103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB2544

Introduced , by Rep. Joyce Mason

SYNOPSIS AS INTRODUCED:

`35 ILCS 105/3-10`
`35 ILCS 110/3-10`	`from Ch. 120, par. 439.33-10`
`35 ILCS 115/3-10`	`from Ch. 120, par. 439.103-10`
`35 ILCS 120/2-10`

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that, beginning on January 1, 2024, the tax on gun safes and locks designed to secure firearms is imposed at the rate of 1%. Effective immediately.

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A BILL FOR

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1 AN ACT concerning revenue.

2 Be it enacted by the People of the State of Illinois,

3 represented in the General Assembly:

4 Section 5. The Use Tax Act is amended by changing Section

5 3-10 as follows:

6 (35 ILCS 105/3-10)

7 Sec. 3-10. Rate of tax. Unless otherwise provided in this

8 Section, the tax imposed by this Act is at the rate of 6.25% of

9 either the selling price or the fair market value, if any, of

10 the tangible personal property. In all cases where property

11 functionally used or consumed is the same as the property that

12 was purchased at retail, then the tax is imposed on the selling

13 price of the property. In all cases where property

14 functionally used or consumed is a by-product or waste product

15 that has been refined, manufactured, or produced from property

16 purchased at retail, then the tax is imposed on the lower of

17 the fair market value, if any, of the specific property so used

18 in this State or on the selling price of the property purchased

19 at retail. For purposes of this Section "fair market value"

20 means the price at which property would change hands between a

21 willing buyer and a willing seller, neither being under any

22 compulsion to buy or sell and both having reasonable knowledge

23 of the relevant facts. The fair market value shall be

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1 established by Illinois sales by the taxpayer of the same

2 property as that functionally used or consumed, or if there

3 are no such sales by the taxpayer, then comparable sales or

4 purchases of property of like kind and character in Illinois.

5 Beginning on July 1, 2000 and through December 31, 2000,

6 with respect to motor fuel, as defined in Section 1.1 of the

7 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

8 the Use Tax Act, the tax is imposed at the rate of 1.25%.

9 Beginning on August 6, 2010 through August 15, 2010, and

10 beginning again on August 5, 2022 through August 14, 2022,

11 with respect to sales tax holiday items as defined in Section

12 3-6 of this Act, the tax is imposed at the rate of 1.25%.

13 With respect to gasohol, the tax imposed by this Act

14 applies to (i) 70% of the proceeds of sales made on or after

15 January 1, 1990, and before July 1, 2003, (ii) 80% of the

16 proceeds of sales made on or after July 1, 2003 and on or

17 before July 1, 2017, and (iii) 100% of the proceeds of sales

18 made thereafter. If, at any time, however, the tax under this

19 Act on sales of gasohol is imposed at the rate of 1.25%, then

20 the tax imposed by this Act applies to 100% of the proceeds of

21 sales of gasohol made during that time.

22 With respect to majority blended ethanol fuel, the tax

23 imposed by this Act does not apply to the proceeds of sales

24 made on or after July 1, 2003 and on or before December 31,

25 2023 but applies to 100% of the proceeds of sales made

26 thereafter.

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1 With respect to biodiesel blends with no less than 1% and

2 no more than 10% biodiesel, the tax imposed by this Act applies

3 to (i) 80% of the proceeds of sales made on or after July 1,

4 2003 and on or before December 31, 2018 and (ii) 100% of the

5 proceeds of sales made after December 31, 2018 and before

6 January 1, 2024. On and after January 1, 2024 and on or before

7 December 31, 2030, the taxation of biodiesel, renewable

8 diesel, and biodiesel blends shall be as provided in Section

9 3-5.1. If, at any time, however, the tax under this Act on

10 sales of biodiesel blends with no less than 1% and no more than

11 10% biodiesel is imposed at the rate of 1.25%, then the tax

12 imposed by this Act applies to 100% of the proceeds of sales of

13 biodiesel blends with no less than 1% and no more than 10%

14 biodiesel made during that time.

15 With respect to biodiesel and biodiesel blends with more

16 than 10% but no more than 99% biodiesel, the tax imposed by

17 this Act does not apply to the proceeds of sales made on or

18 after July 1, 2003 and on or before December 31, 2023. On and

19 after January 1, 2024 and on or before December 31, 2030, the

20 taxation of biodiesel, renewable diesel, and biodiesel blends

21 shall be as provided in Section 3-5.1.

22 With respect to gun safes and locks designed to secure

23 firearms, beginning on January 1, 2024, the tax is imposed at

24 the rate of 1%.

25 Until July 1, 2022 and beginning again on July 1, 2023,

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, food consisting of or infused with adult

3 use cannabis, soft drinks, and food that has been prepared for

4 immediate consumption), the tax is imposed at the rate of 1%.

5 Beginning on July 1, 2022 and until July 1, 2023, with respect

6 to food for human consumption that is to be consumed off the

7 premises where it is sold (other than alcoholic beverages,

8 food consisting of or infused with adult use cannabis, soft

9 drinks, and food that has been prepared for immediate

10 consumption), the tax is imposed at the rate of 0%.

11 With respect to prescription and nonprescription

12 medicines, drugs, medical appliances, products classified as

13 Class III medical devices by the United States Food and Drug

14 Administration that are used for cancer treatment pursuant to

15 a prescription, as well as any accessories and components

16 related to those devices, modifications to a motor vehicle for

17 the purpose of rendering it usable by a person with a

18 disability, and insulin, blood sugar testing materials,

19 syringes, and needles used by human diabetics, the tax is

20 imposed at the rate of 1%. For the purposes of this Section,

21 until September 1, 2009: the term "soft drinks" means any

22 complete, finished, ready-to-use, non-alcoholic drink, whether

23 carbonated or not, including, but not limited to,soda water,

24 cola, fruit juice, vegetable juice, carbonated water, and all

25 other preparations commonly known as soft drinks of whatever

26 kind or description that are contained in any closed or sealed

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1 bottle, can, carton, or container, regardless of size; but

2 "soft drinks" does not include coffee, tea, non-carbonated

3 water, infant formula, milk or milk products as defined in the

4 Grade A Pasteurized Milk and Milk Products Act, or drinks

5 containing 50% or more natural fruit or vegetable juice.

6 Notwithstanding any other provisions of this Act,

7 beginning September 1, 2009, "soft drinks" means non-alcoholic

8 beverages that contain natural or artificial sweeteners. "Soft

9 drinks" does ~~do~~ not include beverages that contain milk or

10 milk products, soy, rice or similar milk substitutes, or

11 greater than 50% of vegetable or fruit juice by volume.

12 Until August 1, 2009, and notwithstanding any other

13 provisions of this Act, "food for human consumption that is to

14 be consumed off the premises where it is sold" includes all

15 food sold through a vending machine, except soft drinks and

16 food products that are dispensed hot from a vending machine,

17 regardless of the location of the vending machine. Beginning

18 August 1, 2009, and notwithstanding any other provisions of

19 this Act, "food for human consumption that is to be consumed

20 off the premises where it is sold" includes all food sold

21 through a vending machine, except soft drinks, candy, and food

22 products that are dispensed hot from a vending machine,

23 regardless of the location of the vending machine.

24 Notwithstanding any other provisions of this Act,

25 beginning September 1, 2009, "food for human consumption that

26 is to be consumed off the premises where it is sold" does not

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1 include candy. For purposes of this Section, "candy" means a

2 preparation of sugar, honey, or other natural or artificial

3 sweeteners in combination with chocolate, fruits, nuts or

4 other ingredients or flavorings in the form of bars, drops, or

5 pieces. "Candy" does not include any preparation that contains

6 flour or requires refrigeration.

7 Notwithstanding any other provisions of this Act,

8 beginning September 1, 2009, "nonprescription medicines and

9 drugs" does not include grooming and hygiene products. For

10 purposes of this Section, "grooming and hygiene products"

11 includes, but is not limited to, soaps and cleaning solutions,

12 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

13 lotions and screens, unless those products are available by

14 prescription only, regardless of whether the products meet the

15 definition of "over-the-counter-drugs". For the purposes of

16 this paragraph, "over-the-counter-drug" means a drug for human

17 use that contains a label that identifies the product as a drug

18 as required by 21 CFR ~~C.F.R. �~~ 201.66. The

19 "over-the-counter-drug" label includes:

20 (A) a ~~A~~ "Drug Facts" panel; or

21 (B) a ~~A~~ statement of the "active ingredient(s)" with a

22 list of those ingredients contained in the compound,

23 substance or preparation.

24 Beginning on January 1, 2014 (the effective date of Public

25 Act 98-122) ~~this amendatory Act of the 98th General Assembly~~,

26 "prescription and nonprescription medicines and drugs"

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1 includes medical cannabis purchased from a registered

2 dispensing organization under the Compassionate Use of Medical

3 Cannabis Program Act.

4 As used in this Section, "adult use cannabis" means

5 cannabis subject to tax under the Cannabis Cultivation

6 Privilege Tax Law and the Cannabis Purchaser Excise Tax Law

7 and does not include cannabis subject to tax under the

8 Compassionate Use of Medical Cannabis Program Act.

9 If the property that is purchased at retail from a

10 retailer is acquired outside Illinois and used outside

11 Illinois before being brought to Illinois for use here and is

12 taxable under this Act, the "selling price" on which the tax is

13 computed shall be reduced by an amount that represents a

14 reasonable allowance for depreciation for the period of prior

15 out-of-state use.

16 (Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;

17 102-4, eff. 4-27-21; 102-700, Article 20, Section 20-5, eff.

18 4-19-22; 102-700, Article 60, Section 60-15, eff. 4-19-22;

19 102-700, Article 65, Section 65-5, eff. 4-19-22; revised

20 5-27-22.)

21 Section 10. The Service Use Tax Act is amended by changing

22 Section 3-10 as follows:

23 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)

24 Sec. 3-10. Rate of tax. Unless otherwise provided in this

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1 Section, the tax imposed by this Act is at the rate of 6.25% of

2 the selling price of tangible personal property transferred as

3 an incident to the sale of service, but, for the purpose of

4 computing this tax, in no event shall the selling price be less

5 than the cost price of the property to the serviceman.

6 Beginning on July 1, 2000 and through December 31, 2000,

7 with respect to motor fuel, as defined in Section 1.1 of the

8 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

9 the Use Tax Act, the tax is imposed at the rate of 1.25%.

10 With respect to gasohol, as defined in the Use Tax Act, the

11 tax imposed by this Act applies to (i) 70% of the selling price

12 of property transferred as an incident to the sale of service

13 on or after January 1, 1990, and before July 1, 2003, (ii) 80%

14 of the selling price of property transferred as an incident to

15 the sale of service on or after July 1, 2003 and on or before

16 July 1, 2017, and (iii) 100% of the selling price thereafter.

17 If, at any time, however, the tax under this Act on sales of

18 gasohol, as defined in the Use Tax Act, is imposed at the rate

19 of 1.25%, then the tax imposed by this Act applies to 100% of

20 the proceeds of sales of gasohol made during that time.

21 With respect to majority blended ethanol fuel, as defined

22 in the Use Tax Act, the tax imposed by this Act does not apply

23 to the selling price of property transferred as an incident to

24 the sale of service on or after July 1, 2003 and on or before

25 December 31, 2023 but applies to 100% of the selling price

26 thereafter.

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1 With respect to biodiesel blends, as defined in the Use

2 Tax Act, with no less than 1% and no more than 10% biodiesel,

3 the tax imposed by this Act applies to (i) 80% of the selling

4 price of property transferred as an incident to the sale of

5 service on or after July 1, 2003 and on or before December 31,

6 2018 and (ii) 100% of the proceeds of the selling price after

7 December 31, 2018 and before January 1, 2024. On and after

8 January 1, 2024 and on or before December 31, 2030, the

9 taxation of biodiesel, renewable diesel, and biodiesel blends

10 shall be as provided in Section 3-5.1 of the Use Tax Act. If,

11 at any time, however, the tax under this Act on sales of

12 biodiesel blends, as defined in the Use Tax Act, with no less

13 than 1% and no more than 10% biodiesel is imposed at the rate

14 of 1.25%, then the tax imposed by this Act applies to 100% of

15 the proceeds of sales of biodiesel blends with no less than 1%

16 and no more than 10% biodiesel made during that time.

17 With respect to biodiesel, as defined in the Use Tax Act,

18 and biodiesel blends, as defined in the Use Tax Act, with more

19 than 10% but no more than 99% biodiesel, the tax imposed by

20 this Act does not apply to the proceeds of the selling price of

21 property transferred as an incident to the sale of service on

22 or after July 1, 2003 and on or before December 31, 2023. On

23 and after January 1, 2024 and on or before December 31, 2030,

24 the taxation of biodiesel, renewable diesel, and biodiesel

25 blends shall be as provided in Section 3-5.1 of the Use Tax

26 Act.

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1 At the election of any registered serviceman made for each

2 fiscal year, sales of service in which the aggregate annual

3 cost price of tangible personal property transferred as an

4 incident to the sales of service is less than 35%, or 75% in

5 the case of servicemen transferring prescription drugs or

6 servicemen engaged in graphic arts production, of the

7 aggregate annual total gross receipts from all sales of

8 service, the tax imposed by this Act shall be based on the

9 serviceman's cost price of the tangible personal property

10 transferred as an incident to the sale of those services.

11 With respect to gun safes and locks designed to secure

12 firearms, beginning on January 1, 2024, the tax is imposed at

13 the rate of 1%.

14 Until July 1, 2022 and beginning again on July 1, 2023, the

15 tax shall be imposed at the rate of 1% on food prepared for

16 immediate consumption and transferred incident to a sale of

17 service subject to this Act or the Service Occupation Tax Act

18 by an entity licensed under the Hospital Licensing Act, the

19 Nursing Home Care Act, the Assisted Living and Shared Housing

20 Act, the ID/DD Community Care Act, the MC/DD Act, the

21 Specialized Mental Health Rehabilitation Act of 2013, or the

22 Child Care Act of 1969, or an entity that holds a permit issued

23 pursuant to the Life Care Facilities Act. Until July 1, 2022

24 and beginning again on July 1, 2023, the tax shall also be

25 imposed at the rate of 1% on food for human consumption that is

26 to be consumed off the premises where it is sold (other than

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1 alcoholic beverages, food consisting of or infused with adult

2 use cannabis, soft drinks, and food that has been prepared for

3 immediate consumption and is not otherwise included in this

4 paragraph).

5 Beginning on July 1, 2022 and until July 1, 2023, the tax

6 shall be imposed at the rate of 0% on food prepared for

7 immediate consumption and transferred incident to a sale of

8 service subject to this Act or the Service Occupation Tax Act

9 by an entity licensed under the Hospital Licensing Act, the

10 Nursing Home Care Act, the Assisted Living and Shared Housing

11 Act, the ID/DD Community Care Act, the MC/DD Act, the

12 Specialized Mental Health Rehabilitation Act of 2013, or the

13 Child Care Act of 1969, or an entity that holds a permit issued

14 pursuant to the Life Care Facilities Act. Beginning on July 1,

15 2022 and until July 1, 2023, the tax shall also be imposed at

16 the rate of 0% on food for human consumption that is to be

17 consumed off the premises where it is sold (other than

18 alcoholic beverages, food consisting of or infused with adult

19 use cannabis, soft drinks, and food that has been prepared for

20 immediate consumption and is not otherwise included in this

21 paragraph).

22 The tax shall also be imposed at the rate of 1% on

23 prescription and nonprescription medicines, drugs, medical

24 appliances, products classified as Class III medical devices

25 by the United States Food and Drug Administration that are

26 used for cancer treatment pursuant to a prescription, as well

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1 as any accessories and components related to those devices,

2 modifications to a motor vehicle for the purpose of rendering

3 it usable by a person with a disability, and insulin, blood

4 sugar testing materials, syringes, and needles used by human

5 diabetics. For the purposes of this Section, until September

6 1, 2009: the term "soft drinks" means any complete, finished,

7 ready-to-use, non-alcoholic drink, whether carbonated or not,

8 including, but not limited to, soda water, cola, fruit juice,

9 vegetable juice, carbonated water, and all other preparations

10 commonly known as soft drinks of whatever kind or description

11 that are contained in any closed or sealed bottle, can,

12 carton, or container, regardless of size; but "soft drinks"

13 does not include coffee, tea, non-carbonated water, infant

14 formula, milk or milk products as defined in the Grade A

15 Pasteurized Milk and Milk Products Act, or drinks containing

16 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" does ~~do~~ not include beverages that contain milk or

21 milk products, soy, rice or similar milk substitutes, or

22 greater 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

15 other 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 CFR ~~C.F.R. �~~ 201.66. The

4 "over-the-counter-drug" label includes:

5 (A) a ~~A~~ "Drug Facts" panel; or

6 (B) a ~~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 January 1, 2014 (the effective date of Public

10 Act 98-122), "prescription and nonprescription medicines and

11 drugs" includes medical cannabis purchased from a registered

12 dispensing organization under the Compassionate Use of Medical

13 Cannabis Program Act.

14 As used in this Section, "adult use cannabis" means

15 cannabis subject to tax under the Cannabis Cultivation

16 Privilege Tax Law and the Cannabis Purchaser Excise Tax Law

17 and does not include cannabis subject to tax under the

18 Compassionate Use of Medical Cannabis Program Act.

19 If the property that is acquired from a serviceman is

20 acquired outside Illinois and used outside Illinois before

21 being brought to Illinois for use here and is taxable under

22 this Act, the "selling price" on which the tax is computed

23 shall be reduced by an amount that represents a reasonable

24 allowance for depreciation for the period of prior

25 out-of-state use.

26 (Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;

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1 102-4, eff. 4-27-21; 102-16, eff. 6-17-21; 102-700, Article

2 20, Section 20-10, eff. 4-19-22; 102-700, Article 60, Section

3 60-20, eff. 4-19-22; revised 6-1-22.)

4 Section 15. The Service Occupation Tax Act is amended by

5 changing Section 3-10 as follows:

6 (35 ILCS 115/3-10) (from Ch. 120, par. 439.103-10)

7 Sec. 3-10. Rate of tax. Unless otherwise provided in this

8 Section, the tax imposed by this Act is at the rate of 6.25% of

9 the "selling price", as defined in Section 2 of the Service Use

10 Tax Act, of the tangible personal property. For the purpose of

11 computing this tax, in no event shall the "selling price" be

12 less than the cost price to the serviceman of the tangible

13 personal property transferred. The selling price of each item

14 of tangible personal property transferred as an incident of a

15 sale of service may be shown as a distinct and separate item on

16 the serviceman's billing to the service customer. If the

17 selling price is not so shown, the selling price of the

18 tangible personal property is deemed to be 50% of the

19 serviceman's entire billing to the service customer. When,

20 however, a serviceman contracts to design, develop, and

21 produce special order machinery or equipment, the tax imposed

22 by this Act shall be based on the serviceman's cost price of

23 the tangible personal property transferred incident to the

24 completion of the contract.

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1 Beginning on July 1, 2000 and through December 31, 2000,

2 with respect to motor fuel, as defined in Section 1.1 of the

3 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

4 the Use Tax Act, the tax is imposed at the rate of 1.25%.

5 With respect to gasohol, as defined in the Use Tax Act, the

6 tax imposed by this Act shall apply to (i) 70% of the cost

7 price of property transferred as an incident to the sale of

8 service on or after January 1, 1990, and before July 1, 2003,

9 (ii) 80% of the selling price of property transferred as an

10 incident to the sale of service on or after July 1, 2003 and on

11 or before July 1, 2017, and (iii) 100% of the cost price

12 thereafter. If, at any time, however, the tax under this Act on

13 sales of gasohol, as defined in the Use Tax Act, is imposed at

14 the rate of 1.25%, then the tax imposed by this Act applies to

15 100% of the proceeds of sales of gasohol made during that time.

16 With respect to majority blended ethanol fuel, as defined

17 in the Use Tax Act, the tax imposed by this Act does not apply

18 to the selling price of property transferred as an incident to

19 the sale of service on or after July 1, 2003 and on or before

20 December 31, 2023 but applies to 100% of the selling price

21 thereafter.

22 With respect to gun safes and locks designed to secure

23 firearms, beginning on January 1, 2024, the tax is imposed at

24 the rate of 1%.

25 With respect to biodiesel blends, as defined in the Use

26 Tax Act, with no less than 1% and no more than 10% biodiesel,

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1 the tax imposed by this Act applies to (i) 80% of the selling

2 price of property transferred as an incident to the sale of

3 service on or after July 1, 2003 and on or before December 31,

4 2018 and (ii) 100% of the proceeds of the selling price after

5 December 31, 2018 and before January 1, 2024. On and after

6 January 1, 2024 and on or before December 31, 2030, the

7 taxation of biodiesel, renewable diesel, and biodiesel blends

8 shall be as provided in Section 3-5.1 of the Use Tax Act. If,

9 at any time, however, the tax under this Act on sales of

10 biodiesel blends, as defined in the Use Tax Act, with no less

11 than 1% and no more than 10% biodiesel is imposed at the rate

12 of 1.25%, then the tax imposed by this Act applies to 100% of

13 the proceeds of sales of biodiesel blends with no less than 1%

14 and no more than 10% biodiesel made during that time.

15 With respect to biodiesel, as defined in the Use Tax Act,

16 and biodiesel blends, as defined in the Use Tax Act, with more

17 than 10% but no more than 99% biodiesel material, the tax

18 imposed by this Act does not apply to the proceeds of the

19 selling price of property transferred as an incident to the

20 sale of service on or after July 1, 2003 and on or before

21 December 31, 2023. On and after January 1, 2024 and on or

22 before December 31, 2030, the taxation of biodiesel, renewable

23 diesel, and biodiesel blends shall be as provided in Section

24 3-5.1 of the Use Tax Act.

25 At the election of any registered serviceman made for each

26 fiscal year, sales of service in which the aggregate annual

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1 cost price of tangible personal property transferred as an

2 incident to the sales of service is less than 35%, or 75% in

3 the case of servicemen transferring prescription drugs or

4 servicemen engaged in graphic arts production, of the

5 aggregate annual total gross receipts from all sales of

6 service, the tax imposed by this Act shall be based on the

7 serviceman's cost price of the tangible personal property

8 transferred incident to the sale of those services.

9 Until July 1, 2022 and beginning again on July 1, 2023, the

10 tax shall be imposed at the rate of 1% on food prepared for

11 immediate consumption and transferred incident to a sale of

12 service subject to this Act or the Service Use Tax Act by an

13 entity licensed under the Hospital Licensing Act, the Nursing

14 Home Care Act, the Assisted Living and Shared Housing Act, the

15 ID/DD Community Care Act, the MC/DD Act, the Specialized

16 Mental Health Rehabilitation Act of 2013, or the Child Care

17 Act of 1969, or an entity that holds a permit issued pursuant

18 to the Life Care Facilities Act. Until July 1, 2022 and

19 beginning again on July 1, 2023, the tax shall also be imposed

20 at the rate of 1% on food for human consumption that is to be

21 consumed off the premises where it is sold (other than

22 alcoholic beverages, food consisting of or infused with adult

23 use cannabis, soft drinks, and food that has been prepared for

24 immediate consumption and is not otherwise included in this

25 paragraph).

26 Beginning on July 1, 2022 and until July 1, 2023, the tax

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1 shall be imposed at the rate of 0% on food prepared for

2 immediate consumption and transferred incident to a sale of

3 service subject to this Act or the Service Use Tax Act by an

4 entity licensed under the Hospital Licensing Act, the Nursing

5 Home Care Act, the Assisted Living and Shared Housing Act, the

6 ID/DD Community Care Act, the MC/DD Act, the Specialized

7 Mental Health Rehabilitation Act of 2013, or the Child Care

8 Act of 1969, or an entity that holds a permit issued pursuant

9 to the Life Care Facilities Act. Beginning July 1, 2022 and

10 until July 1, 2023, the tax shall also be imposed at the rate

11 of 0% on food for human consumption that is to be consumed off

12 the premises where it is sold (other than alcoholic beverages,

13 food consisting of or infused with adult use cannabis, soft

14 drinks, and food that has been prepared for immediate

15 consumption and is not otherwise included in this paragraph).

16 The tax shall also be imposed at the rate of 1% on

17 prescription and nonprescription medicines, drugs, medical

18 appliances, products classified as Class III medical devices

19 by the United States Food and Drug Administration that are

20 used for cancer treatment pursuant to a prescription, as well

21 as any accessories and components related to those devices,

22 modifications to a motor vehicle for the purpose of rendering

23 it usable by a person with a disability, and insulin, blood

24 sugar testing materials, syringes, and needles used by human

25 diabetics. For the purposes of this Section, until September

26 1, 2009: the term "soft drinks" means any complete, finished,

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1 ready-to-use, non-alcoholic drink, whether carbonated or not,

2 including, but not limited to, soda water, cola, fruit juice,

3 vegetable juice, carbonated water, and all other preparations

4 commonly known as soft drinks of whatever kind or description

5 that are contained in any closed or sealed can, carton, or

6 container, regardless of size; but "soft drinks" does not

7 include coffee, tea, non-carbonated water, infant formula,

8 milk or milk products as defined in the Grade A Pasteurized

9 Milk and Milk Products Act, or drinks containing 50% or more

10 natural fruit or vegetable juice.

11 Notwithstanding any other provisions of this Act,

12 beginning September 1, 2009, "soft drinks" means non-alcoholic

13 beverages that contain natural or artificial sweeteners. "Soft

14 drinks" does ~~do~~ not include beverages that contain milk or

15 milk products, soy, rice or similar milk substitutes, or

16 greater than 50% of vegetable or fruit juice by volume.

17 Until August 1, 2009, and notwithstanding any other

18 provisions of this Act, "food for human consumption that is to

19 be consumed off the premises where it is sold" includes all

20 food sold through a vending machine, except soft drinks and

21 food products that are dispensed hot from a vending machine,

22 regardless of the location of the vending machine. Beginning

23 August 1, 2009, and notwithstanding any other provisions of

24 this Act, "food for human consumption that is to be consumed

25 off the premises where it is sold" includes all food sold

26 through a vending machine, except soft drinks, candy, and food

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1 products that are dispensed hot from a vending machine,

2 regardless of the location of the vending machine.

3 Notwithstanding any other provisions of this Act,

4 beginning September 1, 2009, "food for human consumption that

5 is to be consumed off the premises where it is sold" does not

6 include candy. For purposes of this Section, "candy" means a

7 preparation of sugar, honey, or other natural or artificial

8 sweeteners in combination with chocolate, fruits, nuts or

9 other ingredients or flavorings in the form of bars, drops, or

10 pieces. "Candy" does not include any preparation that contains

11 flour or requires refrigeration.

12 Notwithstanding any other provisions of this Act,

13 beginning September 1, 2009, "nonprescription medicines and

14 drugs" does not include grooming and hygiene products. For

15 purposes of this Section, "grooming and hygiene products"

16 includes, but is not limited to, soaps and cleaning solutions,

17 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

18 lotions and screens, unless those products are available by

19 prescription only, regardless of whether the products meet the

20 definition of "over-the-counter-drugs". For the purposes of

21 this paragraph, "over-the-counter-drug" means a drug for human

22 use that contains a label that identifies the product as a drug

23 as required by 21 CFR ~~C.F.R. �~~ 201.66. The

24 "over-the-counter-drug" label includes:

25 (A) a ~~A~~ "Drug Facts" panel; or

26 (B) a ~~A~~ statement of the "active ingredient(s)" with a

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1 list of those ingredients contained in the compound,

2 substance or preparation.

3 Beginning on January 1, 2014 (the effective date of Public

4 Act 98-122), "prescription and nonprescription medicines and

5 drugs" includes medical cannabis purchased from a registered

6 dispensing organization under the Compassionate Use of Medical

7 Cannabis Program Act.

8 As used in this Section, "adult use cannabis" means

9 cannabis subject to tax under the Cannabis Cultivation

10 Privilege Tax Law and the Cannabis Purchaser Excise Tax Law

11 and does not include cannabis subject to tax under the

12 Compassionate Use of Medical Cannabis Program Act.

13 (Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;

14 102-4, eff. 4-27-21; 102-16, eff. 6-17-21; 102-700, Article

15 20, Section 20-15, eff. 4-19-22; 102-700, Article 60, Section

16 60-25, eff. 4-19-22; revised 6-1-22.)

17 Section 20. The Retailers' Occupation Tax Act is amended

18 by changing Section 2-10 as follows:

19 (35 ILCS 120/2-10)

20 Sec. 2-10. Rate of tax. Unless otherwise provided in this

21 Section, the tax imposed by this Act is at the rate of 6.25% of

22 gross receipts from sales of tangible personal property made

23 in the course of business.

24 Beginning on July 1, 2000 and through December 31, 2000,

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1 with respect to motor fuel, as defined in Section 1.1 of the

2 Motor Fuel Tax Law, and gasohol, as defined in Section 3-40 of

3 the Use Tax Act, the tax is imposed at the rate of 1.25%.

4 Beginning on August 6, 2010 through August 15, 2010, and

5 beginning again on August 5, 2022 through August 14, 2022,

6 with respect to sales tax holiday items as defined in Section

7 2-8 of this Act, the tax is imposed at the rate of 1.25%.

8 Within 14 days after July 1, 2000 (the effective date of

9 Public Act 91-872) ~~this amendatory Act of the 91st General~~

10 ~~Assembly~~, each retailer of motor fuel and gasohol shall cause

11 the following notice to be posted in a prominently visible

12 place on each retail dispensing device that is used to

13 dispense motor fuel or gasohol in the State of Illinois: "As of

14 July 1, 2000, the State of Illinois has eliminated the State's

15 share of sales tax on motor fuel and gasohol through December

16 31, 2000. The price on this pump should reflect the

17 elimination of the tax." The notice shall be printed in bold

18 print on a sign that is no smaller than 4 inches by 8 inches.

19 The sign shall be clearly visible to customers. Any retailer

20 who fails to post or maintain a required sign through December

21 31, 2000 is guilty of a petty offense for which the fine shall

22 be $500 per day per each retail premises where a violation

23 occurs.

24 With respect to gasohol, as defined in the Use Tax Act, the

25 tax imposed by this Act applies to (i) 70% of the proceeds of

26 sales made on or after January 1, 1990, and before July 1,

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1 2003, (ii) 80% of the proceeds of sales made on or after July

2 1, 2003 and on or before July 1, 2017, and (iii) 100% of the

3 proceeds of sales made thereafter. If, at any time, however,

4 the tax under this Act on sales of gasohol, as defined in the

5 Use Tax Act, is imposed at the rate of 1.25%, then the tax

6 imposed by this Act applies to 100% of the proceeds of sales of

7 gasohol made during that time.

8 With respect to majority blended ethanol fuel, as defined

9 in the Use Tax Act, the tax imposed by this Act does not apply

10 to the proceeds of sales made on or after July 1, 2003 and on

11 or before December 31, 2023 but applies to 100% of the proceeds

12 of sales made thereafter.

13 With respect to biodiesel blends, as defined in the Use

14 Tax Act, with no less than 1% and no more than 10% biodiesel,

15 the tax imposed by this Act applies to (i) 80% of the proceeds

16 of sales made on or after July 1, 2003 and on or before

17 December 31, 2018 and (ii) 100% of the proceeds of sales made

18 after December 31, 2018 and before January 1, 2024. On and

19 after January 1, 2024 and on or before December 31, 2030, the

20 taxation of biodiesel, renewable diesel, and biodiesel blends

21 shall be as provided in Section 3-5.1 of the Use Tax Act. If,

22 at any time, however, the tax under this Act on sales of

23 biodiesel blends, as defined in the Use Tax Act, with no less

24 than 1% and no more than 10% biodiesel is imposed at the rate

25 of 1.25%, then the tax imposed by this Act applies to 100% of

26 the proceeds of sales of biodiesel blends with no less than 1%

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1 and no more than 10% biodiesel made during that time.

2 With respect to biodiesel, as defined in the Use Tax Act,

3 and biodiesel blends, as defined in the Use Tax Act, with more

4 than 10% but no more than 99% biodiesel, the tax imposed by

5 this Act does not apply to the proceeds of sales made on or

6 after July 1, 2003 and on or before December 31, 2023. On and

7 after January 1, 2024 and on or before December 31, 2030, the

8 taxation of biodiesel, renewable diesel, and biodiesel blends

9 shall be as provided in Section 3-5.1 of the Use Tax Act.

10 With respect to gun safes and locks designed to secure

11 firearms, beginning on January 1, 2024, the tax is imposed at

12 the rate of 1%.

13 Until July 1, 2022 and beginning again on July 1, 2023,

14 with respect to food for human consumption that is to be

15 consumed off the premises where it is sold (other than

16 alcoholic beverages, food consisting of or infused with adult

17 use cannabis, soft drinks, and food that has been prepared for

18 immediate consumption), the tax is imposed at the rate of 1%.

19 Beginning July 1, 2022 and until July 1, 2023, with respect to

20 food for human consumption that is to be consumed off the

21 premises where it is sold (other than alcoholic beverages,

22 food consisting of or infused with adult use cannabis, soft

23 drinks, and food that has been prepared for immediate

24 consumption), the tax is imposed at the rate of 0%.

25 With respect to prescription and nonprescription

26 medicines, drugs, medical appliances, products classified as

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1 Class III medical devices by the United States Food and Drug

2 Administration that are used for cancer treatment pursuant to

3 a prescription, as well as any accessories and components

4 related to those devices, modifications to a motor vehicle for

5 the purpose of rendering it usable by a person with a

6 disability, and insulin, blood sugar testing materials,

7 syringes, and needles used by human diabetics, the tax is

8 imposed at the rate of 1%. For the purposes of this Section,

9 until September 1, 2009: the term "soft drinks" means any

10 complete, finished, ready-to-use, non-alcoholic drink, whether

11 carbonated or not, including, but not limited to,soda water,

12 cola, fruit juice, vegetable juice, carbonated water, and all

13 other preparations commonly known as soft drinks of whatever

14 kind or description that are contained in any closed or sealed

15 bottle, can, carton, or container, regardless of size; but

16 "soft drinks" does not include coffee, tea, non-carbonated

17 water, infant formula, milk or milk products as defined in the

18 Grade A Pasteurized Milk and Milk Products Act, or drinks

19 containing 50% or more natural fruit or vegetable juice.

20 Notwithstanding any other provisions of this Act,

21 beginning September 1, 2009, "soft drinks" means non-alcoholic

22 beverages that contain natural or artificial sweeteners. "Soft

23 drinks" does ~~do~~ not include beverages that contain milk or

24 milk products, soy, rice or similar milk substitutes, or

25 greater than 50% of vegetable or fruit juice by volume.

26 Until August 1, 2009, and notwithstanding any other

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1 provisions of this Act, "food for human consumption that is to

2 be consumed off the premises where it is sold" includes all

3 food sold through a vending machine, except soft drinks and

4 food products that are dispensed hot from a vending machine,

5 regardless of the location of the vending machine. Beginning

6 August 1, 2009, and notwithstanding any other provisions of

7 this Act, "food for human consumption that is to be consumed

8 off the premises where it is sold" includes all food sold

9 through a vending machine, except soft drinks, candy, and food

10 products that are dispensed hot from a vending machine,

11 regardless of the location of the vending machine.

12 Notwithstanding any other provisions of this Act,

13 beginning September 1, 2009, "food for human consumption that

14 is to be consumed off the premises where it is sold" does not

15 include candy. For purposes of this Section, "candy" means a

16 preparation of sugar, honey, or other natural or artificial

17 sweeteners in combination with chocolate, fruits, nuts or

18 other ingredients or flavorings in the form of bars, drops, or

19 pieces. "Candy" does not include any preparation that contains

20 flour or requires refrigeration.

21 Notwithstanding any other provisions of this Act,

22 beginning September 1, 2009, "nonprescription medicines and

23 drugs" does not include grooming and hygiene products. For

24 purposes of this Section, "grooming and hygiene products"

25 includes, but is not limited to, soaps and cleaning solutions,

26 shampoo, toothpaste, mouthwash, antiperspirants, and sun tan

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1 lotions and screens, unless those products are available by

2 prescription only, regardless of whether the products meet the

3 definition of "over-the-counter-drugs". For the purposes of

4 this paragraph, "over-the-counter-drug" means a drug for human

5 use that contains a label that identifies the product as a drug

6 as required by 21 CFR ~~C.F.R. �~~ 201.66. The

7 "over-the-counter-drug" label includes:

8 (A) a ~~A~~ "Drug Facts" panel; or

9 (B) a ~~A~~ statement of the "active ingredient(s)" with a

10 list of those ingredients contained in the compound,

11 substance or preparation.

12 Beginning on January 1, 2014 (the effective date of Public

13 Act 98-122) ~~this amendatory Act of the 98th General Assembly~~,

14 "prescription and nonprescription medicines and drugs"

15 includes medical cannabis purchased from a registered

16 dispensing organization under the Compassionate Use of Medical

17 Cannabis Program Act.

18 As used in this Section, "adult use cannabis" means

19 cannabis subject to tax under the Cannabis Cultivation

20 Privilege Tax Law and the Cannabis Purchaser Excise Tax Law

21 and does not include cannabis subject to tax under the

22 Compassionate Use of Medical Cannabis Program Act.

23 (Source: P.A. 101-363, eff. 8-9-19; 101-593, eff. 12-4-19;

24 102-4, eff. 4-27-21; 102-700, Article 20, Section 20-20, eff.

25 4-19-22; 102-700, Article 60, Section 60-30, eff. 4-19-22;

26 102-700, Article 65, Section 65-10, eff. 4-19-22; revised

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1 6-1-22.)

2 Section 99. Effective date. This Act takes effect upon

3 becoming law.