial gas that is delivered to customers through pipes,
4		pipelines, or mains; and (3) water that is delivered to
5		customers through pipes, pipelines, or mains are not subject to
6		tax under this Act. The provisions of this amendatory Act of
7		the 98th General Assembly are declaratory of existing law as to
8		the meaning and scope of this Act.
9		(Source: P.A. 98-583, eff. 1-1-14.)
10		(35 ILCS 105/3-5)
11		Sec. 3-5. Exemptions. Use of the following tangible
12		personal property or taxable service is exempt from the tax
13		imposed by this Act:
14		(1) Personal property or taxable services purchased from a
15		corporation, society, association, foundation, institution, or
16		organization, other than a limited liability company, that is
17		organized and operated as a not-for-profit service enterprise
18		for the benefit of persons 65 years of age or older if the
19		personal property or taxable service was not purchased by the
20		enterprise for the purpose of resale by the enterprise.
21		(2) Personal property or taxable service purchased by a
22		not-for-profit Illinois county fair association for use in
23		conducting, operating, or promoting the county fair.
24		(3) Personal property or taxable services purchased by a
25		not-for-profit arts or cultural organization that establishes,

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1		by proof required by the Department by rule, that it has
2		received an exemption under Section 501(c)(3) of the Internal
3		Revenue Code and that is organized and operated primarily for
4		the presentation or support of arts or cultural programming,
5		activities, or services. These organizations include, but are
6		not limited to, music and dramatic arts organizations such as
7		symphony orchestras and theatrical groups, arts and cultural
8		service organizations, local arts councils, visual arts
9		organizations, and media arts organizations. On and after the
10		effective date of this amendatory Act of the 92nd General
11		Assembly, however, an entity otherwise eligible for this
12		exemption shall not make tax-free purchases unless it has an
13		active identification number issued by the Department.
14		(4) Personal property or taxable services purchased by a
15		governmental body, by a corporation, society, association,
16		foundation, or institution organized and operated exclusively
17		for charitable, religious, or educational purposes, or by a
18		not-for-profit corporation, society, association, foundation,
19		institution, or organization that has no compensated officers
20		or employees and that is organized and operated primarily for
21		the recreation of persons 55 years of age or older. A limited
22		liability company may qualify for the exemption under this
23		paragraph only if the limited liability company is organized
24		and operated exclusively for educational purposes. On and after
25		July 1, 1987, however, no entity otherwise eligible for this
26		exemption shall make tax-free purchases unless it has an active

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1		exemption identification number issued by the Department.
2		(5) Until July 1, 2003, a passenger car that is a
3		replacement vehicle to the extent that the purchase price of
4		the car is subject to the Replacement Vehicle Tax.
5		(6) Until July 1, 2003 and beginning again on September 1,
6		2004 through August 30, 2014, graphic arts machinery and
7		equipment, including repair and replacement parts, both new and
8		used, and including that manufactured on special order,
9		certified by the purchaser to be used primarily for graphic
10		arts production, and including machinery and equipment
11		purchased for lease. Equipment includes chemicals or chemicals
12		acting as catalysts but only if the chemicals or chemicals
13		acting as catalysts effect a direct and immediate change upon a
14		graphic arts product. Beginning on July 1, 2017, graphic arts
15		machinery and equipment is included in the manufacturing and
16		assembling machinery and equipment exemption under paragraph
17		(18).
18		(7) Farm chemicals.
19		(8) Legal tender, currency, medallions, or gold or silver
20		coinage issued by the State of Illinois, the government of the
21		United States of America, or the government of any foreign
22		country, and bullion.
23		(9) Personal property purchased from a teacher-sponsored
24		student organization affiliated with an elementary or
25		secondary school located in Illinois.
26		(10) A motor vehicle that is used for automobile renting,

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1		as defined in the Automobile Renting Occupation and Use Tax
2		Act.
3		(11) Farm machinery and equipment, both new and used,
4		including that manufactured on special order, certified by the
5		purchaser to be used primarily for production agriculture or
6		State or federal agricultural programs, including individual
7		replacement parts for the machinery and equipment, including
8		machinery and equipment purchased for lease, and including
9		implements of husbandry defined in Section 1-130 of the
10		Illinois Vehicle Code, farm machinery and agricultural
11		chemical and fertilizer spreaders, and nurse wagons required to
12		be registered under Section 3-809 of the Illinois Vehicle Code,
13		but excluding other motor vehicles required to be registered
14		under the Illinois Vehicle Code. Horticultural polyhouses or
15		hoop houses used for propagating, growing, or overwintering
16		plants shall be considered farm machinery and equipment under
17		this item (11). Agricultural chemical tender tanks and dry
18		boxes shall include units sold separately from a motor vehicle
19		required to be licensed and units sold mounted on a motor
20		vehicle required to be licensed if the selling price of the
21		tender is separately stated.
22		Farm machinery and equipment shall include precision
23		farming equipment that is installed or purchased to be
24		installed on farm machinery and equipment including, but not
25		limited to, tractors, harvesters, sprayers, planters, seeders,
26		or spreaders. Precision farming equipment includes, but is not

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1		limited to, soil testing sensors, computers, monitors,
2		software, global positioning and mapping systems, and other
3		such equipment.
4		Farm machinery and equipment also includes computers,
5		sensors, software, and related equipment used primarily in the
6		computer-assisted operation of production agriculture
7		facilities, equipment, and activities such as, but not limited
8		to, the collection, monitoring, and correlation of animal and
9		crop data for the purpose of formulating animal diets and
10		agricultural chemicals. This item (11) is exempt from the
11		provisions of Section 3-90.
12		(12) Until June 30, 2013, fuel and petroleum products sold
13		to or used by an air common carrier, certified by the carrier
14		to be used for consumption, shipment, or storage in the conduct
15		of its business as an air common carrier, for a flight destined
16		for or returning from a location or locations outside the
17		United States without regard to previous or subsequent domestic
18		stopovers.
19		Beginning July 1, 2013, fuel and petroleum products sold to
20		or used by an air carrier, certified by the carrier to be used
21		for consumption, shipment, or storage in the conduct of its
22		business as an air common carrier, for a flight that (i) is
23		engaged in foreign trade or is engaged in trade between the
24		United States and any of its possessions and (ii) transports at
25		least one individual or package for hire from the city of
26		origination to the city of final destination on the same

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1		aircraft, without regard to a change in the flight number of
2		that aircraft.
3		(13) Proceeds of mandatory service charges separately
4		stated on customers' bills for the purchase and consumption of
5		food and beverages or taxable services purchased at retail from
6		a retailer, to the extent that the proceeds of the service
7		charge are in fact turned over as tips or as a substitute for
8		tips to the employees who participate directly in preparing,
9		serving, hosting or cleaning up the food or beverage function
10		with respect to which the service charge is imposed.
11		(14) Until July 1, 2003, oil field exploration, drilling,
12		and production equipment, including (i) rigs and parts of rigs,
13		rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
14		tubular goods, including casing and drill strings, (iii) pumps
15		and pump-jack units, (iv) storage tanks and flow lines, (v) any
16		individual replacement part for oil field exploration,
17		drilling, and production equipment, and (vi) machinery and
18		equipment purchased for lease; but excluding motor vehicles
19		required to be registered under the Illinois Vehicle Code.
20		(15) Photoprocessing machinery and equipment, including
21		repair and replacement parts, both new and used, including that
22		manufactured on special order, certified by the purchaser to be
23		used primarily for photoprocessing, and including
24		photoprocessing machinery and equipment purchased for lease.
25		(16) Coal and aggregate exploration, mining, off-highway
26		hauling, processing, maintenance, and reclamation equipment,

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1		including replacement parts and equipment, and including
2		equipment purchased for lease, but excluding motor vehicles
3		required to be registered under the Illinois Vehicle Code. The
4		changes made to this Section by Public Act 97-767 apply on and
5		after July 1, 2003, but no claim for credit or refund is
6		allowed on or after August 16, 2013 (the effective date of
7		Public Act 98-456) for such taxes paid during the period
8		beginning July 1, 2003 and ending on August 16, 2013 (the
9		effective date of Public Act 98-456).
10		(17) Until July 1, 2003, distillation machinery and
11		equipment, sold as a unit or kit, assembled or installed by the
12		retailer, certified by the user to be used only for the
13		production of ethyl alcohol that will be used for consumption
14		as motor fuel or as a component of motor fuel for the personal
15		use of the user, and not subject to sale or resale.
16		(18) Manufacturing and assembling machinery and equipment
17		used primarily in the process of manufacturing or assembling
18		tangible personal property for wholesale or retail sale or
19		lease, whether that sale or lease is made directly by the
20		manufacturer or by some other person, whether the materials
21		used in the process are owned by the manufacturer or some other
22		person, or whether that sale or lease is made apart from or as
23		an incident to the seller's engaging in the service occupation
24		of producing machines, tools, dies, jigs, patterns, gauges, or
25		other similar items of no commercial value on special order for
26		a particular purchaser. The exemption provided by this

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1		paragraph (18) does not include machinery and equipment used in
2		(i) the generation of electricity for wholesale or retail sale;
3		(ii) the generation or treatment of natural or artificial gas
4		for wholesale or retail sale that is delivered to customers
5		through pipes, pipelines, or mains; or (iii) the treatment of
6		water for wholesale or retail sale that is delivered to
7		customers through pipes, pipelines, or mains. The provisions of
8		Public Act 98-583 are declaratory of existing law as to the
9		meaning and scope of this exemption. Beginning on July 1, 2017,
10		the exemption provided by this paragraph (18) includes, but is
11		not limited to, graphic arts machinery and equipment, as
12		defined in paragraph (6) of this Section. Beginning on July 1,
13		2017, the exemption provided by this paragraph (18) includes,
14		but is not limited to, production related tangible personal
15		property, as defined in Section 3-50 of this Act. The exemption
16		provided by this paragraph (18) is exempt from the provisions
17		of Section 3-90.
18		(19) Personal property delivered to a purchaser or
19		purchaser's donee inside Illinois when the purchase order for
20		that personal property was received by a florist located
21		outside Illinois who has a florist located inside Illinois
22		deliver the personal property.
23		(20) Semen used for artificial insemination of livestock
24		for direct agricultural production.
25		(21) Horses, or interests in horses, registered with and
26		meeting the requirements of any of the Arabian Horse Club

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1		Registry of America, Appaloosa Horse Club, American Quarter
2		Horse Association, United States Trotting Association, or
3		Jockey Club, as appropriate, used for purposes of breeding or
4		racing for prizes. This item (21) is exempt from the provisions
5		of Section 3-90, and the exemption provided for under this item
6		(21) applies for all periods beginning May 30, 1995, but no
7		claim for credit or refund is allowed on or after January 1,
8		2008 for such taxes paid during the period beginning May 30,
9		2000 and ending on January 1, 2008.
10		(22) Computers and communications equipment utilized for
11		any hospital purpose and equipment used in the diagnosis,
12		analysis, or treatment of hospital patients purchased by a
13		lessor who leases the equipment, under a lease of one year or
14		longer executed or in effect at the time the lessor would
15		otherwise be subject to the tax imposed by this Act, to a
16		hospital that has been issued an active tax exemption
17		identification number by the Department under Section 1g of the
18		Retailers' Occupation Tax Act. If the equipment is leased in a
19		manner that does not qualify for this exemption or is used in
20		any other non-exempt manner, the lessor shall be liable for the
21		tax imposed under this Act or the Service Use Tax Act, as the
22		case may be, based on the fair market value of the property at
23		the time the non-qualifying use occurs. No lessor shall collect
24		or attempt to collect an amount (however designated) that
25		purports to reimburse that lessor for the tax imposed by this
26		Act or the Service Use Tax Act, as the case may be, if the tax

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1		has not been paid by the lessor. If a lessor improperly
2		collects any such amount from the lessee, the lessee shall have
3		a legal right to claim a refund of that amount from the lessor.
4		If, however, that amount is not refunded to the lessee for any
5		reason, the lessor is liable to pay that amount to the
6		Department.
7		(23) Personal property purchased by a lessor who leases the
8		property, under a lease of one year or longer executed or in
9		effect at the time the lessor would otherwise be subject to the
10		tax imposed by this Act, to a governmental body that has been
11		issued an active sales tax exemption identification number by
12		the Department under Section 1g of the Retailers' Occupation
13		Tax Act. If the property is leased in a manner that does not
14		qualify for this exemption or used in any other non-exempt
15		manner, the lessor shall be liable for the tax imposed under
16		this Act or the Service Use Tax Act, as the case may be, based
17		on the fair market value of the property at the time the
18		non-qualifying use occurs. No lessor shall collect or attempt
19		to collect an amount (however designated) that purports to
20		reimburse that lessor for the tax imposed by this Act or the
21		Service Use Tax Act, as the case may be, if the tax has not been
22		paid by the lessor. If a lessor improperly collects any such
23		amount from the lessee, the lessee shall have a legal right to
24		claim a refund of that amount from the lessor. If, however,
25		that amount is not refunded to the lessee for any reason, the
26		lessor is liable to pay that amount to the Department.

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1		(24) Beginning with taxable years ending on or after
2		December 31, 1995 and ending with taxable years ending on or
3		before December 31, 2004, personal property that is donated for
4		disaster relief to be used in a State or federally declared
5		disaster area in Illinois or bordering Illinois by a
6		manufacturer or retailer that is registered in this State to a
7		corporation, society, association, foundation, or institution
8		that has been issued a sales tax exemption identification
9		number by the Department that assists victims of the disaster
10		who reside within the declared disaster area.
11		(25) Beginning with taxable years ending on or after
12		December 31, 1995 and ending with taxable years ending on or
13		before December 31, 2004, personal property that is used in the
14		performance of infrastructure repairs in this State, including
15		but not limited to municipal roads and streets, access roads,
16		bridges, sidewalks, waste disposal systems, water and sewer
17		line extensions, water distribution and purification
18		facilities, storm water drainage and retention facilities, and
19		sewage treatment facilities, resulting from a State or
20		federally declared disaster in Illinois or bordering Illinois
21		when such repairs are initiated on facilities located in the
22		declared disaster area within 6 months after the disaster.
23		(26) Beginning July 1, 1999, game or game birds purchased
24		at a "game breeding and hunting preserve area" as that term is
25		used in the Wildlife Code. This paragraph is exempt from the
26		provisions of Section 3-90.

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1		(27) A motor vehicle, as that term is defined in Section
2		1-146 of the Illinois Vehicle Code, that is donated to a
3		corporation, limited liability company, society, association,
4		foundation, or institution that is determined by the Department
5		to be organized and operated exclusively for educational
6		purposes. For purposes of this exemption, "a corporation,
7		limited liability company, society, association, foundation,
8		or institution organized and operated exclusively for
9		educational purposes" means all tax-supported public schools,
10		private schools that offer systematic instruction in useful
11		branches of learning by methods common to public schools and
12		that compare favorably in their scope and intensity with the
13		course of study presented in tax-supported schools, and
14		vocational or technical schools or institutes organized and
15		operated exclusively to provide a course of study of not less
16		than 6 weeks duration and designed to prepare individuals to
17		follow a trade or to pursue a manual, technical, mechanical,
18		industrial, business, or commercial occupation.
19		(28) Beginning January 1, 2000, personal property,
20		including food, purchased through fundraising events for the
21		benefit of a public or private elementary or secondary school,
22		a group of those schools, or one or more school districts if
23		the events are sponsored by an entity recognized by the school
24		district that consists primarily of volunteers and includes
25		parents and teachers of the school children. This paragraph
26		does not apply to fundraising events (i) for the benefit of

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1		private home instruction or (ii) for which the fundraising
2		entity purchases the personal property sold at the events from
3		another individual or entity that sold the property for the
4		purpose of resale by the fundraising entity and that profits
5		from the sale to the fundraising entity. This paragraph is
6		exempt from the provisions of Section 3-90.
7		(29) Beginning January 1, 2000 and through December 31,
8		2001, new or used automatic vending machines that prepare and
9		serve hot food and beverages, including coffee, soup, and other
10		items, and replacement parts for these machines. Beginning
11		January 1, 2002 and through June 30, 2003, machines and parts
12		for machines used in commercial, coin-operated amusement and
13		vending business if a use or occupation tax is paid on the
14		gross receipts derived from the use of the commercial,
15		coin-operated amusement and vending machines. This paragraph
16		is exempt from the provisions of Section 3-90.
17		(30) Beginning January 1, 2001 and through June 30, 2016,
18		food for human consumption that is to be consumed off the
19		premises where it is sold (other than alcoholic beverages, soft
20		drinks, and food that has been prepared for immediate
21		consumption) and prescription and nonprescription medicines,
22		drugs, medical appliances, and insulin, urine testing
23		materials, syringes, and needles used by diabetics, for human
24		use, when purchased for use by a person receiving medical
25		assistance under Article V of the Illinois Public Aid Code who
26		resides in a licensed long-term care facility, as defined in

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1		the Nursing Home Care Act, or in a licensed facility as defined
2		in the ID/DD Community Care Act, the MC/DD Act, or the
3		Specialized Mental Health Rehabilitation Act of 2013.
4		(31) Beginning on the effective date of this amendatory Act
5		of the 92nd General Assembly, computers and communications
6		equipment utilized for any hospital purpose and equipment used
7		in the diagnosis, analysis, or treatment of hospital patients
8		purchased by a lessor who leases the equipment, under a lease
9		of one year or longer executed or in effect at the time the
10		lessor would otherwise be subject to the tax imposed by this
11		Act, to a hospital that has been issued an active tax exemption
12		identification number by the Department under Section 1g of the
13		Retailers' Occupation Tax Act. If the equipment is leased in a
14		manner that does not qualify for this exemption or is used in
15		any other nonexempt manner, the lessor shall be liable for the
16		tax imposed under this Act or the Service Use Tax Act, as the
17		case may be, based on the fair market value of the property at
18		the time the nonqualifying use occurs. No lessor shall collect
19		or attempt to collect an amount (however designated) that
20		purports to reimburse that lessor for the tax imposed by this
21		Act or the Service Use Tax Act, as the case may be, if the tax
22		has not been paid by the lessor. If a lessor improperly
23		collects any such amount from the lessee, the lessee shall have
24		a legal right to claim a refund of that amount from the lessor.
25		If, however, that amount is not refunded to the lessee for any
26		reason, the lessor is liable to pay that amount to the

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1		Department. This paragraph is exempt from the provisions of
2		Section 3-90.
3		(32) Beginning on the effective date of this amendatory Act
4		of the 92nd General Assembly, personal property purchased by a
5		lessor who leases the property, under a lease of one year or
6		longer executed or in effect at the time the lessor would
7		otherwise be subject to the tax imposed by this Act, to a
8		governmental body that has been issued an active sales tax
9		exemption identification number by the Department under
10		Section 1g of the Retailers' Occupation Tax Act. If the
11		property is leased in a manner that does not qualify for this
12		exemption or used in any other nonexempt manner, the lessor
13		shall be liable for the tax imposed under this Act or the
14		Service Use Tax Act, as the case may be, based on the fair
15		market value of the property at the time the nonqualifying use
16		occurs. No lessor shall collect or attempt to collect an amount
17		(however designated) that purports to reimburse that lessor for
18		the tax imposed by this Act or the Service Use Tax Act, as the
19		case may be, if the tax has not been paid by the lessor. If a
20		lessor improperly collects any such amount from the lessee, the
21		lessee shall have a legal right to claim a refund of that
22		amount from the lessor. If, however, that amount is not
23		refunded to the lessee for any reason, the lessor is liable to
24		pay that amount to the Department. This paragraph is exempt
25		from the provisions of Section 3-90.
26		(33) On and after July 1, 2003 and through June 30, 2004,

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1		the use in this State of motor vehicles of the second division
2		with a gross vehicle weight in excess of 8,000 pounds and that
3		are subject to the commercial distribution fee imposed under
4		Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
5		1, 2004 and through June 30, 2005, the use in this State of
6		motor vehicles of the second division: (i) with a gross vehicle
7		weight rating in excess of 8,000 pounds; (ii) that are subject
8		to the commercial distribution fee imposed under Section
9		3-815.1 of the Illinois Vehicle Code; and (iii) that are
10		primarily used for commercial purposes. Through June 30, 2005,
11		this exemption applies to repair and replacement parts added
12		after the initial purchase of such a motor vehicle if that
13		motor vehicle is used in a manner that would qualify for the
14		rolling stock exemption otherwise provided for in this Act. For
15		purposes of this paragraph, the term "used for commercial
16		purposes" means the transportation of persons or property in
17		furtherance of any commercial or industrial enterprise,
18		whether for-hire or not.
19		(34) Beginning January 1, 2008, tangible personal property
20		used in the construction or maintenance of a community water
21		supply, as defined under Section 3.145 of the Environmental
22		Protection Act, that is operated by a not-for-profit
23		corporation that holds a valid water supply permit issued under
24		Title IV of the Environmental Protection Act. This paragraph is
25		exempt from the provisions of Section 3-90.
26		(35) Beginning January 1, 2010, materials, parts,

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1		equipment, components, and furnishings incorporated into or
2		upon an aircraft as part of the modification, refurbishment,
3		completion, replacement, repair, or maintenance of the
4		aircraft. This exemption includes consumable supplies used in
5		the modification, refurbishment, completion, replacement,
6		repair, and maintenance of aircraft, but excludes any
7		materials, parts, equipment, components, and consumable
8		supplies used in the modification, replacement, repair, and
9		maintenance of aircraft engines or power plants, whether such
10		engines or power plants are installed or uninstalled upon any
11		such aircraft. "Consumable supplies" include, but are not
12		limited to, adhesive, tape, sandpaper, general purpose
13		lubricants, cleaning solution, latex gloves, and protective
14		films. This exemption applies only to the use of qualifying
15		tangible personal property by persons who modify, refurbish,
16		complete, repair, replace, or maintain aircraft and who (i)
17		hold an Air Agency Certificate and are empowered to operate an
18		approved repair station by the Federal Aviation
19		Administration, (ii) have a Class IV Rating, and (iii) conduct
20		operations in accordance with Part 145 of the Federal Aviation
21		Regulations. The exemption does not include aircraft operated
22		by a commercial air carrier providing scheduled passenger air
23		service pursuant to authority issued under Part 121 or Part 129
24		of the Federal Aviation Regulations. The changes made to this
25		paragraph (35) by Public Act 98-534 are declarative of existing
26		law.

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1		(36) Tangible personal property purchased by a
2		public-facilities corporation, as described in Section
3		11-65-10 of the Illinois Municipal Code, for purposes of
4		constructing or furnishing a municipal convention hall, but
5		only if the legal title to the municipal convention hall is
6		transferred to the municipality without any further
7		consideration by or on behalf of the municipality at the time
8		of the completion of the municipal convention hall or upon the
9		retirement or redemption of any bonds or other debt instruments
10		issued by the public-facilities corporation in connection with
11		the development of the municipal convention hall. This
12		exemption includes existing public-facilities corporations as
13		provided in Section 11-65-25 of the Illinois Municipal Code.
14		This paragraph is exempt from the provisions of Section 3-90.
15		(37) Beginning January 1, 2017, menstrual pads, tampons,
16		and menstrual cups.
17		(38) Beginning January 1, 2018, taxable services performed
18		on or to tangible personal property the sale of which is exempt
19		from taxation under this Act. This paragraph is exempt from the
20		provisions of Section 2-70.
21		(39) Beginning January 1, 2018, taxable services performed
22		in a transaction that would be exempt from taxation under this
23		Act if it involved solely the sale of tangible personal
24		property. Such exemption could be due to the nature of the
25		seller or of the service provider, the purchaser or service
26		recipient, or other features of the transaction, including but

SB0009 Engrossed - 247 - LRB100 06347 HLH 16385 b
1		not limited to the location or sale-for-resale nature of the
2		transaction. Any such exemption applies to transactions
3		involving solely the sale of tangible personal property, solely
4		the performance of taxable service, or some combination
5		thereof. This paragraph is exempt from the provisions of
6		Section 2-70.
7		(40) Beginning January 1, 2018, taxable services performed
8		for or provided to businesses making purchases of service for
9		the benefit of or in furtherance of the business. This
10		paragraph is exempt from the provisions of Section 2-70.
11		(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
12		98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
13		1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
14		7-29-15; 99-855, eff. 8-19-16.)
15		(35 ILCS 105/3-10)
16		Sec. 3-10. Rate of tax. Unless otherwise provided in this
17		Section, the tax imposed by this Act is at the rate of 6.25% of
18		either the selling price or the fair market value, if any, of
19		the tangible personal property. Beginning on July 1, 2017, the
20		tax is also imposed at the rate of 6.25% of either the selling
21		price or the fair market value, if any, of taxable services. In
22		all cases where property or service functionally used or
23		consumed is the same as the property or service that was
24		purchased at retail, then the tax is imposed on the selling
25		price of the property or taxable service. In all cases where

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1		property functionally used or consumed is a by-product or waste
2		product that has been refined, manufactured, or produced from
3		property purchased at retail, then the tax is imposed on the
4		lower of the fair market value, if any, of the specific
5		property so used in this State or on the selling price of the
6		property purchased at retail. For purposes of this Section
7		"fair market value" means the price at which property or
8		service would change hands between a willing buyer and a
9		willing seller, neither being under any compulsion to buy or
10		sell and both having reasonable knowledge of the relevant
11		facts. The fair market value shall be established by Illinois
12		sales by the taxpayer of the same property or service as that
13		functionally used or consumed, or if there are no such sales by
14		the taxpayer, then comparable sales or purchases of property or
15		service of like kind and character in Illinois.
16		Beginning on July 1, 2000 and through December 31, 2000,
17		with respect to motor fuel, as defined in Section 1.1 of the
18		Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
19		the Use Tax Act, the tax is imposed at the rate of 1.25%.
20		Beginning on August 6, 2010 through August 15, 2010, with
21		respect to sales tax holiday items as defined in Section 3-6 of
22		this Act, the tax is imposed at the rate of 1.25%.
23		With respect to gasohol, the tax imposed by this Act
24		applies to (i) 70% of the proceeds of sales made on or after
25		January 1, 1990, and before July 1, 2003, (ii) 80% of the
26		proceeds of sales made on or after July 1, 2003 and on or

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1		before December 31, 2018, and (iii) 100% of the proceeds of
2		sales made thereafter. If, at any time, however, the tax under
3		this Act on sales of gasohol is imposed at the rate of 1.25%,
4		then the tax imposed by this Act applies to 100% of the
5		proceeds of sales of gasohol made during that time.
6		With respect to majority blended ethanol fuel, the tax
7		imposed by this Act does not apply to the proceeds of sales
8		made on or after July 1, 2003 and on or before December 31,
9		2018 but applies to 100% of the proceeds of sales made
10		thereafter.
11		With respect to biodiesel blends with no less than 1% and
12		no more than 10% biodiesel, the tax imposed by this Act applies
13		to (i) 80% of the proceeds of sales made on or after July 1,
14		2003 and on or before December 31, 2018 and (ii) 100% of the
15		proceeds of sales made thereafter. If, at any time, however,
16		the tax under this Act on sales of biodiesel blends with no
17		less than 1% and no more than 10% biodiesel is imposed at the
18		rate of 1.25%, then the tax imposed by this Act applies to 100%
19		of the proceeds of sales of biodiesel blends with no less than
20		1% and no more than 10% biodiesel made during that time.
21		With respect to 100% biodiesel and biodiesel blends with
22		more than 10% but no more than 99% biodiesel, the tax imposed
23		by this Act does not apply to the proceeds of sales made on or
24		after July 1, 2003 and on or before December 31, 2018 but
25		applies to 100% of the proceeds of sales made thereafter.
26		With respect to food for human consumption that is to be

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1		consumed off the premises where it is sold (other than
2		alcoholic beverages, soft drinks, and food that has been
3		prepared for immediate consumption) and prescription and
4		nonprescription medicines, drugs, medical appliances, products
5		classified as Class III medical devices by the United States
6		Food and Drug Administration that are used for cancer treatment
7		pursuant to a prescription, as well as any accessories and
8		components related to those devices, modifications to a motor
9		vehicle for the purpose of rendering it usable by a person with
10		a disability, and insulin, urine testing materials, syringes,
11		and needles used by diabetics, for human use, the tax is
12		imposed at the rate of 1%. For the purposes of this Section,
13		until September 1, 2009: the term "soft drinks" means any
14		complete, finished, ready-to-use, non-alcoholic drink, whether
15		carbonated or not, including but not limited to soda water,
16		cola, fruit juice, vegetable juice, carbonated water, and all
17		other preparations commonly known as soft drinks of whatever
18		kind or description that are contained in any closed or sealed
19		bottle, can, carton, or container, regardless of size; but
20		"soft drinks" does not include coffee, tea, non-carbonated
21		water, infant formula, milk or milk products as defined in the
22		Grade A Pasteurized Milk and Milk Products Act, or drinks
23		containing 50% or more natural fruit or vegetable juice.
24		Notwithstanding any other provisions of this Act,
25		beginning September 1, 2009, "soft drinks" means non-alcoholic
26		beverages that contain natural or artificial sweeteners. "Soft

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1		drinks" do not include beverages that contain milk or milk
2		products, soy, rice or similar milk substitutes, or greater
3		than 50% of vegetable or fruit juice by volume.
4		Until August 1, 2009, and notwithstanding any other
5		provisions of this Act, "food for human consumption that is to
6		be consumed off the premises where it is sold" includes all
7		food sold through a vending machine, except soft drinks and
8		food products that are dispensed hot from a vending machine,
9		regardless of the location of the vending machine. Beginning
10		August 1, 2009, and notwithstanding any other provisions of
11		this Act, "food for human consumption that is to be consumed
12		off the premises where it is sold" includes all food sold
13		through a vending machine, except soft drinks, candy, and food
14		products that are dispensed hot from a vending machine,
15		regardless of the location of the vending machine.
16		Notwithstanding any other provisions of this Act,
17		beginning September 1, 2009, "food for human consumption that
18		is to be consumed off the premises where it is sold" does not
19		include candy. For purposes of this Section, "candy" means a
20		preparation of sugar, honey, or other natural or artificial
21		sweeteners in combination with chocolate, fruits, nuts or other
22		ingredients or flavorings in the form of bars, drops, or
23		pieces. "Candy" does not include any preparation that contains
24		flour or requires refrigeration.
25		Notwithstanding any other provisions of this Act,
26		beginning September 1, 2009, "nonprescription medicines and

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1		drugs" does not include grooming and hygiene products. For
2		purposes of this Section, "grooming and hygiene products"
3		includes, but is not limited to, soaps and cleaning solutions,
4		shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
5		lotions and screens, unless those products are available by
6		prescription only, regardless of whether the products meet the
7		definition of "over-the-counter-drugs". For the purposes of
8		this paragraph, "over-the-counter-drug" means a drug for human
9		use that contains a label that identifies the product as a drug
10		as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
11		label includes:
12		(A) A "Drug Facts" panel; or
13		(B) A statement of the "active ingredient(s)" with a
14		list of those ingredients contained in the compound,
15		substance or preparation.
16		Beginning on the effective date of this amendatory Act of
17		the 98th General Assembly, "prescription and nonprescription
18		medicines and drugs" includes medical cannabis purchased from a
19		registered dispensing organization under the Compassionate Use
20		of Medical Cannabis Pilot Program Act.
21		If the property that is purchased at retail from a retailer
22		is acquired outside Illinois and used outside Illinois before
23		being brought to Illinois for use here and is taxable under
24		this Act, the "selling price" on which the tax is computed
25		shall be reduced by an amount that represents a reasonable
26		allowance for depreciation for the period of prior out-of-state

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1		use.
2		(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
3		99-858, eff. 8-19-16.)
4		(35 ILCS 105/3-10.5)
5		Sec. 3-10.5. Direct payment of retailers' occupation tax
6		and applicable local retailers' occupation tax by purchaser;
7		purchaser relieved of paying use tax and local retailers'
8		occupation tax reimbursement liabilities to retailer.
9		(a) A retailer who makes a retail sale of tangible personal
10		property or taxable service to a purchaser who provides the
11		retailer with a copy of the purchaser's valid Direct Pay Permit
12		issued under Section 2-10.5 of the Retailers' Occupation Tax
13		Act is not required under Section 3-45 of this Act to collect
14		the tax imposed by this Act on that sale.
15		(b) A purchaser who makes a purchase from a retailer who
16		would otherwise incur retailers' occupation tax liability on
17		the transaction and who provides the retailer with a copy of a
18		valid Direct Pay Permit issued under Section 2-10.5 of the
19		Retailers' Occupation Tax Act does not incur the tax imposed by
20		this Act on the purchase. The purchaser assumes the retailer's
21		obligation to pay the retailers' occupation tax directly to the
22		Department, including all local retailers' occupation tax
23		liabilities applicable to that retail sale.
24		(c) A purchaser who makes a purchase from a retailer who
25		would not incur retailers' occupation tax liability on the

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1		transaction and who provides the retailer with a copy of a
2		valid Direct Pay Permit issued under Section 2-10.5 of the
3		Retailers' Occupation Tax Act incurs the tax imposed by this
4		Act on the purchase. If, on any transaction, the retailer is
5		entitled under this Act to a discount for collecting and
6		remitting the tax imposed under this Act to the Department, the
7		right to the discount provided in Section 9 of this Act shall
8		be transferred to the Permit holder. If the retailer would not
9		be entitled to a discount as provided in Section 9 of this Act,
10		then the Permit holder is not entitled to a discount.
11		(Source: P.A. 92-484, eff. 8-23-01.)
12		(35 ILCS 105/3-45) (from Ch. 120, par. 439.3-45)
13		Sec. 3-45. Collection. The tax imposed by this Act shall be
14		collected from the purchaser by a retailer maintaining a place
15		of business in this State or a retailer authorized by the
16		Department under Section 6 of this Act, and shall be remitted
17		to the Department as provided in Section 9 of this Act, except
18		as provided in Section 3-10.5 of this Act.
19		The tax imposed by this Act that is not paid to a retailer
20		under this Section shall be paid to the Department directly by
21		any person using the property within this State as provided in
22		Section 10 of this Act.
23		Retailers shall collect the tax from users by adding the
24		tax to the selling price of tangible personal property or
25		taxable service, when sold for use, in the manner prescribed by

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1		the Department. The Department may adopt and promulgate
2		reasonable rules and regulations for the adding of the tax by
3		retailers to selling prices by prescribing bracket systems for
4		the purpose of enabling the retailers to add and collect, as
5		far as practicable, the amount of the tax.
6		If a seller collects use tax measured by receipts that are
7		not subject to use tax, or if a seller, in collecting use tax
8		measured by receipts that are subject to tax under this Act,
9		collects more from the purchaser than the required amount of
10		the use tax on the transaction, the purchaser shall have a
11		legal right to claim a refund of that amount from the seller.
12		If, however, that amount is not refunded to the purchaser for
13		any reason, the seller is liable to pay that amount to the
14		Department. This paragraph does not apply to an amount
15		collected by the seller as use tax on receipts that are subject
16		to tax under this Act as long as the collection is made in
17		compliance with the tax collection brackets prescribed by the
18		Department in its rules and regulations.
19		(Source: P.A. 91-51, eff. 6-30-99; 92-484, eff. 8-23-01.)
20		(35 ILCS 105/3-50) (from Ch. 120, par. 439.3-50)
21		Sec. 3-50. Manufacturing and assembly exemption. The
22		manufacturing and assembling machinery and equipment exemption
23		includes machinery and equipment that replaces machinery and
24		equipment in an existing manufacturing facility as well as
25		machinery and equipment that are for use in an expanded or new

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1		manufacturing facility. The machinery and equipment exemption
2		also includes machinery and equipment used in the general
3		maintenance or repair of exempt machinery and equipment or for
4		in-house manufacture of exempt machinery and equipment.
5		Beginning on July 1, 2017, the manufacturing and assembling
6		machinery and equipment exemption also includes graphic arts
7		machinery and equipment, as defined in paragraph (6) of Section
8		3-5. Beginning on July 1, 2017, the manufacturing and
9		assembling machinery and equipment exemption also includes
10		production related tangible personal property, as defined in
11		this Section. The machinery and equipment exemption does not
12		include machinery and equipment used in (i) the generation of
13		electricity for wholesale or retail sale; (ii) the generation
14		or treatment of natural or artificial gas for wholesale or
15		retail sale that is delivered to customers through pipes,
16		pipelines, or mains; or (iii) the treatment of water for
17		wholesale or retail sale that is delivered to customers through
18		pipes, pipelines, or mains. The provisions of this amendatory
19		Act of the 98th General Assembly are declaratory of existing
20		law as to the meaning and scope of this exemption. For the
21		purposes of this exemption, terms have the following meanings:
22		(1) "Manufacturing process" means the production of an
23		article of tangible personal property, whether the article
24		is a finished product or an article for use in the process
25		of manufacturing or assembling a different article of
26		tangible personal property, by a procedure commonly

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1		regarded as manufacturing, processing, fabricating, or
2		refining that changes some existing material into a
3		material with a different form, use, or name. In relation
4		to a recognized integrated business composed of a series of
5		operations that collectively constitute manufacturing, or
6		individually constitute manufacturing operations, the
7		manufacturing process commences with the first operation
8		or stage of production in the series and does not end until
9		the completion of the final product in the last operation
10		or stage of production in the series. For purposes of this
11		exemption, photoprocessing is a manufacturing process of
12		tangible personal property for wholesale or retail sale.
13		(2) "Assembling process" means the production of an
14		article of tangible personal property, whether the article
15		is a finished product or an article for use in the process
16		of manufacturing or assembling a different article of
17		tangible personal property, by the combination of existing
18		materials in a manner commonly regarded as assembling that
19		results in an article or material of a different form, use,
20		or name.
21		(3) "Machinery" means major mechanical machines or
22		major components of those machines contributing to a
23		manufacturing or assembling process.
24		(4) "Equipment" includes an independent device or tool
25		separate from machinery but essential to an integrated
26		manufacturing or assembly process; including computers

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1		used primarily in a manufacturer's computer assisted
2		design, computer assisted manufacturing (CAD/CAM) system;
3		any subunit or assembly comprising a component of any
4		machinery or auxiliary, adjunct, or attachment parts of
5		machinery, such as tools, dies, jigs, fixtures, patterns,
6		and molds; and any parts that require periodic replacement
7		in the course of normal operation; but does not include
8		hand tools. Equipment includes chemicals or chemicals
9		acting as catalysts but only if the chemicals or chemicals
10		acting as catalysts effect a direct and immediate change
11		upon a product being manufactured or assembled for
12		wholesale or retail sale or lease.
13		(5) "Production related tangible personal property"
14		means all tangible personal property that is used or
15		consumed by the purchaser in a manufacturing facility in
16		which a manufacturing process takes place and includes,
17		without limitation, tangible personal property that is
18		purchased for incorporation into real estate within a
19		manufacturing facility and tangible personal property that
20		is used or consumed in activities such as research and
21		development, preproduction material handling, receiving,
22		quality control, inventory control, storage, staging, and
23		packaging for shipping and transportation purposes.
24		"Production related tangible personal property" does not
25		include (i) tangible personal property that is used, within
26		or without a manufacturing facility, in sales, purchasing,

SB0009 Engrossed - 259 - LRB100 06347 HLH 16385 b
1		accounting, fiscal management, marketing, personnel
2		recruitment or selection, or landscaping or (ii) tangible
3		personal property that is required to be titled or
4		registered with a department, agency, or unit of federal,
5		State, or local government.
6		The manufacturing and assembling machinery and equipment
7		exemption includes production related tangible personal
8		property that is purchased (i) on or after July 1, 2007 and on
9		or before June 30, 2008 or (ii) on and after July 1, 2017. The
10		exemption for production related tangible personal property
11		purchased on or after July 1, 2007 and on or before June 30,
12		2008 is subject to both of the following limitations:
13		(1) The maximum amount of the exemption for any one
14		taxpayer may not exceed 5% of the purchase price of
15		production related tangible personal property that is
16		purchased on or after July 1, 2007 and on or before June
17		30, 2008. A credit under Section 3-85 of this Act may not
18		be earned by the purchase of production related tangible
19		personal property for which an exemption is received under
20		this Section.
21		(2) The maximum aggregate amount of the exemptions for
22		production related tangible personal property awarded
23		under this Act and the Retailers' Occupation Tax Act to all
24		taxpayers may not exceed $10,000,000. If the claims for the
25		exemption exceed $10,000,000, then the Department shall
26		reduce the amount of the exemption to each taxpayer on a

SB0009 Engrossed - 260 - LRB100 06347 HLH 16385 b
1		pro rata basis.
2		The Department may adopt rules to implement and administer the
3		exemption for production related tangible personal property.
4		The manufacturing and assembling machinery and equipment
5		exemption includes the sale of materials to a purchaser who
6		produces exempted types of machinery, equipment, or tools and
7		who rents or leases that machinery, equipment, or tools to a
8		manufacturer of tangible personal property. This exemption
9		also includes the sale of materials to a purchaser who
10		manufactures those materials into an exempted type of
11		machinery, equipment, or tools that the purchaser uses himself
12		or herself in the manufacturing of tangible personal property.
13		This exemption includes the sale of exempted types of machinery
14		or equipment to a purchaser who is not the manufacturer, but
15		who rents or leases the use of the property to a manufacturer.
16		The purchaser of the machinery and equipment who has an active
17		resale registration number shall furnish that number to the
18		seller at the time of purchase. A user of the machinery,
19		equipment, or tools without an active resale registration
20		number shall prepare a certificate of exemption for each
21		transaction stating facts establishing the exemption for that
22		transaction, and that certificate shall be available to the
23		Department for inspection or audit. The Department shall
24		prescribe the form of the certificate. Informal rulings,
25		opinions, or letters issued by the Department in response to an
26		inquiry or request for an opinion from any person regarding the

SB0009 Engrossed - 261 - LRB100 06347 HLH 16385 b
1		coverage and applicability of this exemption to specific
2		devices shall be published, maintained as a public record, and
3		made available for public inspection and copying. If the
4		informal ruling, opinion, or letter contains trade secrets or
5		other confidential information, where possible, the Department
6		shall delete that information before publication. Whenever
7		informal rulings, opinions, or letters contain a policy of
8		general applicability, the Department shall formulate and
9		adopt that policy as a rule in accordance with the Illinois
10		Administrative Procedure Act.
11		The manufacturing and assembling machinery and equipment
12		exemption, including the addition of production related
13		tangible personal property, is exempt from the provisions of
14		Section 3-90.
15		(Source: P.A. 98-583, eff. 1-1-14.)
16		(35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)
17		Sec. 3-55. Multistate exemption. To prevent actual or
18		likely multistate taxation, the tax imposed by this Act does
19		not apply to the use of tangible personal property in this
20		State under the following circumstances:
21		(a) The use, in this State, of tangible personal property
22		acquired outside this State by a nonresident individual and
23		brought into this State by the individual for his or her own
24		use while temporarily within this State or while passing
25		through this State.

SB0009 Engrossed - 262 - LRB100 06347 HLH 16385 b
1		(b) The use, in this State, of tangible personal property
2		by an interstate carrier for hire as rolling stock moving in
3		interstate commerce or by lessors under a lease of one year or
4		longer executed or in effect at the time of purchase of
5		tangible personal property by interstate carriers for-hire for
6		use as rolling stock moving in interstate commerce as long as
7		so used by the interstate carriers for-hire, and equipment
8		operated by a telecommunications provider, licensed as a common
9		carrier by the Federal Communications Commission, which is
10		permanently installed in or affixed to aircraft moving in
11		interstate commerce.
12		(c) The use, in this State, by owners, lessors, or shippers
13		of tangible personal property that is utilized by interstate
14		carriers for hire for use as rolling stock moving in interstate
15		commerce as long as so used by the interstate carriers for
16		hire, and equipment operated by a telecommunications provider,
17		licensed as a common carrier by the Federal Communications
18		Commission, which is permanently installed in or affixed to
19		aircraft moving in interstate commerce.
20		(d) The use, in this State, of tangible personal property
21		or taxable service that is acquired outside this State and
22		caused to be brought into or performed in this State by a
23		person who has already paid a tax in another State in respect
24		to the sale, purchase, or use of that property, to the extent
25		of the amount of the tax properly due and paid in the other
26		State.

SB0009 Engrossed - 263 - LRB100 06347 HLH 16385 b
1		(e) The temporary storage, in this State, of tangible
2		personal property that is acquired outside this State and that,
3		after being brought into this State and stored here
4		temporarily, is used solely outside this State or is physically
5		attached to or incorporated into other tangible personal
6		property that is used solely outside this State, or is altered
7		by converting, fabricating, manufacturing, printing,
8		processing, or shaping, and, as altered, is used solely outside
9		this State.
10		(f) The temporary storage in this State of building
11		materials and fixtures that are acquired either in this State
12		or outside this State by an Illinois registered combination
13		retailer and construction contractor, and that the purchaser
14		thereafter uses outside this State by incorporating that
15		property into real estate located outside this State.
16		(g) The use or purchase of tangible personal property by a
17		common carrier by rail or motor that receives the physical
18		possession of the property in Illinois, and that transports the
19		property, or shares with another common carrier in the
20		transportation of the property, out of Illinois on a standard
21		uniform bill of lading showing the seller of the property as
22		the shipper or consignor of the property to a destination
23		outside Illinois, for use outside Illinois.
24		(h) Except as provided in subsection (h-1), the use, in
25		this State, of a motor vehicle that was sold in this State to a
26		nonresident, even though the motor vehicle is delivered to the

SB0009 Engrossed - 264 - LRB100 06347 HLH 16385 b
1		nonresident in this State, if the motor vehicle is not to be
2		titled in this State, and if a drive-away permit is issued to
3		the motor vehicle as provided in Section 3-603 of the Illinois
4		Vehicle Code or if the nonresident purchaser has vehicle
5		registration plates to transfer to the motor vehicle upon
6		returning to his or her home state. The issuance of the
7		drive-away permit or having the out-of-state registration
8		plates to be transferred shall be prima facie evidence that the
9		motor vehicle will not be titled in this State.
10		(h-1) The exemption under subsection (h) does not apply if
11		the state in which the motor vehicle will be titled does not
12		allow a reciprocal exemption for the use in that state of a
13		motor vehicle sold and delivered in that state to an Illinois
14		resident but titled in Illinois. The tax collected under this
15		Act on the sale of a motor vehicle in this State to a resident
16		of another state that does not allow a reciprocal exemption
17		shall be imposed at a rate equal to the state's rate of tax on
18		taxable property in the state in which the purchaser is a
19		resident, except that the tax shall not exceed the tax that
20		would otherwise be imposed under this Act. At the time of the
21		sale, the purchaser shall execute a statement, signed under
22		penalty of perjury, of his or her intent to title the vehicle
23		in the state in which the purchaser is a resident within 30
24		days after the sale and of the fact of the payment to the State
25		of Illinois of tax in an amount equivalent to the state's rate
26		of tax on taxable property in his or her state of residence and

SB0009 Engrossed - 265 - LRB100 06347 HLH 16385 b
1		shall submit the statement to the appropriate tax collection
2		agency in his or her state of residence. In addition, the
3		retailer must retain a signed copy of the statement in his or
4		her records. Nothing in this subsection shall be construed to
5		require the removal of the vehicle from this state following
6		the filing of an intent to title the vehicle in the purchaser's
7		state of residence if the purchaser titles the vehicle in his
8		or her state of residence within 30 days after the date of
9		sale. The tax collected under this Act in accordance with this
10		subsection (h-1) shall be proportionately distributed as if the
11		tax were collected at the 6.25% general rate imposed under this
12		Act.
13		(h-2) The following exemptions apply with respect to
14		certain aircraft:
15		(1) Beginning on July 1, 2007, no tax is imposed under
16		this Act on the purchase of an aircraft, as defined in
17		Section 3 of the Illinois Aeronautics Act, if all of the
18		following conditions are met:
19		(A) the aircraft leaves this State within 15 days
20		after the later of either the issuance of the final
21		billing for the purchase of the aircraft or the
22		authorized approval for return to service, completion
23		of the maintenance record entry, and completion of the
24		test flight and ground test for inspection, as required
25		by 14 C.F.R. 91.407;
26		(B) the aircraft is not based or registered in this

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1		State after the purchase of the aircraft; and
2		(C) the purchaser provides the Department with a
3		signed and dated certification, on a form prescribed by
4		the Department, certifying that the requirements of
5		this item (1) are met. The certificate must also
6		include the name and address of the purchaser, the
7		address of the location where the aircraft is to be
8		titled or registered, the address of the primary
9		physical location of the aircraft, and other
10		information that the Department may reasonably
11		require.
12		(2) Beginning on July 1, 2007, no tax is imposed under
13		this Act on the use of an aircraft, as defined in Section 3
14		of the Illinois Aeronautics Act, that is temporarily
15		located in this State for the purpose of a prepurchase
16		evaluation if all of the following conditions are met:
17		(A) the aircraft is not based or registered in this
18		State after the prepurchase evaluation; and
19		(B) the purchaser provides the Department with a
20		signed and dated certification, on a form prescribed by
21		the Department, certifying that the requirements of
22		this item (2) are met. The certificate must also
23		include the name and address of the purchaser, the
24		address of the location where the aircraft is to be
25		titled or registered, the address of the primary
26		physical location of the aircraft, and other

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1		information that the Department may reasonably
2		require.
3		(3) Beginning on July 1, 2007, no tax is imposed under
4		this Act on the use of an aircraft, as defined in Section 3
5		of the Illinois Aeronautics Act, that is temporarily
6		located in this State for the purpose of a post-sale
7		customization if all of the following conditions are met:
8		(A) the aircraft leaves this State within 15 days
9		after the authorized approval for return to service,
10		completion of the maintenance record entry, and
11		completion of the test flight and ground test for
12		inspection, as required by 14 C.F.R. 91.407;
13		(B) the aircraft is not based or registered in this
14		State either before or after the post-sale
15		customization; and
16		(C) the purchaser provides the Department with a
17		signed and dated certification, on a form prescribed by
18		the Department, certifying that the requirements of
19		this item (3) are met. The certificate must also
20		include the name and address of the purchaser, the
21		address of the location where the aircraft is to be
22		titled or registered, the address of the primary
23		physical location of the aircraft, and other
24		information that the Department may reasonably
25		require.
26		If tax becomes due under this subsection (h-2) because of

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1		the purchaser's use of the aircraft in this State, the
2		purchaser shall file a return with the Department and pay the
3		tax on the fair market value of the aircraft. This return and
4		payment of the tax must be made no later than 30 days after the
5		aircraft is used in a taxable manner in this State. The tax is
6		based on the fair market value of the aircraft on the date that
7		it is first used in a taxable manner in this State.
8		For purposes of this subsection (h-2):
9		"Based in this State" means hangared, stored, or otherwise
10		used, excluding post-sale customizations as defined in this
11		Section, for 10 or more days in each 12-month period
12		immediately following the date of the sale of the aircraft.
13		"Post-sale customization" means any improvement,
14		maintenance, or repair that is performed on an aircraft
15		following a transfer of ownership of the aircraft.
16		"Prepurchase evaluation" means an examination of an
17		aircraft to provide a potential purchaser with information
18		relevant to the potential purchase.
19		"Registered in this State" means an aircraft registered
20		with the Department of Transportation, Aeronautics Division,
21		or titled or registered with the Federal Aviation
22		Administration to an address located in this State.
23		This subsection (h-2) is exempt from the provisions of
24		Section 3-90.
25		(i) Beginning July 1, 1999, the use, in this State, of fuel
26		acquired outside this State and brought into this State in the

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1		fuel supply tanks of locomotives engaged in freight hauling and
2		passenger service for interstate commerce. This subsection is
3		exempt from the provisions of Section 3-90.
4		(j) Beginning on January 1, 2002 and through June 30, 2016,
5		the use of tangible personal property purchased from an
6		Illinois retailer by a taxpayer engaged in centralized
7		purchasing activities in Illinois who will, upon receipt of the
8		property in Illinois, temporarily store the property in
9		Illinois (i) for the purpose of subsequently transporting it
10		outside this State for use or consumption thereafter solely
11		outside this State or (ii) for the purpose of being processed,
12		fabricated, or manufactured into, attached to, or incorporated
13		into other tangible personal property to be transported outside
14		this State and thereafter used or consumed solely outside this
15		State. The Director of Revenue shall, pursuant to rules adopted
16		in accordance with the Illinois Administrative Procedure Act,
17		issue a permit to any taxpayer in good standing with the
18		Department who is eligible for the exemption under this
19		subsection (j). The permit issued under this subsection (j)
20		shall authorize the holder, to the extent and in the manner
21		specified in the rules adopted under this Act, to purchase
22		tangible personal property from a retailer exempt from the
23		taxes imposed by this Act. Taxpayers shall maintain all
24		necessary books and records to substantiate the use and
25		consumption of all such tangible personal property outside of
26		the State of Illinois.

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1		(Source: P.A. 97-73, eff. 6-30-11.)
2		(35 ILCS 105/3-65) (from Ch. 120, par. 439.3-65)
3		Sec. 3-65. R.O.T. nontaxability. If the seller of tangible
4		personal property or taxable service for use would not be
5		taxable under the Retailers' Occupation Tax Act despite all
6		elements of the sale occurring in Illinois, then the tax
7		imposed by this Act does not apply to the use of the tangible
8		personal property or taxable service in this State.
9		(Source: P.A. 91-51, eff. 6-30-99.)
10		(35 ILCS 105/3-75) (from Ch. 120, par. 439.3-75)
11		Sec. 3-75. Serviceman transfer. Tangible personal property
12		purchased by a serviceman, as defined in Section 2 of the
13		Service Occupation Tax Act, is subject to the tax imposed by
14		this Act when purchased for transfer by the serviceman
15		incidental to completion of a maintenance agreement. Effective
16		January 1, 2018, purchases of tangible personal property
17		purchased for transfer incidental to performance of a taxable
18		service is not subject to the tax imposed by this Act.
19		(Source: P.A. 91-51, eff. 6-30-99.)
20		(35 ILCS 105/3a) (from Ch. 120, par. 439.3a)
21		Sec. 3a. The tax imposed by the Act shall when collected be
22		stated as a distinct item separate and apart from the selling
23		price of the tangible personal property or taxable service.

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1		However, where it is not possible to state the sales tax
2		separately in situations such as sales from vending machines or
3		sales of liquor by the drink the Department may by rule exempt
4		such sales from this requirement so long as purchasers are
5		notified by a sign that the tax is included in the selling
6		price.
7		(Source: P.A. 84-229.)
8		(35 ILCS 105/4) (from Ch. 120, par. 439.4)
9		Sec. 4. Evidence that tangible personal property or taxable
10		service was sold by any person for delivery to a person
11		residing or engaged in business in this State shall be prima
12		facie evidence that such tangible personal property or taxable
13		service was sold for use in this State.
14		(Source: Laws 1955, p. 2027.)
15		(35 ILCS 105/5) (from Ch. 120, par. 439.5)
16		Sec. 5. Except as to motor vehicles and other items of
17		tangible personal property that must be titled or registered
18		under an Illinois law, but that cannot be so titled or
19		registered without a use tax receipt or exemption determination
20		from the Department, every retailer maintaining a place of
21		business in this State and making sales of tangible personal
22		property or taxable service for use in this State (whether
23		those sales are made within or without this State) shall, when
24		collecting the tax as provided in Section 3-45 of this Act from

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1		the purchaser, give to the purchaser (if demanded by the
2		purchaser) a receipt for the tax in the manner and form
3		prescribed by the Department. The receipt shall be sufficient
4		to relieve the purchaser from further liability for the tax to
5		which the receipt may refer. Each retailer shall list with the
6		Department the names and addresses of all of his or her agents
7		operating in this State and the location of any and all of his
8		or her distribution or sales houses, offices, or other places
9		of business in this State.
10		(Source: P.A. 86-1475.)
11		(35 ILCS 105/7) (from Ch. 120, par. 439.7)
12		Sec. 7.
13		It is unlawful for any retailer to advertise or hold out or
14		state to the public or to any purchaser, consumer or user,
15		directly or indirectly, that the tax or any part thereof
16		imposed by Section 3 hereof will be assumed or absorbed by the
17		retailer or that it will not be added to the selling price of
18		the property or taxable service sold, or if added that it or
19		any part thereof will be refunded other than when the retailer
20		refunds the selling price and tax because of the merchandise's
21		being returned to the retailer (or the taxable service
22		transaction's being partially or wholly cancelled) or other
23		than when the retailer credits or refunds the tax to the
24		purchaser to support a claim filed with the Department under
25		the Retailers' Occupation Tax Act or under this Act. Any person

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1		violating any of the provisions of this Section within this
2		State shall be guilty of a Class A misdemeanor.
3		(Source: P.A. 77-2830.)
4		(35 ILCS 105/9) (from Ch. 120, par. 439.9)
5		Sec. 9. Except as to motor vehicles, watercraft, aircraft,
6		and trailers that are required to be registered with an agency
7		of this State, each retailer required or authorized to collect
8		the tax imposed by this Act shall pay to the Department the
9		amount of such tax (except as otherwise provided) at the time
10		when he is required to file his return for the period during
11		which such tax was collected, less a discount of 2.1% prior to
12		January 1, 1990, and 1.75% on and after January 1, 1990, or $5
13		per calendar year, whichever is greater, which is allowed to
14		reimburse the retailer for expenses incurred in collecting the
15		tax, keeping records, preparing and filing returns, remitting
16		the tax and supplying data to the Department on request. In the
17		case of retailers who report and pay the tax on a transaction
18		by transaction basis, as provided in this Section, such
19		discount shall be taken with each such tax remittance instead
20		of when such retailer files his periodic return. The Department
21		may disallow the discount for retailers whose certificate of
22		registration is revoked at the time the return is filed, but
23		only if the Department's decision to revoke the certificate of
24		registration has become final. A retailer need not remit that
25		part of any tax collected by him to the extent that he is

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1		required to remit and does remit the tax imposed by the
2		Retailers' Occupation Tax Act, with respect to the sale of the
3		same property.
4		Where such tangible personal property or taxable service is
5		sold under a conditional sales contract, or under any other
6		form of sale wherein the payment of the principal sum, or a
7		part thereof, is extended beyond the close of the period for
8		which the return is filed, the retailer, in collecting the tax
9		(except as to motor vehicles, watercraft, aircraft, and
10		trailers that are required to be registered with an agency of
11		this State), may collect for each tax return period, only the
12		tax applicable to that part of the selling price actually
13		received during such tax return period.
14		Except as provided in this Section, on or before the
15		twentieth day of each calendar month, such retailer shall file
16		a return for the preceding calendar month. Such return shall be
17		filed on forms prescribed by the Department and shall furnish
18		such information as the Department may reasonably require.
19		The Department may require returns to be filed on a
20		quarterly basis. If so required, a return for each calendar
21		quarter shall be filed on or before the twentieth day of the
22		calendar month following the end of such calendar quarter. The
23		taxpayer shall also file a return with the Department for each
24		of the first two months of each calendar quarter, on or before
25		the twentieth day of the following calendar month, stating:
26		1. The name of the seller;

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1		2. The address of the principal place of business from
2		which he engages in the business of selling tangible
3		personal property at retail in this State;
4		3. The total amount of taxable receipts received by him
5		during the preceding calendar month from sales of tangible
6		personal property by him during such preceding calendar
7		month, including receipts from charge and time sales, but
8		less all deductions allowed by law;
9		4. The amount of credit provided in Section 2d of this
10		Act;
11		5. The amount of tax due;
12		5-5. The signature of the taxpayer; and
13		6. Such other reasonable information as the Department
14		may require.
15		If a taxpayer fails to sign a return within 30 days after
16		the proper notice and demand for signature by the Department,
17		the return shall be considered valid and any amount shown to be
18		due on the return shall be deemed assessed.
19		Beginning October 1, 1993, a taxpayer who has an average
20		monthly tax liability of $150,000 or more shall make all
21		payments required by rules of the Department by electronic
22		funds transfer. Beginning October 1, 1994, a taxpayer who has
23		an average monthly tax liability of $100,000 or more shall make
24		all payments required by rules of the Department by electronic
25		funds transfer. Beginning October 1, 1995, a taxpayer who has
26		an average monthly tax liability of $50,000 or more shall make

SB0009 Engrossed - 276 - LRB100 06347 HLH 16385 b
1		all payments required by rules of the Department by electronic
2		funds transfer. Beginning October 1, 2000, a taxpayer who has
3		an annual tax liability of $200,000 or more shall make all
4		payments required by rules of the Department by electronic
5		funds transfer. The term "annual tax liability" shall be the
6		sum of the taxpayer's liabilities under this Act, and under all
7		other State and local occupation and use tax laws administered
8		by the Department, for the immediately preceding calendar year.
9		The term "average monthly tax liability" means the sum of the
10		taxpayer's liabilities under this Act, and under all other
11		State and local occupation and use tax laws administered by the
12		Department, for the immediately preceding calendar year
13		divided by 12. Beginning on October 1, 2002, a taxpayer who has
14		a tax liability in the amount set forth in subsection (b) of
15		Section 2505-210 of the Department of Revenue Law shall make
16		all payments required by rules of the Department by electronic
17		funds transfer.
18		Before August 1 of each year beginning in 1993, the
19		Department shall notify all taxpayers required to make payments
20		by electronic funds transfer. All taxpayers required to make
21		payments by electronic funds transfer shall make those payments
22		for a minimum of one year beginning on October 1.
23		Any taxpayer not required to make payments by electronic
24		funds transfer may make payments by electronic funds transfer
25		with the permission of the Department.
26		All taxpayers required to make payment by electronic funds

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1		transfer and any taxpayers authorized to voluntarily make
2		payments by electronic funds transfer shall make those payments
3		in the manner authorized by the Department.
4		The Department shall adopt such rules as are necessary to
5		effectuate a program of electronic funds transfer and the
6		requirements of this Section.
7		Before October 1, 2000, if the taxpayer's average monthly
8		tax liability to the Department under this Act, the Retailers'
9		Occupation Tax Act, the Service Occupation Tax Act, the Service
10		Use Tax Act was $10,000 or more during the preceding 4 complete
11		calendar quarters, he shall file a return with the Department
12		each month by the 20th day of the month next following the
13		month during which such tax liability is incurred and shall
14		make payments to the Department on or before the 7th, 15th,
15		22nd and last day of the month during which such liability is
16		incurred. On and after October 1, 2000, if the taxpayer's
17		average monthly tax liability to the Department under this Act,
18		the Retailers' Occupation Tax Act, the Service Occupation Tax
19		Act, and the Service Use Tax Act was $20,000 or more during the
20		preceding 4 complete calendar quarters, he shall file a return
21		with the Department each month by the 20th day of the month
22		next following the month during which such tax liability is
23		incurred and shall make payment to the Department on or before
24		the 7th, 15th, 22nd and last day of the month during which such
25		liability is incurred. If the month during which such tax
26		liability is incurred began prior to January 1, 1985, each

SB0009 Engrossed - 278 - LRB100 06347 HLH 16385 b
1		payment shall be in an amount equal to 1/4 of the taxpayer's
2		actual liability for the month or an amount set by the
3		Department not to exceed 1/4 of the average monthly liability
4		of the taxpayer to the Department for the preceding 4 complete
5		calendar quarters (excluding the month of highest liability and
6		the month of lowest liability in such 4 quarter period). If the
7		month during which such tax liability is incurred begins on or
8		after January 1, 1985, and prior to January 1, 1987, each
9		payment shall be in an amount equal to 22.5% of the taxpayer's
10		actual liability for the month or 27.5% of the taxpayer's
11		liability for the same calendar month of the preceding year. If
12		the month during which such tax liability is incurred begins on
13		or after January 1, 1987, and prior to January 1, 1988, each
14		payment shall be in an amount equal to 22.5% of the taxpayer's
15		actual liability for the month or 26.25% of the taxpayer's
16		liability for the same calendar month of the preceding year. If
17		the month during which such tax liability is incurred begins on
18		or after January 1, 1988, and prior to January 1, 1989, or
19		begins on or after January 1, 1996, each payment shall be in an
20		amount equal to 22.5% of the taxpayer's actual liability for
21		the month or 25% of the taxpayer's liability for the same
22		calendar month of the preceding year. If the month during which
23		such tax liability is incurred begins on or after January 1,
24		1989, and prior to January 1, 1996, each payment shall be in an
25		amount equal to 22.5% of the taxpayer's actual liability for
26		the month or 25% of the taxpayer's liability for the same

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1		calendar month of the preceding year or 100% of the taxpayer's
2		actual liability for the quarter monthly reporting period. The
3		amount of such quarter monthly payments shall be credited
4		against the final tax liability of the taxpayer's return for
5		that month. Before October 1, 2000, once applicable, the
6		requirement of the making of quarter monthly payments to the
7		Department shall continue until such taxpayer's average
8		monthly liability to the Department during the preceding 4
9		complete calendar quarters (excluding the month of highest
10		liability and the month of lowest liability) is less than
11		$9,000, or until such taxpayer's average monthly liability to
12		the Department as computed for each calendar quarter of the 4
13		preceding complete calendar quarter period is less than
14		$10,000. However, if a taxpayer can show the Department that a
15		substantial change in the taxpayer's business has occurred
16		which causes the taxpayer to anticipate that his average
17		monthly tax liability for the reasonably foreseeable future
18		will fall below the $10,000 threshold stated above, then such
19		taxpayer may petition the Department for change in such
20		taxpayer's reporting status. On and after October 1, 2000, once
21		applicable, the requirement of the making of quarter monthly
22		payments to the Department shall continue until such taxpayer's
23		average monthly liability to the Department during the
24		preceding 4 complete calendar quarters (excluding the month of
25		highest liability and the month of lowest liability) is less
26		than $19,000 or until such taxpayer's average monthly liability

SB0009 Engrossed - 280 - LRB100 06347 HLH 16385 b
1		to the Department as computed for each calendar quarter of the
2		4 preceding complete calendar quarter period is less than
3		$20,000. However, if a taxpayer can show the Department that a
4		substantial change in the taxpayer's business has occurred
5		which causes the taxpayer to anticipate that his average
6		monthly tax liability for the reasonably foreseeable future
7		will fall below the $20,000 threshold stated above, then such
8		taxpayer may petition the Department for a change in such
9		taxpayer's reporting status. The Department shall change such
10		taxpayer's reporting status unless it finds that such change is
11		seasonal in nature and not likely to be long term. If any such
12		quarter monthly payment is not paid at the time or in the
13		amount required by this Section, then the taxpayer shall be
14		liable for penalties and interest on the difference between the
15		minimum amount due and the amount of such quarter monthly
16		payment actually and timely paid, except insofar as the
17		taxpayer has previously made payments for that month to the
18		Department in excess of the minimum payments previously due as
19		provided in this Section. The Department shall make reasonable
20		rules and regulations to govern the quarter monthly payment
21		amount and quarter monthly payment dates for taxpayers who file
22		on other than a calendar monthly basis.
23		If any such payment provided for in this Section exceeds
24		the taxpayer's liabilities under this Act, the Retailers'
25		Occupation Tax Act, the Service Occupation Tax Act and the
26		Service Use Tax Act, as shown by an original monthly return,

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1		the Department shall issue to the taxpayer a credit memorandum
2		no later than 30 days after the date of payment, which
3		memorandum may be submitted by the taxpayer to the Department
4		in payment of tax liability subsequently to be remitted by the
5		taxpayer to the Department or be assigned by the taxpayer to a
6		similar taxpayer under this Act, the Retailers' Occupation Tax
7		Act, the Service Occupation Tax Act or the Service Use Tax Act,
8		in accordance with reasonable rules and regulations to be
9		prescribed by the Department, except that if such excess
10		payment is shown on an original monthly return and is made
11		after December 31, 1986, no credit memorandum shall be issued,
12		unless requested by the taxpayer. If no such request is made,
13		the taxpayer may credit such excess payment against tax
14		liability subsequently to be remitted by the taxpayer to the
15		Department under this Act, the Retailers' Occupation Tax Act,
16		the Service Occupation Tax Act or the Service Use Tax Act, in
17		accordance with reasonable rules and regulations prescribed by
18		the Department. If the Department subsequently determines that
19		all or any part of the credit taken was not actually due to the
20		taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall
21		be reduced by 2.1% or 1.75% of the difference between the
22		credit taken and that actually due, and the taxpayer shall be
23		liable for penalties and interest on such difference.
24		If the retailer is otherwise required to file a monthly
25		return and if the retailer's average monthly tax liability to
26		the Department does not exceed $200, the Department may

SB0009 Engrossed - 282 - LRB100 06347 HLH 16385 b
1		authorize his returns to be filed on a quarter annual basis,
2		with the return for January, February, and March of a given
3		year being due by April 20 of such year; with the return for
4		April, May and June of a given year being due by July 20 of such
5		year; with the return for July, August and September of a given
6		year being due by October 20 of such year, and with the return
7		for October, November and December of a given year being due by
8		January 20 of the following year.
9		If the retailer is otherwise required to file a monthly or
10		quarterly return and if the retailer's average monthly tax
11		liability to the Department does not exceed $50, the Department
12		may authorize his returns to be filed on an annual basis, with
13		the return for a given year being due by January 20 of the
14		following year.
15		Such quarter annual and annual returns, as to form and
16		substance, shall be subject to the same requirements as monthly
17		returns.
18		Notwithstanding any other provision in this Act concerning
19		the time within which a retailer may file his return, in the
20		case of any retailer who ceases to engage in a kind of business
21		which makes him responsible for filing returns under this Act,
22		such retailer shall file a final return under this Act with the
23		Department not more than one month after discontinuing such
24		business.
25		In addition, with respect to motor vehicles, watercraft,
26		aircraft, and trailers that are required to be registered with

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1		an agency of this State, every retailer selling this kind of
2		tangible personal property shall file, with the Department,
3		upon a form to be prescribed and supplied by the Department, a
4		separate return for each such item of tangible personal
5		property which the retailer sells, except that if, in the same
6		transaction, (i) a retailer of aircraft, watercraft, motor
7		vehicles or trailers transfers more than one aircraft,
8		watercraft, motor vehicle or trailer to another aircraft,
9		watercraft, motor vehicle or trailer retailer for the purpose
10		of resale or (ii) a retailer of aircraft, watercraft, motor
11		vehicles, or trailers transfers more than one aircraft,
12		watercraft, motor vehicle, or trailer to a purchaser for use as
13		a qualifying rolling stock as provided in Section 3-55 of this
14		Act, then that seller may report the transfer of all the
15		aircraft, watercraft, motor vehicles or trailers involved in
16		that transaction to the Department on the same uniform
17		invoice-transaction reporting return form. For purposes of
18		this Section, "watercraft" means a Class 2, Class 3, or Class 4
19		watercraft as defined in Section 3-2 of the Boat Registration
20		and Safety Act, a personal watercraft, or any boat equipped
21		with an inboard motor.
22		The transaction reporting return in the case of motor
23		vehicles or trailers that are required to be registered with an
24		agency of this State, shall be the same document as the Uniform
25		Invoice referred to in Section 5-402 of the Illinois Vehicle
26		Code and must show the name and address of the seller; the name

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1		and address of the purchaser; the amount of the selling price
2		including the amount allowed by the retailer for traded-in
3		property, if any; the amount allowed by the retailer for the
4		traded-in tangible personal property, if any, to the extent to
5		which Section 2 of this Act allows an exemption for the value
6		of traded-in property; the balance payable after deducting such
7		trade-in allowance from the total selling price; the amount of
8		tax due from the retailer with respect to such transaction; the
9		amount of tax collected from the purchaser by the retailer on
10		such transaction (or satisfactory evidence that such tax is not
11		due in that particular instance, if that is claimed to be the
12		fact); the place and date of the sale; a sufficient
13		identification of the property sold; such other information as
14		is required in Section 5-402 of the Illinois Vehicle Code, and
15		such other information as the Department may reasonably
16		require.
17		The transaction reporting return in the case of watercraft
18		and aircraft must show the name and address of the seller; the
19		name and address of the purchaser; the amount of the selling
20		price including the amount allowed by the retailer for
21		traded-in property, if any; the amount allowed by the retailer
22		for the traded-in tangible personal property, if any, to the
23		extent to which Section 2 of this Act allows an exemption for
24		the value of traded-in property; the balance payable after
25		deducting such trade-in allowance from the total selling price;
26		the amount of tax due from the retailer with respect to such

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1		transaction; the amount of tax collected from the purchaser by
2		the retailer on such transaction (or satisfactory evidence that
3		such tax is not due in that particular instance, if that is
4		claimed to be the fact); the place and date of the sale, a
5		sufficient identification of the property sold, and such other
6		information as the Department may reasonably require.
7		Such transaction reporting return shall be filed not later
8		than 20 days after the date of delivery of the item that is
9		being sold, but may be filed by the retailer at any time sooner
10		than that if he chooses to do so. The transaction reporting
11		return and tax remittance or proof of exemption from the tax
12		that is imposed by this Act may be transmitted to the
13		Department by way of the State agency with which, or State
14		officer with whom, the tangible personal property must be
15		titled or registered (if titling or registration is required)
16		if the Department and such agency or State officer determine
17		that this procedure will expedite the processing of
18		applications for title or registration.
19		With each such transaction reporting return, the retailer
20		shall remit the proper amount of tax due (or shall submit
21		satisfactory evidence that the sale is not taxable if that is
22		the case), to the Department or its agents, whereupon the
23		Department shall issue, in the purchaser's name, a tax receipt
24		(or a certificate of exemption if the Department is satisfied
25		that the particular sale is tax exempt) which such purchaser
26		may submit to the agency with which, or State officer with

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1		whom, he must title or register the tangible personal property
2		that is involved (if titling or registration is required) in
3		support of such purchaser's application for an Illinois
4		certificate or other evidence of title or registration to such
5		tangible personal property.
6		No retailer's failure or refusal to remit tax under this
7		Act precludes a user, who has paid the proper tax to the
8		retailer, from obtaining his certificate of title or other
9		evidence of title or registration (if titling or registration
10		is required) upon satisfying the Department that such user has
11		paid the proper tax (if tax is due) to the retailer. The
12		Department shall adopt appropriate rules to carry out the
13		mandate of this paragraph.
14		If the user who would otherwise pay tax to the retailer
15		wants the transaction reporting return filed and the payment of
16		tax or proof of exemption made to the Department before the
17		retailer is willing to take these actions and such user has not
18		paid the tax to the retailer, such user may certify to the fact
19		of such delay by the retailer, and may (upon the Department
20		being satisfied of the truth of such certification) transmit
21		the information required by the transaction reporting return
22		and the remittance for tax or proof of exemption directly to
23		the Department and obtain his tax receipt or exemption
24		determination, in which event the transaction reporting return
25		and tax remittance (if a tax payment was required) shall be
26		credited by the Department to the proper retailer's account

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1		with the Department, but without the 2.1% or 1.75% discount
2		provided for in this Section being allowed. When the user pays
3		the tax directly to the Department, he shall pay the tax in the
4		same amount and in the same form in which it would be remitted
5		if the tax had been remitted to the Department by the retailer.
6		Where a retailer collects the tax with respect to the
7		selling price of tangible personal property or taxable service
8		which he sells and the purchaser thereafter returns such
9		tangible personal property or cancels the providing of taxable
10		service and the retailer refunds the selling price thereof to
11		the purchaser, such retailer shall also refund, to the
12		purchaser, the tax so collected from the purchaser. When filing
13		his return for the period in which he refunds such tax to the
14		purchaser, the retailer may deduct the amount of the tax so
15		refunded by him to the purchaser from any other use tax which
16		such retailer may be required to pay or remit to the
17		Department, as shown by such return, if the amount of the tax
18		to be deducted was previously remitted to the Department by
19		such retailer. If the retailer has not previously remitted the
20		amount of such tax to the Department, he is entitled to no
21		deduction under this Act upon refunding such tax to the
22		purchaser.
23		Any retailer filing a return under this Section shall also
24		include (for the purpose of paying tax thereon) the total tax
25		covered by such return upon the selling price of tangible
26		personal property or taxable service purchased by him at retail

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1		from a retailer, but as to which the tax imposed by this Act
2		was not collected from the retailer filing such return, and
3		such retailer shall remit the amount of such tax to the
4		Department when filing such return.
5		If experience indicates such action to be practicable, the
6		Department may prescribe and furnish a combination or joint
7		return which will enable retailers, who are required to file
8		returns hereunder and also under the Retailers' Occupation Tax
9		Act, to furnish all the return information required by both
10		Acts on the one form.
11		Where the retailer has more than one business registered
12		with the Department under separate registration under this Act,
13		such retailer may not file each return that is due as a single
14		return covering all such registered businesses, but shall file
15		separate returns for each such registered business.
16		Beginning January 1, 1990, each month the Department shall
17		pay into the State and Local Sales Tax Reform Fund, a special
18		fund in the State Treasury which is hereby created, the net
19		revenue realized for the preceding month from the 1% tax on
20		sales of food for human consumption which is to be consumed off
21		the premises where it is sold (other than alcoholic beverages,
22		soft drinks and food which has been prepared for immediate
23		consumption) and prescription and nonprescription medicines,
24		drugs, medical appliances, products classified as Class III
25		medical devices by the United States Food and Drug
26		Administration that are used for cancer treatment pursuant to a

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1		prescription, as well as any accessories and components related
2		to those devices, and insulin, urine testing materials,
3		syringes and needles used by diabetics.
4		Beginning January 1, 1990, each month the Department shall
5		pay into the County and Mass Transit District Fund 4% of the
6		net revenue realized for the preceding month from the 6.25%
7		general rate on the selling price of tangible personal property
8		which is purchased outside Illinois at retail from a retailer
9		and which is titled or registered by an agency of this State's
10		government.
11		Beginning January 1, 1990, each month the Department shall
12		pay into the State and Local Sales Tax Reform Fund, a special
13		fund in the State Treasury, 20% of the net revenue realized for
14		the preceding month from the 6.25% general rate on the selling
15		price of tangible personal property, other than tangible
16		personal property which is purchased outside Illinois at retail
17		from a retailer and which is titled or registered by an agency
18		of this State's government.
19		From July 1, 2017 through June 30, 2018, no deposits shall
20		be made into the State and Local Sales Tax Reform Fund from the
21		net revenue realized from the 6.25% general rate on taxable
22		services. Beginning July 1, 2018 and through June 30, 2019,
23		each month the Department shall pay into the State and Local
24		Sales Tax Reform Fund 7% of the net revenue realized for the
25		preceding month from the 6.25% general rate on the selling
26		price of taxable services. Beginning July 1, 2019 and through

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1		June 30, 2020, each month the Department shall pay into the
2		State and Local Sales Tax Reform Fund 13% of the net revenue
3		realized for the preceding month from the 6.25% general rate on
4		the selling price of taxable services. Beginning July 1, 2020,
5		each month the Department shall pay into the State and Local
6		Sales Tax Reform Fund 20% of the net revenue realized for the
7		preceding month from the 6.25% general rate on the selling
8		price of taxable services.
9		Beginning August 1, 2000, each month the Department shall
10		pay into the State and Local Sales Tax Reform Fund 100% of the
11		net revenue realized for the preceding month from the 1.25%
12		rate on the selling price of motor fuel and gasohol. Beginning
13		September 1, 2010, each month the Department shall pay into the
14		State and Local Sales Tax Reform Fund 100% of the net revenue
15		realized for the preceding month from the 1.25% rate on the
16		selling price of sales tax holiday items.
17		Beginning January 1, 1990, each month the Department shall
18		pay into the Local Government Tax Fund 16% of the net revenue
19		realized for the preceding month from the 6.25% general rate on
20		the selling price of tangible personal property which is
21		purchased outside Illinois at retail from a retailer and which
22		is titled or registered by an agency of this State's
23		government.
24		Beginning October 1, 2009, each month the Department shall
25		pay into the Capital Projects Fund an amount that is equal to
26		an amount estimated by the Department to represent 80% of the

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1		net revenue realized for the preceding month from the sale of
2		candy, grooming and hygiene products, and soft drinks that had
3		been taxed at a rate of 1% prior to September 1, 2009 but that
4		are now taxed at 6.25%.
5		Beginning July 1, 2011, each month the Department shall pay
6		into the Clean Air Act Permit Fund 80% of the net revenue
7		realized for the preceding month from the 6.25% general rate on
8		the selling price of sorbents used in Illinois in the process
9		of sorbent injection as used to comply with the Environmental
10		Protection Act or the federal Clean Air Act, but the total
11		payment into the Clean Air Act Permit Fund under this Act and
12		the Retailers' Occupation Tax Act shall not exceed $2,000,000
13		in any fiscal year.
14		Beginning July 1, 2013, each month the Department shall pay
15		into the Underground Storage Tank Fund from the proceeds
16		collected under this Act, the Service Use Tax Act, the Service
17		Occupation Tax Act, and the Retailers' Occupation Tax Act an
18		amount equal to the average monthly deficit in the Underground
19		Storage Tank Fund during the prior year, as certified annually
20		by the Illinois Environmental Protection Agency, but the total
21		payment into the Underground Storage Tank Fund under this Act,
22		the Service Use Tax Act, the Service Occupation Tax Act, and
23		the Retailers' Occupation Tax Act shall not exceed $18,000,000
24		in any State fiscal year. As used in this paragraph, the
25		"average monthly deficit" shall be equal to the difference
26		between the average monthly claims for payment by the fund and

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1		the average monthly revenues deposited into the fund, excluding
2		payments made pursuant to this paragraph.
3		Beginning July 1, 2015, of the remainder of the moneys
4		received by the Department under this Act, the Service Use Tax
5		Act, the Service Occupation Tax Act, and the Retailers'
6		Occupation Tax Act, each month the Department shall deposit
7		$500,000 into the State Crime Laboratory Fund.
8		Of the remainder of the moneys received by the Department
9		pursuant to this Act, (a) 1.75% thereof shall be paid into the
10		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
11		and after July 1, 1989, 3.8% thereof shall be paid into the
12		Build Illinois Fund; provided, however, that if in any fiscal
13		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
14		may be, of the moneys received by the Department and required
15		to be paid into the Build Illinois Fund pursuant to Section 3
16		of the Retailers' Occupation Tax Act, Section 9 of the Use Tax
17		Act, Section 9 of the Service Use Tax Act, and Section 9 of the
18		Service Occupation Tax Act, such Acts being hereinafter called
19		the "Tax Acts" and such aggregate of 2.2% or 3.8%, as the case
20		may be, of moneys being hereinafter called the "Tax Act
21		Amount", and (2) the amount transferred to the Build Illinois
22		Fund from the State and Local Sales Tax Reform Fund shall be
23		less than the Annual Specified Amount (as defined in Section 3
24		of the Retailers' Occupation Tax Act), an amount equal to the
25		difference shall be immediately paid into the Build Illinois
26		Fund from other moneys received by the Department pursuant to

SB0009 Engrossed - 293 - LRB100 06347 HLH 16385 b
1		the Tax Acts; and further provided, that if on the last
2		business day of any month the sum of (1) the Tax Act Amount
3		required to be deposited into the Build Illinois Bond Account
4		in the Build Illinois Fund during such month and (2) the amount
5		transferred during such month to the Build Illinois Fund from
6		the State and Local Sales Tax Reform Fund shall have been less
7		than 1/12 of the Annual Specified Amount, an amount equal to
8		the difference shall be immediately paid into the Build
9		Illinois Fund from other moneys received by the Department
10		pursuant to the Tax Acts; and, further provided, that in no
11		event shall the payments required under the preceding proviso
12		result in aggregate payments into the Build Illinois Fund
13		pursuant to this clause (b) for any fiscal year in excess of
14		the greater of (i) the Tax Act Amount or (ii) the Annual
15		Specified Amount for such fiscal year; and, further provided,
16		that the amounts payable into the Build Illinois Fund under
17		this clause (b) shall be payable only until such time as the
18		aggregate amount on deposit under each trust indenture securing
19		Bonds issued and outstanding pursuant to the Build Illinois
20		Bond Act is sufficient, taking into account any future
21		investment income, to fully provide, in accordance with such
22		indenture, for the defeasance of or the payment of the
23		principal of, premium, if any, and interest on the Bonds
24		secured by such indenture and on any Bonds expected to be
25		issued thereafter and all fees and costs payable with respect
26		thereto, all as certified by the Director of the Bureau of the

SB0009 Engrossed - 294 - LRB100 06347 HLH 16385 b
1		Budget (now Governor's Office of Management and Budget). If on
2		the last business day of any month in which Bonds are
3		outstanding pursuant to the Build Illinois Bond Act, the
4		aggregate of the moneys deposited in the Build Illinois Bond
5		Account in the Build Illinois Fund in such month shall be less
6		than the amount required to be transferred in such month from
7		the Build Illinois Bond Account to the Build Illinois Bond
8		Retirement and Interest Fund pursuant to Section 13 of the
9		Build Illinois Bond Act, an amount equal to such deficiency
10		shall be immediately paid from other moneys received by the
11		Department pursuant to the Tax Acts to the Build Illinois Fund;
12		provided, however, that any amounts paid to the Build Illinois
13		Fund in any fiscal year pursuant to this sentence shall be
14		deemed to constitute payments pursuant to clause (b) of the
15		preceding sentence and shall reduce the amount otherwise
16		payable for such fiscal year pursuant to clause (b) of the
17		preceding sentence. The moneys received by the Department
18		pursuant to this Act and required to be deposited into the
19		Build Illinois Fund are subject to the pledge, claim and charge
20		set forth in Section 12 of the Build Illinois Bond Act.
21		Subject to payment of amounts into the Build Illinois Fund
22		as provided in the preceding paragraph or in any amendment
23		thereto hereafter enacted, the following specified monthly
24		installment of the amount requested in the certificate of the
25		Chairman of the Metropolitan Pier and Exposition Authority
26		provided under Section 8.25f of the State Finance Act, but not

SB0009 Engrossed - 295 - LRB100 06347 HLH 16385 b
1		in excess of the sums designated as "Total Deposit", shall be
2		deposited in the aggregate from collections under Section 9 of
3		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
4		9 of the Service Occupation Tax Act, and Section 3 of the
5		Retailers' Occupation Tax Act into the McCormick Place
6		Expansion Project Fund in the specified fiscal years.
7 Fiscal Year Total Deposit 8 1993 $0 9 1994 53,000,000 10 1995 58,000,000 11 1996 61,000,000 12 1997 64,000,000 13 1998 68,000,000 14 1999 71,000,000 15 2000 75,000,000 16 2001 80,000,000 17 2002 93,000,000 18 2003 99,000,000 19 2004 103,000,000 20 2005 108,000,000 21 2006 113,000,000 22 2007 119,000,000 23 2008 126,000,000 24 2009 132,000,000 25 2010 139,000,000 26 2011 146,000,000

SB0009 Engrossed - 296 - LRB100 06347 HLH 16385 b

1 2012 153,000,000 2 2013 161,000,000 3 2014 170,000,000 4 2015 179,000,000 5 2016 189,000,000 6 2017 199,000,000 7 2018 210,000,000 8 2019 221,000,000 9 2020 233,000,000 10 2021 246,000,000 11 2022 260,000,000 12 2023 275,000,000 13 2024 275,000,000 14 2025 275,000,000 15 2026 279,000,000 16 2027 292,000,000 17 2028 307,000,000 18 2029 322,000,000 19 2030 338,000,000 20 2031 350,000,000 21 2032 350,000,000 22 and 23 each fiscal year 24 thereafter that bonds 25 are outstanding under 26 Section 13.2 of the

SB0009 Engrossed - 297 - LRB100 06347 HLH 16385 b
1 Metropolitan Pier and 2 Exposition Authority Act, 3 but not after fiscal year 2060.
4		Beginning July 20, 1993 and in each month of each fiscal
5		year thereafter, one-eighth of the amount requested in the
6		certificate of the Chairman of the Metropolitan Pier and
7		Exposition Authority for that fiscal year, less the amount
8		deposited into the McCormick Place Expansion Project Fund by
9		the State Treasurer in the respective month under subsection
10		(g) of Section 13 of the Metropolitan Pier and Exposition
11		Authority Act, plus cumulative deficiencies in the deposits
12		required under this Section for previous months and years,
13		shall be deposited into the McCormick Place Expansion Project
14		Fund, until the full amount requested for the fiscal year, but
15		not in excess of the amount specified above as "Total Deposit",
16		has been deposited.
17		Subject to payment of amounts into the Build Illinois Fund
18		and the McCormick Place Expansion Project Fund pursuant to the
19		preceding paragraphs or in any amendments thereto hereafter
20		enacted, beginning July 1, 1993 and ending on September 30,
21		2013, the Department shall each month pay into the Illinois Tax
22		Increment Fund 0.27% of 80% of the net revenue realized for the
23		preceding month from the 6.25% general rate on the selling
24		price of tangible personal property.
25		Subject to payment of amounts into the Build Illinois Fund
26		and the McCormick Place Expansion Project Fund pursuant to the

SB0009 Engrossed - 298 - LRB100 06347 HLH 16385 b
1		preceding paragraphs or in any amendments thereto hereafter
2		enacted, beginning with the receipt of the first report of
3		taxes paid by an eligible business and continuing for a 25-year
4		period, the Department shall each month pay into the Energy
5		Infrastructure Fund 80% of the net revenue realized from the
6		6.25% general rate on the selling price of Illinois-mined coal
7		that was sold to an eligible business. For purposes of this
8		paragraph, the term "eligible business" means a new electric
9		generating facility certified pursuant to Section 605-332 of
10		the Department of Commerce and Economic Opportunity Law of the
11		Civil Administrative Code of Illinois.
12		Subject to payment of amounts into the Build Illinois Fund,
13		the McCormick Place Expansion Project Fund, the Illinois Tax
14		Increment Fund, and the Energy Infrastructure Fund pursuant to
15		the preceding paragraphs or in any amendments to this Section
16		hereafter enacted, beginning on the first day of the first
17		calendar month to occur on or after August 26, 2014 (the
18		effective date of Public Act 98-1098) this amendatory Act of
19		the 98th General Assembly, each month, from the collections
20		made under Section 9 of the Use Tax Act, Section 9 of the
21		Service Use Tax Act, Section 9 of the Service Occupation Tax
22		Act, and Section 3 of the Retailers' Occupation Tax Act, the
23		Department shall pay into the Tax Compliance and Administration
24		Fund, to be used, subject to appropriation, to fund additional
25		auditors and compliance personnel at the Department of Revenue,
26		an amount equal to 1/12 of 5% of 80% of the cash receipts

SB0009 Engrossed - 299 - LRB100 06347 HLH 16385 b
1		collected during the preceding fiscal year by the Audit Bureau
2		of the Department under the Use Tax Act, the Service Use Tax
3		Act, the Service Occupation Tax Act, the Retailers' Occupation
4		Tax Act, and associated local occupation and use taxes
5		administered by the Department.
6		Of the remainder of the moneys received by the Department
7		pursuant to this Act, 75% thereof shall be paid into the State
8		Treasury and 25% shall be reserved in a special account and
9		used only for the transfer to the Common School Fund as part of
10		the monthly transfer from the General Revenue Fund in
11		accordance with Section 8a of the State Finance Act.
12		As soon as possible after the first day of each month, upon
13		certification of the Department of Revenue, the Comptroller
14		shall order transferred and the Treasurer shall transfer from
15		the General Revenue Fund to the Motor Fuel Tax Fund an amount
16		equal to 1.7% of 80% of the net revenue realized under this Act
17		for the second preceding month. Beginning April 1, 2000, this
18		transfer is no longer required and shall not be made.
19		Net revenue realized for a month shall be the revenue
20		collected by the State pursuant to this Act, less the amount
21		paid out during that month as refunds to taxpayers for
22		overpayment of liability.
23		For greater simplicity of administration, manufacturers,
24		importers and wholesalers whose products are sold at retail in
25		Illinois by numerous retailers, and who wish to do so, may
26		assume the responsibility for accounting and paying to the

SB0009 Engrossed - 300 - LRB100 06347 HLH 16385 b
1		Department all tax accruing under this Act with respect to such
2		sales, if the retailers who are affected do not make written
3		objection to the Department to this arrangement.
4		(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
5		98-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
6		8-26-14; 99-352, eff. 8-12-15; 99-858, eff. 8-19-16; 99-933,
7		eff. 1-27-17; revised 2-3-17.)
8		(35 ILCS 105/10) (from Ch. 120, par. 439.10)
9		Sec. 10. Except as to motor vehicles, aircraft, watercraft,
10		and trailers, and except as to cigarettes as defined in the
11		Cigarette Use Tax Act, when tangible personal property or
12		(beginning January 1, 2018 a taxable service) is purchased from
13		a retailer for use in this State by a purchaser who did not pay
14		the tax imposed by this Act to the retailer, and who does not
15		file returns with the Department as a retailer under Section 9
16		of this Act, such purchaser (by the last day of the month
17		following the calendar month in which such purchaser makes any
18		payment upon the selling price of such property) shall, except
19		as otherwise provided in this Section, file a return with the
20		Department and pay the tax upon that portion of the selling
21		price so paid by the purchaser during the preceding calendar
22		month. When tangible personal property, including but not
23		limited to motor vehicles and aircraft, is purchased by a
24		lessor, under a lease for one year or longer, executed or in
25		effect at the time of purchase to an interstate carrier for

SB0009 Engrossed - 301 - LRB100 06347 HLH 16385 b
1		hire, who did not pay the tax imposed by this Act to the
2		retailer, such lessor (by the last day of the month following
3		the calendar month in which such property reverts to the use of
4		such lessor) shall file a return with the Department and pay
5		the tax upon the fair market value of such property on the date
6		of such reversion. However, in determining the fair market
7		value at the time of reversion, the fair market value of such
8		property shall not exceed the original purchase price of the
9		property that was paid by the lessor at the time of purchase.
10		Such return shall be filed on a form prescribed by the
11		Department and shall contain such information as the Department
12		may reasonably require. Such return and payment from the
13		purchaser shall be submitted to the Department sooner than the
14		last day of the month after the month in which the purchase is
15		made to the extent that that may be necessary in order to
16		secure the title to a motor vehicle or the certificate of
17		registration for an aircraft. However, except as to motor
18		vehicles and aircraft, and except as to cigarettes as defined
19		in the Cigarette Use Tax Act, if the purchaser's annual use tax
20		liability does not exceed $600, the purchaser may file the
21		return on an annual basis on or before April 15th of the year
22		following the year use tax liability was incurred. Individual
23		purchasers with an annual use tax liability that does not
24		exceed $600 may, in lieu of the filing and payment requirements
25		in this Section, file and pay in compliance with Section 502.1
26		of the Illinois Income Tax Act.

SB0009 Engrossed - 302 - LRB100 06347 HLH 16385 b
1		If cigarettes, as defined in the Cigarette Use Tax Act, are
2		purchased from a retailer for use in this State by a purchaser
3		who did not pay the tax imposed by this Act to the retailer,
4		and who does not file returns with the Department as a retailer
5		under Section 9 of this Act, such purchaser must, within 30
6		days after acquiring the cigarettes, file a return with the
7		Department and pay the tax upon that portion of the selling
8		price so paid by the purchaser for the cigarettes.
9		In addition with respect to motor vehicles, aircraft,
10		watercraft, and trailers, a purchaser of such tangible personal
11		property for use in this State, who purchases such tangible
12		personal property from an out-of-state retailer, shall file
13		with the Department, upon a form to be prescribed and supplied
14		by the Department, a return for each such item of tangible
15		personal property purchased, except that if, in the same
16		transaction, (i) a purchaser of motor vehicles, aircraft,
17		watercraft, or trailers who is a retailer of motor vehicles,
18		aircraft, watercraft, or trailers purchases more than one motor
19		vehicle, aircraft, watercraft, or trailer for the purpose of
20		resale or (ii) a purchaser of motor vehicles, aircraft,
21		watercraft, or trailers purchases more than one motor vehicle,
22		aircraft, watercraft, or trailer for use as qualifying rolling
23		stock as provided in Section 3-55 of this Act, then the
24		purchaser may report the purchase of all motor vehicles,
25		aircraft, watercraft, or trailers involved in that transaction
26		to the Department on a single return prescribed by the

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1		Department. Such return in the case of motor vehicles and
2		aircraft must show the name and address of the seller, the
3		name, address of purchaser, the amount of the selling price
4		including the amount allowed by the retailer for traded in
5		property, if any; the amount allowed by the retailer for the
6		traded-in tangible personal property, if any, to the extent to
7		which Section 2 of this Act allows an exemption for the value
8		of traded-in property; the balance payable after deducting such
9		trade-in allowance from the total selling price; the amount of
10		tax due from the purchaser with respect to such transaction;
11		the amount of tax collected from the purchaser by the retailer
12		on such transaction (or satisfactory evidence that such tax is
13		not due in that particular instance if that is claimed to be
14		the fact); the place and date of the sale, a sufficient
15		identification of the property sold, and such other information
16		as the Department may reasonably require.
17		Such return shall be filed not later than 30 days after
18		such motor vehicle or aircraft is brought into this State for
19		use.
20		For purposes of this Section, "watercraft" means a Class 2,
21		Class 3, or Class 4 watercraft as defined in Section 3-2 of the
22		Boat Registration and Safety Act, a personal watercraft, or any
23		boat equipped with an inboard motor.
24		The return and tax remittance or proof of exemption from
25		the tax that is imposed by this Act may be transmitted to the
26		Department by way of the State agency with which, or State

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1		officer with whom, the tangible personal property must be
2		titled or registered (if titling or registration is required)
3		if the Department and such agency or State officer determine
4		that this procedure will expedite the processing of
5		applications for title or registration.
6		With each such return, the purchaser shall remit the proper
7		amount of tax due (or shall submit satisfactory evidence that
8		the sale is not taxable if that is the case), to the Department
9		or its agents, whereupon the Department shall issue, in the
10		purchaser's name, a tax receipt (or a certificate of exemption
11		if the Department is satisfied that the particular sale is tax
12		exempt) which such purchaser may submit to the agency with
13		which, or State officer with whom, he must title or register
14		the tangible personal property that is involved (if titling or
15		registration is required) in support of such purchaser's
16		application for an Illinois certificate or other evidence of
17		title or registration to such tangible personal property.
18		When a purchaser pays a tax imposed by this Act directly to
19		the Department, the Department (upon request therefor from such
20		purchaser) shall issue an appropriate receipt to such purchaser
21		showing that he has paid such tax to the Department. Such
22		receipt shall be sufficient to relieve the purchaser from
23		further liability for the tax to which such receipt may refer.
24		A user who is liable to pay use tax directly to the
25		Department only occasionally and not on a frequently recurring
26		basis, and who is not required to file returns with the

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1		Department as a retailer under Section 9 of this Act, or under
2		the "Retailers' Occupation Tax Act", or as a registrant with
3		the Department under the "Service Occupation Tax Act" or the
4		"Service Use Tax Act", need not register with the Department.
5		However, if such a user has a frequently recurring direct use
6		tax liability to pay to the Department, such user shall be
7		required to register with the Department on forms prescribed by
8		the Department and to obtain and display a certificate of
9		registration from the Department. In that event, all of the
10		provisions of Section 9 of this Act concerning the filing of
11		regular monthly, quarterly or annual tax returns and all of the
12		provisions of Section 2a of the "Retailers' Occupation Tax Act"
13		concerning the requirements for registrants to post bond or
14		other security with the Department, as the provisions of such
15		sections now exist or may hereafter be amended, shall apply to
16		such users to the same extent as if such provisions were
17		included herein.
18		(Source: P.A. 96-520, eff. 8-14-09; 96-1000, eff. 7-2-10;
19		96-1388, eff. 7-29-10.)
20		(35 ILCS 105/11) (from Ch. 120, par. 439.11)
21		Sec. 11. Every retailer required or authorized to collect
22		taxes hereunder and every person using in this State tangible
23		personal property or taxable service purchased at retail from a
24		retailer on or after the effective date hereof shall keep such
25		records, receipts, invoices and other pertinent books,

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1		documents, memoranda and papers as the Department shall
2		require, in such form as the Department shall require. The
3		Department may adopt rules that establish requirements,
4		including record forms and formats, for records required to be
5		kept and maintained by taxpayers. For purposes of this Section,
6		"records" means all data maintained by the taxpayer, including
7		data on paper, microfilm, microfiche or any type of
8		machine-sensible data compilation. For the purpose of
9		administering and enforcing the provisions hereof, the
10		Department, or any officer or employee of the Department
11		designated, in writing, by the Director thereof, may hold
12		investigations and hearings concerning any matters covered
13		herein and may examine any books, papers, records, documents or
14		memoranda of any retailer or purchaser bearing upon the sales
15		or purchases of tangible personal property, the privilege of
16		using which is taxed hereunder, and may require the attendance
17		of such person or any officer or employee of such person, or of
18		any person having knowledge of the facts, and may take
19		testimony and require proof for its information.
20		(Source: P.A. 88-480.)
21		Section 30-25. The Service Use Tax Act is amended by
22		changing Sections 2 and 3-5 as follows:
23		(35 ILCS 110/2) (from Ch. 120, par. 439.32)
24		Sec. 2. Definitions.

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1		"Use" means the exercise by any person of any right or
2		power over tangible personal property incident to the ownership
3		of that property, but does not include the sale or use for
4		demonstration by him of that property in any form as tangible
5		personal property in the regular course of business. "Use" does
6		not mean the interim use of tangible personal property nor the
7		physical incorporation of tangible personal property, as an
8		ingredient or constituent, into other tangible personal
9		property, (a) which is sold in the regular course of business
10		or (b) which the person incorporating such ingredient or
11		constituent therein has undertaken at the time of such purchase
12		to cause to be transported in interstate commerce to
13		destinations outside the State of Illinois.
14		"Purchased from a serviceman" means the acquisition of the
15		ownership of, or title to, tangible personal property through a
16		sale of service.
17		"Purchaser" means any person who, through a sale of
18		service, acquires the ownership of, or title to, any tangible
19		personal property.
20		"Cost price" means the consideration paid by the serviceman
21		for a purchase valued in money, whether paid in money or
22		otherwise, including cash, credits and services, and shall be
23		determined without any deduction on account of the supplier's
24		cost of the property sold or on account of any other expense
25		incurred by the supplier. When a serviceman contracts out part
26		or all of the services required in his sale of service, it

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1		shall be presumed that the cost price to the serviceman of the
2		property transferred to him or her by his or her subcontractor
3		is equal to 50% of the subcontractor's charges to the
4		serviceman in the absence of proof of the consideration paid by
5		the subcontractor for the purchase of such property.
6		"Selling price" means the consideration for a sale valued
7		in money whether received in money or otherwise, including
8		cash, credits and service, and shall be determined without any
9		deduction on account of the serviceman's cost of the property
10		sold, the cost of materials used, labor or service cost or any
11		other expense whatsoever, but does not include interest or
12		finance charges which appear as separate items on the bill of
13		sale or sales contract nor charges that are added to prices by
14		sellers on account of the seller's duty to collect, from the
15		purchaser, the tax that is imposed by this Act.
16		"Department" means the Department of Revenue.
17		"Person" means any natural individual, firm, partnership,
18		association, joint stock company, joint venture, public or
19		private corporation, limited liability company, and any
20		receiver, executor, trustee, guardian or other representative
21		appointed by order of any court.
22		"Sale of service" means any transaction except:
23		(1) a retail sale of tangible personal property taxable
24		under the Retailers' Occupation Tax Act or under the Use
25		Tax Act.
26		(2) a sale of tangible personal property for the

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1		purpose of resale made in compliance with Section 2c of the
2		Retailers' Occupation Tax Act.
3		(3) except as hereinafter provided, a sale or transfer
4		of tangible personal property as an incident to the
5		rendering of service for or by any governmental body, or
6		for or by any corporation, society, association,
7		foundation or institution organized and operated
8		exclusively for charitable, religious or educational
9		purposes or any not-for-profit corporation, society,
10		association, foundation, institution or organization which
11		has no compensated officers or employees and which is
12		organized and operated primarily for the recreation of
13		persons 55 years of age or older. A limited liability
14		company may qualify for the exemption under this paragraph
15		only if the limited liability company is organized and
16		operated exclusively for educational purposes.
17		(4) a sale or transfer of tangible personal property as
18		an incident to the rendering of service for interstate
19		carriers for hire for use as rolling stock moving in
20		interstate commerce or by lessors under a lease of one year
21		or longer, executed or in effect at the time of purchase of
22		personal property, to interstate carriers for hire for use
23		as rolling stock moving in interstate commerce so long as
24		so used by such interstate carriers for hire, and equipment
25		operated by a telecommunications provider, licensed as a
26		common carrier by the Federal Communications Commission,

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1		which is permanently installed in or affixed to aircraft
2		moving in interstate commerce.
3		(4a) a sale or transfer of tangible personal property
4		as an incident to the rendering of service for owners,
5		lessors, or shippers of tangible personal property which is
6		utilized by interstate carriers for hire for use as rolling
7		stock moving in interstate commerce so long as so used by
8		interstate carriers for hire, and equipment operated by a
9		telecommunications provider, licensed as a common carrier
10		by the Federal Communications Commission, which is
11		permanently installed in or affixed to aircraft moving in
12		interstate commerce.
13		(4a-5) on and after July 1, 2003 and through June 30,
14		2004, a sale or transfer of a motor vehicle of the second
15		division with a gross vehicle weight in excess of 8,000
16		pounds as an incident to the rendering of service if that
17		motor vehicle is subject to the commercial distribution fee
18		imposed under Section 3-815.1 of the Illinois Vehicle Code.
19		Beginning on July 1, 2004 and through June 30, 2005, the
20		use in this State of motor vehicles of the second division:
21		(i) with a gross vehicle weight rating in excess of 8,000
22		pounds; (ii) that are subject to the commercial
23		distribution fee imposed under Section 3-815.1 of the
24		Illinois Vehicle Code; and (iii) that are primarily used
25		for commercial purposes. Through June 30, 2005, this
26		exemption applies to repair and replacement parts added

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1		after the initial purchase of such a motor vehicle if that
2		motor vehicle is used in a manner that would qualify for
3		the rolling stock exemption otherwise provided for in this
4		Act. For purposes of this paragraph, "used for commercial
5		purposes" means the transportation of persons or property
6		in furtherance of any commercial or industrial enterprise
7		whether for-hire or not.
8		(5) a sale or transfer of machinery and equipment used
9		primarily in the process of the manufacturing or
10		assembling, either in an existing, an expanded or a new
11		manufacturing facility, of tangible personal property for
12		wholesale or retail sale or lease, whether such sale or
13		lease is made directly by the manufacturer or by some other
14		person, whether the materials used in the process are owned
15		by the manufacturer or some other person, or whether such
16		sale or lease is made apart from or as an incident to the
17		seller's engaging in a service occupation and the
18		applicable tax is a Service Use Tax or Service Occupation
19		Tax, rather than Use Tax or Retailers' Occupation Tax. The
20		exemption provided by this paragraph (5) does not include
21		machinery and equipment used in (i) the generation of
22		electricity for wholesale or retail sale; (ii) the
23		generation or treatment of natural or artificial gas for
24		wholesale or retail sale that is delivered to customers
25		through pipes, pipelines, or mains; or (iii) the treatment
26		of water for wholesale or retail sale that is delivered to

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1		customers through pipes, pipelines, or mains. The
2		provisions of this amendatory Act of the 98th General
3		Assembly are declaratory of existing law as to the meaning
4		and scope of this exemption. The exemption under this
5		paragraph (5) is exempt from the provisions of Section
6		3-75.
7		(5a) the repairing, reconditioning or remodeling, for
8		a common carrier by rail, of tangible personal property
9		which belongs to such carrier for hire, and as to which
10		such carrier receives the physical possession of the
11		repaired, reconditioned or remodeled item of tangible
12		personal property in Illinois, and which such carrier
13		transports, or shares with another common carrier in the
14		transportation of such property, out of Illinois on a
15		standard uniform bill of lading showing the person who
16		repaired, reconditioned or remodeled the property to a
17		destination outside Illinois, for use outside Illinois.
18		(5b) a sale or transfer of tangible personal property
19		which is produced by the seller thereof on special order in
20		such a way as to have made the applicable tax the Service
21		Occupation Tax or the Service Use Tax, rather than the
22		Retailers' Occupation Tax or the Use Tax, for an interstate
23		carrier by rail which receives the physical possession of
24		such property in Illinois, and which transports such
25		property, or shares with another common carrier in the
26		transportation of such property, out of Illinois on a

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1		standard uniform bill of lading showing the seller of the
2		property as the shipper or consignor of such property to a
3		destination outside Illinois, for use outside Illinois.
4		(6) until July 1, 2003, a sale or transfer of
5		distillation machinery and equipment, sold as a unit or kit
6		and assembled or installed by the retailer, which machinery
7		and equipment is certified by the user to be used only for
8		the production of ethyl alcohol that will be used for
9		consumption as motor fuel or as a component of motor fuel
10		for the personal use of such user and not subject to sale
11		or resale.
12		(7) at the election of any serviceman not required to
13		be otherwise registered as a retailer under Section 2a of
14		the Retailers' Occupation Tax Act, made for each fiscal
15		year sales of service in which the aggregate annual cost
16		price of tangible personal property transferred as an
17		incident to the sales of service is less than 35%, or 75%
18		in the case of servicemen transferring prescription drugs
19		or servicemen engaged in graphic arts production, of the
20		aggregate annual total gross receipts from all sales of
21		service. The purchase of such tangible personal property by
22		the serviceman shall be subject to tax under the Retailers'
23		Occupation Tax Act and the Use Tax Act. However, if a
24		primary serviceman who has made the election described in
25		this paragraph subcontracts service work to a secondary
26		serviceman who has also made the election described in this

SB0009 Engrossed - 314 - LRB100 06347 HLH 16385 b
1		paragraph, the primary serviceman does not incur a Use Tax
2		liability if the secondary serviceman (i) has paid or will
3		pay Use Tax on his or her cost price of any tangible
4		personal property transferred to the primary serviceman
5		and (ii) certifies that fact in writing to the primary
6		serviceman.
7		Tangible personal property transferred incident to the
8		completion of a maintenance agreement is exempt from the tax
9		imposed pursuant to this Act.
10		Exemption (5) also includes machinery and equipment used in
11		the general maintenance or repair of such exempt machinery and
12		equipment or for in-house manufacture of exempt machinery and
13		equipment. On and after July 1, 2017, exemption (5) also
14		includes production related tangible personal property, as
15		defined in Section 3-50 of the Use Tax Act. On and after July
16		1, 2017, exemption (5) also includes graphic arts machinery and
17		equipment, as defined in paragraph (5) of Section 3-5. The
18		machinery and equipment exemption does not include machinery
19		and equipment used in (i) the generation of electricity for
20		wholesale or retail sale; (ii) the generation or treatment of
21		natural or artificial gas for wholesale or retail sale that is
22		delivered to customers through pipes, pipelines, or mains; or
23		(iii) the treatment of water for wholesale or retail sale that
24		is delivered to customers through pipes, pipelines, or mains.
25		The provisions of this amendatory Act of the 98th General
26		Assembly are declaratory of existing law as to the meaning and

SB0009 Engrossed - 315 - LRB100 06347 HLH 16385 b
1		scope of this exemption. For the purposes of exemption (5),
2		each of these terms shall have the following meanings: (1)
3		"manufacturing process" shall mean the production of any
4		article of tangible personal property, whether such article is
5		a finished product or an article for use in the process of
6		manufacturing or assembling a different article of tangible
7		personal property, by procedures commonly regarded as
8		manufacturing, processing, fabricating, or refining which
9		changes some existing material or materials into a material
10		with a different form, use or name. In relation to a recognized
11		integrated business composed of a series of operations which
12		collectively constitute manufacturing, or individually
13		constitute manufacturing operations, the manufacturing process
14		shall be deemed to commence with the first operation or stage
15		of production in the series, and shall not be deemed to end
16		until the completion of the final product in the last operation
17		or stage of production in the series; and further, for purposes
18		of exemption (5), photoprocessing is deemed to be a
19		manufacturing process of tangible personal property for
20		wholesale or retail sale; (2) "assembling process" shall mean
21		the production of any article of tangible personal property,
22		whether such article is a finished product or an article for
23		use in the process of manufacturing or assembling a different
24		article of tangible personal property, by the combination of
25		existing materials in a manner commonly regarded as assembling
26		which results in a material of a different form, use or name;

SB0009 Engrossed - 316 - LRB100 06347 HLH 16385 b
1		(3) "machinery" shall mean major mechanical machines or major
2		components of such machines contributing to a manufacturing or
3		assembling process; and (4) "equipment" shall include any
4		independent device or tool separate from any machinery but
5		essential to an integrated manufacturing or assembly process;
6		including computers used primarily in a manufacturer's
7		computer assisted design, computer assisted manufacturing
8		(CAD/CAM) system; or any subunit or assembly comprising a
9		component of any machinery or auxiliary, adjunct or attachment
10		parts of machinery, such as tools, dies, jigs, fixtures,
11		patterns and molds; or any parts which require periodic
12		replacement in the course of normal operation; but shall not
13		include hand tools. Equipment includes chemicals or chemicals
14		acting as catalysts but only if the chemicals or chemicals
15		acting as catalysts effect a direct and immediate change upon a
16		product being manufactured or assembled for wholesale or retail
17		sale or lease. The purchaser of such machinery and equipment
18		who has an active resale registration number shall furnish such
19		number to the seller at the time of purchase. The user of such
20		machinery and equipment and tools without an active resale
21		registration number shall prepare a certificate of exemption
22		for each transaction stating facts establishing the exemption
23		for that transaction, which certificate shall be available to
24		the Department for inspection or audit. The Department shall
25		prescribe the form of the certificate.
26		Any informal rulings, opinions or letters issued by the

SB0009 Engrossed - 317 - LRB100 06347 HLH 16385 b
1		Department in response to an inquiry or request for any opinion
2		from any person regarding the coverage and applicability of
3		exemption (5) to specific devices shall be published,
4		maintained as a public record, and made available for public
5		inspection and copying. If the informal ruling, opinion or
6		letter contains trade secrets or other confidential
7		information, where possible the Department shall delete such
8		information prior to publication. Whenever such informal
9		rulings, opinions, or letters contain any policy of general
10		applicability, the Department shall formulate and adopt such
11		policy as a rule in accordance with the provisions of the
12		Illinois Administrative Procedure Act.
13		On and after July 1, 1987, no entity otherwise eligible
14		under exemption (3) of this Section shall make tax free
15		purchases unless it has an active exemption identification
16		number issued by the Department.
17		The purchase, employment and transfer of such tangible
18		personal property as newsprint and ink for the primary purpose
19		of conveying news (with or without other information) is not a
20		purchase, use or sale of service or of tangible personal
21		property within the meaning of this Act.
22		"Serviceman" means any person who is engaged in the
23		occupation of making sales of service.
24		"Sale at retail" means "sale at retail" as defined in the
25		Retailers' Occupation Tax Act.
26		"Supplier" means any person who makes sales of tangible

SB0009 Engrossed - 318 - LRB100 06347 HLH 16385 b
1		personal property to servicemen for the purpose of resale as an
2		incident to a sale of service.
3		"Serviceman maintaining a place of business in this State",
4		or any like term, means and includes any serviceman:
5		1. having or maintaining within this State, directly or
6		by a subsidiary, an office, distribution house, sales
7		house, warehouse or other place of business, or any agent
8		or other representative operating within this State under
9		the authority of the serviceman or its subsidiary,
10		irrespective of whether such place of business or agent or
11		other representative is located here permanently or
12		temporarily, or whether such serviceman or subsidiary is
13		licensed to do business in this State;
14		1.1. having a contract with a person located in this
15		State under which the person, for a commission or other
16		consideration based on the sale of service by the
17		serviceman, directly or indirectly refers potential
18		customers to the serviceman by providing to the potential
19		customers a promotional code or other mechanism that allows
20		the serviceman to track purchases referred by such persons.
21		Examples of mechanisms that allow the serviceman to track
22		purchases referred by such persons include but are not
23		limited to the use of a link on the person's Internet
24		website, promotional codes distributed through the
25		person's hand-delivered or mailed material, and
26		promotional codes distributed by the person through radio

SB0009 Engrossed - 319 - LRB100 06347 HLH 16385 b
1		or other broadcast media. The provisions of this paragraph
2		1.1 shall apply only if the cumulative gross receipts from
3		sales of service by the serviceman to customers who are
4		referred to the serviceman by all persons in this State
5		under such contracts exceed $10,000 during the preceding 4
6		quarterly periods ending on the last day of March, June,
7		September, and December; a serviceman meeting the
8		requirements of this paragraph 1.1 shall be presumed to be
9		maintaining a place of business in this State but may rebut
10		this presumption by submitting proof that the referrals or
11		other activities pursued within this State by such persons
12		were not sufficient to meet the nexus standards of the
13		United States Constitution during the preceding 4
14		quarterly periods;
15		1.2. beginning July 1, 2011, having a contract with a
16		person located in this State under which:
17		A. the serviceman sells the same or substantially
18		similar line of services as the person located in this
19		State and does so using an identical or substantially
20		similar name, trade name, or trademark as the person
21		located in this State; and
22		B. the serviceman provides a commission or other
23		consideration to the person located in this State based
24		upon the sale of services by the serviceman.
25		The provisions of this paragraph 1.2 shall apply only if
26		the cumulative gross receipts from sales of service by the

SB0009 Engrossed - 320 - LRB100 06347 HLH 16385 b
1		serviceman to customers in this State under all such
2		contracts exceed $10,000 during the preceding 4 quarterly
3		periods ending on the last day of March, June, September,
4		and December;
5		2. soliciting orders for tangible personal property by
6		means of a telecommunication or television shopping system
7		(which utilizes toll free numbers) which is intended by the
8		retailer to be broadcast by cable television or other means
9		of broadcasting, to consumers located in this State;
10		3. pursuant to a contract with a broadcaster or
11		publisher located in this State, soliciting orders for
12		tangible personal property by means of advertising which is
13		disseminated primarily to consumers located in this State
14		and only secondarily to bordering jurisdictions;
15		4. soliciting orders for tangible personal property by
16		mail if the solicitations are substantial and recurring and
17		if the retailer benefits from any banking, financing, debt
18		collection, telecommunication, or marketing activities
19		occurring in this State or benefits from the location in
20		this State of authorized installation, servicing, or
21		repair facilities;
22		5. being owned or controlled by the same interests
23		which own or control any retailer engaging in business in
24		the same or similar line of business in this State;
25		6. having a franchisee or licensee operating under its
26		trade name if the franchisee or licensee is required to

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1		collect the tax under this Section;
2		7. pursuant to a contract with a cable television
3		operator located in this State, soliciting orders for
4		tangible personal property by means of advertising which is
5		transmitted or distributed over a cable television system
6		in this State; or
7		8. engaging in activities in Illinois, which
8		activities in the state in which the supply business
9		engaging in such activities is located would constitute
10		maintaining a place of business in that state.
11		(Source: P.A. 98-583, eff. 1-1-14; 98-1089, eff. 1-1-15.)
12		(35 ILCS 110/3-5)
13		Sec. 3-5. Exemptions. Use of the following tangible
14		personal property is exempt from the tax imposed by this Act:
15		(1) Personal property purchased from a corporation,
16		society, association, foundation, institution, or
17		organization, other than a limited liability company, that is
18		organized and operated as a not-for-profit service enterprise
19		for the benefit of persons 65 years of age or older if the
20		personal property was not purchased by the enterprise for the
21		purpose of resale by the enterprise.
22		(2) Personal property purchased by a non-profit Illinois
23		county fair association for use in conducting, operating, or
24		promoting the county fair.
25		(3) Personal property purchased by a not-for-profit arts or

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1		cultural organization that establishes, by proof required by
2		the Department by rule, that it has received an exemption under
3		Section 501(c)(3) of the Internal Revenue Code and that is
4		organized and operated primarily for the presentation or
5		support of arts or cultural programming, activities, or
6		services. These organizations include, but are not limited to,
7		music and dramatic arts organizations such as symphony
8		orchestras and theatrical groups, arts and cultural service
9		organizations, local arts councils, visual arts organizations,
10		and media arts organizations. On and after the effective date
11		of this amendatory Act of the 92nd General Assembly, however,
12		an entity otherwise eligible for this exemption shall not make
13		tax-free purchases unless it has an active identification
14		number issued by the Department.
15		(4) Legal tender, currency, medallions, or gold or silver
16		coinage issued by the State of Illinois, the government of the
17		United States of America, or the government of any foreign
18		country, and bullion.
19		(5) Until July 1, 2003 and beginning again on September 1,
20		2004 through August 30, 2014, graphic arts machinery and
21		equipment, including repair and replacement parts, both new and
22		used, and including that manufactured on special order or
23		purchased for lease, certified by the purchaser to be used
24		primarily for graphic arts production. Equipment includes
25		chemicals or chemicals acting as catalysts but only if the
26		chemicals or chemicals acting as catalysts effect a direct and

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1		immediate change upon a graphic arts product. Beginning on July
2		1, 2017, graphic arts machinery and equipment is included in
3		the manufacturing and assembling machinery and equipment
4		exemption under Section 2 of this Act.
5		(6) Personal property purchased from a teacher-sponsored
6		student organization affiliated with an elementary or
7		secondary school located in Illinois.
8		(7) Farm machinery and equipment, both new and used,
9		including that manufactured on special order, certified by the
10		purchaser to be used primarily for production agriculture or
11		State or federal agricultural programs, including individual
12		replacement parts for the machinery and equipment, including
13		machinery and equipment purchased for lease, and including
14		implements of husbandry defined in Section 1-130 of the
15		Illinois Vehicle Code, farm machinery and agricultural
16		chemical and fertilizer spreaders, and nurse wagons required to
17		be registered under Section 3-809 of the Illinois Vehicle Code,
18		but excluding other motor vehicles required to be registered
19		under the Illinois Vehicle Code. Horticultural polyhouses or
20		hoop houses used for propagating, growing, or overwintering
21		plants shall be considered farm machinery and equipment under
22		this item (7). Agricultural chemical tender tanks and dry boxes
23		shall include units sold separately from a motor vehicle
24		required to be licensed and units sold mounted on a motor
25		vehicle required to be licensed if the selling price of the
26		tender is separately stated.

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1		Farm machinery and equipment shall include precision
2		farming equipment that is installed or purchased to be
3		installed on farm machinery and equipment including, but not
4		limited to, tractors, harvesters, sprayers, planters, seeders,
5		or spreaders. Precision farming equipment includes, but is not
6		limited to, soil testing sensors, computers, monitors,
7		software, global positioning and mapping systems, and other
8		such equipment.
9		Farm machinery and equipment also includes computers,
10		sensors, software, and related equipment used primarily in the
11		computer-assisted operation of production agriculture
12		facilities, equipment, and activities such as, but not limited
13		to, the collection, monitoring, and correlation of animal and
14		crop data for the purpose of formulating animal diets and
15		agricultural chemicals. This item (7) is exempt from the
16		provisions of Section 3-75.
17		(8) Until June 30, 2013, fuel and petroleum products sold
18		to or used by an air common carrier, certified by the carrier
19		to be used for consumption, shipment, or storage in the conduct
20		of its business as an air common carrier, for a flight destined
21		for or returning from a location or locations outside the
22		United States without regard to previous or subsequent domestic
23		stopovers.
24		Beginning July 1, 2013, fuel and petroleum products sold to
25		or used by an air carrier, certified by the carrier to be used
26		for consumption, shipment, or storage in the conduct of its

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1		business as an air common carrier, for a flight that (i) is
2		engaged in foreign trade or is engaged in trade between the
3		United States and any of its possessions and (ii) transports at
4		least one individual or package for hire from the city of
5		origination to the city of final destination on the same
6		aircraft, without regard to a change in the flight number of
7		that aircraft.
8		(9) Proceeds of mandatory service charges separately
9		stated on customers' bills for the purchase and consumption of
10		food and beverages acquired as an incident to the purchase of a
11		service from a serviceman, to the extent that the proceeds of
12		the service charge are in fact turned over as tips or as a
13		substitute for tips to the employees who participate directly
14		in preparing, serving, hosting or cleaning up the food or
15		beverage function with respect to which the service charge is
16		imposed.
17		(10) Until July 1, 2003, oil field exploration, drilling,
18		and production equipment, including (i) rigs and parts of rigs,
19		rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
20		tubular goods, including casing and drill strings, (iii) pumps
21		and pump-jack units, (iv) storage tanks and flow lines, (v) any
22		individual replacement part for oil field exploration,
23		drilling, and production equipment, and (vi) machinery and
24		equipment purchased for lease; but excluding motor vehicles
25		required to be registered under the Illinois Vehicle Code.
26		(11) Proceeds from the sale of photoprocessing machinery

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1		and equipment, including repair and replacement parts, both new
2		and used, including that manufactured on special order,
3		certified by the purchaser to be used primarily for
4		photoprocessing, and including photoprocessing machinery and
5		equipment purchased for lease.
6		(12) Coal and aggregate exploration, mining, off-highway
7		hauling, processing, maintenance, and reclamation equipment,
8		including replacement parts and equipment, and including
9		equipment purchased for lease, but excluding motor vehicles
10		required to be registered under the Illinois Vehicle Code. The
11		changes made to this Section by Public Act 97-767 apply on and
12		after July 1, 2003, but no claim for credit or refund is
13		allowed on or after August 16, 2013 (the effective date of
14		Public Act 98-456) for such taxes paid during the period
15		beginning July 1, 2003 and ending on August 16, 2013 (the
16		effective date of Public Act 98-456).
17		(13) Semen used for artificial insemination of livestock
18		for direct agricultural production.
19		(14) Horses, or interests in horses, registered with and
20		meeting the requirements of any of the Arabian Horse Club
21		Registry of America, Appaloosa Horse Club, American Quarter
22		Horse Association, United States Trotting Association, or
23		Jockey Club, as appropriate, used for purposes of breeding or
24		racing for prizes. This item (14) is exempt from the provisions
25		of Section 3-75, and the exemption provided for under this item
26		(14) applies for all periods beginning May 30, 1995, but no

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1		claim for credit or refund is allowed on or after the effective
2		date of this amendatory Act of the 95th General Assembly for
3		such taxes paid during the period beginning May 30, 2000 and
4		ending on the effective date of this amendatory Act of the 95th
5		General Assembly.
6		(15) Computers and communications equipment utilized for
7		any hospital purpose and equipment used in the diagnosis,
8		analysis, or treatment of hospital patients purchased by a
9		lessor who leases the equipment, under a lease of one year or
10		longer executed or in effect at the time the lessor would
11		otherwise be subject to the tax imposed by this Act, to a
12		hospital that has been issued an active tax exemption
13		identification number by the Department under Section 1g of the
14		Retailers' Occupation Tax Act. If the equipment is leased in a
15		manner that does not qualify for this exemption or is used in
16		any other non-exempt manner, the lessor shall be liable for the
17		tax imposed under this Act or the Use Tax Act, as the case may
18		be, based on the fair market value of the property at the time
19		the non-qualifying use occurs. No lessor shall collect or
20		attempt to collect an amount (however designated) that purports
21		to reimburse that lessor for the tax imposed by this Act or the
22		Use Tax Act, as the case may be, if the tax has not been paid by
23		the lessor. If a lessor improperly collects any such amount
24		from the lessee, the lessee shall have a legal right to claim a
25		refund of that amount from the lessor. If, however, that amount
26		is not refunded to the lessee for any reason, the lessor is

SB0009 Engrossed - 328 - LRB100 06347 HLH 16385 b
1		liable to pay that amount to the Department.
2		(16) Personal property purchased by a lessor who leases the
3		property, under a lease of one year or longer executed or in
4		effect at the time the lessor would otherwise be subject to the
5		tax imposed by this Act, to a governmental body that has been
6		issued an active tax exemption identification number by the
7		Department under Section 1g of the Retailers' Occupation Tax
8		Act. If the property is leased in a manner that does not
9		qualify for this exemption or is used in any other non-exempt
10		manner, the lessor shall be liable for the tax imposed under
11		this Act or the Use Tax Act, as the case may be, based on the
12		fair market value of the property at the time the
13		non-qualifying use occurs. No lessor shall collect or attempt
14		to collect an amount (however designated) that purports to
15		reimburse that lessor for the tax imposed by this Act or the
16		Use Tax Act, as the case may be, if the tax has not been paid by
17		the lessor. If a lessor improperly collects any such amount
18		from the lessee, the lessee shall have a legal right to claim a
19		refund of that amount from the lessor. If, however, that amount
20		is not refunded to the lessee for any reason, the lessor is
21		liable to pay that amount to the Department.
22		(17) Beginning with taxable years ending on or after
23		December 31, 1995 and ending with taxable years ending on or
24		before December 31, 2004, personal property that is donated for
25		disaster relief to be used in a State or federally declared
26		disaster area in Illinois or bordering Illinois by a

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1		manufacturer or retailer that is registered in this State to a
2		corporation, society, association, foundation, or institution
3		that has been issued a sales tax exemption identification
4		number by the Department that assists victims of the disaster
5		who reside within the declared disaster area.
6		(18) Beginning with taxable years ending on or after
7		December 31, 1995 and ending with taxable years ending on or
8		before December 31, 2004, personal property that is used in the
9		performance of infrastructure repairs in this State, including
10		but not limited to municipal roads and streets, access roads,
11		bridges, sidewalks, waste disposal systems, water and sewer
12		line extensions, water distribution and purification
13		facilities, storm water drainage and retention facilities, and
14		sewage treatment facilities, resulting from a State or
15		federally declared disaster in Illinois or bordering Illinois
16		when such repairs are initiated on facilities located in the
17		declared disaster area within 6 months after the disaster.
18		(19) Beginning July 1, 1999, game or game birds purchased
19		at a "game breeding and hunting preserve area" as that term is
20		used in the Wildlife Code. This paragraph is exempt from the
21		provisions of Section 3-75.
22		(20) A motor vehicle, as that term is defined in Section
23		1-146 of the Illinois Vehicle Code, that is donated to a
24		corporation, limited liability company, society, association,
25		foundation, or institution that is determined by the Department
26		to be organized and operated exclusively for educational

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1		purposes. For purposes of this exemption, "a corporation,
2		limited liability company, society, association, foundation,
3		or institution organized and operated exclusively for
4		educational purposes" means all tax-supported public schools,
5		private schools that offer systematic instruction in useful
6		branches of learning by methods common to public schools and
7		that compare favorably in their scope and intensity with the
8		course of study presented in tax-supported schools, and
9		vocational or technical schools or institutes organized and
10		operated exclusively to provide a course of study of not less
11		than 6 weeks duration and designed to prepare individuals to
12		follow a trade or to pursue a manual, technical, mechanical,
13		industrial, business, or commercial occupation.
14		(21) Beginning January 1, 2000, personal property,
15		including food, purchased through fundraising events for the
16		benefit of a public or private elementary or secondary school,
17		a group of those schools, or one or more school districts if
18		the events are sponsored by an entity recognized by the school
19		district that consists primarily of volunteers and includes
20		parents and teachers of the school children. This paragraph
21		does not apply to fundraising events (i) for the benefit of
22		private home instruction or (ii) for which the fundraising
23		entity purchases the personal property sold at the events from
24		another individual or entity that sold the property for the
25		purpose of resale by the fundraising entity and that profits
26		from the sale to the fundraising entity. This paragraph is

SB0009 Engrossed - 331 - LRB100 06347 HLH 16385 b
1		exempt from the provisions of Section 3-75.
2		(22) Beginning January 1, 2000 and through December 31,
3		2001, new or used automatic vending machines that prepare and
4		serve hot food and beverages, including coffee, soup, and other
5		items, and replacement parts for these machines. Beginning
6		January 1, 2002 and through June 30, 2003, machines and parts
7		for machines used in commercial, coin-operated amusement and
8		vending business if a use or occupation tax is paid on the
9		gross receipts derived from the use of the commercial,
10		coin-operated amusement and vending machines. This paragraph
11		is exempt from the provisions of Section 3-75.
12		(23) Beginning August 23, 2001 and through June 30, 2016,
13		food for human consumption that is to be consumed off the
14		premises where it is sold (other than alcoholic beverages, soft
15		drinks, and food that has been prepared for immediate
16		consumption) and prescription and nonprescription medicines,
17		drugs, medical appliances, and insulin, urine testing
18		materials, syringes, and needles used by diabetics, for human
19		use, when purchased for use by a person receiving medical
20		assistance under Article V of the Illinois Public Aid Code who
21		resides in a licensed long-term care facility, as defined in
22		the Nursing Home Care Act, or in a licensed facility as defined
23		in the ID/DD Community Care Act, the MC/DD Act, or the
24		Specialized Mental Health Rehabilitation Act of 2013.
25		(24) Beginning on the effective date of this amendatory Act
26		of the 92nd General Assembly, computers and communications

SB0009 Engrossed - 332 - LRB100 06347 HLH 16385 b
1		equipment utilized for any hospital purpose and equipment used
2		in the diagnosis, analysis, or treatment of hospital patients
3		purchased by a lessor who leases the equipment, under a lease
4		of one year or longer executed or in effect at the time the
5		lessor would otherwise be subject to the tax imposed by this
6		Act, to a hospital that has been issued an active tax exemption
7		identification number by the Department under Section 1g of the
8		Retailers' Occupation Tax Act. If the equipment is leased in a
9		manner that does not qualify for this exemption or is used in
10		any other nonexempt manner, the lessor shall be liable for the
11		tax imposed under this Act or the Use Tax Act, as the case may
12		be, based on the fair market value of the property at the time
13		the nonqualifying use occurs. No lessor shall collect or
14		attempt to collect an amount (however designated) that purports
15		to reimburse that lessor for the tax imposed by this Act or the
16		Use Tax Act, as the case may be, if the tax has not been paid by
17		the lessor. If a lessor improperly collects any such amount
18		from the lessee, the lessee shall have a legal right to claim a
19		refund of that amount from the lessor. If, however, that amount
20		is not refunded to the lessee for any reason, the lessor is
21		liable to pay that amount to the Department. This paragraph is
22		exempt from the provisions of Section 3-75.
23		(25) Beginning on the effective date of this amendatory Act
24		of the 92nd General Assembly, personal property purchased by a
25		lessor who leases the property, under a lease of one year or
26		longer executed or in effect at the time the lessor would

SB0009 Engrossed - 333 - LRB100 06347 HLH 16385 b
1		otherwise be subject to the tax imposed by this Act, to a
2		governmental body that has been issued an active tax exemption
3		identification number by the Department under Section 1g of the
4		Retailers' Occupation Tax Act. If the property is leased in a
5		manner that does not qualify for this exemption or is used in
6		any other nonexempt manner, the lessor shall be liable for the
7		tax imposed under this Act or the Use Tax Act, as the case may
8		be, based on the fair market value of the property at the time
9		the nonqualifying use occurs. No lessor shall collect or
10		attempt to collect an amount (however designated) that purports
11		to reimburse that lessor for the tax imposed by this Act or the
12		Use Tax Act, as the case may be, if the tax has not been paid by
13		the lessor. If a lessor improperly collects any such amount
14		from the lessee, the lessee shall have a legal right to claim a
15		refund of that amount from the lessor. If, however, that amount
16		is not refunded to the lessee for any reason, the lessor is
17		liable to pay that amount to the Department. This paragraph is
18		exempt from the provisions of Section 3-75.
19		(26) Beginning January 1, 2008, tangible personal property
20		used in the construction or maintenance of a community water
21		supply, as defined under Section 3.145 of the Environmental
22		Protection Act, that is operated by a not-for-profit
23		corporation that holds a valid water supply permit issued under
24		Title IV of the Environmental Protection Act. This paragraph is
25		exempt from the provisions of Section 3-75.
26		(27) Beginning January 1, 2010, materials, parts,

SB0009 Engrossed - 334 - LRB100 06347 HLH 16385 b
1		equipment, components, and furnishings incorporated into or
2		upon an aircraft as part of the modification, refurbishment,
3		completion, replacement, repair, or maintenance of the
4		aircraft. This exemption includes consumable supplies used in
5		the modification, refurbishment, completion, replacement,
6		repair, and maintenance of aircraft, but excludes any
7		materials, parts, equipment, components, and consumable
8		supplies used in the modification, replacement, repair, and
9		maintenance of aircraft engines or power plants, whether such
10		engines or power plants are installed or uninstalled upon any
11		such aircraft. "Consumable supplies" include, but are not
12		limited to, adhesive, tape, sandpaper, general purpose
13		lubricants, cleaning solution, latex gloves, and protective
14		films. This exemption applies only to the use of qualifying
15		tangible personal property transferred incident to the
16		modification, refurbishment, completion, replacement, repair,
17		or maintenance of aircraft by persons who (i) hold an Air
18		Agency Certificate and are empowered to operate an approved
19		repair station by the Federal Aviation Administration, (ii)
20		have a Class IV Rating, and (iii) conduct operations in
21		accordance with Part 145 of the Federal Aviation Regulations.
22		The exemption does not include aircraft operated by a
23		commercial air carrier providing scheduled passenger air
24		service pursuant to authority issued under Part 121 or Part 129
25		of the Federal Aviation Regulations. The changes made to this
26		paragraph (27) by Public Act 98-534 are declarative of existing

SB0009 Engrossed - 335 - LRB100 06347 HLH 16385 b
1		law.
2		(28) Tangible personal property purchased by a
3		public-facilities corporation, as described in Section
4		11-65-10 of the Illinois Municipal Code, for purposes of
5		constructing or furnishing a municipal convention hall, but
6		only if the legal title to the municipal convention hall is
7		transferred to the municipality without any further
8		consideration by or on behalf of the municipality at the time
9		of the completion of the municipal convention hall or upon the
10		retirement or redemption of any bonds or other debt instruments
11		issued by the public-facilities corporation in connection with
12		the development of the municipal convention hall. This
13		exemption includes existing public-facilities corporations as
14		provided in Section 11-65-25 of the Illinois Municipal Code.
15		This paragraph is exempt from the provisions of Section 3-75.
16		(29) Beginning January 1, 2017, menstrual pads, tampons,
17		and menstrual cups.
18		(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
19		98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
20		7-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)
21		Section 30-30. The Service Occupation Tax Act is amended by
22		changing Sections 2 and 3-5 as follows:
23		(35 ILCS 115/2) (from Ch. 120, par. 439.102)
24		Sec. 2. "Transfer" means any transfer of the title to

SB0009 Engrossed - 336 - LRB100 06347 HLH 16385 b
1		property or of the ownership of property whether or not the
2		transferor retains title as security for the payment of amounts
3		due him from the transferee.
4		"Cost Price" means the consideration paid by the serviceman
5		for a purchase valued in money, whether paid in money or
6		otherwise, including cash, credits and services, and shall be
7		determined without any deduction on account of the supplier's
8		cost of the property sold or on account of any other expense
9		incurred by the supplier. When a serviceman contracts out part
10		or all of the services required in his sale of service, it
11		shall be presumed that the cost price to the serviceman of the
12		property transferred to him by his or her subcontractor is
13		equal to 50% of the subcontractor's charges to the serviceman
14		in the absence of proof of the consideration paid by the
15		subcontractor for the purchase of such property.
16		"Department" means the Department of Revenue.
17		"Person" means any natural individual, firm, partnership,
18		association, joint stock company, joint venture, public or
19		private corporation, limited liability company, and any
20		receiver, executor, trustee, guardian or other representative
21		appointed by order of any court.
22		"Sale of Service" means any transaction except:
23		(a) A retail sale of tangible personal property taxable
24		under the Retailers' Occupation Tax Act or under the Use Tax
25		Act.
26		(b) A sale of tangible personal property for the purpose of

SB0009 Engrossed - 337 - LRB100 06347 HLH 16385 b
1		resale made in compliance with Section 2c of the Retailers'
2		Occupation Tax Act.
3		(c) Except as hereinafter provided, a sale or transfer of
4		tangible personal property as an incident to the rendering of
5		service for or by any governmental body or for or by any
6		corporation, society, association, foundation or institution
7		organized and operated exclusively for charitable, religious
8		or educational purposes or any not-for-profit corporation,
9		society, association, foundation, institution or organization
10		which has no compensated officers or employees and which is
11		organized and operated primarily for the recreation of persons
12		55 years of age or older. A limited liability company may
13		qualify for the exemption under this paragraph only if the
14		limited liability company is organized and operated
15		exclusively for educational purposes.
16		(d) A sale or transfer of tangible personal property as an
17		incident to the rendering of service for interstate carriers
18		for hire for use as rolling stock moving in interstate commerce
19		or lessors under leases of one year or longer, executed or in
20		effect at the time of purchase, to interstate carriers for hire
21		for use as rolling stock moving in interstate commerce, and
22		equipment operated by a telecommunications provider, licensed
23		as a common carrier by the Federal Communications Commission,
24		which is permanently installed in or affixed to aircraft moving
25		in interstate commerce.
26		(d-1) A sale or transfer of tangible personal property as

SB0009 Engrossed - 338 - LRB100 06347 HLH 16385 b
1		an incident to the rendering of service for owners, lessors or
2		shippers of tangible personal property which is utilized by
3		interstate carriers for hire for use as rolling stock moving in
4		interstate commerce, and equipment operated by a
5		telecommunications provider, licensed as a common carrier by
6		the Federal Communications Commission, which is permanently
7		installed in or affixed to aircraft moving in interstate
8		commerce.
9		(d-1.1) On and after July 1, 2003 and through June 30,
10		2004, a sale or transfer of a motor vehicle of the second
11		division with a gross vehicle weight in excess of 8,000 pounds
12		as an incident to the rendering of service if that motor
13		vehicle is subject to the commercial distribution fee imposed
14		under Section 3-815.1 of the Illinois Vehicle Code. Beginning
15		on July 1, 2004 and through June 30, 2005, the use in this
16		State of motor vehicles of the second division: (i) with a
17		gross vehicle weight rating in excess of 8,000 pounds; (ii)
18		that are subject to the commercial distribution fee imposed
19		under Section 3-815.1 of the Illinois Vehicle Code; and (iii)
20		that are primarily used for commercial purposes. Through June
21		30, 2005, this exemption applies to repair and replacement
22		parts added after the initial purchase of such a motor vehicle
23		if that motor vehicle is used in a manner that would qualify
24		for the rolling stock exemption otherwise provided for in this
25		Act. For purposes of this paragraph, "used for commercial
26		purposes" means the transportation of persons or property in

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1		furtherance of any commercial or industrial enterprise whether
2		for-hire or not.
3		(d-2) The repairing, reconditioning or remodeling, for a
4		common carrier by rail, of tangible personal property which
5		belongs to such carrier for hire, and as to which such carrier
6		receives the physical possession of the repaired,
7		reconditioned or remodeled item of tangible personal property
8		in Illinois, and which such carrier transports, or shares with
9		another common carrier in the transportation of such property,
10		out of Illinois on a standard uniform bill of lading showing
11		the person who repaired, reconditioned or remodeled the
12		property as the shipper or consignor of such property to a
13		destination outside Illinois, for use outside Illinois.
14		(d-3) A sale or transfer of tangible personal property
15		which is produced by the seller thereof on special order in
16		such a way as to have made the applicable tax the Service
17		Occupation Tax or the Service Use Tax, rather than the
18		Retailers' Occupation Tax or the Use Tax, for an interstate
19		carrier by rail which receives the physical possession of such
20		property in Illinois, and which transports such property, or
21		shares with another common carrier in the transportation of
22		such property, out of Illinois on a standard uniform bill of
23		lading showing the seller of the property as the shipper or
24		consignor of such property to a destination outside Illinois,
25		for use outside Illinois.
26		(d-4) Until January 1, 1997, a sale, by a registered

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1		serviceman paying tax under this Act to the Department, of
2		special order printed materials delivered outside Illinois and
3		which are not returned to this State, if delivery is made by
4		the seller or agent of the seller, including an agent who
5		causes the product to be delivered outside Illinois by a common
6		carrier or the U.S. postal service.
7		(e) A sale or transfer of machinery and equipment used
8		primarily in the process of the manufacturing or assembling,
9		either in an existing, an expanded or a new manufacturing
10		facility, of tangible personal property for wholesale or retail
11		sale or lease, whether such sale or lease is made directly by
12		the manufacturer or by some other person, whether the materials
13		used in the process are owned by the manufacturer or some other
14		person, or whether such sale or lease is made apart from or as
15		an incident to the seller's engaging in a service occupation
16		and the applicable tax is a Service Occupation Tax or Service
17		Use Tax, rather than Retailers' Occupation Tax or Use Tax. The
18		exemption provided by this paragraph (e) does not include
19		machinery and equipment used in (i) the generation of
20		electricity for wholesale or retail sale; (ii) the generation
21		or treatment of natural or artificial gas for wholesale or
22		retail sale that is delivered to customers through pipes,
23		pipelines, or mains; or (iii) the treatment of water for
24		wholesale or retail sale that is delivered to customers through
25		pipes, pipelines, or mains. The provisions of this amendatory
26		Act of the 98th General Assembly are declaratory of existing

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1		law as to the meaning and scope of this exemption. The
2		exemption under this subsection (e) is exempt from the
3		provisions of Section 3-75.
4		(f) Until July 1, 2003, the sale or transfer of
5		distillation machinery and equipment, sold as a unit or kit and
6		assembled or installed by the retailer, which machinery and
7		equipment is certified by the user to be used only for the
8		production of ethyl alcohol that will be used for consumption
9		as motor fuel or as a component of motor fuel for the personal
10		use of such user and not subject to sale or resale.
11		(g) At the election of any serviceman not required to be
12		otherwise registered as a retailer under Section 2a of the
13		Retailers' Occupation Tax Act, made for each fiscal year sales
14		of service in which the aggregate annual cost price of tangible
15		personal property transferred as an incident to the sales of
16		service is less than 35% (75% in the case of servicemen
17		transferring prescription drugs or servicemen engaged in
18		graphic arts production) of the aggregate annual total gross
19		receipts from all sales of service. The purchase of such
20		tangible personal property by the serviceman shall be subject
21		to tax under the Retailers' Occupation Tax Act and the Use Tax
22		Act. However, if a primary serviceman who has made the election
23		described in this paragraph subcontracts service work to a
24		secondary serviceman who has also made the election described
25		in this paragraph, the primary serviceman does not incur a Use
26		Tax liability if the secondary serviceman (i) has paid or will

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1		pay Use Tax on his or her cost price of any tangible personal
2		property transferred to the primary serviceman and (ii)
3		certifies that fact in writing to the primary serviceman.
4		Tangible personal property transferred incident to the
5		completion of a maintenance agreement is exempt from the tax
6		imposed pursuant to this Act.
7		Exemption (e) also includes machinery and equipment used in
8		the general maintenance or repair of such exempt machinery and
9		equipment or for in-house manufacture of exempt machinery and
10		equipment. On and after July 1, 2017, exemption (e) also
11		includes production related tangible personal property, as
12		defined in Section 2-45 of the Retailers' Occupation Tax Act.
13		On and after July 1, 2017, exemption (e) also includes graphic
14		arts machinery and equipment, as defined in paragraph (5) of
15		Section 3-5. The machinery and equipment exemption does not
16		include machinery and equipment used in (i) the generation of
17		electricity for wholesale or retail sale; (ii) the generation
18		or treatment of natural or artificial gas for wholesale or
19		retail sale that is delivered to customers through pipes,
20		pipelines, or mains; or (iii) the treatment of water for
21		wholesale or retail sale that is delivered to customers through
22		pipes, pipelines, or mains. The provisions of this amendatory
23		Act of the 98th General Assembly are declaratory of existing
24		law as to the meaning and scope of this exemption. For the
25		purposes of exemption (e), each of these terms shall have the
26		following meanings: (1) "manufacturing process" shall mean the

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1		production of any article of tangible personal property,
2		whether such article is a finished product or an article for
3		use in the process of manufacturing or assembling a different
4		article of tangible personal property, by procedures commonly
5		regarded as manufacturing, processing, fabricating, or
6		refining which changes some existing material or materials into
7		a material with a different form, use or name. In relation to a
8		recognized integrated business composed of a series of
9		operations which collectively constitute manufacturing, or
10		individually constitute manufacturing operations, the
11		manufacturing process shall be deemed to commence with the
12		first operation or stage of production in the series, and shall
13		not be deemed to end until the completion of the final product
14		in the last operation or stage of production in the series; and
15		further for purposes of exemption (e), photoprocessing is
16		deemed to be a manufacturing process of tangible personal
17		property for wholesale or retail sale; (2) "assembling process"
18		shall mean the production of any article of tangible personal
19		property, whether such article is a finished product or an
20		article for use in the process of manufacturing or assembling a
21		different article of tangible personal property, by the
22		combination of existing materials in a manner commonly regarded
23		as assembling which results in a material of a different form,
24		use or name; (3) "machinery" shall mean major mechanical
25		machines or major components of such machines contributing to a
26		manufacturing or assembling process; and (4) "equipment" shall

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1		include any independent device or tool separate from any
2		machinery but essential to an integrated manufacturing or
3		assembly process; including computers used primarily in a
4		manufacturer's computer assisted design, computer assisted
5		manufacturing (CAD/CAM) system; or any subunit or assembly
6		comprising a component of any machinery or auxiliary, adjunct
7		or attachment parts of machinery, such as tools, dies, jigs,
8		fixtures, patterns and molds; or any parts which require
9		periodic replacement in the course of normal operation; but
10		shall not include hand tools. Equipment includes chemicals or
11		chemicals acting as catalysts but only if the chemicals or
12		chemicals acting as catalysts effect a direct and immediate
13		change upon a product being manufactured or assembled for
14		wholesale or retail sale or lease. The purchaser of such
15		machinery and equipment who has an active resale registration
16		number shall furnish such number to the seller at the time of
17		purchase. The purchaser of such machinery and equipment and
18		tools without an active resale registration number shall
19		furnish to the seller a certificate of exemption for each
20		transaction stating facts establishing the exemption for that
21		transaction, which certificate shall be available to the
22		Department for inspection or audit.
23		Except as provided in Section 2d of this Act, the rolling
24		stock exemption applies to rolling stock used by an interstate
25		carrier for hire, even just between points in Illinois, if such
26		rolling stock transports, for hire, persons whose journeys or

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1		property whose shipments originate or terminate outside
2		Illinois.
3		Any informal rulings, opinions or letters issued by the
4		Department in response to an inquiry or request for any opinion
5		from any person regarding the coverage and applicability of
6		exemption (e) to specific devices shall be published,
7		maintained as a public record, and made available for public
8		inspection and copying. If the informal ruling, opinion or
9		letter contains trade secrets or other confidential
10		information, where possible the Department shall delete such
11		information prior to publication. Whenever such informal
12		rulings, opinions, or letters contain any policy of general
13		applicability, the Department shall formulate and adopt such
14		policy as a rule in accordance with the provisions of the
15		Illinois Administrative Procedure Act.
16		On and after July 1, 1987, no entity otherwise eligible
17		under exemption (c) of this Section shall make tax free
18		purchases unless it has an active exemption identification
19		number issued by the Department.
20		"Serviceman" means any person who is engaged in the
21		occupation of making sales of service.
22		"Sale at Retail" means "sale at retail" as defined in the
23		Retailers' Occupation Tax Act.
24		"Supplier" means any person who makes sales of tangible
25		personal property to servicemen for the purpose of resale as an
26		incident to a sale of service.

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1		(Source: P.A. 98-583, eff. 1-1-14.)
2		(35 ILCS 115/3-5)
3		Sec. 3-5. Exemptions. The following tangible personal
4		property is exempt from the tax imposed by this Act:
5		(1) Personal property sold by a corporation, society,
6		association, foundation, institution, or organization, other
7		than a limited liability company, that is organized and
8		operated as a not-for-profit service enterprise for the benefit
9		of persons 65 years of age or older if the personal property
10		was not purchased by the enterprise for the purpose of resale
11		by the enterprise.
12		(2) Personal property purchased by a not-for-profit
13		Illinois county fair association for use in conducting,
14		operating, or promoting the county fair.
15		(3) Personal property purchased by any not-for-profit arts
16		or cultural organization that establishes, by proof required by
17		the Department by rule, that it has received an exemption under
18		Section 501(c)(3) of the Internal Revenue Code and that is
19		organized and operated primarily for the presentation or
20		support of arts or cultural programming, activities, or
21		services. These organizations include, but are not limited to,
22		music and dramatic arts organizations such as symphony
23		orchestras and theatrical groups, arts and cultural service
24		organizations, local arts councils, visual arts organizations,
25		and media arts organizations. On and after the effective date

SB0009 Engrossed - 347 - LRB100 06347 HLH 16385 b
1		of this amendatory Act of the 92nd General Assembly, however,
2		an entity otherwise eligible for this exemption shall not make
3		tax-free purchases unless it has an active identification
4		number issued by the Department.
5		(4) Legal tender, currency, medallions, or gold or silver
6		coinage issued by the State of Illinois, the government of the
7		United States of America, or the government of any foreign
8		country, and bullion.
9		(5) Until July 1, 2003 and beginning again on September 1,
10		2004 through August 30, 2014, graphic arts machinery and
11		equipment, including repair and replacement parts, both new and
12		used, and including that manufactured on special order or
13		purchased for lease, certified by the purchaser to be used
14		primarily for graphic arts production. Equipment includes
15		chemicals or chemicals acting as catalysts but only if the
16		chemicals or chemicals acting as catalysts effect a direct and
17		immediate change upon a graphic arts product. Beginning on July
18		1, 2017, graphic arts machinery and equipment is included in
19		the manufacturing and assembling machinery and equipment
20		exemption under Section 2 of this Act.
21		(6) Personal property sold by a teacher-sponsored student
22		organization affiliated with an elementary or secondary school
23		located in Illinois.
24		(7) Farm machinery and equipment, both new and used,
25		including that manufactured on special order, certified by the
26		purchaser to be used primarily for production agriculture or

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1		State or federal agricultural programs, including individual
2		replacement parts for the machinery and equipment, including
3		machinery and equipment purchased for lease, and including
4		implements of husbandry defined in Section 1-130 of the
5		Illinois Vehicle Code, farm machinery and agricultural
6		chemical and fertilizer spreaders, and nurse wagons required to
7		be registered under Section 3-809 of the Illinois Vehicle Code,
8		but excluding other motor vehicles required to be registered
9		under the Illinois Vehicle Code. Horticultural polyhouses or
10		hoop houses used for propagating, growing, or overwintering
11		plants shall be considered farm machinery and equipment under
12		this item (7). Agricultural chemical tender tanks and dry boxes
13		shall include units sold separately from a motor vehicle
14		required to be licensed and units sold mounted on a motor
15		vehicle required to be licensed if the selling price of the
16		tender is separately stated.
17		Farm machinery and equipment shall include precision
18		farming equipment that is installed or purchased to be
19		installed on farm machinery and equipment including, but not
20		limited to, tractors, harvesters, sprayers, planters, seeders,
21		or spreaders. Precision farming equipment includes, but is not
22		limited to, soil testing sensors, computers, monitors,
23		software, global positioning and mapping systems, and other
24		such equipment.
25		Farm machinery and equipment also includes computers,
26		sensors, software, and related equipment used primarily in the

SB0009 Engrossed - 349 - LRB100 06347 HLH 16385 b
1		computer-assisted operation of production agriculture
2		facilities, equipment, and activities such as, but not limited
3		to, the collection, monitoring, and correlation of animal and
4		crop data for the purpose of formulating animal diets and
5		agricultural chemicals. This item (7) is exempt from the
6		provisions of Section 3-55.
7		(8) Until June 30, 2013, fuel and petroleum products sold
8		to or used by an air common carrier, certified by the carrier
9		to be used for consumption, shipment, or storage in the conduct
10		of its business as an air common carrier, for a flight destined
11		for or returning from a location or locations outside the
12		United States without regard to previous or subsequent domestic
13		stopovers.
14		Beginning July 1, 2013, fuel and petroleum products sold to
15		or used by an air carrier, certified by the carrier to be used
16		for consumption, shipment, or storage in the conduct of its
17		business as an air common carrier, for a flight that (i) is
18		engaged in foreign trade or is engaged in trade between the
19		United States and any of its possessions and (ii) transports at
20		least one individual or package for hire from the city of
21		origination to the city of final destination on the same
22		aircraft, without regard to a change in the flight number of
23		that aircraft.
24		(9) Proceeds of mandatory service charges separately
25		stated on customers' bills for the purchase and consumption of
26		food and beverages, to the extent that the proceeds of the

SB0009 Engrossed - 350 - LRB100 06347 HLH 16385 b
1		service charge are in fact turned over as tips or as a
2		substitute for tips to the employees who participate directly
3		in preparing, serving, hosting or cleaning up the food or
4		beverage function with respect to which the service charge is
5		imposed.
6		(10) Until July 1, 2003, oil field exploration, drilling,
7		and production equipment, including (i) rigs and parts of rigs,
8		rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
9		tubular goods, including casing and drill strings, (iii) pumps
10		and pump-jack units, (iv) storage tanks and flow lines, (v) any
11		individual replacement part for oil field exploration,
12		drilling, and production equipment, and (vi) machinery and
13		equipment purchased for lease; but excluding motor vehicles
14		required to be registered under the Illinois Vehicle Code.
15		(11) Photoprocessing machinery and equipment, including
16		repair and replacement parts, both new and used, including that
17		manufactured on special order, certified by the purchaser to be
18		used primarily for photoprocessing, and including
19		photoprocessing machinery and equipment purchased for lease.
20		(12) Coal and aggregate exploration, mining, off-highway
21		hauling, processing, maintenance, and reclamation equipment,
22		including replacement parts and equipment, and including
23		equipment purchased for lease, but excluding motor vehicles
24		required to be registered under the Illinois Vehicle Code. The
25		changes made to this Section by Public Act 97-767 apply on and
26		after July 1, 2003, but no claim for credit or refund is

SB0009 Engrossed - 351 - LRB100 06347 HLH 16385 b
1		allowed on or after August 16, 2013 (the effective date of
2		Public Act 98-456) for such taxes paid during the period
3		beginning July 1, 2003 and ending on August 16, 2013 (the
4		effective date of Public Act 98-456).
5		(13) Beginning January 1, 1992 and through June 30, 2016,
6		food for human consumption that is to be consumed off the
7		premises where it is sold (other than alcoholic beverages, soft
8		drinks and food that has been prepared for immediate
9		consumption) and prescription and non-prescription medicines,
10		drugs, medical appliances, and insulin, urine testing
11		materials, syringes, and needles used by diabetics, for human
12		use, when purchased for use by a person receiving medical
13		assistance under Article V of the Illinois Public Aid Code who
14		resides in a licensed long-term care facility, as defined in
15		the Nursing Home Care Act, or in a licensed facility as defined
16		in the ID/DD Community Care Act, the MC/DD Act, or the
17		Specialized Mental Health Rehabilitation Act of 2013.
18		(14) Semen used for artificial insemination of livestock
19		for direct agricultural production.
20		(15) Horses, or interests in horses, registered with and
21		meeting the requirements of any of the Arabian Horse Club
22		Registry of America, Appaloosa Horse Club, American Quarter
23		Horse Association, United States Trotting Association, or
24		Jockey Club, as appropriate, used for purposes of breeding or
25		racing for prizes. This item (15) is exempt from the provisions
26		of Section 3-55, and the exemption provided for under this item

SB0009 Engrossed - 352 - LRB100 06347 HLH 16385 b
1		(15) applies for all periods beginning May 30, 1995, but no
2		claim for credit or refund is allowed on or after January 1,
3		2008 (the effective date of Public Act 95-88) for such taxes
4		paid during the period beginning May 30, 2000 and ending on
5		January 1, 2008 (the effective date of Public Act 95-88).
6		(16) Computers and communications equipment utilized for
7		any hospital purpose and equipment used in the diagnosis,
8		analysis, or treatment of hospital patients sold to a lessor
9		who leases the equipment, under a lease of one year or longer
10		executed or in effect at the time of the purchase, to a
11		hospital that has been issued an active tax exemption
12		identification number by the Department under Section 1g of the
13		Retailers' Occupation Tax Act.
14		(17) Personal property sold to a lessor who leases the
15		property, under a lease of one year or longer executed or in
16		effect at the time of the purchase, to a governmental body that
17		has been issued an active tax exemption identification number
18		by the Department under Section 1g of the Retailers' Occupation
19		Tax Act.
20		(18) Beginning with taxable years ending on or after
21		December 31, 1995 and ending with taxable years ending on or
22		before December 31, 2004, personal property that is donated for
23		disaster relief to be used in a State or federally declared
24		disaster area in Illinois or bordering Illinois by a
25		manufacturer or retailer that is registered in this State to a
26		corporation, society, association, foundation, or institution

SB0009 Engrossed - 353 - LRB100 06347 HLH 16385 b
1		that has been issued a sales tax exemption identification
2		number by the Department that assists victims of the disaster
3		who reside within the declared disaster area.
4		(19) Beginning with taxable years ending on or after
5		December 31, 1995 and ending with taxable years ending on or
6		before December 31, 2004, personal property that is used in the
7		performance of infrastructure repairs in this State, including
8		but not limited to municipal roads and streets, access roads,
9		bridges, sidewalks, waste disposal systems, water and sewer
10		line extensions, water distribution and purification
11		facilities, storm water drainage and retention facilities, and
12		sewage treatment facilities, resulting from a State or
13		federally declared disaster in Illinois or bordering Illinois
14		when such repairs are initiated on facilities located in the
15		declared disaster area within 6 months after the disaster.
16		(20) Beginning July 1, 1999, game or game birds sold at a
17		"game breeding and hunting preserve area" as that term is used
18		in the Wildlife Code. This paragraph is exempt from the
19		provisions of Section 3-55.
20		(21) A motor vehicle, as that term is defined in Section
21		1-146 of the Illinois Vehicle Code, that is donated to a
22		corporation, limited liability company, society, association,
23		foundation, or institution that is determined by the Department
24		to be organized and operated exclusively for educational
25		purposes. For purposes of this exemption, "a corporation,
26		limited liability company, society, association, foundation,

SB0009 Engrossed - 354 - LRB100 06347 HLH 16385 b
1		or institution organized and operated exclusively for
2		educational purposes" means all tax-supported public schools,
3		private schools that offer systematic instruction in useful
4		branches of learning by methods common to public schools and
5		that compare favorably in their scope and intensity with the
6		course of study presented in tax-supported schools, and
7		vocational or technical schools or institutes organized and
8		operated exclusively to provide a course of study of not less
9		than 6 weeks duration and designed to prepare individuals to
10		follow a trade or to pursue a manual, technical, mechanical,
11		industrial, business, or commercial occupation.
12		(22) Beginning January 1, 2000, personal property,
13		including food, purchased through fundraising events for the
14		benefit of a public or private elementary or secondary school,
15		a group of those schools, or one or more school districts if
16		the events are sponsored by an entity recognized by the school
17		district that consists primarily of volunteers and includes
18		parents and teachers of the school children. This paragraph
19		does not apply to fundraising events (i) for the benefit of
20		private home instruction or (ii) for which the fundraising
21		entity purchases the personal property sold at the events from
22		another individual or entity that sold the property for the
23		purpose of resale by the fundraising entity and that profits
24		from the sale to the fundraising entity. This paragraph is
25		exempt from the provisions of Section 3-55.
26		(23) Beginning January 1, 2000 and through December 31,

SB0009 Engrossed - 355 - LRB100 06347 HLH 16385 b
1		2001, new or used automatic vending machines that prepare and
2		serve hot food and beverages, including coffee, soup, and other
3		items, and replacement parts for these machines. Beginning
4		January 1, 2002 and through June 30, 2003, machines and parts
5		for machines used in commercial, coin-operated amusement and
6		vending business if a use or occupation tax is paid on the
7		gross receipts derived from the use of the commercial,
8		coin-operated amusement and vending machines. This paragraph
9		is exempt from the provisions of Section 3-55.
10		(24) Beginning on the effective date of this amendatory Act
11		of the 92nd General Assembly, computers and communications
12		equipment utilized for any hospital purpose and equipment used
13		in the diagnosis, analysis, or treatment of hospital patients
14		sold to a lessor who leases the equipment, under a lease of one
15		year or longer executed or in effect at the time of the
16		purchase, to a hospital that has been issued an active tax
17		exemption identification number by the Department under
18		Section 1g of the Retailers' Occupation Tax Act. This paragraph
19		is exempt from the provisions of Section 3-55.
20		(25) Beginning on the effective date of this amendatory Act
21		of the 92nd General Assembly, personal property sold to a
22		lessor who leases the property, under a lease of one year or
23		longer executed or in effect at the time of the purchase, to a
24		governmental body that has been issued an active tax exemption
25		identification number by the Department under Section 1g of the
26		Retailers' Occupation Tax Act. This paragraph is exempt from

SB0009 Engrossed - 356 - LRB100 06347 HLH 16385 b
1		the provisions of Section 3-55.
2		(26) Beginning on January 1, 2002 and through June 30,
3		2016, tangible personal property purchased from an Illinois
4		retailer by a taxpayer engaged in centralized purchasing
5		activities in Illinois who will, upon receipt of the property
6		in Illinois, temporarily store the property in Illinois (i) for
7		the purpose of subsequently transporting it outside this State
8		for use or consumption thereafter solely outside this State or
9		(ii) for the purpose of being processed, fabricated, or
10		manufactured into, attached to, or incorporated into other
11		tangible personal property to be transported outside this State
12		and thereafter used or consumed solely outside this State. The
13		Director of Revenue shall, pursuant to rules adopted in
14		accordance with the Illinois Administrative Procedure Act,
15		issue a permit to any taxpayer in good standing with the
16		Department who is eligible for the exemption under this
17		paragraph (26). The permit issued under this paragraph (26)
18		shall authorize the holder, to the extent and in the manner
19		specified in the rules adopted under this Act, to purchase
20		tangible personal property from a retailer exempt from the
21		taxes imposed by this Act. Taxpayers shall maintain all
22		necessary books and records to substantiate the use and
23		consumption of all such tangible personal property outside of
24		the State of Illinois.
25		(27) Beginning January 1, 2008, tangible personal property
26		used in the construction or maintenance of a community water

SB0009 Engrossed - 357 - LRB100 06347 HLH 16385 b
1		supply, as defined under Section 3.145 of the Environmental
2		Protection Act, that is operated by a not-for-profit
3		corporation that holds a valid water supply permit issued under
4		Title IV of the Environmental Protection Act. This paragraph is
5		exempt from the provisions of Section 3-55.
6		(28) Tangible personal property sold to a
7		public-facilities corporation, as described in Section
8		11-65-10 of the Illinois Municipal Code, for purposes of
9		constructing or furnishing a municipal convention hall, but
10		only if the legal title to the municipal convention hall is
11		transferred to the municipality without any further
12		consideration by or on behalf of the municipality at the time
13		of the completion of the municipal convention hall or upon the
14		retirement or redemption of any bonds or other debt instruments
15		issued by the public-facilities corporation in connection with
16		the development of the municipal convention hall. This
17		exemption includes existing public-facilities corporations as
18		provided in Section 11-65-25 of the Illinois Municipal Code.
19		This paragraph is exempt from the provisions of Section 3-55.
20		(29) Beginning January 1, 2010, materials, parts,
21		equipment, components, and furnishings incorporated into or
22		upon an aircraft as part of the modification, refurbishment,
23		completion, replacement, repair, or maintenance of the
24		aircraft. This exemption includes consumable supplies used in
25		the modification, refurbishment, completion, replacement,
26		repair, and maintenance of aircraft, but excludes any

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1		materials, parts, equipment, components, and consumable
2		supplies used in the modification, replacement, repair, and
3		maintenance of aircraft engines or power plants, whether such
4		engines or power plants are installed or uninstalled upon any
5		such aircraft. "Consumable supplies" include, but are not
6		limited to, adhesive, tape, sandpaper, general purpose
7		lubricants, cleaning solution, latex gloves, and protective
8		films. This exemption applies only to the transfer of
9		qualifying tangible personal property incident to the
10		modification, refurbishment, completion, replacement, repair,
11		or maintenance of an aircraft by persons who (i) hold an Air
12		Agency Certificate and are empowered to operate an approved
13		repair station by the Federal Aviation Administration, (ii)
14		have a Class IV Rating, and (iii) conduct operations in
15		accordance with Part 145 of the Federal Aviation Regulations.
16		The exemption does not include aircraft operated by a
17		commercial air carrier providing scheduled passenger air
18		service pursuant to authority issued under Part 121 or Part 129
19		of the Federal Aviation Regulations. The changes made to this
20		paragraph (29) by Public Act 98-534 are declarative of existing
21		law.
22		(30) Beginning January 1, 2017, menstrual pads, tampons,
23		and menstrual cups.
24		(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
25		98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-756, eff.
26		7-16-14; 99-180, eff. 7-29-15; 99-855, eff. 8-19-16.)

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1		Section 30-35. The Retailers' Occupation Tax Act is amended
2		by changing Sections 1, 2, 2-5, 2-10, 2-10.5, 2-12, 2-45, 2-55,
3		2a, 2b, 2c, 3, 7, and 13 and by adding Section 1b as follows:
4		(35 ILCS 120/1) (from Ch. 120, par. 440)
5		Sec. 1. Definitions. "Sale at retail" means any transfer of
6		the ownership of or title to tangible personal property to a
7		purchaser or the performance of a taxable service for a
8		purchaser, for the purpose of use or consumption, and not for
9		the purpose of resale in any form as tangible personal property
10		or taxable service to the extent not first subjected to a use
11		for which it was purchased, for a valuable consideration:
12		Provided that the property or service purchased is deemed to be
13		purchased for the purpose of resale, despite first being used,
14		to the extent to which it is resold as an ingredient of an
15		intentionally produced product or byproduct of manufacturing
16		or otherwise transferred to the purchaser of tangible personal
17		property or taxable service. For this purpose, slag produced as
18		an incident to manufacturing pig iron or steel and sold is
19		considered to be an intentionally produced byproduct of
20		manufacturing. Transactions whereby the possession of the
21		property is transferred but the seller retains the title as
22		security for payment of the selling price shall be deemed to be
23		sales.
24		"Sale at retail" shall be construed to include any transfer

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1		of the ownership of or title to tangible personal property to a
2		purchaser or the performance of a taxable service for a
3		purchaser, for use or consumption by any other person to whom
4		such purchaser may transfer the tangible personal property or
5		taxable service without a valuable consideration, and to
6		include any transfer, whether made for or without a valuable
7		consideration, for resale in any form as tangible personal
8		property or taxable service unless made in compliance with
9		Section 2c of this Act.
10		Sales of tangible personal property, which property, to the
11		extent not first subjected to a use for which it was purchased,
12		as an ingredient or constituent, goes into and forms a part of
13		tangible personal property subsequently the subject of a "Sale
14		at retail", or transferred to a purchaser of a taxable service
15		that is a "sale at retail" are not sales at retail as defined
16		in this Act: Provided that the property purchased is deemed to
17		be purchased for the purpose of resale, despite first being
18		used, to the extent to which it is resold as an ingredient of
19		an intentionally produced product or byproduct of
20		manufacturing.
21		"Sale at retail" shall be construed to include any Illinois
22		florist's sales transaction in which the purchase order is
23		received in Illinois by a florist and the sale is for use or
24		consumption, but the Illinois florist has a florist in another
25		state deliver the property to the purchaser or the purchaser's
26		donee in such other state.

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1		Nonreusable tangible personal property that is used by
2		persons engaged in the business of operating a restaurant,
3		cafeteria, or drive-in is a sale for resale when it is
4		transferred to customers in the ordinary course of business as
5		part of the sale of food or beverages and is used to deliver,
6		package, or consume food or beverages, regardless of where
7		consumption of the food or beverages occurs. Examples of those
8		items include, but are not limited to nonreusable, paper and
9		plastic cups, plates, baskets, boxes, sleeves, buckets or other
10		containers, utensils, straws, placemats, napkins, doggie bags,
11		and wrapping or packaging materials that are transferred to
12		customers as part of the sale of food or beverages in the
13		ordinary course of business.
14		The purchase, employment and transfer of such tangible
15		personal property as newsprint and ink for the primary purpose
16		of conveying news (with or without other information) is not a
17		purchase, use or sale of tangible personal property.
18		A person whose activities are organized and conducted
19		primarily as a not-for-profit service enterprise, and who
20		engages in selling tangible personal property or taxable
21		service at retail (whether to the public or merely to members
22		and their guests) is engaged in the business of selling
23		tangible personal property or taxable service at retail with
24		respect to such transactions, excepting only a person organized
25		and operated exclusively for charitable, religious or
26		educational purposes either (1), to the extent of sales by such

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1		person to its members, students, patients or inmates of
2		tangible personal property or taxable service to be used
3		primarily for the purposes of such person, or (2), to the
4		extent of sales by such person of tangible personal property or
5		taxable service which is not sold or offered for sale by
6		persons organized for profit. The selling of school books and
7		school supplies by schools at retail to students is not
8		"primarily for the purposes of" the school which does such
9		selling. The provisions of this paragraph shall not apply to
10		nor subject to taxation occasional dinners, socials or similar
11		activities of a person organized and operated exclusively for
12		charitable, religious or educational purposes, whether or not
13		such activities are open to the public.
14		A person who is the recipient of a grant or contract under
15		Title VII of the Older Americans Act of 1965 (P.L. 92-258) and
16		serves meals to participants in the federal Nutrition Program
17		for the Elderly in return for contributions established in
18		amount by the individual participant pursuant to a schedule of
19		suggested fees as provided for in the federal Act is not
20		engaged in the business of selling tangible personal property
21		or taxable service at retail with respect to such transactions.
22		"Purchaser" means anyone who, through a sale at retail,
23		acquires the ownership of or title to tangible personal
24		property or taxable service for a valuable consideration.
25		"Reseller of motor fuel" means any person engaged in the
26		business of selling or delivering or transferring title of

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1		motor fuel to another person other than for use or consumption.
2		No person shall act as a reseller of motor fuel within this
3		State without first being registered as a reseller pursuant to
4		Section 2c or a retailer pursuant to Section 2a.
5		"Selling price" or the "amount of sale" means the
6		consideration for a sale valued in money whether received in
7		money or otherwise, including cash, credits, property, other
8		than as hereinafter provided, and services, but not including
9		the value of or credit given for traded-in tangible personal
10		property where the item that is traded-in is of like kind and
11		character as that which is being sold, and shall be determined
12		without any deduction on account of the cost of the property
13		sold, the cost of materials used, labor or service cost or any
14		other expense whatsoever, but does not include charges that are
15		added to prices by sellers on account of the seller's tax
16		liability under this Act, or on account of the seller's duty to
17		collect, from the purchaser, the tax that is imposed by the Use
18		Tax Act, or, except as otherwise provided with respect to any
19		cigarette tax imposed by a home rule unit, on account of the
20		seller's tax liability under any local occupation tax
21		administered by the Department, or, except as otherwise
22		provided with respect to any cigarette tax imposed by a home
23		rule unit on account of the seller's duty to collect, from the
24		purchasers, the tax that is imposed under any local use tax
25		administered by the Department. Effective December 1, 1985,
26		"selling price" shall include charges that are added to prices

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1		by sellers on account of the seller's tax liability under the
2		Cigarette Tax Act, on account of the sellers' duty to collect,
3		from the purchaser, the tax imposed under the Cigarette Use Tax
4		Act, and on account of the seller's duty to collect, from the
5		purchaser, any cigarette tax imposed by a home rule unit.
6		Notwithstanding any law to the contrary, for any motor
7		vehicle, as defined in Section 1-146 of the Vehicle Code, that
8		is sold on or after January 1, 2015 for the purpose of leasing
9		the vehicle for a defined period that is longer than one year
10		and (1) is a motor vehicle of the second division that: (A) is
11		a self-contained motor vehicle designed or permanently
12		converted to provide living quarters for recreational,
13		camping, or travel use, with direct walk through access to the
14		living quarters from the driver's seat; (B) is of the van
15		configuration designed for the transportation of not less than
16		7 nor more than 16 passengers; or (C) has a gross vehicle
17		weight rating of 8,000 pounds or less or (2) is a motor vehicle
18		of the first division, "selling price" or "amount of sale"
19		means the consideration received by the lessor pursuant to the
20		lease contract, including amounts due at lease signing and all
21		monthly or other regular payments charged over the term of the
22		lease. Also included in the selling price is any amount
23		received by the lessor from the lessee for the leased vehicle
24		that is not calculated at the time the lease is executed,
25		including, but not limited to, excess mileage charges and
26		charges for excess wear and tear. For sales that occur in

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1		Illinois, with respect to any amount received by the lessor
2		from the lessee for the leased vehicle that is not calculated
3		at the time the lease is executed, the lessor who purchased the
4		motor vehicle does not incur the tax imposed by the Use Tax Act
5		on those amounts, and the retailer who makes the retail sale of
6		the motor vehicle to the lessor is not required to collect the
7		tax imposed by the Use Tax Act or to pay the tax imposed by this
8		Act on those amounts. However, the lessor who purchased the
9		motor vehicle assumes the liability for reporting and paying
10		the tax on those amounts directly to the Department in the same
11		form (Illinois Retailers' Occupation Tax, and local retailers'
12		occupation taxes, if applicable) in which the retailer would
13		have reported and paid such tax if the retailer had accounted
14		for the tax to the Department. For amounts received by the
15		lessor from the lessee that are not calculated at the time the
16		lease is executed, the lessor must file the return and pay the
17		tax to the Department by the due date otherwise required by
18		this Act for returns other than transaction returns. If the
19		retailer is entitled under this Act to a discount for
20		collecting and remitting the tax imposed under this Act to the
21		Department with respect to the sale of the motor vehicle to the
22		lessor, then the right to the discount provided in this Act
23		shall be transferred to the lessor with respect to the tax paid
24		by the lessor for any amount received by the lessor from the
25		lessee for the leased vehicle that is not calculated at the
26		time the lease is executed; provided that the discount is only

SB0009 Engrossed - 366 - LRB100 06347 HLH 16385 b
1		allowed if the return is timely filed and for amounts timely
2		paid. The "selling price" of a motor vehicle that is sold on or
3		after January 1, 2015 for the purpose of leasing for a defined
4		period of longer than one year shall not be reduced by the
5		value of or credit given for traded-in tangible personal
6		property owned by the lessor, nor shall it be reduced by the
7		value of or credit given for traded-in tangible personal
8		property owned by the lessee, regardless of whether the
9		trade-in value thereof is assigned by the lessee to the lessor.
10		In the case of a motor vehicle that is sold for the purpose of
11		leasing for a defined period of longer than one year, the sale
12		occurs at the time of the delivery of the vehicle, regardless
13		of the due date of any lease payments. A lessor who incurs a
14		Retailers' Occupation Tax liability on the sale of a motor
15		vehicle coming off lease may not take a credit against that
16		liability for the Use Tax the lessor paid upon the purchase of
17		the motor vehicle (or for any tax the lessor paid with respect
18		to any amount received by the lessor from the lessee for the
19		leased vehicle that was not calculated at the time the lease
20		was executed) if the selling price of the motor vehicle at the
21		time of purchase was calculated using the definition of
22		"selling price" as defined in this paragraph. Notwithstanding
23		any other provision of this Act to the contrary, lessors shall
24		file all returns and make all payments required under this
25		paragraph to the Department by electronic means in the manner
26		and form as required by the Department. This paragraph does not

SB0009 Engrossed - 367 - LRB100 06347 HLH 16385 b
1		apply to leases of motor vehicles for which, at the time the
2		lease is entered into, the term of the lease is not a defined
3		period, including leases with a defined initial period with the
4		option to continue the lease on a month-to-month or other basis
5		beyond the initial defined period.
6		The phrase "like kind and character" shall be liberally
7		construed (including but not limited to any form of motor
8		vehicle for any form of motor vehicle, or any kind of farm or
9		agricultural implement for any other kind of farm or
10		agricultural implement), while not including a kind of item
11		which, if sold at retail by that retailer, would be exempt from
12		retailers' occupation tax and use tax as an isolated or
13		occasional sale.
14		"Gross receipts" from the sales of tangible personal
15		property or taxable service at retail means the total selling
16		price or the amount of such sales, as hereinbefore defined. In
17		the case of charge and time sales, the amount thereof shall be
18		included only as and when payments are received by the seller.
19		Receipts or other consideration derived by a seller from the
20		sale, transfer or assignment of accounts receivable to a wholly
21		owned subsidiary will not be deemed payments prior to the time
22		the purchaser makes payment on such accounts.
23		"Department" means the Department of Revenue.
24		"Person" means any natural individual, firm, partnership,
25		association, joint stock company, joint adventure, public or
26		private corporation, limited liability company, or a receiver,

SB0009 Engrossed - 368 - LRB100 06347 HLH 16385 b
1		executor, trustee, guardian or other representative appointed
2		by order of any court.
3		The isolated or occasional sale of tangible personal
4		property or taxable service at retail by a person who does not
5		hold himself out as being engaged (or who does not habitually
6		engage) in selling such tangible personal property or taxable
7		service at retail, or a sale through a bulk vending machine,
8		does not constitute engaging in a business of selling such
9		tangible personal property or taxable service at retail within
10		the meaning of this Act; provided that any person who is
11		engaged in a business which is not subject to the tax imposed
12		by this Act because of involving the sale of or a contract to
13		sell real estate or a construction contract to improve real
14		estate or a construction contract to engineer, install, and
15		maintain an integrated system of products, but who, in the
16		course of conducting such business, transfers tangible
17		personal property to users or consumers in the finished form in
18		which it was purchased, and which does not become real estate
19		or was not engineered and installed, under any provision of a
20		construction contract or real estate sale or real estate sales
21		agreement entered into with some other person arising out of or
22		because of such nontaxable business, is engaged in the business
23		of selling tangible personal property at retail to the extent
24		of the value of the tangible personal property so transferred.
25		If, in such a transaction, a separate charge is made for the
26		tangible personal property so transferred, the value of such

SB0009 Engrossed - 369 - LRB100 06347 HLH 16385 b
1		property, for the purpose of this Act, shall be the amount so
2		separately charged, but not less than the cost of such property
3		to the transferor; if no separate charge is made, the value of
4		such property, for the purposes of this Act, is the cost to the
5		transferor of such tangible personal property. Construction
6		contracts for the improvement of real estate consisting of
7		engineering, installation, and maintenance of voice, data,
8		video, security, and all telecommunication systems do not
9		constitute engaging in a business of selling tangible personal
10		property or taxable service at retail within the meaning of
11		this Act if they are sold at one specified contract price.
12		A person who holds himself or herself out as being engaged
13		(or who habitually engages) in selling tangible personal
14		property or taxable service at retail is a person engaged in
15		the business of selling tangible personal property or taxable
16		service at retail hereunder with respect to such sales (and not
17		primarily in a nontaxable service occupation) notwithstanding
18		the fact that such person designs and produces such tangible
19		personal property or taxable service on special order for the
20		purchaser and in such a way as to render the property or
21		service of value only to such purchaser, if such tangible
22		personal property or taxable service so produced on special
23		order serves substantially the same function as stock or
24		standard items of tangible personal property or taxable service
25		that are sold at retail.
26		Persons who engage in the business of transferring tangible

SB0009 Engrossed - 370 - LRB100 06347 HLH 16385 b
1		personal property or taxable service upon the redemption of
2		trading stamps are engaged in the business of selling such
3		property or service at retail and shall be liable for and shall
4		pay the tax imposed by this Act on the basis of the retail
5		value of the property or service transferred upon redemption of
6		such stamps.
7		"Bulk vending machine" means a vending machine, containing
8		unsorted confections, nuts, toys, or other items designed
9		primarily to be used or played with by children which, when a
10		coin or coins of a denomination not larger than $0.50 are
11		inserted, are dispensed in equal portions, at random and
12		without selection by the customer.
13		(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14.)
14		(35 ILCS 120/1b new)
15		Sec. 1b. Taxable service. Beginning January 1, 2018,
16		"taxable service" has the meaning provided in Section 2a-2 of
17		the Use Tax Act.
18		(35 ILCS 120/2) (from Ch. 120, par. 441)
19		Sec. 2. Tax imposed. A tax is imposed upon persons engaged
20		in the business of selling at retail taxable service or
21		tangible personal property, or both, including computer
22		software, and including photographs, negatives, and positives
23		that are the product of photoprocessing, but not including
24		products of photoprocessing produced for use in motion pictures

SB0009 Engrossed - 371 - LRB100 06347 HLH 16385 b
1		for public commercial exhibition. Beginning January 1, 2001,
2		prepaid telephone calling arrangements shall be considered
3		tangible personal property subject to the tax imposed under
4		this Act regardless of the form in which those arrangements may
5		be embodied, transmitted, or fixed by any method now known or
6		hereafter developed. Sales of (1) electricity delivered to
7		customers by wire; (2) natural or artificial gas that is
8		delivered to customers through pipes, pipelines, or mains; and
9		(3) water that is delivered to customers through pipes,
10		pipelines, or mains are not subject to tax under this Act. The
11		provisions of this amendatory Act of the 98th General Assembly
12		are declaratory of existing law as to the meaning and scope of
13		this Act.
14		(Source: P.A. 98-583, eff. 1-1-14.)
15		(35 ILCS 120/2-5)
16		Sec. 2-5. Exemptions. Gross receipts from proceeds from the
17		sale of the following tangible personal property and taxable
18		services are exempt from the tax imposed by this Act:
19		(1) Farm chemicals.
20		(2) Farm machinery and equipment, both new and used,
21		including that manufactured on special order, certified by the
22		purchaser to be used primarily for production agriculture or
23		State or federal agricultural programs, including individual
24		replacement parts for the machinery and equipment, including
25		machinery and equipment purchased for lease, and including

SB0009 Engrossed - 372 - LRB100 06347 HLH 16385 b
1		implements of husbandry defined in Section 1-130 of the
2		Illinois Vehicle Code, farm machinery and agricultural
3		chemical and fertilizer spreaders, and nurse wagons required to
4		be registered under Section 3-809 of the Illinois Vehicle Code,
5		but excluding other motor vehicles required to be registered
6		under the Illinois Vehicle Code. Horticultural polyhouses or
7		hoop houses used for propagating, growing, or overwintering
8		plants shall be considered farm machinery and equipment under
9		this item (2). Agricultural chemical tender tanks and dry boxes
10		shall include units sold separately from a motor vehicle
11		required to be licensed and units sold mounted on a motor
12		vehicle required to be licensed, if the selling price of the
13		tender is separately stated.
14		Farm machinery and equipment shall include precision
15		farming equipment that is installed or purchased to be
16		installed on farm machinery and equipment including, but not
17		limited to, tractors, harvesters, sprayers, planters, seeders,
18		or spreaders. Precision farming equipment includes, but is not
19		limited to, soil testing sensors, computers, monitors,
20		software, global positioning and mapping systems, and other
21		such equipment.
22		Farm machinery and equipment also includes computers,
23		sensors, software, and related equipment used primarily in the
24		computer-assisted operation of production agriculture
25		facilities, equipment, and activities such as, but not limited
26		to, the collection, monitoring, and correlation of animal and

SB0009 Engrossed - 373 - LRB100 06347 HLH 16385 b
1		crop data for the purpose of formulating animal diets and
2		agricultural chemicals. This item (2) is exempt from the
3		provisions of Section 2-70.
4		(3) Until July 1, 2003, distillation machinery and
5		equipment, sold as a unit or kit, assembled or installed by the
6		retailer, certified by the user to be used only for the
7		production of ethyl alcohol that will be used for consumption
8		as motor fuel or as a component of motor fuel for the personal
9		use of the user, and not subject to sale or resale.
10		(4) Until July 1, 2003 and beginning again September 1,
11		2004 through August 30, 2014, graphic arts machinery and
12		equipment, including repair and replacement parts, both new and
13		used, and including that manufactured on special order or
14		purchased for lease, certified by the purchaser to be used
15		primarily for graphic arts production. Equipment includes
16		chemicals or chemicals acting as catalysts but only if the
17		chemicals or chemicals acting as catalysts effect a direct and
18		immediate change upon a graphic arts product. Beginning on July
19		1, 2017, graphic arts machinery and equipment is included in
20		the manufacturing and assembling machinery and equipment
21		exemption under paragraph (14).
22		(5) A motor vehicle that is used for automobile renting, as
23		defined in the Automobile Renting Occupation and Use Tax Act.
24		This paragraph is exempt from the provisions of Section 2-70.
25		(6) Personal property sold by a teacher-sponsored student
26		organization affiliated with an elementary or secondary school

SB0009 Engrossed - 374 - LRB100 06347 HLH 16385 b
1		located in Illinois.
2		(7) Until July 1, 2003, proceeds of that portion of the
3		selling price of a passenger car the sale of which is subject
4		to the Replacement Vehicle Tax.
5		(8) Personal property sold to an Illinois county fair
6		association for use in conducting, operating, or promoting the
7		county fair.
8		(9) Personal property sold to or taxable service performed
9		for a not-for-profit arts or cultural organization that
10		establishes, by proof required by the Department by rule, that
11		it has received an exemption under Section 501(c)(3) of the
12		Internal Revenue Code and that is organized and operated
13		primarily for the presentation or support of arts or cultural
14		programming, activities, or services. These organizations
15		include, but are not limited to, music and dramatic arts
16		organizations such as symphony orchestras and theatrical
17		groups, arts and cultural service organizations, local arts
18		councils, visual arts organizations, and media arts
19		organizations. On and after the effective date of this
20		amendatory Act of the 92nd General Assembly, however, an entity
21		otherwise eligible for this exemption shall not make tax-free
22		purchases unless it has an active identification number issued
23		by the Department.
24		(10) Personal property sold or taxable service performed by
25		a corporation, society, association, foundation, institution,
26		or organization, other than a limited liability company, that

SB0009 Engrossed - 375 - LRB100 06347 HLH 16385 b
1		is organized and operated as a not-for-profit service
2		enterprise for the benefit of persons 65 years of age or older
3		if the personal property was not purchased by the enterprise
4		for the purpose of resale by the enterprise.
5		(11) Personal property or taxable service sold to a
6		governmental body, to a corporation, society, association,
7		foundation, or institution organized and operated exclusively
8		for charitable, religious, or educational purposes, or to a
9		not-for-profit corporation, society, association, foundation,
10		institution, or organization that has no compensated officers
11		or employees and that is organized and operated primarily for
12		the recreation of persons 55 years of age or older. A limited
13		liability company may qualify for the exemption under this
14		paragraph only if the limited liability company is organized
15		and operated exclusively for educational purposes. On and after
16		July 1, 1987, however, no entity otherwise eligible for this
17		exemption shall make tax-free purchases unless it has an active
18		identification number issued by the Department.
19		(12) Tangible personal property sold to interstate
20		carriers for hire for use as rolling stock moving in interstate
21		commerce or to lessors under leases of one year or longer
22		executed or in effect at the time of purchase by interstate
23		carriers for hire for use as rolling stock moving in interstate
24		commerce and equipment operated by a telecommunications
25		provider, licensed as a common carrier by the Federal
26		Communications Commission, which is permanently installed in

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1		or affixed to aircraft moving in interstate commerce.
2		(12-5) On and after July 1, 2003 and through June 30, 2004,
3		motor vehicles of the second division with a gross vehicle
4		weight in excess of 8,000 pounds that are subject to the
5		commercial distribution fee imposed under Section 3-815.1 of
6		the Illinois Vehicle Code. Beginning on July 1, 2004 and
7		through June 30, 2005, the use in this State of motor vehicles
8		of the second division: (i) with a gross vehicle weight rating
9		in excess of 8,000 pounds; (ii) that are subject to the
10		commercial distribution fee imposed under Section 3-815.1 of
11		the Illinois Vehicle Code; and (iii) that are primarily used
12		for commercial purposes. Through June 30, 2005, this exemption
13		applies to repair and replacement parts added after the initial
14		purchase of such a motor vehicle if that motor vehicle is used
15		in a manner that would qualify for the rolling stock exemption
16		otherwise provided for in this Act. For purposes of this
17		paragraph, "used for commercial purposes" means the
18		transportation of persons or property in furtherance of any
19		commercial or industrial enterprise whether for-hire or not.
20		(13) Proceeds from sales to owners, lessors, or shippers of
21		tangible personal property that is utilized by interstate
22		carriers for hire for use as rolling stock moving in interstate
23		commerce and equipment operated by a telecommunications
24		provider, licensed as a common carrier by the Federal
25		Communications Commission, which is permanently installed in
26		or affixed to aircraft moving in interstate commerce.

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1		(14) Machinery and equipment that will be used by the
2		purchaser, or a lessee of the purchaser, primarily in the
3		process of manufacturing or assembling tangible personal
4		property for wholesale or retail sale or lease, whether the
5		sale or lease is made directly by the manufacturer or by some
6		other person, whether the materials used in the process are
7		owned by the manufacturer or some other person, or whether the
8		sale or lease is made apart from or as an incident to the
9		seller's engaging in the service occupation of producing
10		machines, tools, dies, jigs, patterns, gauges, or other similar
11		items of no commercial value on special order for a particular
12		purchaser. The exemption provided by this paragraph (14) does
13		not include machinery and equipment used in (i) the generation
14		of electricity for wholesale or retail sale; (ii) the
15		generation or treatment of natural or artificial gas for
16		wholesale or retail sale that is delivered to customers through
17		pipes, pipelines, or mains; or (iii) the treatment of water for
18		wholesale or retail sale that is delivered to customers through
19		pipes, pipelines, or mains. The provisions of Public Act 98-583
20		are declaratory of existing law as to the meaning and scope of
21		this exemption. Beginning on July 1, 2017, the exemption
22		provided by this paragraph (14) includes, but is not limited
23		to, graphic arts machinery and equipment, as defined in
24		paragraph (4) of this Section. Beginning on July 1, 2017, the
25		exemption provided by this paragraph (14) includes, but is not
26		limited to, production related tangible personal property, as

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1		defined in Section 2-45 of this Act. The exemption provided by
2		this paragraph (14) is exempt from the provisions of Section
3		2-70.
4		(15) Proceeds of mandatory service charges separately
5		stated on customers' bills for purchase and consumption of food
6		and beverages or of taxable service, to the extent that the
7		proceeds of the service charge are in fact turned over as tips
8		or as a substitute for tips to the employees who participate
9		directly in preparing, serving, hosting or cleaning up the food
10		or beverage function with respect to which the service charge
11		is imposed.
12		(16) Petroleum products sold to a purchaser if the seller
13		is prohibited by federal law from charging tax to the
14		purchaser.
15		(17) Tangible personal property sold to a common carrier by
16		rail or motor that receives the physical possession of the
17		property in Illinois and that transports the property, or
18		shares with another common carrier in the transportation of the
19		property, out of Illinois on a standard uniform bill of lading
20		showing the seller of the property as the shipper or consignor
21		of the property to a destination outside Illinois, for use
22		outside Illinois.
23		(18) Legal tender, currency, medallions, or gold or silver
24		coinage issued by the State of Illinois, the government of the
25		United States of America, or the government of any foreign
26		country, and bullion.

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1		(19) Until July 1 2003, oil field exploration, drilling,
2		and production equipment, including (i) rigs and parts of rigs,
3		rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
4		tubular goods, including casing and drill strings, (iii) pumps
5		and pump-jack units, (iv) storage tanks and flow lines, (v) any
6		individual replacement part for oil field exploration,
7		drilling, and production equipment, and (vi) machinery and
8		equipment purchased for lease; but excluding motor vehicles
9		required to be registered under the Illinois Vehicle Code.
10		(20) Photoprocessing machinery and equipment, including
11		repair and replacement parts, both new and used, including that
12		manufactured on special order, certified by the purchaser to be
13		used primarily for photoprocessing, and including
14		photoprocessing machinery and equipment purchased for lease.
15		(21) Coal and aggregate exploration, mining, off-highway
16		hauling, processing, maintenance, and reclamation equipment,
17		including replacement parts and equipment, and including
18		equipment purchased for lease, but excluding motor vehicles
19		required to be registered under the Illinois Vehicle Code. The
20		changes made to this Section by Public Act 97-767 apply on and
21		after July 1, 2003, but no claim for credit or refund is
22		allowed on or after August 16, 2013 (the effective date of
23		Public Act 98-456) for such taxes paid during the period
24		beginning July 1, 2003 and ending on August 16, 2013 (the
25		effective date of Public Act 98-456).
26		(22) Until June 30, 2013, fuel and petroleum products sold

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1		to or used by an air carrier, certified by the carrier to be
2		used for consumption, shipment, or storage in the conduct of
3		its business as an air common carrier, for a flight destined
4		for or returning from a location or locations outside the
5		United States without regard to previous or subsequent domestic
6		stopovers.
7		Beginning July 1, 2013, fuel and petroleum products sold to
8		or used by an air carrier, certified by the carrier to be used
9		for consumption, shipment, or storage in the conduct of its
10		business as an air common carrier, for a flight that (i) is
11		engaged in foreign trade or is engaged in trade between the
12		United States and any of its possessions and (ii) transports at
13		least one individual or package for hire from the city of
14		origination to the city of final destination on the same
15		aircraft, without regard to a change in the flight number of
16		that aircraft.
17		(23) A transaction in which the purchase order is received
18		by a florist who is located outside Illinois, but who has a
19		florist located in Illinois deliver the property to the
20		purchaser or the purchaser's donee in Illinois.
21		(24) Fuel consumed or used in the operation of ships,
22		barges, or vessels that are used primarily in or for the
23		transportation of property or the conveyance of persons for
24		hire on rivers bordering on this State if the fuel is delivered
25		by the seller to the purchaser's barge, ship, or vessel while
26		it is afloat upon that bordering river.

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1		(25) Except as provided in item (25-5) of this Section, a
2		motor vehicle sold in this State to a nonresident even though
3		the motor vehicle is delivered to the nonresident in this
4		State, if the motor vehicle is not to be titled in this State,
5		and if a drive-away permit is issued to the motor vehicle as
6		provided in Section 3-603 of the Illinois Vehicle Code or if
7		the nonresident purchaser has vehicle registration plates to
8		transfer to the motor vehicle upon returning to his or her home
9		state. The issuance of the drive-away permit or having the
10		out-of-state registration plates to be transferred is prima
11		facie evidence that the motor vehicle will not be titled in
12		this State.
13		(25-5) The exemption under item (25) does not apply if the
14		state in which the motor vehicle will be titled does not allow
15		a reciprocal exemption for a motor vehicle sold and delivered
16		in that state to an Illinois resident but titled in Illinois.
17		The tax collected under this Act on the sale of a motor vehicle
18		in this State to a resident of another state that does not
19		allow a reciprocal exemption shall be imposed at a rate equal
20		to the state's rate of tax on taxable property in the state in
21		which the purchaser is a resident, except that the tax shall
22		not exceed the tax that would otherwise be imposed under this
23		Act. At the time of the sale, the purchaser shall execute a
24		statement, signed under penalty of perjury, of his or her
25		intent to title the vehicle in the state in which the purchaser
26		is a resident within 30 days after the sale and of the fact of

SB0009 Engrossed - 382 - LRB100 06347 HLH 16385 b
1		the payment to the State of Illinois of tax in an amount
2		equivalent to the state's rate of tax on taxable property in
3		his or her state of residence and shall submit the statement to
4		the appropriate tax collection agency in his or her state of
5		residence. In addition, the retailer must retain a signed copy
6		of the statement in his or her records. Nothing in this item
7		shall be construed to require the removal of the vehicle from
8		this state following the filing of an intent to title the
9		vehicle in the purchaser's state of residence if the purchaser
10		titles the vehicle in his or her state of residence within 30
11		days after the date of sale. The tax collected under this Act
12		in accordance with this item (25-5) shall be proportionately
13		distributed as if the tax were collected at the 6.25% general
14		rate imposed under this Act.
15		(25-7) Beginning on July 1, 2007, no tax is imposed under
16		this Act on the sale of an aircraft, as defined in Section 3 of
17		the Illinois Aeronautics Act, if all of the following
18		conditions are met:
19		(1) the aircraft leaves this State within 15 days after
20		the later of either the issuance of the final billing for
21		the sale of the aircraft, or the authorized approval for
22		return to service, completion of the maintenance record
23		entry, and completion of the test flight and ground test
24		for inspection, as required by 14 C.F.R. 91.407;
25		(2) the aircraft is not based or registered in this
26		State after the sale of the aircraft; and

SB0009 Engrossed - 383 - LRB100 06347 HLH 16385 b
1		(3) the seller retains in his or her books and records
2		and provides to the Department a signed and dated
3		certification from the purchaser, on a form prescribed by
4		the Department, certifying that the requirements of this
5		item (25-7) are met. The certificate must also include the
6		name and address of the purchaser, the address of the
7		location where the aircraft is to be titled or registered,
8		the address of the primary physical location of the
9		aircraft, and other information that the Department may
10		reasonably require.
11		For purposes of this item (25-7):
12		"Based in this State" means hangared, stored, or otherwise
13		used, excluding post-sale customizations as defined in this
14		Section, for 10 or more days in each 12-month period
15		immediately following the date of the sale of the aircraft.
16		"Registered in this State" means an aircraft registered
17		with the Department of Transportation, Aeronautics Division,
18		or titled or registered with the Federal Aviation
19		Administration to an address located in this State.
20		This paragraph (25-7) is exempt from the provisions of
21		Section 2-70.
22		(26) Semen used for artificial insemination of livestock
23		for direct agricultural production.
24		(27) Horses, or interests in horses, registered with and
25		meeting the requirements of any of the Arabian Horse Club
26		Registry of America, Appaloosa Horse Club, American Quarter

SB0009 Engrossed - 384 - LRB100 06347 HLH 16385 b
1		Horse Association, United States Trotting Association, or
2		Jockey Club, as appropriate, used for purposes of breeding or
3		racing for prizes. This item (27) is exempt from the provisions
4		of Section 2-70, and the exemption provided for under this item
5		(27) applies for all periods beginning May 30, 1995, but no
6		claim for credit or refund is allowed on or after January 1,
7		2008 (the effective date of Public Act 95-88) for such taxes
8		paid during the period beginning May 30, 2000 and ending on
9		January 1, 2008 (the effective date of Public Act 95-88).
10		(28) Computers and communications equipment utilized for
11		any hospital purpose and equipment used in the diagnosis,
12		analysis, or treatment of hospital patients sold to a lessor
13		who leases the equipment, under a lease of one year or longer
14		executed or in effect at the time of the purchase, to a
15		hospital that has been issued an active tax exemption
16		identification number by the Department under Section 1g of
17		this Act.
18		(29) Personal property sold to a lessor who leases the
19		property, under a lease of one year or longer executed or in
20		effect at the time of the purchase, to a governmental body that
21		has been issued an active tax exemption identification number
22		by the Department under Section 1g of this Act.
23		(30) Beginning with taxable years ending on or after
24		December 31, 1995 and ending with taxable years ending on or
25		before December 31, 2004, personal property that is donated for
26		disaster relief to be used in a State or federally declared

SB0009 Engrossed - 385 - LRB100 06347 HLH 16385 b
1		disaster area in Illinois or bordering Illinois by a
2		manufacturer or retailer that is registered in this State to a
3		corporation, society, association, foundation, or institution
4		that has been issued a sales tax exemption identification
5		number by the Department that assists victims of the disaster
6		who reside within the declared disaster area.
7		(31) Beginning with taxable years ending on or after
8		December 31, 1995 and ending with taxable years ending on or
9		before December 31, 2004, personal property that is used in the
10		performance of infrastructure repairs in this State, including
11		but not limited to municipal roads and streets, access roads,
12		bridges, sidewalks, waste disposal systems, water and sewer
13		line extensions, water distribution and purification
14		facilities, storm water drainage and retention facilities, and
15		sewage treatment facilities, resulting from a State or
16		federally declared disaster in Illinois or bordering Illinois
17		when such repairs are initiated on facilities located in the
18		declared disaster area within 6 months after the disaster.
19		(32) Beginning July 1, 1999, game or game birds sold at a
20		"game breeding and hunting preserve area" as that term is used
21		in the Wildlife Code. This paragraph is exempt from the
22		provisions of Section 2-70.
23		(33) A motor vehicle, as that term is defined in Section
24		1-146 of the Illinois Vehicle Code, that is donated to a
25		corporation, limited liability company, society, association,
26		foundation, or institution that is determined by the Department

SB0009 Engrossed - 386 - LRB100 06347 HLH 16385 b
1		to be organized and operated exclusively for educational
2		purposes. For purposes of this exemption, "a corporation,
3		limited liability company, society, association, foundation,
4		or institution organized and operated exclusively for
5		educational purposes" means all tax-supported public schools,
6		private schools that offer systematic instruction in useful
7		branches of learning by methods common to public schools and
8		that compare favorably in their scope and intensity with the
9		course of study presented in tax-supported schools, and
10		vocational or technical schools or institutes organized and
11		operated exclusively to provide a course of study of not less
12		than 6 weeks duration and designed to prepare individuals to
13		follow a trade or to pursue a manual, technical, mechanical,
14		industrial, business, or commercial occupation.
15		(34) Beginning January 1, 2000, personal property,
16		including food, purchased through fundraising events for the
17		benefit of a public or private elementary or secondary school,
18		a group of those schools, or one or more school districts if
19		the events are sponsored by an entity recognized by the school
20		district that consists primarily of volunteers and includes
21		parents and teachers of the school children. This paragraph
22		does not apply to fundraising events (i) for the benefit of
23		private home instruction or (ii) for which the fundraising
24		entity purchases the personal property sold at the events from
25		another individual or entity that sold the property for the
26		purpose of resale by the fundraising entity and that profits

SB0009 Engrossed - 387 - LRB100 06347 HLH 16385 b
1		from the sale to the fundraising entity. This paragraph is
2		exempt from the provisions of Section 2-70.
3		(35) Beginning January 1, 2000 and through December 31,
4		2001, new or used automatic vending machines that prepare and
5		serve hot food and beverages, including coffee, soup, and other
6		items, and replacement parts for these machines. Beginning
7		January 1, 2002 and through June 30, 2003, machines and parts
8		for machines used in commercial, coin-operated amusement and
9		vending business if a use or occupation tax is paid on the
10		gross receipts derived from the use of the commercial,
11		coin-operated amusement and vending machines. This paragraph
12		is exempt from the provisions of Section 2-70.
13		(35-5) Beginning August 23, 2001 and through June 30, 2016,
14		food for human consumption that is to be consumed off the
15		premises where it is sold (other than alcoholic beverages, soft
16		drinks, and food that has been prepared for immediate
17		consumption) and prescription and nonprescription medicines,
18		drugs, medical appliances, and insulin, urine testing
19		materials, syringes, and needles used by diabetics, for human
20		use, when purchased for use by a person receiving medical
21		assistance under Article V of the Illinois Public Aid Code who
22		resides in a licensed long-term care facility, as defined in
23		the Nursing Home Care Act, or a licensed facility as defined in
24		the ID/DD Community Care Act, the MC/DD Act, or the Specialized
25		Mental Health Rehabilitation Act of 2013.
26		(36) Beginning August 2, 2001, computers and

SB0009 Engrossed - 388 - LRB100 06347 HLH 16385 b
1		communications equipment utilized for any hospital purpose and
2		equipment used in the diagnosis, analysis, or treatment of
3		hospital patients sold to a lessor who leases the equipment,
4		under a lease of one year or longer executed or in effect at
5		the time of the purchase, to a hospital that has been issued an
6		active tax exemption identification number by the Department
7		under Section 1g of this Act. This paragraph is exempt from the
8		provisions of Section 2-70.
9		(37) Beginning August 2, 2001, personal property sold to a
10		lessor who leases the property, under a lease of one year or
11		longer executed or in effect at the time of the purchase, to a
12		governmental body that has been issued an active tax exemption
13		identification number by the Department under Section 1g of
14		this Act. This paragraph is exempt from the provisions of
15		Section 2-70.
16		(38) Beginning on January 1, 2002 and through June 30,
17		2016, tangible personal property purchased from an Illinois
18		retailer by a taxpayer engaged in centralized purchasing
19		activities in Illinois who will, upon receipt of the property
20		in Illinois, temporarily store the property in Illinois (i) for
21		the purpose of subsequently transporting it outside this State
22		for use or consumption thereafter solely outside this State or
23		(ii) for the purpose of being processed, fabricated, or
24		manufactured into, attached to, or incorporated into other
25		tangible personal property to be transported outside this State
26		and thereafter used or consumed solely outside this State. The

SB0009 Engrossed - 389 - LRB100 06347 HLH 16385 b
1		Director of Revenue shall, pursuant to rules adopted in
2		accordance with the Illinois Administrative Procedure Act,
3		issue a permit to any taxpayer in good standing with the
4		Department who is eligible for the exemption under this
5		paragraph (38). The permit issued under this paragraph (38)
6		shall authorize the holder, to the extent and in the manner
7		specified in the rules adopted under this Act, to purchase
8		tangible personal property from a retailer exempt from the
9		taxes imposed by this Act. Taxpayers shall maintain all
10		necessary books and records to substantiate the use and
11		consumption of all such tangible personal property outside of
12		the State of Illinois.
13		(39) Beginning January 1, 2008, tangible personal property
14		used in the construction or maintenance of a community water
15		supply, as defined under Section 3.145 of the Environmental
16		Protection Act, that is operated by a not-for-profit
17		corporation that holds a valid water supply permit issued under
18		Title IV of the Environmental Protection Act. This paragraph is
19		exempt from the provisions of Section 2-70.
20		(40) Beginning January 1, 2010, materials, parts,
21		equipment, components, and furnishings incorporated into or
22		upon an aircraft as part of the modification, refurbishment,
23		completion, replacement, repair, or maintenance of the
24		aircraft. This exemption includes consumable supplies used in
25		the modification, refurbishment, completion, replacement,
26		repair, and maintenance of aircraft, but excludes any

SB0009 Engrossed - 390 - LRB100 06347 HLH 16385 b
1		materials, parts, equipment, components, and consumable
2		supplies used in the modification, replacement, repair, and
3		maintenance of aircraft engines or power plants, whether such
4		engines or power plants are installed or uninstalled upon any
5		such aircraft. "Consumable supplies" include, but are not
6		limited to, adhesive, tape, sandpaper, general purpose
7		lubricants, cleaning solution, latex gloves, and protective
8		films. This exemption applies only to the sale of qualifying
9		tangible personal property to persons who modify, refurbish,
10		complete, replace, or maintain an aircraft and who (i) hold an
11		Air Agency Certificate and are empowered to operate an approved
12		repair station by the Federal Aviation Administration, (ii)
13		have a Class IV Rating, and (iii) conduct operations in
14		accordance with Part 145 of the Federal Aviation Regulations.
15		The exemption does not include aircraft operated by a
16		commercial air carrier providing scheduled passenger air
17		service pursuant to authority issued under Part 121 or Part 129
18		of the Federal Aviation Regulations. The changes made to this
19		paragraph (40) by Public Act 98-534 are declarative of existing
20		law.
21		(41) Tangible personal property sold to a
22		public-facilities corporation, as described in Section
23		11-65-10 of the Illinois Municipal Code, for purposes of
24		constructing or furnishing a municipal convention hall, but
25		only if the legal title to the municipal convention hall is
26		transferred to the municipality without any further

SB0009 Engrossed - 391 - LRB100 06347 HLH 16385 b
1		consideration by or on behalf of the municipality at the time
2		of the completion of the municipal convention hall or upon the
3		retirement or redemption of any bonds or other debt instruments
4		issued by the public-facilities corporation in connection with
5		the development of the municipal convention hall. This
6		exemption includes existing public-facilities corporations as
7		provided in Section 11-65-25 of the Illinois Municipal Code.
8		This paragraph is exempt from the provisions of Section 2-70.
9		(42) Beginning January 1, 2017, menstrual pads, tampons,
10		and menstrual cups.
11		(43) Beginning January 1, 2018, taxable service performed
12		on or to tangible personal property the sale of which is exempt
13		from taxation under this Act. This paragraph is exempt from the
14		provisions of Section 2-70.
15		(44) Beginning January 1, 2018, taxable service performed
16		in a transaction that would be exempt from taxation under this
17		Act if it involved solely the sale of tangible personal
18		property. Such exemption could be due to the nature of the
19		seller or of the service provider, the purchaser or service
20		recipient, or other features of the transaction, including but
21		not limited to the location or sale-for-resale nature of the
22		transaction. Any such exemption applies to transactions
23		involving solely the sale of tangible personal property, solely
24		the performance of taxable service, or some combination
25		thereof. This paragraph is exempt from the provisions of
26		Section 2-70.

SB0009 Engrossed - 392 - LRB100 06347 HLH 16385 b
1		(45) Beginning January 1, 2018, taxable service performed
2		for or provided to businesses making purchases of services for
3		the benefit of or in furtherance of the business. This
4		paragraph is exempt from the provisions of Section 2-70.
5		(Source: P.A. 98-104, eff. 7-22-13; 98-422, eff. 8-16-13;
6		98-456, eff. 8-16-13; 98-534, eff. 8-23-13; 98-574, eff.
7		1-1-14; 98-583, eff. 1-1-14; 98-756, eff. 7-16-14; 99-180, eff.
8		7-29-15; 99-855, eff. 8-19-16.)
9		(35 ILCS 120/2-10)
10		Sec. 2-10. Rate of tax. Unless otherwise provided in this
11		Section, the tax imposed by this Act is at the rate of 6.25% of
12		gross receipts from sales of tangible personal property made in
13		the course of business. Beginning July 1, 2017, the tax is also
14		imposed at the rate of 6.25% of the gross receipts from sales
15		of taxable services.
16		Beginning on July 1, 2000 and through December 31, 2000,
17		with respect to motor fuel, as defined in Section 1.1 of the
18		Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of
19		the Use Tax Act, the tax is imposed at the rate of 1.25%.
20		Beginning on August 6, 2010 through August 15, 2010, with
21		respect to sales tax holiday items as defined in Section 2-8 of
22		this Act, the tax is imposed at the rate of 1.25%.
23		Within 14 days after the effective date of this amendatory
24		Act of the 91st General Assembly, each retailer of motor fuel
25		and gasohol shall cause the following notice to be posted in a

SB0009 Engrossed - 393 - LRB100 06347 HLH 16385 b
1		prominently visible place on each retail dispensing device that
2		is used to dispense motor fuel or gasohol in the State of
3		Illinois: "As of July 1, 2000, the State of Illinois has
4		eliminated the State's share of sales tax on motor fuel and
5		gasohol through December 31, 2000. The price on this pump
6		should reflect the elimination of the tax." The notice shall be
7		printed in bold print on a sign that is no smaller than 4
8		inches by 8 inches. The sign shall be clearly visible to
9		customers. Any retailer who fails to post or maintain a
10		required sign through December 31, 2000 is guilty of a petty
11		offense for which the fine shall be $500 per day per each
12		retail premises where a violation occurs.
13		With respect to gasohol, as defined in the Use Tax Act, the
14		tax imposed by this Act applies to (i) 70% of the proceeds of
15		sales made on or after January 1, 1990, and before July 1,
16		2003, (ii) 80% of the proceeds of sales made on or after July
17		1, 2003 and on or before December 31, 2018, and (iii) 100% of
18		the proceeds of sales made thereafter. If, at any time,
19		however, the tax under this Act on sales of gasohol, as defined
20		in the Use Tax Act, is imposed at the rate of 1.25%, then the
21		tax imposed by this Act applies to 100% of the proceeds of
22		sales of gasohol made during that time.
23		With respect to majority blended ethanol fuel, as defined
24		in the Use Tax Act, the tax imposed by this Act does not apply
25		to the proceeds of sales made on or after July 1, 2003 and on or
26		before December 31, 2018 but applies to 100% of the proceeds of

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1		sales made thereafter.
2		With respect to biodiesel blends, as defined in the Use Tax
3		Act, with no less than 1% and no more than 10% biodiesel, the
4		tax imposed by this Act applies to (i) 80% of the proceeds of
5		sales made on or after July 1, 2003 and on or before December
6		31, 2018 and (ii) 100% of the proceeds of sales made
7		thereafter. If, at any time, however, the tax under this Act on
8		sales of biodiesel blends, as defined in the Use Tax Act, with
9		no less than 1% and no more than 10% biodiesel is imposed at
10		the rate of 1.25%, then the tax imposed by this Act applies to
11		100% of the proceeds of sales of biodiesel blends with no less
12		than 1% and no more than 10% biodiesel made during that time.
13		With respect to 100% biodiesel, as defined in the Use Tax
14		Act, and biodiesel blends, as defined in the Use Tax Act, with
15		more than 10% but no more than 99% biodiesel, the tax imposed
16		by this Act does not apply to the proceeds of sales made on or
17		after July 1, 2003 and on or before December 31, 2018 but
18		applies to 100% of the proceeds of sales made thereafter.
19		With respect to food for human consumption that is to be
20		consumed off the premises where it is sold (other than
21		alcoholic beverages, soft drinks, and food that has been
22		prepared for immediate consumption) and prescription and
23		nonprescription medicines, drugs, medical appliances, products
24		classified as Class III medical devices by the United States
25		Food and Drug Administration that are used for cancer treatment
26		pursuant to a prescription, as well as any accessories and

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1		components related to those devices, modifications to a motor
2		vehicle for the purpose of rendering it usable by a person with
3		a disability, and insulin, urine testing materials, syringes,
4		and needles used by diabetics, for human use, the tax is
5		imposed at the rate of 1%. For the purposes of this Section,
6		until September 1, 2009: the term "soft drinks" means any
7		complete, finished, ready-to-use, non-alcoholic drink, whether
8		carbonated or not, including but not limited to soda water,
9		cola, fruit juice, vegetable juice, carbonated water, and all
10		other preparations commonly known as soft drinks of whatever
11		kind or description that are contained in any closed or sealed
12		bottle, can, carton, or container, regardless of size; but
13		"soft drinks" does not include coffee, tea, non-carbonated
14		water, infant formula, milk or milk products as defined in the
15		Grade A Pasteurized Milk and Milk Products Act, or drinks
16		containing 50% or more natural fruit or vegetable juice.
17		Notwithstanding any other provisions of this Act,
18		beginning September 1, 2009, "soft drinks" means non-alcoholic
19		beverages that contain natural or artificial sweeteners. "Soft
20		drinks" do not include beverages that contain milk or milk
21		products, soy, rice or similar milk substitutes, or greater
22		than 50% of vegetable or fruit juice by volume.
23		Until August 1, 2009, and notwithstanding any other
24		provisions of this Act, "food for human consumption that is to
25		be consumed off the premises where it is sold" includes all
26		food sold through a vending machine, except soft drinks and

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1		food products that are dispensed hot from a vending machine,
2		regardless of the location of the vending machine. Beginning
3		August 1, 2009, and notwithstanding any other provisions of
4		this Act, "food for human consumption that is to be consumed
5		off the premises where it is sold" includes all food sold
6		through a vending machine, except soft drinks, candy, and food
7		products that are dispensed hot from a vending machine,
8		regardless of the location of the vending machine.
9		Notwithstanding any other provisions of this Act,
10		beginning September 1, 2009, "food for human consumption that
11		is to be consumed off the premises where it is sold" does not
12		include candy. For purposes of this Section, "candy" means a
13		preparation of sugar, honey, or other natural or artificial
14		sweeteners in combination with chocolate, fruits, nuts or other
15		ingredients or flavorings in the form of bars, drops, or
16		pieces. "Candy" does not include any preparation that contains
17		flour or requires refrigeration.
18		Notwithstanding any other provisions of this Act,
19		beginning September 1, 2009, "nonprescription medicines and
20		drugs" does not include grooming and hygiene products. For
21		purposes of this Section, "grooming and hygiene products"
22		includes, but is not limited to, soaps and cleaning solutions,
23		shampoo, toothpaste, mouthwash, antiperspirants, and sun tan
24		lotions and screens, unless those products are available by
25		prescription only, regardless of whether the products meet the
26		definition of "over-the-counter-drugs". For the purposes of

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1		this paragraph, "over-the-counter-drug" means a drug for human
2		use that contains a label that identifies the product as a drug
3		as required by 21 C.F.R. § 201.66. The "over-the-counter-drug"
4		label includes:
5		(A) A "Drug Facts" panel; or
6		(B) A statement of the "active ingredient(s)" with a
7		list of those ingredients contained in the compound,
8		substance or preparation.
9		Beginning on the effective date of this amendatory Act of
10		the 98th General Assembly, "prescription and nonprescription
11		medicines and drugs" includes medical cannabis purchased from a
12		registered dispensing organization under the Compassionate Use
13		of Medical Cannabis Pilot Program Act.
14		(Source: P.A. 98-122, eff. 1-1-14; 99-143, eff. 7-27-15;
15		99-858, eff. 8-19-16.)
16		(35 ILCS 120/2-10.5)
17		Sec. 2-10.5. Direct payment program; purchaser's providing
18		of permit to retailer; retailer relieved of collecting use tax
19		and local retailers' occupation tax reimbursements from
20		purchaser; direct payment of retailers' occupation tax and
21		local retailers' occupation tax by purchaser.
22		(a) Beginning on July 1, 2001 there is established in this
23		State a Direct Payment Program to be administered by the
24		Department. The Department shall issue a Direct Pay Permit to
25		applicants who have been approved to participate in the Direct

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1		Payment Program. Each person applying to participate in the
2		Direct Payment Program must demonstrate (1) the applicant's
3		ability to comply with the retailers' occupation tax laws and
4		the use tax laws in effect in this State and that the
5		applicant's accounting system will reflect the proper amount of
6		tax due, (2) that the applicant has a valid business purpose
7		for participating in the Direct Payment Program, and (3) how
8		the applicant's participation in the Direct Payment Program
9		will benefit tax compliance. Application shall be made on forms
10		provided by the Department and shall contain information as the
11		Department may reasonably require. The Department shall
12		approve or deny an applicant within 90 days after the
13		Department's receipt of the application, unless the Department
14		makes a written request for additional information from the
15		applicant.
16		(b) A person who has been approved for the Direct Payment
17		Program and who has been issued a Direct Pay Permit by the
18		Department is relieved of paying tax to a retailer when
19		purchasing tangible personal property or taxable service for
20		use or consumption, except as provided in subsection (d), by
21		providing that retailer a copy of that Direct Pay Permit. A
22		retailer who accepts a copy of a customer's Direct Pay Permit
23		is relieved of the obligation to remit the tax imposed by this
24		Act on the transaction. References in this Section to "the tax
25		imposed by this Act" include any local occupation taxes
26		administered by the Department that would be incurred on the

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1		retail sale.
2		(c) Once the holder of a Direct Pay Permit uses that Permit
3		to relieve the Permit holder from paying tax to a particular
4		retailer, the holder must use its Permit for all purchases,
5		except as provided in subsection (d), from that retailer for so
6		long as the Permit is valid.
7		(d) Direct Pay Permits are not valid and shall not be used
8		for sales or purchases of:
9		(1) food or beverage;
10		(2) tangible personal property required to be titled or
11		registered with an agency of government; or
12		(3) any transactions subject to the Service Occupation
13		Tax Act or Service Use Tax Act.
14		(e) Direct Pay Permits are not assignable and are not
15		transferable. As an illustration, a construction contractor
16		shall not make purchases using a customer's Direct Pay Permit.
17		(f) A Direct Pay Permit is valid until it is revoked by the
18		Department or until the holder notifies the Department in
19		writing that the holder is withdrawing from the Direct Payment
20		Program. A Direct Pay Permit can be revoked by the Department,
21		after notice and hearing, if the holder violates any provision
22		of this Act, any provision of the Illinois Use Tax Act, or any
23		provision of any Act imposing a local retailers' occupation tax
24		administered by the Department.
25		(g) The holder of a Direct Pay Permit who has been relieved
26		of paying tax to a retailer on a purchase for use or

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1		consumption by representing to that retailer that it would pay
2		all applicable taxes directly to the Department shall pay those
3		taxes to the Department not later than the 20th day of the
4		month following the month in which the purchase was made.
5		Permit holders making such purchases are subject to all
6		provisions of this Act, and the tax must be reported and paid
7		as retailers' occupation tax in the same manner that the
8		retailer from whom the purchases were made would have reported
9		and paid it, including any local retailers' occupation taxes
10		applicable to that retail sale. Notwithstanding any other
11		provision of this Act, Permit holders shall make all payments
12		to the Department through the use of electronic funds transfer.
13		(Source: P.A. 92-484, eff. 8-23-01.)
14		(35 ILCS 120/2-12)
15		Sec. 2-12. Location where retailer is deemed to be engaged
16		in the business of selling. The purpose of this Section is to
17		specify where a retailer is deemed to be engaged in the
18		business of selling tangible personal property or taxable
19		service for the purposes of this Act, the Use Tax Act, the
20		Service Use Tax Act, and the Service Occupation Tax Act, and
21		for the purpose of collecting any other local retailers'
22		occupation tax administered by the Department. This Section
23		applies only with respect to the particular selling activities
24		described in the following paragraphs. The provisions of this
25		Section are not intended to, and shall not be interpreted to,

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1		affect where a retailer is deemed to be engaged in the business
2		of selling with respect to any activity that is not
3		specifically described in the following paragraphs.
4		(1) If a purchaser who is present at the retailer's
5		place of business, having no prior commitment to the
6		retailer, agrees to purchase and makes payment for tangible
7		personal property at the retailer's place of business, then
8		the transaction shall be deemed an over-the-counter sale
9		occurring at the retailer's same place of business where
10		the purchaser was present and made payment for that
11		tangible personal property if the retailer regularly
12		stocks the purchased tangible personal property or similar
13		tangible personal property in the quantity, or similar
14		quantity, for sale at the retailer's same place of business
15		and then either (i) the purchaser takes possession of the
16		tangible personal property at the same place of business or
17		(ii) the retailer delivers or arranges for the tangible
18		personal property to be delivered to the purchaser.
19		(2) If a purchaser, having no prior commitment to the
20		retailer, agrees to purchase tangible personal property
21		and makes payment over the phone, in writing, or via the
22		Internet and takes possession of the tangible personal
23		property at the retailer's place of business, then the sale
24		shall be deemed to have occurred at the retailer's place of
25		business where the purchaser takes possession of the
26		property if the retailer regularly stocks the item or

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1		similar items in the quantity, or similar quantities,
2		purchased by the purchaser.
3		(3) A retailer is deemed to be engaged in the business
4		of selling food, beverages, or other tangible personal
5		property through a vending machine at the location where
6		the vending machine is located at the time the sale is made
7		if (i) the vending machine is a device operated by coin,
8		currency, credit card, token, coupon or similar device; (2)
9		the food, beverage or other tangible personal property is
10		contained within the vending machine and dispensed from the
11		vending machine; and (3) the purchaser takes possession of
12		the purchased food, beverage or other tangible personal
13		property immediately.
14		(4) Minerals. A producer of coal or other mineral mined
15		in Illinois is deemed to be engaged in the business of
16		selling at the place where the coal or other mineral mined
17		in Illinois is extracted from the earth. With respect to
18		minerals (i) the term "extracted from the earth" means the
19		location at which the coal or other mineral is extracted
20		from the mouth of the mine, and (ii) a "mineral" includes
21		not only coal, but also oil, sand, stone taken from a
22		quarry, gravel and any other thing commonly regarded as a
23		mineral and extracted from the earth. This paragraph does
24		not apply to coal or another mineral when it is delivered
25		or shipped by the seller to the purchaser at a point
26		outside Illinois so that the sale is exempt under the

SB0009 Engrossed - 403 - LRB100 06347 HLH 16385 b
1		United States Constitution as a sale in interstate or
2		foreign commerce.
3		(5) A retailer selling tangible personal property to a
4		nominal lessee or bailee pursuant to a lease with a dollar
5		or other nominal option to purchase is engaged in the
6		business of selling at the location where the property is
7		first delivered to the lessee or bailee for its intended
8		use.
9		(6) Landscaping services shall be sourced to the
10		location of the parcel or tract of land where the benefit
11		of the landscaping services is realized.
12		(Source: P.A. 98-1098, eff. 8-26-14; 99-126, eff. 7-23-15.)
13		(35 ILCS 120/2-45) (from Ch. 120, par. 441-45)
14		Sec. 2-45. Manufacturing and assembly exemption. The
15		manufacturing and assembly machinery and equipment exemption
16		includes machinery and equipment that replaces machinery and
17		equipment in an existing manufacturing facility as well as
18		machinery and equipment that are for use in an expanded or new
19		manufacturing facility.
20		The machinery and equipment exemption also includes
21		machinery and equipment used in the general maintenance or
22		repair of exempt machinery and equipment or for in-house
23		manufacture of exempt machinery and equipment. Beginning on
24		July 1, 2017, the manufacturing and assembling machinery and
25		equipment exemption also includes graphic arts machinery and

SB0009 Engrossed - 404 - LRB100 06347 HLH 16385 b
1		equipment, as defined in paragraph (4) of Section 2-5.
2		Beginning on July 1, 2017, the manufacturing and assembling
3		machinery and equipment exemption also includes production
4		related tangible personal property, as defined in this Section.
5		The machinery and equipment exemption does not include
6		machinery and equipment used in (i) the generation of
7		electricity for wholesale or retail sale; (ii) the generation
8		or treatment of natural or artificial gas for wholesale or
9		retail sale that is delivered to customers through pipes,
10		pipelines, or mains; or (iii) the treatment of water for
11		wholesale or retail sale that is delivered to customers through
12		pipes, pipelines, or mains. The provisions of this amendatory
13		Act of the 98th General Assembly are declaratory of existing
14		law as to the meaning and scope of this exemption. For the
15		purposes of this exemption, terms have the following meanings:
16		(1) "Manufacturing process" means the production of an
17		article of tangible personal property, whether the article
18		is a finished product or an article for use in the process
19		of manufacturing or assembling a different article of
20		tangible personal property, by a procedure commonly
21		regarded as manufacturing, processing, fabricating, or
22		refining that changes some existing material or materials
23		into a material with a different form, use, or name. In
24		relation to a recognized integrated business composed of a
25		series of operations that collectively constitute
26		manufacturing, or individually constitute manufacturing

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1		operations, the manufacturing process commences with the
2		first operation or stage of production in the series and
3		does not end until the completion of the final product in
4		the last operation or stage of production in the series.
5		For purposes of this exemption, photoprocessing is a
6		manufacturing process of tangible personal property for
7		wholesale or retail sale.
8		(2) "Assembling process" means the production of an
9		article of tangible personal property, whether the article
10		is a finished product or an article for use in the process
11		of manufacturing or assembling a different article of
12		tangible personal property, by the combination of existing
13		materials in a manner commonly regarded as assembling that
14		results in a material of a different form, use, or name.
15		(3) "Machinery" means major mechanical machines or
16		major components of those machines contributing to a
17		manufacturing or assembling process.
18		(4) "Equipment" includes an independent device or tool
19		separate from machinery but essential to an integrated
20		manufacturing or assembly process; including computers
21		used primarily in a manufacturer's computer assisted
22		design, computer assisted manufacturing (CAD/CAM) system;
23		any subunit or assembly comprising a component of any
24		machinery or auxiliary, adjunct, or attachment parts of
25		machinery, such as tools, dies, jigs, fixtures, patterns,
26		and molds; and any parts that require periodic replacement

SB0009 Engrossed - 406 - LRB100 06347 HLH 16385 b
1		in the course of normal operation; but does not include
2		hand tools. Equipment includes chemicals or chemicals
3		acting as catalysts but only if the chemicals or chemicals
4		acting as catalysts effect a direct and immediate change
5		upon a product being manufactured or assembled for
6		wholesale or retail sale or lease.
7		(5) "Production related tangible personal property"
8		means all tangible personal property that is used or
9		consumed by the purchaser in a manufacturing facility in
10		which a manufacturing process takes place and includes,
11		without limitation, tangible personal property that is
12		purchased for incorporation into real estate within a
13		manufacturing facility and tangible personal property that
14		is used or consumed in activities such as research and
15		development, preproduction material handling, receiving,
16		quality control, inventory control, storage, staging, and
17		packaging for shipping and transportation purposes.
18		"Production related tangible personal property" does not
19		include (i) tangible personal property that is used, within
20		or without a manufacturing facility, in sales, purchasing,
21		accounting, fiscal management, marketing, personnel
22		recruitment or selection, or landscaping or (ii) tangible
23		personal property that is required to be titled or
24		registered with a department, agency, or unit of federal,
25		State, or local government.
26		The manufacturing and assembling machinery and equipment

SB0009 Engrossed - 407 - LRB100 06347 HLH 16385 b
1		exemption includes production related tangible personal
2		property that is purchased (i) on or after July 1, 2007 and on
3		or before June 30, 2008 or (ii) on and after July 1, 2017. The
4		exemption for production related tangible personal property
5		purchased on or after July 1, 2007 and on or before June 30,
6		2008 is subject to both of the following limitations:
7		(1) The maximum amount of the exemption for any one
8		taxpayer may not exceed 5% of the purchase price of
9		production related tangible personal property that is
10		purchased on or after July 1, 2007 and on or before June
11		30, 2008. A credit under Section 3-85 of this Act may not
12		be earned by the purchase of production related tangible
13		personal property for which an exemption is received under
14		this Section.
15		(2) The maximum aggregate amount of the exemptions for
16		production related tangible personal property awarded
17		under this Act and the Use Tax Act to all taxpayers may not
18		exceed $10,000,000. If the claims for the exemption exceed
19		$10,000,000, then the Department shall reduce the amount of
20		the exemption to each taxpayer on a pro rata basis.
21		The Department may adopt rules to implement and administer the
22		exemption for production related tangible personal property.
23		The manufacturing and assembling machinery and equipment
24		exemption includes the sale of materials to a purchaser who
25		produces exempted types of machinery, equipment, or tools and
26		who rents or leases that machinery, equipment, or tools to a

SB0009 Engrossed - 408 - LRB100 06347 HLH 16385 b
1		manufacturer of tangible personal property. This exemption
2		also includes the sale of materials to a purchaser who
3		manufactures those materials into an exempted type of
4		machinery, equipment, or tools that the purchaser uses himself
5		or herself in the manufacturing of tangible personal property.
6		The purchaser of the machinery and equipment who has an active
7		resale registration number shall furnish that number to the
8		seller at the time of purchase. A purchaser of the machinery,
9		equipment, and tools without an active resale registration
10		number shall furnish to the seller a certificate of exemption
11		for each transaction stating facts establishing the exemption
12		for that transaction, and that certificate shall be available
13		to the Department for inspection or audit. Informal rulings,
14		opinions, or letters issued by the Department in response to an
15		inquiry or request for an opinion from any person regarding the
16		coverage and applicability of this exemption to specific
17		devices shall be published, maintained as a public record, and
18		made available for public inspection and copying. If the
19		informal ruling, opinion, or letter contains trade secrets or
20		other confidential information, where possible, the Department
21		shall delete that information before publication. Whenever
22		informal rulings, opinions, or letters contain a policy of
23		general applicability, the Department shall formulate and
24		adopt that policy as a rule in accordance with the Illinois
25		Administrative Procedure Act.
26		The manufacturing and assembling machinery and equipment

SB0009 Engrossed - 409 - LRB100 06347 HLH 16385 b
1		exemption is exempt from the provisions of Section 2-70.
2		(Source: P.A. 98-583, eff. 1-1-14.)
3		(35 ILCS 120/2-55) (from Ch. 120, par. 441-55)
4		Sec. 2-55. Serviceman transfer. Tangible personal property
5		purchased by a serviceman, as defined in Section 2 of the
6		Service Occupation Tax Act, is subject to the tax imposed by
7		this Act when purchased for transfer by the serviceman
8		incidental to completion of a maintenance agreement. Effective
9		January 1, 2018, purchases of tangible personal property
10		purchased for transfer incidental to performance of a taxable
11		service is not subject to the tax imposed by this Act.
12		(Source: P.A. 91-51, eff. 6-30-99.)
13		(35 ILCS 120/2a) (from Ch. 120, par. 441a)
14		Sec. 2a. It is unlawful for any person to engage in the
15		business of selling tangible personal property or taxable
16		service at retail in this State without a certificate of
17		registration from the Department. Application for a
18		certificate of registration shall be made to the Department
19		upon forms furnished by it. Each such application shall be
20		signed and verified and shall state: (1) the name and social
21		security number of the applicant; (2) the address of his
22		principal place of business; (3) the address of the principal
23		place of business from which he engages in the business of
24		selling tangible personal property or taxable service at retail

SB0009 Engrossed - 410 - LRB100 06347 HLH 16385 b
1		in this State and the addresses of all other places of
2		business, if any (enumerating such addresses, if any, in a
3		separate list attached to and made a part of the application),
4		from which he engages in the business of selling tangible
5		personal property or taxable service at retail in this State;
6		(4) the name and address of the person or persons who will be
7		responsible for filing returns and payment of taxes due under
8		this Act; (5) in the case of a publicly traded corporation, the
9		name and title of the Chief Financial Officer, Chief Operating
10		Officer, and any other officer or employee with responsibility
11		for preparing tax returns under this Act, along with the last 4
12		digits of each of their social security numbers, and, in the
13		case of all other corporations, the name, title, and social
14		security number of each corporate officer; (6) in the case of a
15		limited liability company, the name, social security number,
16		and FEIN number of each manager and member; and (7) such other
17		information as the Department may reasonably require. The
18		application shall contain an acceptance of responsibility
19		signed by the person or persons who will be responsible for
20		filing returns and payment of the taxes due under this Act. If
21		the applicant will sell tangible personal property at retail
22		through vending machines, his application to register shall
23		indicate the number of vending machines to be so operated. If
24		requested by the Department at any time, that person shall
25		verify the total number of vending machines he or she uses in
26		his or her business of selling tangible personal property at

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1		retail.
2		The Department may deny a certificate of registration to
3		any applicant if a person who is named as the owner, a partner,
4		a manager or member of a limited liability company, or a
5		corporate officer of the applicant on the application for the
6		certificate of registration is or has been named as the owner,
7		a partner, a manager or member of a limited liability company,
8		or a corporate officer on the application for the certificate
9		of registration of another retailer that is in default for
10		moneys due under this Act or any other tax or fee Act
11		administered by the Department. For purposes of this paragraph
12		only, in determining whether a person is in default for moneys
13		due, the Department shall include only amounts established as a
14		final liability within the 20 years prior to the date of the
15		Department's notice of denial of a certificate of registration.
16		The Department may require an applicant for a certificate
17		of registration hereunder to, at the time of filing such
18		application, furnish a bond from a surety company authorized to
19		do business in the State of Illinois, or an irrevocable bank
20		letter of credit or a bond signed by 2 personal sureties who
21		have filed, with the Department, sworn statements disclosing
22		net assets equal to at least 3 times the amount of the bond to
23		be required of such applicant, or a bond secured by an
24		assignment of a bank account or certificate of deposit, stocks
25		or bonds, conditioned upon the applicant paying to the State of
26		Illinois all moneys becoming due under this Act and under any

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1		other State tax law or municipal or county tax ordinance or
2		resolution under which the certificate of registration that is
3		issued to the applicant under this Act will permit the
4		applicant to engage in business without registering separately
5		under such other law, ordinance or resolution. In making a
6		determination as to whether to require a bond or other
7		security, the Department shall take into consideration whether
8		the owner, any partner, any manager or member of a limited
9		liability company, or a corporate officer of the applicant is
10		or has been the owner, a partner, a manager or member of a
11		limited liability company, or a corporate officer of another
12		retailer that is in default for moneys due under this Act or
13		any other tax or fee Act administered by the Department; and
14		whether the owner, any partner, any manager or member of a
15		limited liability company, or a corporate officer of the
16		applicant is or has been the owner, a partner, a manager or
17		member of a limited liability company, or a corporate officer
18		of another retailer whose certificate of registration has been
19		revoked within the previous 5 years under this Act or any other
20		tax or fee Act administered by the Department. If a bond or
21		other security is required, the Department shall fix the amount
22		of the bond or other security, taking into consideration the
23		amount of money expected to become due from the applicant under
24		this Act and under any other State tax law or municipal or
25		county tax ordinance or resolution under which the certificate
26		of registration that is issued to the applicant under this Act

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1		will permit the applicant to engage in business without
2		registering separately under such other law, ordinance, or
3		resolution. The amount of security required by the Department
4		shall be such as, in its opinion, will protect the State of
5		Illinois against failure to pay the amount which may become due
6		from the applicant under this Act and under any other State tax
7		law or municipal or county tax ordinance or resolution under
8		which the certificate of registration that is issued to the
9		applicant under this Act will permit the applicant to engage in
10		business without registering separately under such other law,
11		ordinance or resolution, but the amount of the security
12		required by the Department shall not exceed three times the
13		amount of the applicant's average monthly tax liability, or
14		$50,000.00, whichever amount is lower.
15		No certificate of registration under this Act shall be
16		issued by the Department until the applicant provides the
17		Department with satisfactory security, if required, as herein
18		provided for.
19		Upon receipt of the application for certificate of
20		registration in proper form, and upon approval by the
21		Department of the security furnished by the applicant, if
22		required, the Department shall issue to such applicant a
23		certificate of registration which shall permit the person to
24		whom it is issued to engage in the business of selling tangible
25		personal property at retail in this State. The certificate of
26		registration shall be conspicuously displayed at the place of

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1		business which the person so registered states in his
2		application to be the principal place of business from which he
3		engages in the business of selling tangible personal property
4		at retail in this State.
5		No certificate of registration issued to a taxpayer who
6		files returns required by this Act on a monthly basis shall be
7		valid after the expiration of 5 years from the date of its
8		issuance or last renewal. The expiration date of a
9		sub-certificate of registration shall be that of the
10		certificate of registration to which the sub-certificate
11		relates. A certificate of registration shall automatically be
12		renewed, subject to revocation as provided by this Act, for an
13		additional 5 years from the date of its expiration unless
14		otherwise notified by the Department as provided by this
15		paragraph. Where a taxpayer to whom a certificate of
16		registration is issued under this Act is in default to the
17		State of Illinois for delinquent returns or for moneys due
18		under this Act or any other State tax law or municipal or
19		county ordinance administered or enforced by the Department,
20		the Department shall, not less than 60 days before the
21		expiration date of such certificate of registration, give
22		notice to the taxpayer to whom the certificate was issued of
23		the account period of the delinquent returns, the amount of
24		tax, penalty and interest due and owing from the taxpayer, and
25		that the certificate of registration shall not be automatically
26		renewed upon its expiration date unless the taxpayer, on or

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1		before the date of expiration, has filed and paid the
2		delinquent returns or paid the defaulted amount in full. A
3		taxpayer to whom such a notice is issued shall be deemed an
4		applicant for renewal. The Department shall promulgate
5		regulations establishing procedures for taxpayers who file
6		returns on a monthly basis but desire and qualify to change to
7		a quarterly or yearly filing basis and will no longer be
8		subject to renewal under this Section, and for taxpayers who
9		file returns on a yearly or quarterly basis but who desire or
10		are required to change to a monthly filing basis and will be
11		subject to renewal under this Section.
12		The Department may in its discretion approve renewal by an
13		applicant who is in default if, at the time of application for
14		renewal, the applicant files all of the delinquent returns or
15		pays to the Department such percentage of the defaulted amount
16		as may be determined by the Department and agrees in writing to
17		waive all limitations upon the Department for collection of the
18		remaining defaulted amount to the Department over a period not
19		to exceed 5 years from the date of renewal of the certificate;
20		however, no renewal application submitted by an applicant who
21		is in default shall be approved if the immediately preceding
22		renewal by the applicant was conditioned upon the installment
23		payment agreement described in this Section. The payment
24		agreement herein provided for shall be in addition to and not
25		in lieu of the security that may be required by this Section of
26		a taxpayer who is no longer considered a prior continuous

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1		compliance taxpayer. The execution of the payment agreement as
2		provided in this Act shall not toll the accrual of interest at
3		the statutory rate.
4		The Department may suspend a certificate of registration if
5		the Department finds that the person to whom the certificate of
6		registration has been issued knowingly sold contraband
7		cigarettes.
8		A certificate of registration issued under this Act more
9		than 5 years before the effective date of this amendatory Act
10		of 1989 shall expire and be subject to the renewal provisions
11		of this Section on the next anniversary of the date of issuance
12		of such certificate which occurs more than 6 months after the
13		effective date of this amendatory Act of 1989. A certificate of
14		registration issued less than 5 years before the effective date
15		of this amendatory Act of 1989 shall expire and be subject to
16		the renewal provisions of this Section on the 5th anniversary
17		of the issuance of the certificate.
18		If the person so registered states that he operates other
19		places of business from which he engages in the business of
20		selling tangible personal property or taxable service at retail
21		in this State, the Department shall furnish him with a
22		sub-certificate of registration for each such place of
23		business, and the applicant shall display the appropriate
24		sub-certificate of registration at each such place of business.
25		All sub-certificates of registration shall bear the same
26		registration number as that appearing upon the certificate of

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1		registration to which such sub-certificates relate.
2		If the applicant will sell tangible personal property at
3		retail through vending machines, the Department shall furnish
4		him with a sub-certificate of registration for each such
5		vending machine, and the applicant shall display the
6		appropriate sub-certificate of registration on each such
7		vending machine by attaching the sub-certificate of
8		registration to a conspicuous part of such vending machine. If
9		a person who is registered to sell tangible personal property
10		at retail through vending machines adds an additional vending
11		machine or additional vending machines to the number of vending
12		machines he or she uses in his or her business of selling
13		tangible personal property at retail, he or she shall notify
14		the Department, on a form prescribed by the Department, to
15		request an additional sub-certificate or additional
16		sub-certificates of registration, as applicable. With each
17		such request, the applicant shall report the number of
18		sub-certificates of registration he or she is requesting as
19		well as the total number of vending machines from which he or
20		she makes retail sales.
21		Where the same person engages in 2 or more businesses of
22		selling tangible personal property or taxable service at retail
23		in this State, which businesses are substantially different in
24		character or engaged in under different trade names or engaged
25		in under other substantially dissimilar circumstances (so that
26		it is more practicable, from an accounting, auditing or

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1		bookkeeping standpoint, for such businesses to be separately
2		registered), the Department may require or permit such person
3		(subject to the same requirements concerning the furnishing of
4		security as those that are provided for hereinbefore in this
5		Section as to each application for a certificate of
6		registration) to apply for and obtain a separate certificate of
7		registration for each such business or for any of such
8		businesses, under a single certificate of registration
9		supplemented by related sub-certificates of registration.
10		Any person who is registered under the "Retailers'
11		Occupation Tax Act" as of March 8, 1963, and who, during the
12		3-year period immediately prior to March 8, 1963, or during a
13		continuous 3-year period part of which passed immediately
14		before and the remainder of which passes immediately after
15		March 8, 1963, has been so registered continuously and who is
16		determined by the Department not to have been either delinquent
17		or deficient in the payment of tax liability during that period
18		under this Act or under any other State tax law or municipal or
19		county tax ordinance or resolution under which the certificate
20		of registration that is issued to the registrant under this Act
21		will permit the registrant to engage in business without
22		registering separately under such other law, ordinance or
23		resolution, shall be considered to be a Prior Continuous
24		Compliance taxpayer. Also any taxpayer who has, as verified by
25		the Department, faithfully and continuously complied with the
26		condition of his bond or other security under the provisions of

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1		this Act for a period of 3 consecutive years shall be
2		considered to be a Prior Continuous Compliance taxpayer.
3		Every Prior Continuous Compliance taxpayer shall be exempt
4		from all requirements under this Act concerning the furnishing
5		of a bond or other security as a condition precedent to his
6		being authorized to engage in the business of selling tangible
7		personal property or taxable service at retail in this State.
8		This exemption shall continue for each such taxpayer until such
9		time as he may be determined by the Department to be delinquent
10		in the filing of any returns, or is determined by the
11		Department (either through the Department's issuance of a final
12		assessment which has become final under the Act, or by the
13		taxpayer's filing of a return which admits tax that is not paid
14		to be due) to be delinquent or deficient in the paying of any
15		tax under this Act or under any other State tax law or
16		municipal or county tax ordinance or resolution under which the
17		certificate of registration that is issued to the registrant
18		under this Act will permit the registrant to engage in business
19		without registering separately under such other law, ordinance
20		or resolution, at which time that taxpayer shall become subject
21		to all the financial responsibility requirements of this Act
22		and, as a condition of being allowed to continue to engage in
23		the business of selling tangible personal property or taxable
24		service at retail, may be required to post bond or other
25		acceptable security with the Department covering liability
26		which such taxpayer may thereafter incur. Any taxpayer who

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1		fails to pay an admitted or established liability under this
2		Act may also be required to post bond or other acceptable
3		security with this Department guaranteeing the payment of such
4		admitted or established liability.
5		No certificate of registration shall be issued to any
6		person who is in default to the State of Illinois for moneys
7		due under this Act or under any other State tax law or
8		municipal or county tax ordinance or resolution under which the
9		certificate of registration that is issued to the applicant
10		under this Act will permit the applicant to engage in business
11		without registering separately under such other law, ordinance
12		or resolution.
13		Any person aggrieved by any decision of the Department
14		under this Section may, within 20 days after notice of such
15		decision, protest and request a hearing, whereupon the
16		Department shall give notice to such person of the time and
17		place fixed for such hearing and shall hold a hearing in
18		conformity with the provisions of this Act and then issue its
19		final administrative decision in the matter to such person. In
20		the absence of such a protest within 20 days, the Department's
21		decision shall become final without any further determination
22		being made or notice given.
23		With respect to security other than bonds (upon which the
24		Department may sue in the event of a forfeiture), if the
25		taxpayer fails to pay, when due, any amount whose payment such
26		security guarantees, the Department shall, after such

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1		liability is admitted by the taxpayer or established by the
2		Department through the issuance of a final assessment that has
3		become final under the law, convert the security which that
4		taxpayer has furnished into money for the State, after first
5		giving the taxpayer at least 10 days' written notice, by
6		registered or certified mail, to pay the liability or forfeit
7		such security to the Department. If the security consists of
8		stocks or bonds or other securities which are listed on a
9		public exchange, the Department shall sell such securities
10		through such public exchange. If the security consists of an
11		irrevocable bank letter of credit, the Department shall convert
12		the security in the manner provided for in the Uniform
13		Commercial Code. If the security consists of a bank certificate
14		of deposit, the Department shall convert the security into
15		money by demanding and collecting the amount of such bank
16		certificate of deposit from the bank which issued such
17		certificate. If the security consists of a type of stocks or
18		other securities which are not listed on a public exchange, the
19		Department shall sell such security to the highest and best
20		bidder after giving at least 10 days' notice of the date, time
21		and place of the intended sale by publication in the "State
22		Official Newspaper". If the Department realizes more than the
23		amount of such liability from the security, plus the expenses
24		incurred by the Department in converting the security into
25		money, the Department shall pay such excess to the taxpayer who
26		furnished such security, and the balance shall be paid into the

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1		State Treasury.
2		The Department shall discharge any surety and shall release
3		and return any security deposited, assigned, pledged or
4		otherwise provided to it by a taxpayer under this Section
5		within 30 days after:
6		(1) such taxpayer becomes a Prior Continuous
7		Compliance taxpayer; or
8		(2) such taxpayer has ceased to collect receipts on
9		which he is required to remit tax to the Department, has
10		filed a final tax return, and has paid to the Department an
11		amount sufficient to discharge his remaining tax
12		liability, as determined by the Department, under this Act
13		and under every other State tax law or municipal or county
14		tax ordinance or resolution under which the certificate of
15		registration issued under this Act permits the registrant
16		to engage in business without registering separately under
17		such other law, ordinance or resolution. The Department
18		shall make a final determination of the taxpayer's
19		outstanding tax liability as expeditiously as possible
20		after his final tax return has been filed; if the
21		Department cannot make such final determination within 45
22		days after receiving the final tax return, within such
23		period it shall so notify the taxpayer, stating its reasons
24		therefor.
25		(Source: P.A. 97-335, eff. 1-1-12; 98-496, eff. 1-1-14; 98-583,
26		eff. 1-1-14; 98-756, eff. 7-16-14; 98-974, eff. 1-1-15.)

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1		(35 ILCS 120/2b) (from Ch. 120, par. 441b)
2		Sec. 2b. The Department may, after notice and a hearing as
3		provided herein, revoke the certificate of registration of any
4		person who violates any of the provisions of this Act. Before
5		revocation of a certificate of registration the Department
6		shall, within 90 days after non-compliance and at least 7 days
7		prior to the date of the hearing, give the person so accused
8		notice in writing of the charge against him or her, and on the
9		date designated shall conduct a hearing upon this matter. The
10		lapse of such 90 day period shall not preclude the Department
11		from conducting revocation proceedings at a later date if
12		necessary. Any hearing held under this Section shall be
13		conducted by the Director of Revenue or by any officer or
14		employee of the Department designated, in writing, by the
15		Director of Revenue.
16		Upon the hearing of any such proceeding, the Director of
17		Revenue, or any officer or employee of the Department
18		designated, in writing, by the Director of Revenue, may
19		administer oaths and the Department may procure by its subpoena
20		the attendance of witnesses and, by its subpoena duces tecum,
21		the production of relevant books and papers. Any circuit court,
22		upon application either of the accused or of the Department,
23		may, by order duly entered, require the attendance of witnesses
24		and the production of relevant books and papers, before the
25		Department in any hearing relating to the revocation of

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1		certificates of registration. Upon refusal or neglect to obey
2		the order of the court, the court may compel obedience thereof
3		by proceedings for contempt.
4		The Department may, by application to any circuit court,
5		obtain an injunction restraining any person who engages in the
6		business of selling tangible personal property or taxable
7		service at retail in this State without a certificate of
8		registration (either because the certificate of registration
9		has been revoked or because of a failure to obtain a
10		certificate of registration in the first instance) from
11		engaging in such business until such person, as if he or she
12		were a new applicant for a certificate of registration, shall
13		comply with all of the conditions, restrictions and
14		requirements of Section 2a of this Act and qualify for and
15		obtain a certificate of registration. Upon refusal or neglect
16		to obey the order of the court, the court may compel obedience
17		thereof by proceedings for contempt.
18		It shall not be a defense in a proceeding before the
19		Department to revoke a certificate of registration issued under
20		the Act, or in any action by the Department to collect any tax
21		due under this Act, that the holder of the certificate is a
22		party to an installment payment agreement under Section 2a of
23		this Act if the liability which is the basis of the revocation
24		proceeding, or the tax that is sought to be collected: (1) was
25		incurred after the date of the agreement was approved by the
26		Department; or (2) was incurred prior to the date the agreement

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1		was approved by the Department, but was not included in the
2		agreement; or (3) was included in the agreement, but the
3		taxpayer is in default of the agreement.
4		(Source: P.A. 86-338; 86-383; 86-1028.)
5		(35 ILCS 120/2c) (from Ch. 120, par. 441c)
6		Sec. 2c. If the purchaser is not registered with the
7		Department as a taxpayer, but claims to be a reseller of the
8		tangible personal property or taxable service in such a way
9		that such resales are not taxable under this Act or under some
10		other tax law which the Department may administer, such
11		purchaser (except in the case of an out-of-State purchaser who
12		will always resell and deliver the property to his customers
13		outside Illinois) shall apply to the Department for a resale
14		number. Such applicant shall state facts which will show the
15		Department why such applicant is not liable for tax under this
16		Act or under some other tax law which the Department may
17		administer on any of his resales and shall furnish such
18		additional information as the Department may reasonably
19		require.
20		Upon approval of the application, the Department shall
21		assign a resale number to the applicant and shall certify such
22		number to him. The Department may cancel any such number which
23		is obtained through misrepresentation, or which is used to make
24		a purchase tax-free when the purchase in fact is not a purchase
25		for resale, or which no longer applies because of the

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1		purchaser's having discontinued the making of tax exempt
2		resales of the property.
3		The Department may restrict the use of the number to one
4		year at a time or to some other definite period if the
5		Department finds it impracticable or otherwise inadvisable to
6		issue such numbers for indefinite periods.
7		Except as provided hereinabove in this Section, a sale
8		shall be made tax-free on the ground of being a sale for resale
9		if the purchaser has an active registration number or resale
10		number from the Department and furnishes that number to the
11		seller in connection with certifying to the seller that any
12		sale to such purchaser is nontaxable because of being a sale
13		for resale.
14		Failure to present an active registration number or resale
15		number and a certification to the seller that a sale is for
16		resale creates a presumption that a sale is not for resale.
17		This presumption may be rebutted by other evidence that all of
18		the seller's sales are sale for resale, or that a particular
19		sale is a sale for resale.
20		(Source: P.A. 83-1463.)
21		(35 ILCS 120/3) (from Ch. 120, par. 442)
22		Sec. 3. Except as provided in this Section, on or before
23		the twentieth day of each calendar month, every person engaged
24		in the business of selling tangible personal property or
25		taxable service at retail in this State during the preceding

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1		calendar month shall file a return with the Department,
2		stating:
3		1. The name of the seller;
4		2. His residence address and the address of his
5		principal place of business and the address of the
6		principal place of business (if that is a different
7		address) from which he engages in the business of selling
8		tangible personal property or taxable service at retail in
9		this State;
10		3. Total amount of receipts received by him during the
11		preceding calendar month or quarter, as the case may be,
12		from sales of tangible personal property and taxable
13		service, and from services other than taxable services
14		furnished, by him during such preceding calendar month or
15		quarter;
16		4. Total amount received by him during the preceding
17		calendar month or quarter on charge and time sales of
18		tangible personal property and taxable service, and from
19		services other than taxable services furnished, by him
20		prior to the month or quarter for which the return is
21		filed;
22		5. Deductions allowed by law;
23		6. Gross receipts which were received by him during the
24		preceding calendar month or quarter and upon the basis of
25		which the tax is imposed;
26		7. The amount of credit provided in Section 2d of this

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1		Act;
2		8. The amount of tax due;
3		9. The signature of the taxpayer; and
4		10. Such other reasonable information as the
5		Department may require.
6		If a taxpayer fails to sign a return within 30 days after
7		the proper notice and demand for signature by the Department,
8		the return shall be considered valid and any amount shown to be
9		due on the return shall be deemed assessed.
10		Each return shall be accompanied by the statement of
11		prepaid tax issued pursuant to Section 2e for which credit is
12		claimed.
13		Prior to October 1, 2003, and on and after September 1,
14		2004 a retailer may accept a Manufacturer's Purchase Credit
15		certification from a purchaser in satisfaction of Use Tax as
16		provided in Section 3-85 of the Use Tax Act if the purchaser
17		provides the appropriate documentation as required by Section
18		3-85 of the Use Tax Act. A Manufacturer's Purchase Credit
19		certification, accepted by a retailer prior to October 1, 2003
20		and on and after September 1, 2004 as provided in Section 3-85
21		of the Use Tax Act, may be used by that retailer to satisfy
22		Retailers' Occupation Tax liability in the amount claimed in
23		the certification, not to exceed 6.25% of the receipts subject
24		to tax from a qualifying purchase. A Manufacturer's Purchase
25		Credit reported on any original or amended return filed under
26		this Act after October 20, 2003 for reporting periods prior to

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1		September 1, 2004 shall be disallowed. Manufacturer's
2		Purchaser Credit reported on annual returns due on or after
3		January 1, 2005 will be disallowed for periods prior to
4		September 1, 2004. No Manufacturer's Purchase Credit may be
5		used after September 30, 2003 through August 31, 2004 to
6		satisfy any tax liability imposed under this Act, including any
7		audit liability.
8		The Department may require returns to be filed on a
9		quarterly basis. If so required, a return for each calendar
10		quarter shall be filed on or before the twentieth day of the
11		calendar month following the end of such calendar quarter. The
12		taxpayer shall also file a return with the Department for each
13		of the first two months of each calendar quarter, on or before
14		the twentieth day of the following calendar month, stating:
15		1. The name of the seller;
16		2. The address of the principal place of business from
17		which he engages in the business of selling tangible
18		personal property at retail in this State;
19		3. The total amount of taxable receipts received by him
20		during the preceding calendar month from sales of tangible
21		personal property and taxable services by him during such
22		preceding calendar month, including receipts from charge
23		and time sales, but less all deductions allowed by law;
24		4. The amount of credit provided in Section 2d of this
25		Act;
26		5. The amount of tax due; and

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1		6. Such other reasonable information as the Department
2		may require.
3		Beginning on October 1, 2003, any person who is not a
4		licensed distributor, importing distributor, or manufacturer,
5		as defined in the Liquor Control Act of 1934, but is engaged in
6		the business of selling, at retail, alcoholic liquor shall file
7		a statement with the Department of Revenue, in a format and at
8		a time prescribed by the Department, showing the total amount
9		paid for alcoholic liquor purchased during the preceding month
10		and such other information as is reasonably required by the
11		Department. The Department may adopt rules to require that this
12		statement be filed in an electronic or telephonic format. Such
13		rules may provide for exceptions from the filing requirements
14		of this paragraph. For the purposes of this paragraph, the term
15		"alcoholic liquor" shall have the meaning prescribed in the
16		Liquor Control Act of 1934.
17		Beginning on October 1, 2003, every distributor, importing
18		distributor, and manufacturer of alcoholic liquor as defined in
19		the Liquor Control Act of 1934, shall file a statement with the
20		Department of Revenue, no later than the 10th day of the month
21		for the preceding month during which transactions occurred, by
22		electronic means, showing the total amount of gross receipts
23		from the sale of alcoholic liquor sold or distributed during
24		the preceding month to purchasers; identifying the purchaser to
25		whom it was sold or distributed; the purchaser's tax
26		registration number; and such other information reasonably

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1		required by the Department. A distributor, importing
2		distributor, or manufacturer of alcoholic liquor must
3		personally deliver, mail, or provide by electronic means to
4		each retailer listed on the monthly statement a report
5		containing a cumulative total of that distributor's, importing
6		distributor's, or manufacturer's total sales of alcoholic
7		liquor to that retailer no later than the 10th day of the month
8		for the preceding month during which the transaction occurred.
9		The distributor, importing distributor, or manufacturer shall
10		notify the retailer as to the method by which the distributor,
11		importing distributor, or manufacturer will provide the sales
12		information. If the retailer is unable to receive the sales
13		information by electronic means, the distributor, importing
14		distributor, or manufacturer shall furnish the sales
15		information by personal delivery or by mail. For purposes of
16		this paragraph, the term "electronic means" includes, but is
17		not limited to, the use of a secure Internet website, e-mail,
18		or facsimile.
19		If a total amount of less than $1 is payable, refundable or
20		creditable, such amount shall be disregarded if it is less than
21		50 cents and shall be increased to $1 if it is 50 cents or more.
22		Beginning October 1, 1993, a taxpayer who has an average
23		monthly tax liability of $150,000 or more shall make all
24		payments required by rules of the Department by electronic
25		funds transfer. Beginning October 1, 1994, a taxpayer who has
26		an average monthly tax liability of $100,000 or more shall make

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1		all payments required by rules of the Department by electronic
2		funds transfer. Beginning October 1, 1995, a taxpayer who has
3		an average monthly tax liability of $50,000 or more shall make
4		all payments required by rules of the Department by electronic
5		funds transfer. Beginning October 1, 2000, a taxpayer who has
6		an annual tax liability of $200,000 or more shall make all
7		payments required by rules of the Department by electronic
8		funds transfer. The term "annual tax liability" shall be the
9		sum of the taxpayer's liabilities under this Act, and under all
10		other State and local occupation and use tax laws administered
11		by the Department, for the immediately preceding calendar year.
12		The term "average monthly tax liability" shall be the sum of
13		the taxpayer's liabilities under this Act, and under all other
14		State and local occupation and use tax laws administered by the
15		Department, for the immediately preceding calendar year
16		divided by 12. Beginning on October 1, 2002, a taxpayer who has
17		a tax liability in the amount set forth in subsection (b) of
18		Section 2505-210 of the Department of Revenue Law shall make
19		all payments required by rules of the Department by electronic
20		funds transfer.
21		Before August 1 of each year beginning in 1993, the
22		Department shall notify all taxpayers required to make payments
23		by electronic funds transfer. All taxpayers required to make
24		payments by electronic funds transfer shall make those payments
25		for a minimum of one year beginning on October 1.
26		Any taxpayer not required to make payments by electronic

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1		funds transfer may make payments by electronic funds transfer
2		with the permission of the Department.
3		All taxpayers required to make payment by electronic funds
4		transfer and any taxpayers authorized to voluntarily make
5		payments by electronic funds transfer shall make those payments
6		in the manner authorized by the Department.
7		The Department shall adopt such rules as are necessary to
8		effectuate a program of electronic funds transfer and the
9		requirements of this Section.
10		Any amount which is required to be shown or reported on any
11		return or other document under this Act shall, if such amount
12		is not a whole-dollar amount, be increased to the nearest
13		whole-dollar amount in any case where the fractional part of a
14		dollar is 50 cents or more, and decreased to the nearest
15		whole-dollar amount where the fractional part of a dollar is
16		less than 50 cents.
17		If the retailer is otherwise required to file a monthly
18		return and if the retailer's average monthly tax liability to
19		the Department does not exceed $200, the Department may
20		authorize his returns to be filed on a quarter annual basis,
21		with the return for January, February and March of a given year
22		being due by April 20 of such year; with the return for April,
23		May and June of a given year being due by July 20 of such year;
24		with the return for July, August and September of a given year
25		being due by October 20 of such year, and with the return for
26		October, November and December of a given year being due by

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1		January 20 of the following year.
2		If the retailer is otherwise required to file a monthly or
3		quarterly return and if the retailer's average monthly tax
4		liability with the Department does not exceed $50, the
5		Department may authorize his returns to be filed on an annual
6		basis, with the return for a given year being due by January 20
7		of the following year.
8		Such quarter annual and annual returns, as to form and
9		substance, shall be subject to the same requirements as monthly
10		returns.
11		Notwithstanding any other provision in this Act concerning
12		the time within which a retailer may file his return, in the
13		case of any retailer who ceases to engage in a kind of business
14		which makes him responsible for filing returns under this Act,
15		such retailer shall file a final return under this Act with the
16		Department not more than one month after discontinuing such
17		business.
18		Where the same person has more than one business registered
19		with the Department under separate registrations under this
20		Act, such person may not file each return that is due as a
21		single return covering all such registered businesses, but
22		shall file separate returns for each such registered business.
23		In addition, with respect to motor vehicles, watercraft,
24		aircraft, and trailers that are required to be registered with
25		an agency of this State, every retailer selling this kind of
26		tangible personal property shall file, with the Department,

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1		upon a form to be prescribed and supplied by the Department, a
2		separate return for each such item of tangible personal
3		property which the retailer sells, except that if, in the same
4		transaction, (i) a retailer of aircraft, watercraft, motor
5		vehicles or trailers transfers more than one aircraft,
6		watercraft, motor vehicle or trailer to another aircraft,
7		watercraft, motor vehicle retailer or trailer retailer for the
8		purpose of resale or (ii) a retailer of aircraft, watercraft,
9		motor vehicles, or trailers transfers more than one aircraft,
10		watercraft, motor vehicle, or trailer to a purchaser for use as
11		a qualifying rolling stock as provided in Section 2-5 of this
12		Act, then that seller may report the transfer of all aircraft,
13		watercraft, motor vehicles or trailers involved in that
14		transaction to the Department on the same uniform
15		invoice-transaction reporting return form. For purposes of
16		this Section, "watercraft" means a Class 2, Class 3, or Class 4
17		watercraft as defined in Section 3-2 of the Boat Registration
18		and Safety Act, a personal watercraft, or any boat equipped
19		with an inboard motor.
20		Any retailer who sells only motor vehicles, watercraft,
21		aircraft, or trailers that are required to be registered with
22		an agency of this State, so that all retailers' occupation tax
23		liability is required to be reported, and is reported, on such
24		transaction reporting returns and who is not otherwise required
25		to file monthly or quarterly returns, need not file monthly or
26		quarterly returns. However, those retailers shall be required

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1		to file returns on an annual basis.
2		The transaction reporting return, in the case of motor
3		vehicles or trailers that are required to be registered with an
4		agency of this State, shall be the same document as the Uniform
5		Invoice referred to in Section 5-402 of The Illinois Vehicle
6		Code and must show the name and address of the seller; the name
7		and address of the purchaser; the amount of the selling price
8		including the amount allowed by the retailer for traded-in
9		property, if any; the amount allowed by the retailer for the
10		traded-in tangible personal property, if any, to the extent to
11		which Section 1 of this Act allows an exemption for the value
12		of traded-in property; the balance payable after deducting such
13		trade-in allowance from the total selling price; the amount of
14		tax due from the retailer with respect to such transaction; the
15		amount of tax collected from the purchaser by the retailer on
16		such transaction (or satisfactory evidence that such tax is not
17		due in that particular instance, if that is claimed to be the
18		fact); the place and date of the sale; a sufficient
19		identification of the property sold; such other information as
20		is required in Section 5-402 of The Illinois Vehicle Code, and
21		such other information as the Department may reasonably
22		require.
23		The transaction reporting return in the case of watercraft
24		or aircraft must show the name and address of the seller; the
25		name and address of the purchaser; the amount of the selling
26		price including the amount allowed by the retailer for

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1		traded-in property, if any; the amount allowed by the retailer
2		for the traded-in tangible personal property, if any, to the
3		extent to which Section 1 of this Act allows an exemption for
4		the value of traded-in property; the balance payable after
5		deducting such trade-in allowance from the total selling price;
6		the amount of tax due from the retailer with respect to such
7		transaction; the amount of tax collected from the purchaser by
8		the retailer on such transaction (or satisfactory evidence that
9		such tax is not due in that particular instance, if that is
10		claimed to be the fact); the place and date of the sale, a
11		sufficient identification of the property sold, and such other
12		information as the Department may reasonably require.
13		Such transaction reporting return shall be filed not later
14		than 20 days after the day of delivery of the item that is
15		being sold, but may be filed by the retailer at any time sooner
16		than that if he chooses to do so. The transaction reporting
17		return and tax remittance or proof of exemption from the
18		Illinois use tax may be transmitted to the Department by way of
19		the State agency with which, or State officer with whom the
20		tangible personal property must be titled or registered (if
21		titling or registration is required) if the Department and such
22		agency or State officer determine that this procedure will
23		expedite the processing of applications for title or
24		registration.
25		With each such transaction reporting return, the retailer
26		shall remit the proper amount of tax due (or shall submit

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1		satisfactory evidence that the sale is not taxable if that is
2		the case), to the Department or its agents, whereupon the
3		Department shall issue, in the purchaser's name, a use tax
4		receipt (or a certificate of exemption if the Department is
5		satisfied that the particular sale is tax exempt) which such
6		purchaser may submit to the agency with which, or State officer
7		with whom, he must title or register the tangible personal
8		property that is involved (if titling or registration is
9		required) in support of such purchaser's application for an
10		Illinois certificate or other evidence of title or registration
11		to such tangible personal property.
12		No retailer's failure or refusal to remit tax under this
13		Act precludes a user, who has paid the proper tax to the
14		retailer, from obtaining his certificate of title or other
15		evidence of title or registration (if titling or registration
16		is required) upon satisfying the Department that such user has
17		paid the proper tax (if tax is due) to the retailer. The
18		Department shall adopt appropriate rules to carry out the
19		mandate of this paragraph.
20		If the user who would otherwise pay tax to the retailer
21		wants the transaction reporting return filed and the payment of
22		the tax or proof of exemption made to the Department before the
23		retailer is willing to take these actions and such user has not
24		paid the tax to the retailer, such user may certify to the fact
25		of such delay by the retailer and may (upon the Department
26		being satisfied of the truth of such certification) transmit

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1		the information required by the transaction reporting return
2		and the remittance for tax or proof of exemption directly to
3		the Department and obtain his tax receipt or exemption
4		determination, in which event the transaction reporting return
5		and tax remittance (if a tax payment was required) shall be
6		credited by the Department to the proper retailer's account
7		with the Department, but without the 2.1% or 1.75% discount
8		provided for in this Section being allowed. When the user pays
9		the tax directly to the Department, he shall pay the tax in the
10		same amount and in the same form in which it would be remitted
11		if the tax had been remitted to the Department by the retailer.
12		Refunds made by the seller during the preceding return
13		period to purchasers, on account of tangible personal property
14		returned to the seller or taxable services not performed in
15		full, shall be allowed as a deduction under subdivision 5 of
16		his monthly or quarterly return, as the case may be, in case
17		the seller had theretofore included the receipts from the sale
18		of such tangible personal property in a return filed by him and
19		had paid the tax imposed by this Act with respect to such
20		receipts.
21		Where the seller is a corporation, the return filed on
22		behalf of such corporation shall be signed by the president,
23		vice-president, secretary or treasurer or by the properly
24		accredited agent of such corporation.
25		Where the seller is a limited liability company, the return
26		filed on behalf of the limited liability company shall be

SB0009 Engrossed - 440 - LRB100 06347 HLH 16385 b
1		signed by a manager, member, or properly accredited agent of
2		the limited liability company.
3		Except as provided in this Section, the retailer filing the
4		return under this Section shall, at the time of filing such
5		return, pay to the Department the amount of tax imposed by this
6		Act less a discount of 2.1% prior to January 1, 1990 and 1.75%
7		on and after January 1, 1990, or $5 per calendar year,
8		whichever is greater, which is allowed to reimburse the
9		retailer for the expenses incurred in keeping records,
10		preparing and filing returns, remitting the tax and supplying
11		data to the Department on request. Any prepayment made pursuant
12		to Section 2d of this Act shall be included in the amount on
13		which such 2.1% or 1.75% discount is computed. In the case of
14		retailers who report and pay the tax on a transaction by
15		transaction basis, as provided in this Section, such discount
16		shall be taken with each such tax remittance instead of when
17		such retailer files his periodic return. The Department may
18		disallow the discount for retailers whose certificate of
19		registration is revoked at the time the return is filed, but
20		only if the Department's decision to revoke the certificate of
21		registration has become final.
22		Before October 1, 2000, if the taxpayer's average monthly
23		tax liability to the Department under this Act, the Use Tax
24		Act, the Service Occupation Tax Act, and the Service Use Tax
25		Act, excluding any liability for prepaid sales tax to be
26		remitted in accordance with Section 2d of this Act, was $10,000

SB0009 Engrossed - 441 - LRB100 06347 HLH 16385 b
1		or more during the preceding 4 complete calendar quarters, he
2		shall file a return with the Department each month by the 20th
3		day of the month next following the month during which such tax
4		liability is incurred and shall make payments to the Department
5		on or before the 7th, 15th, 22nd and last day of the month
6		during which such liability is incurred. On and after October
7		1, 2000, if the taxpayer's average monthly tax liability to the
8		Department under this Act, the Use Tax Act, the Service
9		Occupation Tax Act, and the Service Use Tax Act, excluding any
10		liability for prepaid sales tax to be remitted in accordance
11		with Section 2d of this Act, was $20,000 or more during the
12		preceding 4 complete calendar quarters, he shall file a return
13		with the Department each month by the 20th day of the month
14		next following the month during which such tax liability is
15		incurred and shall make payment to the Department on or before
16		the 7th, 15th, 22nd and last day of the month during which such
17		liability is incurred. If the month during which such tax
18		liability is incurred began prior to January 1, 1985, each
19		payment shall be in an amount equal to 1/4 of the taxpayer's
20		actual liability for the month or an amount set by the
21		Department not to exceed 1/4 of the average monthly liability
22		of the taxpayer to the Department for the preceding 4 complete
23		calendar quarters (excluding the month of highest liability and
24		the month of lowest liability in such 4 quarter period). If the
25		month during which such tax liability is incurred begins on or
26		after January 1, 1985 and prior to January 1, 1987, each

SB0009 Engrossed - 442 - LRB100 06347 HLH 16385 b
1		payment shall be in an amount equal to 22.5% of the taxpayer's
2		actual liability for the month or 27.5% of the taxpayer's
3		liability for the same calendar month of the preceding year. If
4		the month during which such tax liability is incurred begins on
5		or after January 1, 1987 and prior to January 1, 1988, each
6		payment shall be in an amount equal to 22.5% of the taxpayer's
7		actual liability for the month or 26.25% of the taxpayer's
8		liability for the same calendar month of the preceding year. If
9		the month during which such tax liability is incurred begins on
10		or after January 1, 1988, and prior to January 1, 1989, or
11		begins on or after January 1, 1996, each payment shall be in an
12		amount equal to 22.5% of the taxpayer's actual liability for
13		the month or 25% of the taxpayer's liability for the same
14		calendar month of the preceding year. If the month during which
15		such tax liability is incurred begins on or after January 1,
16		1989, and prior to January 1, 1996, each payment shall be in an
17		amount equal to 22.5% of the taxpayer's actual liability for
18		the month or 25% of the taxpayer's liability for the same
19		calendar month of the preceding year or 100% of the taxpayer's
20		actual liability for the quarter monthly reporting period. The
21		amount of such quarter monthly payments shall be credited
22		against the final tax liability of the taxpayer's return for
23		that month. Before October 1, 2000, once applicable, the
24		requirement of the making of quarter monthly payments to the
25		Department by taxpayers having an average monthly tax liability
26		of $10,000 or more as determined in the manner provided above

SB0009 Engrossed - 443 - LRB100 06347 HLH 16385 b
1		shall continue until such taxpayer's average monthly liability
2		to the Department during the preceding 4 complete calendar
3		quarters (excluding the month of highest liability and the
4		month of lowest liability) is less than $9,000, or until such
5		taxpayer's average monthly liability to the Department as
6		computed for each calendar quarter of the 4 preceding complete
7		calendar quarter period is less than $10,000. However, if a
8		taxpayer can show the Department that a substantial change in
9		the taxpayer's business has occurred which causes the taxpayer
10		to anticipate that his average monthly tax liability for the
11		reasonably foreseeable future will fall below the $10,000
12		threshold stated above, then such taxpayer may petition the
13		Department for a change in such taxpayer's reporting status. On
14		and after October 1, 2000, once applicable, the requirement of
15		the making of quarter monthly payments to the Department by
16		taxpayers having an average monthly tax liability of $20,000 or
17		more as determined in the manner provided above shall continue
18		until such taxpayer's average monthly liability to the
19		Department during the preceding 4 complete calendar quarters
20		(excluding the month of highest liability and the month of
21		lowest liability) is less than $19,000 or until such taxpayer's
22		average monthly liability to the Department as computed for
23		each calendar quarter of the 4 preceding complete calendar
24		quarter period is less than $20,000. However, if a taxpayer can
25		show the Department that a substantial change in the taxpayer's
26		business has occurred which causes the taxpayer to anticipate

SB0009 Engrossed - 444 - LRB100 06347 HLH 16385 b
1		that his average monthly tax liability for the reasonably
2		foreseeable future will fall below the $20,000 threshold stated
3		above, then such taxpayer may petition the Department for a
4		change in such taxpayer's reporting status. The Department
5		shall change such taxpayer's reporting status unless it finds
6		that such change is seasonal in nature and not likely to be
7		long term. If any such quarter monthly payment is not paid at
8		the time or in the amount required by this Section, then the
9		taxpayer shall be liable for penalties and interest on the
10		difference between the minimum amount due as a payment and the
11		amount of such quarter monthly payment actually and timely
12		paid, except insofar as the taxpayer has previously made
13		payments for that month to the Department in excess of the
14		minimum payments previously due as provided in this Section.
15		The Department shall make reasonable rules and regulations to
16		govern the quarter monthly payment amount and quarter monthly
17		payment dates for taxpayers who file on other than a calendar
18		monthly basis.
19		The provisions of this paragraph apply before October 1,
20		2001. Without regard to whether a taxpayer is required to make
21		quarter monthly payments as specified above, any taxpayer who
22		is required by Section 2d of this Act to collect and remit
23		prepaid taxes and has collected prepaid taxes which average in
24		excess of $25,000 per month during the preceding 2 complete
25		calendar quarters, shall file a return with the Department as
26		required by Section 2f and shall make payments to the

SB0009 Engrossed - 445 - LRB100 06347 HLH 16385 b
1		Department on or before the 7th, 15th, 22nd and last day of the
2		month during which such liability is incurred. If the month
3		during which such tax liability is incurred began prior to
4		September 1, 1985 (the effective date of Public Act 84-221)
5		this amendatory Act of 1985, each payment shall be in an amount
6		not less than 22.5% of the taxpayer's actual liability under
7		Section 2d. If the month during which such tax liability is
8		incurred begins on or after January 1, 1986, each payment shall
9		be in an amount equal to 22.5% of the taxpayer's actual
10		liability for the month or 27.5% of the taxpayer's liability
11		for the same calendar month of the preceding calendar year. If
12		the month during which such tax liability is incurred begins on
13		or after January 1, 1987, each payment shall be in an amount
14		equal to 22.5% of the taxpayer's actual liability for the month
15		or 26.25% of the taxpayer's liability for the same calendar
16		month of the preceding year. The amount of such quarter monthly
17		payments shall be credited against the final tax liability of
18		the taxpayer's return for that month filed under this Section
19		or Section 2f, as the case may be. Once applicable, the
20		requirement of the making of quarter monthly payments to the
21		Department pursuant to this paragraph shall continue until such
22		taxpayer's average monthly prepaid tax collections during the
23		preceding 2 complete calendar quarters is $25,000 or less. If
24		any such quarter monthly payment is not paid at the time or in
25		the amount required, the taxpayer shall be liable for penalties
26		and interest on such difference, except insofar as the taxpayer

SB0009 Engrossed - 446 - LRB100 06347 HLH 16385 b
1		has previously made payments for that month in excess of the
2		minimum payments previously due.
3		The provisions of this paragraph apply on and after October
4		1, 2001. Without regard to whether a taxpayer is required to
5		make quarter monthly payments as specified above, any taxpayer
6		who is required by Section 2d of this Act to collect and remit
7		prepaid taxes and has collected prepaid taxes that average in
8		excess of $20,000 per month during the preceding 4 complete
9		calendar quarters shall file a return with the Department as
10		required by Section 2f and shall make payments to the
11		Department on or before the 7th, 15th, 22nd and last day of the
12		month during which the liability is incurred. Each payment
13		shall be in an amount equal to 22.5% of the taxpayer's actual
14		liability for the month or 25% of the taxpayer's liability for
15		the same calendar month of the preceding year. The amount of
16		the quarter monthly payments shall be credited against the
17		final tax liability of the taxpayer's return for that month
18		filed under this Section or Section 2f, as the case may be.
19		Once applicable, the requirement of the making of quarter
20		monthly payments to the Department pursuant to this paragraph
21		shall continue until the taxpayer's average monthly prepaid tax
22		collections during the preceding 4 complete calendar quarters
23		(excluding the month of highest liability and the month of
24		lowest liability) is less than $19,000 or until such taxpayer's
25		average monthly liability to the Department as computed for
26		each calendar quarter of the 4 preceding complete calendar

SB0009 Engrossed - 447 - LRB100 06347 HLH 16385 b
1		quarters is less than $20,000. If any such quarter monthly
2		payment is not paid at the time or in the amount required, the
3		taxpayer shall be liable for penalties and interest on such
4		difference, except insofar as the taxpayer has previously made
5		payments for that month in excess of the minimum payments
6		previously due.
7		If any payment provided for in this Section exceeds the
8		taxpayer's liabilities under this Act, the Use Tax Act, the
9		Service Occupation Tax Act and the Service Use Tax Act, as
10		shown on an original monthly return, the Department shall, if
11		requested by the taxpayer, issue to the taxpayer a credit
12		memorandum no later than 30 days after the date of payment. The
13		credit evidenced by such credit memorandum may be assigned by
14		the taxpayer to a similar taxpayer under this Act, the Use Tax
15		Act, the Service Occupation Tax Act or the Service Use Tax Act,
16		in accordance with reasonable rules and regulations to be
17		prescribed by the Department. If no such request is made, the
18		taxpayer may credit such excess payment against tax liability
19		subsequently to be remitted to the Department under this Act,
20		the Use Tax Act, the Service Occupation Tax Act or the Service
21		Use Tax Act, in accordance with reasonable rules and
22		regulations prescribed by the Department. If the Department
23		subsequently determined that all or any part of the credit
24		taken was not actually due to the taxpayer, the taxpayer's 2.1%
25		and 1.75% vendor's discount shall be reduced by 2.1% or 1.75%
26		of the difference between the credit taken and that actually

SB0009 Engrossed - 448 - LRB100 06347 HLH 16385 b
1		due, and that taxpayer shall be liable for penalties and
2		interest on such difference.
3		If a retailer of motor fuel is entitled to a credit under
4		Section 2d of this Act which exceeds the taxpayer's liability
5		to the Department under this Act for the month which the
6		taxpayer is filing a return, the Department shall issue the
7		taxpayer a credit memorandum for the excess.
8		Beginning January 1, 1990, each month the Department shall
9		pay into the Local Government Tax Fund, a special fund in the
10		State treasury which is hereby created, the net revenue
11		realized for the preceding month from the 1% tax on sales of
12		food for human consumption which is to be consumed off the
13		premises where it is sold (other than alcoholic beverages, soft
14		drinks and food which has been prepared for immediate
15		consumption) and prescription and nonprescription medicines,
16		drugs, medical appliances, products classified as Class III
17		medical devices by the United States Food and Drug
18		Administration that are used for cancer treatment pursuant to a
19		prescription, as well as any accessories and components related
20		to those devices, and insulin, urine testing materials,
21		syringes and needles used by diabetics.
22		Beginning January 1, 1990, each month the Department shall
23		pay into the County and Mass Transit District Fund, a special
24		fund in the State treasury which is hereby created, 4% of the
25		net revenue realized for the preceding month from the 6.25%
26		general rate.

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1		Beginning August 1, 2000, each month the Department shall
2		pay into the County and Mass Transit District Fund 20% of the
3		net revenue realized for the preceding month from the 1.25%
4		rate on the selling price of motor fuel and gasohol. Beginning
5		September 1, 2010, each month the Department shall pay into the
6		County and Mass Transit District Fund 20% of the net revenue
7		realized for the preceding month from the 1.25% rate on the
8		selling price of sales tax holiday items.
9		Beginning January 1, 1990, each month the Department shall
10		pay into the Local Government Tax Fund 16% of the net revenue
11		realized for the preceding month from the 6.25% general rate on
12		the selling price of tangible personal property.
13		From July 1, 2017 through June 30, 2018, no deposits shall
14		be made into the County and Mass Transit District Fund or the
15		Local Government Tax Fund from the net revenue realized from
16		the 6.25% general rate on taxable services. Beginning July 1,
17		2018 and through June 30, 2019, each month the Department shall
18		pay into the County and Mass Transit District Fund 1.4% of the
19		net revenue realized for the preceding month from the 6.25%
20		general rate on the selling price of taxable services and shall
21		pay into the Local Government Tax Fund 5.6% of the net revenue
22		realized for the preceding month from the 6.25% general rate on
23		the selling price of taxable services. Beginning July 1, 2019
24		and through June 30, 2020, each month the Department shall pay
25		into the County and Mass Transit District Fund 2.6% of the net
26		revenue realized for the preceding month from the 6.25% general

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1		rate on the selling price of taxable services and shall pay
2		into the Local Government Tax Fund 10.4% of the net revenue
3		realized for the preceding month from the 6.25% general rate on
4		the selling price of taxable services. Beginning July 1, 2020,
5		each month the Department shall pay into the County and Mass
6		Transit District Fund 4% of the net revenue realized for the
7		preceding month from the 6.25% general rate on the selling
8		price of taxable services and shall pay into the Local
9		Government Tax Fund 16% of the net revenue realized for the
10		preceding month from the 6.25% general rate on the selling
11		price of taxable services.
12		Beginning August 1, 2000, each month the Department shall
13		pay into the Local Government Tax Fund 80% of the net revenue
14		realized for the preceding month from the 1.25% rate on the
15		selling price of motor fuel and gasohol. Beginning September 1,
16		2010, each month the Department shall pay into the Local
17		Government Tax Fund 80% of the net revenue realized for the
18		preceding month from the 1.25% rate on the selling price of
19		sales tax holiday items.
20		Beginning October 1, 2009, each month the Department shall
21		pay into the Capital Projects Fund an amount that is equal to
22		an amount estimated by the Department to represent 80% of the
23		net revenue realized for the preceding month from the sale of
24		candy, grooming and hygiene products, and soft drinks that had
25		been taxed at a rate of 1% prior to September 1, 2009 but that
26		are now taxed at 6.25%.

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1		Beginning July 1, 2011, each month the Department shall pay
2		into the Clean Air Act Permit Fund 80% of the net revenue
3		realized for the preceding month from the 6.25% general rate on
4		the selling price of sorbents used in Illinois in the process
5		of sorbent injection as used to comply with the Environmental
6		Protection Act or the federal Clean Air Act, but the total
7		payment into the Clean Air Act Permit Fund under this Act and
8		the Use Tax Act shall not exceed $2,000,000 in any fiscal year.
9		Beginning July 1, 2013, each month the Department shall pay
10		into the Underground Storage Tank Fund from the proceeds
11		collected under this Act, the Use Tax Act, the Service Use Tax
12		Act, and the Service Occupation Tax Act an amount equal to the
13		average monthly deficit in the Underground Storage Tank Fund
14		during the prior year, as certified annually by the Illinois
15		Environmental Protection Agency, but the total payment into the
16		Underground Storage Tank Fund under this Act, the Use Tax Act,
17		the Service Use Tax Act, and the Service Occupation Tax Act
18		shall not exceed $18,000,000 in any State fiscal year. As used
19		in this paragraph, the "average monthly deficit" shall be equal
20		to the difference between the average monthly claims for
21		payment by the fund and the average monthly revenues deposited
22		into the fund, excluding payments made pursuant to this
23		paragraph.
24		Beginning July 1, 2015, of the remainder of the moneys
25		received by the Department under the Use Tax Act, the Service
26		Use Tax Act, the Service Occupation Tax Act, and this Act, each

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1		month the Department shall deposit $500,000 into the State
2		Crime Laboratory Fund.
3		Of the remainder of the moneys received by the Department
4		pursuant to this Act, (a) 1.75% thereof shall be paid into the
5		Build Illinois Fund and (b) prior to July 1, 1989, 2.2% and on
6		and after July 1, 1989, 3.8% thereof shall be paid into the
7		Build Illinois Fund; provided, however, that if in any fiscal
8		year the sum of (1) the aggregate of 2.2% or 3.8%, as the case
9		may be, of the moneys received by the Department and required
10		to be paid into the Build Illinois Fund pursuant to this Act,
11		Section 9 of the Use Tax Act, Section 9 of the Service Use Tax
12		Act, and Section 9 of the Service Occupation Tax Act, such Acts
13		being hereinafter called the "Tax Acts" and such aggregate of
14		2.2% or 3.8%, as the case may be, of moneys being hereinafter
15		called the "Tax Act Amount", and (2) the amount transferred to
16		the Build Illinois Fund from the State and Local Sales Tax
17		Reform Fund shall be less than the Annual Specified Amount (as
18		hereinafter defined), an amount equal to the difference shall
19		be immediately paid into the Build Illinois Fund from other
20		moneys received by the Department pursuant to the Tax Acts; the
21		"Annual Specified Amount" means the amounts specified below for
22		fiscal years 1986 through 1993:
23 Fiscal Year Annual Specified Amount 24 1986 $54,800,000 25 1987 $76,650,000 26 1988 $80,480,000

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1 1989 $88,510,000 2 1990 $115,330,000 3 1991 $145,470,000 4 1992 $182,730,000 5 1993 $206,520,000;
6		and means the Certified Annual Debt Service Requirement (as
7		defined in Section 13 of the Build Illinois Bond Act) or the
8		Tax Act Amount, whichever is greater, for fiscal year 1994 and
9		each fiscal year thereafter; and further provided, that if on
10		the last business day of any month the sum of (1) the Tax Act
11		Amount required to be deposited into the Build Illinois Bond
12		Account in the Build Illinois Fund during such month and (2)
13		the amount transferred to the Build Illinois Fund from the
14		State and Local Sales Tax Reform Fund shall have been less than
15		1/12 of the Annual Specified Amount, an amount equal to the
16		difference shall be immediately paid into the Build Illinois
17		Fund from other moneys received by the Department pursuant to
18		the Tax Acts; and, further provided, that in no event shall the
19		payments required under the preceding proviso result in
20		aggregate payments into the Build Illinois Fund pursuant to
21		this clause (b) for any fiscal year in excess of the greater of
22		(i) the Tax Act Amount or (ii) the Annual Specified Amount for
23		such fiscal year. The amounts payable into the Build Illinois
24		Fund under clause (b) of the first sentence in this paragraph
25		shall be payable only until such time as the aggregate amount
26		on deposit under each trust indenture securing Bonds issued and

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1		outstanding pursuant to the Build Illinois Bond Act is
2		sufficient, taking into account any future investment income,
3		to fully provide, in accordance with such indenture, for the
4		defeasance of or the payment of the principal of, premium, if
5		any, and interest on the Bonds secured by such indenture and on
6		any Bonds expected to be issued thereafter and all fees and
7		costs payable with respect thereto, all as certified by the
8		Director of the Bureau of the Budget (now Governor's Office of
9		Management and Budget). If on the last business day of any
10		month in which Bonds are outstanding pursuant to the Build
11		Illinois Bond Act, the aggregate of moneys deposited in the
12		Build Illinois Bond Account in the Build Illinois Fund in such
13		month shall be less than the amount required to be transferred
14		in such month from the Build Illinois Bond Account to the Build
15		Illinois Bond Retirement and Interest Fund pursuant to Section
16		13 of the Build Illinois Bond Act, an amount equal to such
17		deficiency shall be immediately paid from other moneys received
18		by the Department pursuant to the Tax Acts to the Build
19		Illinois Fund; provided, however, that any amounts paid to the
20		Build Illinois Fund in any fiscal year pursuant to this
21		sentence shall be deemed to constitute payments pursuant to
22		clause (b) of the first sentence of this paragraph and shall
23		reduce the amount otherwise payable for such fiscal year
24		pursuant to that clause (b). The moneys received by the
25		Department pursuant to this Act and required to be deposited
26		into the Build Illinois Fund are subject to the pledge, claim

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1		and charge set forth in Section 12 of the Build Illinois Bond
2		Act.
3		Subject to payment of amounts into the Build Illinois Fund
4		as provided in the preceding paragraph or in any amendment
5		thereto hereafter enacted, the following specified monthly
6		installment of the amount requested in the certificate of the
7		Chairman of the Metropolitan Pier and Exposition Authority
8		provided under Section 8.25f of the State Finance Act, but not
9		in excess of sums designated as "Total Deposit", shall be
10		deposited in the aggregate from collections under Section 9 of
11		the Use Tax Act, Section 9 of the Service Use Tax Act, Section
12		9 of the Service Occupation Tax Act, and Section 3 of the
13		Retailers' Occupation Tax Act into the McCormick Place
14		Expansion Project Fund in the specified fiscal years.
15 Fiscal Year Total Deposit 16 1993 $0 17 1994 53,000,000 18 1995 58,000,000 19 1996 61,000,000 20 1997 64,000,000 21 1998 68,000,000 22 1999 71,000,000 23 2000 75,000,000 24 2001 80,000,000 25 2002 93,000,000

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1 2003 99,000,000 2 2004 103,000,000 3 2005 108,000,000 4 2006 113,000,000 5 2007 119,000,000 6 2008 126,000,000 7 2009 132,000,000 8 2010 139,000,000 9 2011 146,000,000 10 2012 153,000,000 11 2013 161,000,000 12 2014 170,000,000 13 2015 179,000,000 14 2016 189,000,000 15 2017 199,000,000 16 2018 210,000,000 17 2019 221,000,000 18 2020 233,000,000 19 2021 246,000,000 20 2022 260,000,000 21 2023 275,000,000 22 2024 275,000,000 23 2025 275,000,000 24 2026 279,000,000 25 2027 292,000,000 26 2028 307,000,000

SB0009 Engrossed - 457 - LRB100 06347 HLH 16385 b
1 2029 322,000,000 2 2030 338,000,000 3 2031 350,000,000 4 2032 350,000,000 5 and 6 each fiscal year 7 thereafter that bonds 8 are outstanding under 9 Section 13.2 of the 10 Metropolitan Pier and 11 Exposition Authority Act, 12 but not after fiscal year 2060.
13		Beginning July 20, 1993 and in each month of each fiscal
14		year thereafter, one-eighth of the amount requested in the
15		certificate of the Chairman of the Metropolitan Pier and
16		Exposition Authority for that fiscal year, less the amount
17		deposited into the McCormick Place Expansion Project Fund by
18		the State Treasurer in the respective month under subsection
19		(g) of Section 13 of the Metropolitan Pier and Exposition
20		Authority Act, plus cumulative deficiencies in the deposits
21		required under this Section for previous months and years,
22		shall be deposited into the McCormick Place Expansion Project
23		Fund, until the full amount requested for the fiscal year, but
24		not in excess of the amount specified above as "Total Deposit",
25		has been deposited.
26		Subject to payment of amounts into the Build Illinois Fund

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1		and the McCormick Place Expansion Project Fund pursuant to the
2		preceding paragraphs or in any amendments thereto hereafter
3		enacted, beginning July 1, 1993 and ending on September 30,
4		2013, the Department shall each month pay into the Illinois Tax
5		Increment Fund 0.27% of 80% of the net revenue realized for the
6		preceding month from the 6.25% general rate on the selling
7		price of tangible personal property.
8		Subject to payment of amounts into the Build Illinois Fund
9		and the McCormick Place Expansion Project Fund pursuant to the
10		preceding paragraphs or in any amendments thereto hereafter
11		enacted, beginning with the receipt of the first report of
12		taxes paid by an eligible business and continuing for a 25-year
13		period, the Department shall each month pay into the Energy
14		Infrastructure Fund 80% of the net revenue realized from the
15		6.25% general rate on the selling price of Illinois-mined coal
16		that was sold to an eligible business. For purposes of this
17		paragraph, the term "eligible business" means a new electric
18		generating facility certified pursuant to Section 605-332 of
19		the Department of Commerce and Economic Opportunity Law of the
20		Civil Administrative Code of Illinois.
21		Subject to payment of amounts into the Build Illinois Fund,
22		the McCormick Place Expansion Project Fund, the Illinois Tax
23		Increment Fund, and the Energy Infrastructure Fund pursuant to
24		the preceding paragraphs or in any amendments to this Section
25		hereafter enacted, beginning on the first day of the first
26		calendar month to occur on or after August 26, 2014 (the

SB0009 Engrossed - 459 - LRB100 06347 HLH 16385 b
1		effective date of Public Act 98-1098) this amendatory Act of
2		the 98th General Assembly, each month, from the collections
3		made under Section 9 of the Use Tax Act, Section 9 of the
4		Service Use Tax Act, Section 9 of the Service Occupation Tax
5		Act, and Section 3 of the Retailers' Occupation Tax Act, the
6		Department shall pay into the Tax Compliance and Administration
7		Fund, to be used, subject to appropriation, to fund additional
8		auditors and compliance personnel at the Department of Revenue,
9		an amount equal to 1/12 of 5% of 80% of the cash receipts
10		collected during the preceding fiscal year by the Audit Bureau
11		of the Department under the Use Tax Act, the Service Use Tax
12		Act, the Service Occupation Tax Act, the Retailers' Occupation
13		Tax Act, and associated local occupation and use taxes
14		administered by the Department.
15		Of the remainder of the moneys received by the Department
16		pursuant to this Act, 75% thereof shall be paid into the State
17		Treasury and 25% shall be reserved in a special account and
18		used only for the transfer to the Common School Fund as part of
19		the monthly transfer from the General Revenue Fund in
20		accordance with Section 8a of the State Finance Act.
21		The Department may, upon separate written notice to a
22		taxpayer, require the taxpayer to prepare and file with the
23		Department on a form prescribed by the Department within not
24		less than 60 days after receipt of the notice an annual
25		information return for the tax year specified in the notice.
26		Such annual return to the Department shall include a statement

SB0009 Engrossed - 460 - LRB100 06347 HLH 16385 b
1		of gross receipts as shown by the retailer's last Federal
2		income tax return. If the total receipts of the business as
3		reported in the Federal income tax return do not agree with the
4		gross receipts reported to the Department of Revenue for the
5		same period, the retailer shall attach to his annual return a
6		schedule showing a reconciliation of the 2 amounts and the
7		reasons for the difference. The retailer's annual return to the
8		Department shall also disclose the cost of goods sold by the
9		retailer during the year covered by such return, opening and
10		closing inventories of such goods for such year, costs of goods
11		used from stock or taken from stock and given away by the
12		retailer during such year, payroll information of the
13		retailer's business during such year and any additional
14		reasonable information which the Department deems would be
15		helpful in determining the accuracy of the monthly, quarterly
16		or annual returns filed by such retailer as provided for in
17		this Section.
18		If the annual information return required by this Section
19		is not filed when and as required, the taxpayer shall be liable
20		as follows:
21		(i) Until January 1, 1994, the taxpayer shall be liable
22		for a penalty equal to 1/6 of 1% of the tax due from such
23		taxpayer under this Act during the period to be covered by
24		the annual return for each month or fraction of a month
25		until such return is filed as required, the penalty to be
26		assessed and collected in the same manner as any other

SB0009 Engrossed - 461 - LRB100 06347 HLH 16385 b
1		penalty provided for in this Act.
2		(ii) On and after January 1, 1994, the taxpayer shall
3		be liable for a penalty as described in Section 3-4 of the
4		Uniform Penalty and Interest Act.
5		The chief executive officer, proprietor, owner or highest
6		ranking manager shall sign the annual return to certify the
7		accuracy of the information contained therein. Any person who
8		willfully signs the annual return containing false or
9		inaccurate information shall be guilty of perjury and punished
10		accordingly. The annual return form prescribed by the
11		Department shall include a warning that the person signing the
12		return may be liable for perjury.
13		The provisions of this Section concerning the filing of an
14		annual information return do not apply to a retailer who is not
15		required to file an income tax return with the United States
16		Government.
17		As soon as possible after the first day of each month, upon
18		certification of the Department of Revenue, the Comptroller
19		shall order transferred and the Treasurer shall transfer from
20		the General Revenue Fund to the Motor Fuel Tax Fund an amount
21		equal to 1.7% of 80% of the net revenue realized under this Act
22		for the second preceding month. Beginning April 1, 2000, this
23		transfer is no longer required and shall not be made.
24		Net revenue realized for a month shall be the revenue
25		collected by the State pursuant to this Act, less the amount
26		paid out during that month as refunds to taxpayers for

SB0009 Engrossed - 462 - LRB100 06347 HLH 16385 b
1		overpayment of liability.
2		For greater simplicity of administration, manufacturers,
3		importers and wholesalers whose products are sold at retail in
4		Illinois by numerous retailers, and who wish to do so, may
5		assume the responsibility for accounting and paying to the
6		Department all tax accruing under this Act with respect to such
7		sales, if the retailers who are affected do not make written
8		objection to the Department to this arrangement.
9		Any person who promotes, organizes, provides retail
10		selling space for concessionaires or other types of sellers at
11		the Illinois State Fair, DuQuoin State Fair, county fairs,
12		local fairs, art shows, flea markets and similar exhibitions or
13		events, including any transient merchant as defined by Section
14		2 of the Transient Merchant Act of 1987, is required to file a
15		report with the Department providing the name of the merchant's
16		business, the name of the person or persons engaged in
17		merchant's business, the permanent address and Illinois
18		Retailers Occupation Tax Registration Number of the merchant,
19		the dates and location of the event and other reasonable
20		information that the Department may require. The report must be
21		filed not later than the 20th day of the month next following
22		the month during which the event with retail sales was held.
23		Any person who fails to file a report required by this Section
24		commits a business offense and is subject to a fine not to
25		exceed $250.
26		Any person engaged in the business of selling tangible

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1		personal property or taxable service at retail as a
2		concessionaire or other type of seller at the Illinois State
3		Fair, county fairs, art shows, flea markets and similar
4		exhibitions or events, or any transient merchants, as defined
5		by Section 2 of the Transient Merchant Act of 1987, may be
6		required to make a daily report of the amount of such sales to
7		the Department and to make a daily payment of the full amount
8		of tax due. The Department shall impose this requirement when
9		it finds that there is a significant risk of loss of revenue to
10		the State at such an exhibition or event. Such a finding shall
11		be based on evidence that a substantial number of
12		concessionaires or other sellers who are not residents of
13		Illinois will be engaging in the business of selling tangible
14		personal property or taxable service at retail at the
15		exhibition or event, or other evidence of a significant risk of
16		loss of revenue to the State. The Department shall notify
17		concessionaires and other sellers affected by the imposition of
18		this requirement. In the absence of notification by the
19		Department, the concessionaires and other sellers shall file
20		their returns as otherwise required in this Section.
21		(Source: P.A. 98-24, eff. 6-19-13; 98-109, eff. 7-25-13;
22		98-496, eff. 1-1-14; 98-756, eff. 7-16-14; 98-1098, eff.
23		8-26-14; 99-352, eff. 8-12-15; 99-858, eff. 8-19-16; 99-933,
24		eff. 1-27-17; revised 2-3-17.)
25		(35 ILCS 120/7) (from Ch. 120, par. 446)

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1		Sec. 7. Every person engaged in the business of selling
2		tangible personal property or taxable service at retail in this
3		State shall keep records and books of all sales of tangible
4		personal property, together with invoices, bills of lading,
5		sales records, copies of bills of sale, inventories prepared as
6		of December 31 of each year or otherwise annually as has been
7		the custom in the specific trade and other pertinent papers and
8		documents. Every person who is engaged in the business of
9		selling tangible personal property or taxable service at retail
10		in this State and who, in connection with such business, also
11		engages in other activities (including, but not limited to,
12		engaging in a service occupation not subject to tax under this
13		Act) shall keep such additional records and books of all such
14		activities as will accurately reflect the character and scope
15		of such activities and the amount of receipts realized
16		therefrom. The Department may adopt rules that establish
17		requirements, including record forms and formats, for records
18		required to be kept and maintained by taxpayers. For purposes
19		of this Section, "records" means all data maintained by the
20		taxpayer, including data on paper, microfilm, microfiche or any
21		type of machine-sensible data compilation.
22		All books and records and other papers and documents which
23		are required by this Act to be kept shall be kept in the
24		English language and shall, at all times during business hours
25		of the day, be subject to inspection by the Department or its
26		duly authorized agents and employees.

SB0009 Engrossed - 465 - LRB100 06347 HLH 16385 b
1		To support deductions made on the tax return form, or
2		authorized under this Act, on account of receipts from isolated
3		or occasional sales of tangible personal property or taxable
4		service, on account of receipts from sales of tangible personal
5		property or taxable service for resale, on account of receipts
6		from sales to governmental bodies or other exempted types of
7		purchasers, on account of receipts from sales of tangible
8		personal property or taxable service in interstate commerce,
9		and on account of receipts from any other kind of transaction
10		that is not taxable under this Act, entries in any books,
11		records or other pertinent papers or documents of the taxpayer
12		in relation thereto shall be in detail sufficient to show the
13		name and address of the taxpayer's customer in each such
14		transaction, the character of every such transaction, the date
15		of every such transaction, the amount of receipts realized from
16		every such transaction and such other information as may be
17		necessary to establish the non-taxable character of such
18		transaction under this Act.
19		Except in the case of a sale to a purchaser who will always
20		resell and deliver the property to his customers outside
21		Illinois, anyone claiming that he has made a nontaxable sale
22		for resale in some form as tangible personal property shall
23		also keep a record of the purchaser's registration number or
24		resale number with the Department.
25		It shall be presumed that all sales of tangible personal
26		property or taxable service are subject to tax under this Act

SB0009 Engrossed - 466 - LRB100 06347 HLH 16385 b
1		until the contrary is established, and the burden of proving
2		that a transaction is not taxable hereunder shall be upon the
3		person who would be required to remit the tax to the Department
4		if such transaction is taxable. In the course of any audit or
5		investigation or hearing by the Department with reference to a
6		given taxpayer, if the Department finds that the taxpayer lacks
7		documentary evidence needed to support the taxpayer's claim to
8		exemption from tax hereunder, the Department is authorized to
9		notify the taxpayer in writing to produce such evidence, and
10		the taxpayer shall have 60 days subject to the right in the
11		Department to extend this period either on request for good
12		cause shown or on its own motion from the date when such notice
13		is sent to the taxpayer by certified or registered mail (or
14		delivered to the taxpayer if the notice is served personally)
15		in which to obtain and produce such evidence for the
16		Department's inspection, failing which the matter shall be
17		closed, and the transaction shall be conclusively presumed to
18		be taxable hereunder.
19		Books and records and other papers reflecting gross
20		receipts received during any period with respect to which the
21		Department is authorized to issue notices of tax liability as
22		provided by Sections 4 and 5 of this Act shall be preserved
23		until the expiration of such period unless the Department, in
24		writing, shall authorize their destruction or disposal prior to
25		such expiration.
26		(Source: P.A. 88-480.)

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1		(35 ILCS 120/13) (from Ch. 120, par. 452)
2		Sec. 13. Criminal penalties.
3		(a) When the amount due is under $300, any person engaged
4		in the business of selling tangible personal property or
5		taxable service at retail in this State who fails to file a
6		return, or who files a fraudulent return, or any officer,
7		employee or agent of a corporation, member, employee or agent
8		of a partnership, or manager, member, agent, or employee of a
9		limited liability company engaged in the business of selling
10		tangible personal property or taxable service at retail in this
11		State who, as such officer, employee, agent, manager, or member
12		is under a duty to file a return, or any officer, agent or
13		employee of a corporation, member, agent, or employee of a
14		partnership, or manager, member, agent, or employee of a
15		limited liability company engaged in the business of selling
16		tangible personal property or taxable service at retail in this
17		State who files or causes to be filed or signs or causes to be
18		signed a fraudulent return filed on behalf of such corporation
19		or limited liability company, or any accountant or other agent
20		who knowingly enters false information on the return of any
21		taxpayer under this Act, is guilty of a Class 4 felony.
22		Any person who or any officer or director of any
23		corporation, partner or member of any partnership, or manager
24		or member of a limited liability company that: (a) violates
25		Section 2a of this Act or (b) fails to keep books and records,

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1		or fails to produce books and records as required by Section 7
2		or (c) willfully violates a rule or regulation of the
3		Department for the administration and enforcement of this Act
4		is guilty of a Class A misdemeanor. Any person, manager or
5		member of a limited liability company, or officer or director
6		of any corporation who engages in the business of selling
7		tangible personal property at retail after the certificate of
8		registration of that person, corporation, limited liability
9		company, or partnership has been revoked is guilty of a Class A
10		misdemeanor. Each day such person, corporation, or partnership
11		is engaged in business without a certificate of registration or
12		after the certificate of registration of that person,
13		corporation, or partnership has been revoked constitutes a
14		separate offense.
15		Any purchaser who obtains a registration number or resale
16		number from the Department through misrepresentation, or who
17		represents to a seller that such purchaser has a registration
18		number or a resale number from the Department when he knows
19		that he does not, or who uses his registration number or resale
20		number to make a seller believe that he is buying tangible
21		personal property for resale when such purchaser in fact knows
22		that this is not the case is guilty of a Class 4 felony.
23		Any distributor, supplier or other reseller of motor fuel
24		registered pursuant to Section 2a or 2c of this Act who fails
25		to collect the prepaid tax on invoiced gallons of motor fuel
26		sold or who fails to deliver a statement of tax paid to the

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1		purchaser or to the Department as required by Sections 2d and
2		2e of this Act, respectively, shall be guilty of a Class A
3		misdemeanor if the amount due is under $300, and a Class 4
4		felony if the amount due is $300 or more.
5		When the amount due is under $300, any person who accepts
6		money that is due to the Department under this Act from a
7		taxpayer for the purpose of acting as the taxpayer's agent to
8		make the payment to the Department, but who fails to remit such
9		payment to the Department when due is guilty of a Class 4
10		felony.
11		Any seller who collects or attempts to collect an amount
12		(however designated) which purports to reimburse such seller
13		for retailers' occupation tax liability measured by receipts
14		which such seller knows are not subject to retailers'
15		occupation tax, or any seller who knowingly over-collects or
16		attempts to over-collect an amount purporting to reimburse such
17		seller for retailers' occupation tax liability in a transaction
18		which is subject to the tax that is imposed by this Act, shall
19		be guilty of a Class 4 felony for each such offense. This
20		paragraph does not apply to an amount collected by the seller
21		as reimbursement for the seller's retailers' occupation tax
22		liability on receipts which are subject to tax under this Act
23		as long as such collection is made in compliance with the tax
24		collection brackets prescribed by the Department in its Rules
25		and Regulations.
26		When the amount due is $300 or more, any person engaged in

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1		the business of selling tangible personal property or taxable
2		service at retail in this State who fails to file a return, or
3		who files a fraudulent return, or any officer, employee or
4		agent of a corporation, member, employee or agent of a
5		partnership, or manager, member, agent, or employee of a
6		limited liability company engaged in the business of selling
7		tangible personal property or taxable service at retail in this
8		State who, as such officer, employee, agent, manager, or member
9		is under a duty to file a return and who fails to file such
10		return or any officer, agent, or employee of a corporation,
11		member, agent or employee of a partnership, or manager, member,
12		agent, or employee of a limited liability company engaged in
13		the business of selling tangible personal property or taxable
14		service at retail in this State who files or causes to be filed
15		or signs or causes to be signed a fraudulent return filed on
16		behalf of such corporation or limited liability company, or any
17		accountant or other agent who knowingly enters false
18		information on the return of any taxpayer under this Act is
19		guilty of a Class 3 felony.
20		When the amount due is $300 or more, any person engaged in
21		the business of selling tangible personal property at retail in
22		this State who accepts money that is due to the Department
23		under this Act from a taxpayer for the purpose of acting as the
24		taxpayer's agent to make payment to the Department but fails to
25		remit such payment to the Department when due, is guilty of a
26		Class 3 felony.

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1		Any person whose principal place of business is in this
2		State and who is charged with a violation under this Section
3		shall be tried in the county where his principal place of
4		business is located unless he asserts a right to be tried in
5		another venue.
6		Any taxpayer or agent of a taxpayer who with the intent to
7		defraud purports to make a payment due to the Department by
8		issuing or delivering a check or other order upon a real or
9		fictitious depository for the payment of money, knowing that it
10		will not be paid by the depository, shall be guilty of a
11		deceptive practice in violation of Section 17-1 of the Criminal
12		Code of 2012.
13		(b) A person commits the offense of sales tax evasion under
14		this Act when he knowingly attempts in any manner to evade or
15		defeat the tax imposed on him or on any other person, or the
16		payment thereof, and he commits an affirmative act in
17		furtherance of the evasion. For purposes of this Section, an
18		"affirmative act in furtherance of the evasion" means an act
19		designed in whole or in part to (i) conceal, misrepresent,
20		falsify, or manipulate any material fact or (ii) tamper with or
21		destroy documents or materials related to a person's tax
22		liability under this Act. Two or more acts of sales tax evasion
23		may be charged as a single count in any indictment,
24		information, or complaint and the amount of tax deficiency may
25		be aggregated for purposes of determining the amount of tax
26		which is attempted to be or is evaded and the period between

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1		the first and last acts may be alleged as the date of the
2		offense.
3		(1) When the amount of tax, the assessment or payment
4		of which is attempted to be or is evaded is less than $500
5		a person is guilty of a Class 4 felony.
6		(2) When the amount of tax, the assessment or payment
7		of which is attempted to be or is evaded is $500 or more
8		but less than $10,000, a person is guilty of a Class 3
9		felony.
10		(3) When the amount of tax, the assessment or payment
11		of which is attempted to be or is evaded is $10,000 or more
12		but less than $100,000, a person is guilty of a Class 2
13		felony.
14		(4) When the amount of tax, the assessment or payment
15		of which is attempted to be or is evaded is $100,000 or
16		more, a person is guilty of a Class 1 felony.
17		Any person who knowingly sells, purchases, installs,
18		transfers, possesses, uses, or accesses any automated sales
19		suppression device, zapper, or phantom-ware in this State is
20		guilty of a Class 3 felony.
21		For the purposes of this Section:
22		"Automated sales suppression device" or "zapper" means a
23		software program that falsifies the electronic records of an
24		electronic cash register or other point-of-sale system,
25		including, but not limited to, transaction data and transaction
26		reports. The term includes the software program, any device

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1		that carries the software program, or an Internet link to the
2		software program.
3		"Phantom-ware" means a hidden programming option embedded
4		in the operating system of an electronic cash register or
5		hardwired into an electronic cash register that can be used to
6		create a second set of records or that can eliminate or
7		manipulate transaction records in an electronic cash register.
8		"Electronic cash register" means a device that keeps a
9		register or supporting documents through the use of an
10		electronic device or computer system designed to record
11		transaction data for the purpose of computing, compiling, or
12		processing retail sales transaction data in any manner.
13		"Transaction data" includes: items purchased by a
14		customer; the price of each item; a taxability determination
15		for each item; a segregated tax amount for each taxed item; the
16		amount of cash or credit tendered; the net amount returned to
17		the customer in change; the date and time of the purchase; the
18		name, address, and identification number of the vendor; and the
19		receipt or invoice number of the transaction.
20		"Transaction report" means a report that documents,
21		without limitation, the sales, taxes, or fees collected, media
22		totals, and discount voids at an electronic cash register and
23		that is printed on a cash register tape at the end of a day or
24		shift, or a report that documents every action at an electronic
25		cash register and is stored electronically.
26		(c) A prosecution for any act in violation of this Section

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1		may be commenced at any time within 5 years of the commission
2		of that act.
3		(Source: P.A. 97-1074, eff. 1-1-13; 97-1150, eff. 1-25-13;
4		98-352, eff. 1-1-14.)
5		Section 30-50. The Counties Code is amended by changing
6		Section 5-1009 and by adding Section 5-1008.10 as follows:
7		(55 ILCS 5/5-1008.10 new)
8		Sec. 5-1008.10. Taxable services. Notwithstanding any
9		other provision of law, whenever a home rule or non-home rule
10		county is authorized to impose a tax on the use or sale of
11		tangible personal property, that county shall also be
12		authorized to impose a tax at the same rate on taxable
13		services, as defined in Section 2a-2 of the Use Tax Act.
14		(55 ILCS 5/5-1009) (from Ch. 34, par. 5-1009)
15		Sec. 5-1009. Limitation on home rule powers. Except as
16		provided in Sections 5-1006, 5-1006.5, 5-1007 and 5-1008, on
17		and after September 1, 1990, no home rule county has the
18		authority to impose, pursuant to its home rule authority, a
19		retailer's occupation tax, service occupation tax, use tax,
20		sales tax or other tax on the (i) use, sale or purchase of
21		tangible personal property based on the gross receipts from
22		such sales or the selling or purchase price, (ii) gross
23		receipts, or (iii) weight or volume from the use, sale, or

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1		purchase of that said tangible personal property.
2		Notwithstanding the foregoing, this Section does not preempt
3		any home rule imposed tax such as the following: (1) a tax on
4		alcoholic beverages, whether based on gross receipts, volume
5		sold or any other measurement; (2) a tax based on the number of
6		units of cigarettes or tobacco products; (3) a tax, however
7		measured, based on the use of a hotel or motel room or similar
8		facility; (4) a tax, however measured, on the sale or transfer
9		of real property; (5) a tax, however measured, on lease
10		receipts; (6) a tax on food prepared for immediate consumption
11		and on alcoholic beverages sold by a business which provides
12		for on premise consumption of said food or alcoholic beverages;
13		or (7) other taxes not based on the selling or purchase price
14		or gross receipts from the use, sale or purchase of tangible
15		personal property; or (8) a tax on the sale of taxable
16		services, as defined in the Use Tax Act. This Section does not
17		preempt a home rule county from imposing a tax, however
18		measured, on the use, for consideration, of a parking lot,
19		garage, or other parking facility. This Section is a
20		limitation, pursuant to subsection (g) of Section 6 of Article
21		VII of the Illinois Constitution, on the power of home rule
22		units to tax.
23		(Source: P.A. 97-1168, eff. 3-8-13; 97-1169, eff. 3-8-13.)
24		Section 30-55. The Illinois Municipal Code is amended by
25		changing Section 8-11-6a and by adding Sections 8-3-20 as

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1		follows:
2		(65 ILCS 5/8-3-20 new)
3		Sec. 8-3-20. Taxable services. Notwithstanding any other
4		provision of law, whenever a home rule or non-home rule
5		municipality is authorized to impose a tax on the use or sale
6		of tangible personal property, that municipality shall also be
7		authorized to impose a tax at the same rate on taxable
8		services, as defined in Section 2a-2 of the Use Tax Act.
9		(65 ILCS 5/8-11-6a) (from Ch. 24, par. 8-11-6a)
10		Sec. 8-11-6a. Home rule municipalities; preemption of
11		certain taxes. Except as provided in Sections 8-11-1, 8-11-5,
12		8-11-6, 8-11-6b, 8-11-6c, and 11-74.3-6 on and after September
13		1, 1990, no home rule municipality has the authority to impose,
14		pursuant to its home rule authority, a retailer's occupation
15		tax, service occupation tax, use tax, sales tax or other tax on
16		the use, sale or purchase of tangible personal property based
17		on (i) the selling or purchase price, (ii) the gross receipts,
18		or (iii) the weight or volume from the use, sale, or purchase
19		from such sales or the selling or purchase price of said
20		tangible personal property. Notwithstanding the foregoing,
21		this Section does not preempt any home rule imposed tax such as
22		the following: (1) a tax on alcoholic beverages, whether based
23		on gross receipts, volume sold or any other measurement; (2) a
24		tax based on the number of units of cigarettes or tobacco

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1		products (provided, however, that a home rule municipality that
2		has not imposed a tax based on the number of units of
3		cigarettes or tobacco products before July 1, 1993, shall not
4		impose such a tax after that date); (3) a tax, however
5		measured, based on the use of a hotel or motel room or similar
6		facility; (4) a tax, however measured, on the sale or transfer
7		of real property; (5) a tax, however measured, on lease
8		receipts; (6) a tax on food prepared for immediate consumption
9		and on alcoholic beverages sold by a business which provides
10		for on premise consumption of said food or alcoholic beverages;
11		or (7) other taxes not based on (i) the selling or purchase
12		price, (ii) the or gross receipts, or (iii) the weight or
13		volume from the use, sale or purchase of tangible personal
14		property; or (8) a tax on the sale of taxable services, as
15		defined in the Use Tax Act. This Section does not preempt a
16		home rule municipality with a population of more than 2,000,000
17		from imposing a tax, however measured, on the use, for
18		consideration, of a parking lot, garage, or other parking
19		facility. This Section is not intended to affect any existing
20		tax on food and beverages prepared for immediate consumption on
21		the premises where the sale occurs, or any existing tax on
22		alcoholic beverages, or any existing tax imposed on the charge
23		for renting a hotel or motel room, which was in effect January
24		15, 1988, or any extension of the effective date of such an
25		existing tax by ordinance of the municipality imposing the tax,
26		which extension is hereby authorized, in any non-home rule

SB0009 Engrossed - 478 - LRB100 06347 HLH 16385 b
1		municipality in which the imposition of such a tax has been
2		upheld by judicial determination, nor is this Section intended
3		to preempt the authority granted by Public Act 85-1006. This
4		Section is a limitation, pursuant to subsection (g) of Section
5		6 of Article VII of the Illinois Constitution, on the power of
6		home rule units to tax.
7		(Source: P.A. 97-1168, eff. 3-8-13; 97-1169, eff. 3-8-13.)
8		Section 30-65. The Illinois False Claims Act is amended by
9		changing Section 3 as follows:
10		(740 ILCS 175/3) (from Ch. 127, par. 4103)
11		Sec. 3. False claims.
12		(a) Liability for certain acts.
13		(1) In general, any person who:
14		(A) knowingly presents, or causes to be presented,
15		a false or fraudulent claim for payment or approval;
16		(B) knowingly makes, uses, or causes to be made or
17		used, a false record or statement material to a false
18		or fraudulent claim;
19		(C) conspires to commit a violation of
20		subparagraph (A), (B), (D), (E), (F), or (G);
21		(D) has possession, custody, or control of
22		property or money used, or to be used, by the State and
23		knowingly delivers, or causes to be delivered, less
24		than all the money or property;

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1		(E) is authorized to make or deliver a document
2		certifying receipt of property used, or to be used, by
3		the State and, intending to defraud the State, makes or
4		delivers the receipt without completely knowing that
5		the information on the receipt is true;
6		(F) knowingly buys, or receives as a pledge of an
7		obligation or debt, public property from an officer or
8		employee of the State, or a member of the Guard, who
9		lawfully may not sell or pledge property; or
10		(G) knowingly makes, uses, or causes to be made or
11		used, a false record or statement material to an
12		obligation to pay or transmit money or property to the
13		State, or knowingly conceals or knowingly and
14		improperly avoids or decreases an obligation to pay or
15		transmit money or property to the State,
16		is liable to the State for a civil penalty of not less than
17		$5,500 and not more than $11,000, plus 3 times the amount
18		of damages which the State sustains because of the act of
19		that person. The penalties in this Section are intended to
20		be remedial rather than punitive, and shall not preclude,
21		nor be precluded by, a criminal prosecution for the same
22		conduct.
23		(2) A person violating this subsection shall also be
24		liable to the State for the costs of a civil action brought
25		to recover any such penalty or damages.
26		(b) Definitions. For purposes of this Section:

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1		(1) The terms "knowing" and "knowingly":
2		(A) mean that a person, with respect to
3		information:
4		(i) has actual knowledge of the information;
5		(ii) acts in deliberate ignorance of the truth
6		or falsity of the information; or
7		(iii) acts in reckless disregard of the truth
8		or falsity of the information, and
9		(B) require no proof of specific intent to defraud.
10		(2) The term "claim":
11		(A) means any request or demand, whether under a
12		contract or otherwise, for money or property and
13		whether or not the State has title to the money or
14		property, that
15		(i) is presented to an officer, employee, or
16		agent of the State; or
17		(ii) is made to a contractor, grantee, or other
18		recipient, if the money or property is to be spent
19		or used on the State's behalf or to advance a State
20		program or interest, and if the State:
21		(I) provides or has provided any portion
22		of the money or property requested or demanded;
23		or
24		(II) will reimburse such contractor,
25		grantee, or other recipient for any portion of
26		the money or property which is requested or

SB0009 Engrossed - 481 - LRB100 06347 HLH 16385 b
1		demanded; and
2		(B) does not include requests or demands for money
3		or property that the State has paid to an individual as
4		compensation for State employment or as an income
5		subsidy with no restrictions on that individual's use
6		of the money or property.
7		(3) The term "obligation" means an established duty,
8		whether or not fixed, arising from an express or implied
9		contractual, grantor-grantee, or licensor-licensee
10		relationship, from a fee-based or similar relationship,
11		from statute or regulation, or from the retention of any
12		overpayment.
13		(4) The term "material" means having a natural tendency
14		to influence, or be capable of influencing, the payment or
15		receipt of money or property.
16		(c) Exclusion. This Section does not apply to any taxes
17		imposed, collected, or administered by the State of Illinois
18		claims, records, or statements made under the Illinois Income
19		Tax Act.
20		(Source: P.A. 95-128, eff. 1-1-08; 96-1304, eff. 7-27-10.)
21		ARTICLE 32. LIMITED LIABILITY COMPANY ACT
22		Section 32-5. The Limited Liability Company Act is amended
23		by changing Section 50-10 as follows:

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1		(805 ILCS 180/50-10)
2		(Text of Section before amendment by P.A. 99-637)
3		Sec. 50-10. Fees.
4		(a) The Secretary of State shall charge and collect in
5		accordance with the provisions of this Act and rules
6		promulgated under its authority all of the following:
7		(1) Fees for filing documents.
8		(2) Miscellaneous charges.
9		(3) Fees for the sale of lists of filings and for
10		copies of any documents.
11		(b) The Secretary of State shall charge and collect for all
12		of the following:
13		(1) Filing articles of organization (domestic),
14		application for admission (foreign), and restated articles
15		of organization (domestic), $39 $500. Notwithstanding the
16		foregoing, the fee for filing articles of organization
17		(domestic), application for admission (foreign), and
18		restated articles of organization (domestic) in connection
19		with a limited liability company with ability to establish
20		series pursuant to Section 37-40 of this Act is $59 $750.
21		(2) Filing articles of amendment or an amended
22		application for admission, $150.
23		(3) Filing articles of dissolution or application for
24		withdrawal, $100.
25		(4) Filing an application to reserve a name, $300.
26		(5) Filing a notice of cancellation of a reserved name,

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1		$100.
2		(6) Filing a notice of a transfer of a reserved name,
3		$100.
4		(7) Registration of a name, $300.
5		(8) Renewal of registration of a name, $100.
6		(9) Filing an application for use of an assumed name
7		under Section 1-20 of this Act, $150 for each year or part
8		thereof ending in 0 or 5, $120 for each year or part
9		thereof ending in 1 or 6, $90 for each year or part thereof
10		ending in 2 or 7, $60 for each year or part thereof ending
11		in 3 or 8, $30 for each year or part thereof ending in 4 or
12		9, and a renewal for each assumed name, $150.
13		(10) Filing an application for change or cancellation
14		of an assumed name, $100.
15		(11) Filing an annual report of a limited liability
16		company or foreign limited liability company, $250, if
17		filed as required by this Act, plus a penalty if
18		delinquent. Notwithstanding the foregoing, the fee for
19		filing an annual report of a limited liability company or
20		foreign limited liability company with ability to
21		establish series is $250 plus $50 for each series for which
22		a certificate of designation has been filed pursuant to
23		Section 37-40 of this Act and active on the last day of the
24		third month preceding the company's anniversary month,
25		plus a penalty if delinquent.
26		(12) Filing an application for reinstatement of a

SB0009 Engrossed - 484 - LRB100 06347 HLH 16385 b
1		limited liability company or foreign limited liability
2		company $500.
3		(13) Filing Articles of Merger, $100 plus $50 for each
4		party to the merger in excess of the first 2 parties.
5		(14) Filing an Agreement of Conversion or Statement of
6		Conversion, $100.
7		(15) Filing a statement of change of address of
8		registered office or change of registered agent, or both,
9		or filing a statement of correction, $25.
10		(16) Filing a petition for refund, $15.
11		(17) Filing any other document, $100.
12		(18) Filing a certificate of designation of a limited
13		liability company with the ability to establish series
14		pursuant to Section 37-40 of this Act, $50.
15		(c) The Secretary of State shall charge and collect all of
16		the following:
17		(1) For furnishing a copy or certified copy of any
18		document, instrument, or paper relating to a limited
19		liability company or foreign limited liability company, or
20		for a certificate, $25.
21		(2) For the transfer of information by computer process
22		media to any purchaser, fees established by rule.
23		(Source: P.A. 97-839, eff. 7-20-12.)
24		(Text of Section after amendment by P.A. 99-637)
25		Sec. 50-10. Fees.

SB0009 Engrossed - 485 - LRB100 06347 HLH 16385 b
1		(a) The Secretary of State shall charge and collect in
2		accordance with the provisions of this Act and rules
3		promulgated under its authority all of the following:
4		(1) Fees for filing documents.
5		(2) Miscellaneous charges.
6		(3) Fees for the sale of lists of filings and for
7		copies of any documents.
8		(b) The Secretary of State shall charge and collect for all
9		of the following:
10		(1) Filing articles of organization (domestic),
11		application for admission (foreign), and restated articles
12		of organization (domestic), $39 $500. Notwithstanding the
13		foregoing, the fee for filing articles of organization
14		(domestic), application for admission (foreign), and
15		restated articles of organization (domestic) in connection
16		with a limited liability company with a series or the
17		ability to establish a series pursuant to Section 37-40 of
18		this Act is $59 $750.
19		(2) Filing amendments (domestic or foreign), $150.
20		(3) Filing a statement of termination or application
21		for withdrawal, $25.
22		(4) Filing an application to reserve a name, $300.
23		(5) Filing a notice of cancellation of a reserved name,
24		$100.
25		(6) Filing a notice of a transfer of a reserved name,
26		$100.

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1		(7) Registration of a name, $300.
2		(8) Renewal of registration of a name, $100.
3		(9) Filing an application for use of an assumed name
4		under Section 1-20 of this Act, $150 for each year or part
5		thereof ending in 0 or 5, $120 for each year or part
6		thereof ending in 1 or 6, $90 for each year or part thereof
7		ending in 2 or 7, $60 for each year or part thereof ending
8		in 3 or 8, $30 for each year or part thereof ending in 4 or
9		9, and a renewal for each assumed name, $150.
10		(10) Filing an application for change or cancellation
11		of an assumed name, $100.
12		(11) Filing an annual report of a limited liability
13		company or foreign limited liability company, $250, if
14		filed as required by this Act, plus a penalty if
15		delinquent. Notwithstanding the foregoing, the fee for
16		filing an annual report of a limited liability company or
17		foreign limited liability company is $250 plus $50 for each
18		series for which a certificate of designation has been
19		filed pursuant to Section 37-40 of this Act and is in
20		effect on the last day of the third month preceding the
21		company's anniversary month, plus a penalty if delinquent.
22		(12) Filing an application for reinstatement of a
23		limited liability company or foreign limited liability
24		company $500.
25		(13) Filing articles of merger, $100 plus $50 for each
26		party to the merger in excess of the first 2 parties.

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1		(14) Filing articles of conversion, $100.
2		(15) Filing a statement of change of address of
3		registered office or change of registered agent, or both,
4		or filing a statement of correction, $25.
5		(16) Filing a petition for refund, $15.
6		(17) Filing a certificate of designation of a limited
7		liability company with a series pursuant to Section 37-40
8		of this Act, $50.
9		(18) Filing articles of domestication, $100.
10		(19) Filing, amending, or cancelling a statement of
11		authority, $50.
12		(20) Filing, amending, or cancelling a statement of
13		denial, $10.
14		(21) Filing any other document, $100.
15		(c) The Secretary of State shall charge and collect all of
16		the following:
17		(1) For furnishing a copy or certified copy of any
18		document, instrument, or paper relating to a limited
19		liability company or foreign limited liability company, or
20		for a certificate, $25.
21		(2) For the transfer of information by computer process
22		media to any purchaser, fees established by rule.
23		(Source: P.A. 99-637, eff. 7-1-17.)
24		ARTICLE 95. NO ACCELERATION OR DELAY

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1		Section 95-995. No acceleration or delay. Where this Act
2		makes changes in a statute that is represented in this Act by
3		text that is not yet or no longer in effect (for example, a
4		Section represented by multiple versions), the use of that text
5		does not accelerate or delay the taking effect of (i) the
6		changes made by this Act or (ii) provisions derived from any
7		other Public Act.
8		ARTICLE 99. EFFECTIVE DATE
9		Section 99-999. Effective date. This Act takes effect upon
10		becoming law.