99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 HB3499

Introduced , by Rep. Mike Smiddy

SYNOPSIS AS INTRODUCED:

See Index

Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that the general rate of tax under the Acts shall be 7.25% (currently, 6.25%). Provides that the additional moneys received from the increase shall be deposited into the School Infrastructure Support Fund. Provides that moneys in the School Infrastructure Support Fund shall be used to make grants to school districts in the State for safety and security upgrades, energy efficient heating and cooling systems, building projects, and facility enhancements, and for the payment of obligations issued by the school district. Amends the Department of Commerce and Economic Opportunity Law of

the
Civil Administrative Code of Illinois and the State Finance Act to make

conforming changes. Effective July 1, 2015.

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FISCAL NOTE ACT MAY APPLY

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 Department of Commerce and Economic

5 Opportunity Law of the Civil Administrative Code of Illinois is

6 amended by changing Section 605-332 as follows:

7 (20 ILCS 605/605-332)

8 Sec. 605-332. Financial assistance to energy generation

9 facilities.

10 (a) As used in this Section:

11 "New electric generating facility" means a

12 newly-constructed electric generation plant or a newly

13 constructed generation capacity expansion at an existing

14 facility, including the transmission lines and associated

15 equipment that transfers electricity from points of supply to

16 points of delivery, and for which foundation construction

17 commenced not sooner than July 1, 2001, which is designed to

18 provide baseload electric generation operating on a continuous

19 basis throughout the year and:

20 (1) has an aggregate rated generating capacity of at

21 least 400 megawatts for all new units at one site, uses

22 coal or gases derived from coal as its primary fuel source,

23 and supports the creation of at least 150 new Illinois coal

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1 mining jobs; or

2 (2) is funded through a federal Department of Energy

3 grant before December 31, 2010 and supports the creation of

4 Illinois coal-mining jobs; or

5 (3) uses coal gasification or integrated

6 gasification-combined cycle units that generate

7 electricity or chemicals, or both, and supports the

8 creation of Illinois coal-mining jobs.

9 "New gasification facility" means a newly constructed coal

10 gasification facility that generates chemical feedstocks or

11 transportation fuels derived from coal (which may include, but

12 are not limited to, methane, methanol, and nitrogen

13 fertilizer), that supports the creation or retention of

14 Illinois coal-mining jobs, and that qualifies for financial

15 assistance from the Department before December 31, 2010. A new

16 gasification facility does not include a pilot project located

17 within Jefferson County or within a county adjacent to

18 Jefferson County for synthetic natural gas from coal.

19 "New facility" means a new electric generating facility or

20 a new gasification facility. A new facility does not include a

21 pilot project located within Jefferson County or within a

22 county adjacent to Jefferson County for synthetic natural gas

23 from coal.

24 "Eligible business" means an entity that proposes to

25 construct a new facility and that has applied to the Department

26 to receive financial assistance pursuant to this Section. With

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1 respect to use and occupation taxes, wherever there is a

2 reference to taxes, that reference means only those taxes paid

3 on Illinois-mined coal used in a new facility.

4 "Department" means the Illinois Department of Commerce and

5 Economic Opportunity.

6 (b) The Department is authorized to provide financial

7 assistance to eligible businesses for new facilities from funds

8 appropriated by the General Assembly as further provided in

9 this Section.

10 An eligible business seeking qualification for financial

11 assistance for a new facility, for purposes of this Section

12 only, shall apply to the Department in the manner specified by

13 the Department. Any projections provided by an eligible

14 business as part of the application shall be independently

15 verified in a manner as set forth by the Department. An

16 application shall include, but not be limited to:

17 (1) the projected or actual completion date of the new

18 facility for which financial assistance is sought;

19 (2) copies of documentation deemed acceptable by the

20 Department establishing either (i) the total State

21 occupation and use taxes paid on Illinois-mined coal used

22 at the new facility for a minimum of 4 preceding calendar

23 quarters or (ii) the projected amount of State occupation

24 and use taxes paid on Illinois-mined coal used at the new

25 facility in 4 calendar year quarters after completion of

26 the new facility. Bond proceeds subject to this Section

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1 shall not be allocated to an eligible business until the

2 eligible business has demonstrated the revenue stream

3 sufficient to service the debt on the bonds; and

4 (3) the actual or projected amount of capital

5 investment by the eligible business in the new facility.

6 The Department shall determine the maximum amount of

7 financial assistance for eligible businesses in accordance

8 with this paragraph. The Department shall not provide financial

9 assistance from general obligation bond funds to any eligible

10 business unless it receives a written certification from the

11 Director of the Bureau of the Budget (now Governor's Office of

12 Management and Budget) that 80% of the State occupation and use

13 tax receipts for a minimum of the preceding 4 calendar quarters

14 for all eligible businesses or as included in projections on

15 approved applications by eligible businesses equal or exceed

16 110% of the maximum annual debt service required with respect

17 to general obligation bonds issued for that purpose. The

18 Department may provide financial assistance not to exceed the

19 amount of State general obligation debt calculated as above,

20 the amount of actual or projected capital investment in the

21 facility, or $100,000,000, whichever is less. Financial

22 assistance received pursuant to this Section may be used for

23 capital facilities consisting of buildings, structures,

24 durable equipment, and land at the new facility. Subject to the

25 provisions of the agreement covering the financial assistance,

26 a portion of the financial assistance may be required to be

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1 repaid to the State if certain conditions for the governmental

2 purpose of the assistance were not met.

3 An eligible business shall file a monthly report with the

4 Illinois Department of Revenue stating the amount of

5 Illinois-mined coal purchased during the previous month for use

6 in the new facility, the purchase price of that coal, the

7 amount of State occupation and use taxes paid on that purchase

8 to the seller of the Illinois-mined coal, and such other

9 information as that Department may reasonably require. In sales

10 of Illinois-mined coal between related parties, the purchase

11 price of the coal must have been determined in an arm's-length

12 transaction. The report shall be filed with the Illinois

13 Department of Revenue on or before the 20th day of each month

14 on a form provided by that Department. However, no report need

15 be filed by an eligible business in a month when it made no

16 reportable purchases of coal in the previous month. The

17 Illinois Department of Revenue shall provide a summary of such

18 reports to the Governor's Office of Management and Budget.

19 Upon granting financial assistance to an eligible

20 business, the Department shall certify the name of the eligible

21 business to the Illinois Department of Revenue. Beginning with

22 the receipt of the first report of State occupation and use

23 taxes paid by an eligible business and continuing for a 25-year

24 period, the Illinois Department of Revenue shall each month pay

25 into the Energy Infrastructure Fund 67% ~~80%~~of the net revenue

26 realized from the 7.25% ~~6.25%~~ general rate on the selling price

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1 of Illinois-mined coal that was sold to an eligible business.

2 (Source: P.A. 98-463, eff. 8-16-13.)

3 Section 15. The State Finance Act is amended by changing

4 Sections 6z-18 and 6z-20 and by adding Section 5.866 as

5 follows:

6 (30 ILCS 105/5.866 new)

7 Sec. 5.866. The School Infrastructure Support Fund.

8 (30 ILCS 105/6z-18) (from Ch. 127, par. 142z-18)

9 Sec. 6z-18. A portion of the money paid into the Local

10 Government Tax Fund from sales of food for human consumption

11 which is to be consumed off the premises where it is sold

12 (other than alcoholic beverages, soft drinks and food which has

13 been prepared for immediate consumption) and prescription and

14 nonprescription medicines, drugs, medical appliances and

15 insulin, urine testing materials, syringes and needles used by

16 diabetics, which occurred in municipalities, shall be

17 distributed to each municipality based upon the sales which

18 occurred in that municipality. The remainder shall be

19 distributed to each county based upon the sales which occurred

20 in the unincorporated area of that county.

21 A portion of the money paid into the Local Government Tax

22 Fund from the7.25% ~~6.25%~~ general use tax rate on the selling

23 price of tangible personal property which is purchased outside

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1 Illinois at retail from a retailer and which is titled or

2 registered by any agency of this State's government shall be

3 distributed to municipalities as provided in this paragraph.

4 Each municipality shall receive the amount attributable to

5 sales for which Illinois addresses for titling or registration

6 purposes are given as being in such municipality. The remainder

7 of the money paid into the Local Government Tax Fund from such

8 sales shall be distributed to counties. Each county shall

9 receive the amount attributable to sales for which Illinois

10 addresses for titling or registration purposes are given as

11 being located in the unincorporated area of such county.

12 A portion of the money paid into the Local Government Tax

13 Fund from the7.25% ~~6.25%~~ general rate (and, beginning July 1,

14 2000 and through December 31, 2000, the 1.25% rate on motor

15 fuel and gasohol, and beginning on August 6, 2010 through

16 August 15, 2010, the 1.25% rate on sales tax holiday items) on

17 sales subject to taxation under the Retailers' Occupation Tax

18 Act and the Service Occupation Tax Act, which occurred in

19 municipalities, shall be distributed to each municipality,

20 based upon the sales which occurred in that municipality. The

21 remainder shall be distributed to each county, based upon the

22 sales which occurred in the unincorporated area of such county.

23 For the purpose of determining allocation to the local

24 government unit, a retail sale by a producer of coal or other

25 mineral mined in Illinois is a sale at retail at the place

26 where the coal or other mineral mined in Illinois is extracted

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1 from the earth. This paragraph does not apply to coal or other

2 mineral when it is delivered or shipped by the seller to the

3 purchaser at a point outside Illinois so that the sale is

4 exempt under the United States Constitution as a sale in

5 interstate or foreign commerce.

6 Whenever the Department determines that a refund of money

7 paid into the Local Government Tax Fund should be made to a

8 claimant instead of issuing a credit memorandum, the Department

9 shall notify the State Comptroller, who shall cause the order

10 to be drawn for the amount specified, and to the person named,

11 in such notification from the Department. Such refund shall be

12 paid by the State Treasurer out of the Local Government Tax

13 Fund.

14 As soon as possible after the first day of each month,

15 beginning January 1, 2011, upon certification of the Department

16 of Revenue, the Comptroller shall order transferred, and the

17 Treasurer shall transfer, to the STAR Bonds Revenue Fund the

18 local sales tax increment, as defined in the Innovation

19 Development and Economy Act, collected during the second

20 preceding calendar month for sales within a STAR bond district

21 and deposited into the Local Government Tax Fund, less 3% of

22 that amount, which shall be transferred into the Tax Compliance

23 and Administration Fund and shall be used by the Department,

24 subject to appropriation, to cover the costs of the Department

25 in administering the Innovation Development and Economy Act.

26 After the monthly transfer to the STAR Bonds Revenue Fund,

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1 on or before the 25th day of each calendar month, the

2 Department shall prepare and certify to the Comptroller the

3 disbursement of stated sums of money to named municipalities

4 and counties, the municipalities and counties to be those

5 entitled to distribution of taxes or penalties paid to the

6 Department during the second preceding calendar month. The

7 amount to be paid to each municipality or county shall be the

8 amount (not including credit memoranda) collected during the

9 second preceding calendar month by the Department and paid into

10 the Local Government Tax Fund, plus an amount the Department

11 determines is necessary to offset any amounts which were

12 erroneously paid to a different taxing body, and not including

13 an amount equal to the amount of refunds made during the second

14 preceding calendar month by the Department, and not including

15 any amount which the Department determines is necessary to

16 offset any amounts which are payable to a different taxing body

17 but were erroneously paid to the municipality or county, and

18 not including any amounts that are transferred to the STAR

19 Bonds Revenue Fund. Within 10 days after receipt, by the

20 Comptroller, of the disbursement certification to the

21 municipalities and counties, provided for in this Section to be

22 given to the Comptroller by the Department, the Comptroller

23 shall cause the orders to be drawn for the respective amounts

24 in accordance with the directions contained in such

25 certification.

26 When certifying the amount of monthly disbursement to a

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1 municipality or county under this Section, the Department shall

2 increase or decrease that amount by an amount necessary to

3 offset any misallocation of previous disbursements. The offset

4 amount shall be the amount erroneously disbursed within the 6

5 months preceding the time a misallocation is discovered.

6 The provisions directing the distributions from the

7 special fund in the State Treasury provided for in this Section

8 shall constitute an irrevocable and continuing appropriation

9 of all amounts as provided herein. The State Treasurer and

10 State Comptroller are hereby authorized to make distributions

11 as provided in this Section.

12 In construing any development, redevelopment, annexation,

13 preannexation or other lawful agreement in effect prior to

14 September 1, 1990, which describes or refers to receipts from a

15 county or municipal retailers' occupation tax, use tax or

16 service occupation tax which now cannot be imposed, such

17 description or reference shall be deemed to include the

18 replacement revenue for such abolished taxes, distributed from

19 the Local Government Tax Fund.

20 As soon as possible after the effective date of this

21 amendatory Act of the 98th General Assembly, the State

22 Comptroller shall order and the State Treasurer shall transfer

23 $6,600,000 from the Local Government Tax Fund to the Illinois

24 State Medical Disciplinary Fund.

25 (Source: P.A. 97-333, eff. 8-12-11; 98-3, eff. 3-8-13.)

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1 (30 ILCS 105/6z-20) (from Ch. 127, par. 142z-20)

2 Sec. 6z-20. Of the money received from the 7.25% ~~6.25%~~

3 general rate (and, beginning July 1, 2000 and through December

4 31, 2000, the 1.25% rate on motor fuel and gasohol, and

5 beginning on August 6, 2010 through August 15, 2010, the 1.25%

6 rate on sales tax holiday items) on sales subject to taxation

7 under the Retailers' Occupation Tax Act and Service Occupation

8 Tax Act and paid into the County and Mass Transit District

9 Fund, distribution to the Regional Transportation Authority

10 tax fund, created pursuant to Section 4.03 of the Regional

11 Transportation Authority Act, for deposit therein shall be made

12 based upon the retail sales occurring in a county having more

13 than 3,000,000 inhabitants. The remainder shall be distributed

14 to each county having 3,000,000 or fewer inhabitants based upon

15 the retail sales occurring in each such county.

16 For the purpose of determining allocation to the local

17 government unit, a retail sale by a producer of coal or other

18 mineral mined in Illinois is a sale at retail at the place

19 where the coal or other mineral mined in Illinois is extracted

20 from the earth. This paragraph does not apply to coal or other

21 mineral when it is delivered or shipped by the seller to the

22 purchaser at a point outside Illinois so that the sale is

23 exempt under the United States Constitution as a sale in

24 interstate or foreign commerce.

25 Of the money received from the 7.25% ~~6.25%~~ general use tax

26 rate on tangible personal property which is purchased outside

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1 Illinois at retail from a retailer and which is titled or

2 registered by any agency of this State's government and paid

3 into the County and Mass Transit District Fund, the amount for

4 which Illinois addresses for titling or registration purposes

5 are given as being in each county having more than 3,000,000

6 inhabitants shall be distributed into the Regional

7 Transportation Authority tax fund, created pursuant to Section

8 4.03 of the Regional Transportation Authority Act. The

9 remainder of the money paid from such sales shall be

10 distributed to each county based on sales for which Illinois

11 addresses for titling or registration purposes are given as

12 being located in the county. Any money paid into the Regional

13 Transportation Authority Occupation and Use Tax Replacement

14 Fund from the County and Mass Transit District Fund prior to

15 January 14, 1991, which has not been paid to the Authority

16 prior to that date, shall be transferred to the Regional

17 Transportation Authority tax fund.

18 Whenever the Department determines that a refund of money

19 paid into the County and Mass Transit District Fund should be

20 made to a claimant instead of issuing a credit memorandum, the

21 Department shall notify the State Comptroller, who shall cause

22 the order to be drawn for the amount specified, and to the

23 person named, in such notification from the Department. Such

24 refund shall be paid by the State Treasurer out of the County

25 and Mass Transit District Fund.

26 As soon as possible after the first day of each month,

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1 beginning January 1, 2011, upon certification of the Department

2 of Revenue, the Comptroller shall order transferred, and the

3 Treasurer shall transfer, to the STAR Bonds Revenue Fund the

4 local sales tax increment, as defined in the Innovation

5 Development and Economy Act, collected during the second

6 preceding calendar month for sales within a STAR bond district

7 and deposited into the County and Mass Transit District Fund,

8 less 3% of that amount, which shall be transferred into the Tax

9 Compliance and Administration Fund and shall be used by the

10 Department, subject to appropriation, to cover the costs of the

11 Department in administering the Innovation Development and

12 Economy Act.

13 After the monthly transfer to the STAR Bonds Revenue Fund,

14 on or before the 25th day of each calendar month, the

15 Department shall prepare and certify to the Comptroller the

16 disbursement of stated sums of money to the Regional

17 Transportation Authority and to named counties, the counties to

18 be those entitled to distribution, as hereinabove provided, of

19 taxes or penalties paid to the Department during the second

20 preceding calendar month. The amount to be paid to the Regional

21 Transportation Authority and each county having 3,000,000 or

22 fewer inhabitants shall be the amount (not including credit

23 memoranda) collected during the second preceding calendar

24 month by the Department and paid into the County and Mass

25 Transit District Fund, plus an amount the Department determines

26 is necessary to offset any amounts which were erroneously paid

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1 to a different taxing body, and not including an amount equal

2 to the amount of refunds made during the second preceding

3 calendar month by the Department, and not including any amount

4 which the Department determines is necessary to offset any

5 amounts which were payable to a different taxing body but were

6 erroneously paid to the Regional Transportation Authority or

7 county, and not including any amounts that are transferred to

8 the STAR Bonds Revenue Fund. Within 10 days after receipt, by

9 the Comptroller, of the disbursement certification to the

10 Regional Transportation Authority and counties, provided for

11 in this Section to be given to the Comptroller by the

12 Department, the Comptroller shall cause the orders to be drawn

13 for the respective amounts in accordance with the directions

14 contained in such certification.

15 When certifying the amount of a monthly disbursement to the

16 Regional Transportation Authority or to a county under this

17 Section, the Department shall increase or decrease that amount

18 by an amount necessary to offset any misallocation of previous

19 disbursements. The offset amount shall be the amount

20 erroneously disbursed within the 6 months preceding the time a

21 misallocation is discovered.

22 The provisions directing the distributions from the

23 special fund in the State Treasury provided for in this Section

24 and from the Regional Transportation Authority tax fund created

25 by Section 4.03 of the Regional Transportation Authority Act

26 shall constitute an irrevocable and continuing appropriation

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1 of all amounts as provided herein. The State Treasurer and

2 State Comptroller are hereby authorized to make distributions

3 as provided in this Section.

4 In construing any development, redevelopment, annexation,

5 preannexation or other lawful agreement in effect prior to

6 September 1, 1990, which describes or refers to receipts from a

7 county or municipal retailers' occupation tax, use tax or

8 service occupation tax which now cannot be imposed, such

9 description or reference shall be deemed to include the

10 replacement revenue for such abolished taxes, distributed from

11 the County and Mass Transit District Fund or Local Government

12 Distributive Fund, as the case may be.

13 (Source: P.A. 96-939, eff. 6-24-10; 96-1012, eff. 7-7-10;

14 97-333, eff. 8-12-11.)

15 Section 20. The Use Tax Act is amended by changing Sections

16 3-6, 3-10, 3-55, 3-85, and 9 as follows:

17 (35 ILCS 105/3-6)

18 Sec. 3-6. Sales tax holiday items.

19 (a) The tangible personal property described in this

20 subsection qualifies for the 1.25% reduced rate of tax for the

21 period set forth in Section 3-10 of this Act (hereinafter

22 referred to as the Sales Tax Holiday Period). The reduced rate

23 on these items shall be administered under the provisions of

24 subsection (b) of this Section. The following items are subject

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1 to the reduced rate:

2 (1) Clothing items that each have a retail selling

3 price of less than $100.

4 "Clothing" means, unless otherwise specified in this

5 Section, all human wearing apparel suitable for general

6 use. "Clothing" does not include clothing accessories,

7 protective equipment, or sport or recreational equipment.

8 "Clothing" includes, but is not limited to: household and

9 shop aprons; athletic supporters; bathing suits and caps;

10 belts and suspenders; boots; coats and jackets; ear muffs;

11 footlets; gloves and mittens for general use; hats and

12 caps; hosiery; insoles for shoes; lab coats; neckties;

13 overshoes; pantyhose; rainwear; rubber pants; sandals;

14 scarves; shoes and shoelaces; slippers; sneakers; socks

15 and stockings; steel-toed shoes; underwear; and school

16 uniforms.

17 "Clothing accessories" means, but is not limited to:

18 briefcases; cosmetics; hair notions, including, but not

19 limited to barrettes, hair bows, and hair nets; handbags;

20 handkerchiefs; jewelry; non-prescription sunglasses;

21 umbrellas; wallets; watches; and wigs and hair pieces.

22 "Protective equipment" means, but is not limited to:

23 breathing masks; clean room apparel and equipment; ear and

24 hearing protectors; face shields; hard hats; helmets;

25 paint or dust respirators; protective gloves; safety

26 glasses and goggles; safety belts; tool belts; and welder's

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1 gloves and masks.

2 "Sport or recreational equipment" means, but is not

3 limited to: ballet and tap shoes; cleated or spiked

4 athletic shoes; gloves, including, but not limited to,

5 baseball, bowling, boxing, hockey, and golf gloves;

6 goggles; hand and elbow guards; life preservers and vests;

7 mouth guards; roller and ice skates; shin guards; shoulder

8 pads; ski boots; waders; and wetsuits and fins.

9 (2) School supplies. "School supplies" means, unless

10 otherwise specified in this Section, items used by a

11 student in a course of study. The purchase of school

12 supplies for use by persons other than students for use in

13 a course of study are not eligible for the reduced rate of

14 tax. "School supplies" do not include school art supplies;

15 school instructional materials; cameras; film and memory

16 cards; videocameras, tapes, and videotapes; computers;

17 cell phones; Personal Digital Assistants (PDAs); handheld

18 electronic schedulers; and school computer supplies.

19 "School supplies" includes, but is not limited to:

20 binders; book bags; calculators; cellophane tape;

21 blackboard chalk; compasses; composition books; crayons;

22 erasers; expandable, pocket, plastic, and manila folders;

23 glue, paste, and paste sticks; highlighters; index cards;

24 index card boxes; legal pads; lunch boxes; markers;

25 notebooks; paper, including loose leaf ruled notebook

26 paper, copy paper, graph paper, tracing paper, manila

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1 paper, colored paper, poster board, and construction

2 paper; pencils; pencil leads; pens; ink and ink refills for

3 pens; pencil boxes and other school supply boxes; pencil

4 sharpeners; protractors; rulers; scissors; and writing

5 tablets.

6 "School art supply" means an item commonly used by a

7 student in a course of study for artwork and includes only

8 the following items: clay and glazes; acrylic, tempera, and

9 oil paint; paintbrushes for artwork; sketch and drawing

10 pads; and watercolors.

11 "School instructional material" means written material

12 commonly used by a student in a course of study as a

13 reference and to learn the subject being taught and

14 includes only the following items: reference books;

15 reference maps and globes; textbooks; and workbooks.

16 "School computer supply" means an item commonly used by

17 a student in a course of study in which a computer is used

18 and applies only to the following items: flashdrives and

19 other computer data storage devices; data storage media,

20 such as diskettes and compact disks; boxes and cases for

21 disk storage; external ports or drives; computer cases;

22 computer cables; computer printers; and printer

23 cartridges, toner, and ink.

24 (b) Administration. Notwithstanding any other provision of

25 this Act, the reduced rate of tax under Section 3-10 of this

26 Act for clothing and school supplies shall be administered by

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1 the Department under the provisions of this subsection (b).

2 (1) Bundled sales. Items that qualify for the reduced

3 rate of tax that are bundled together with items that do

4 not qualify for the reduced rate of tax and that are sold

5 for one itemized price will be subject to the reduced rate

6 of tax only if the value of the items that qualify for the

7 reduced rate of tax exceeds the value of the items that do

8 not qualify for the reduced rate of tax.

9 (2) Coupons and discounts. An unreimbursed discount by

10 the seller reduces the sales price of the property so that

11 the discounted sales price determines whether the sales

12 price is within a sales tax holiday price threshold. A

13 coupon or other reduction in the sales price is treated as

14 a discount if the seller is not reimbursed for the coupon

15 or reduction amount by a third party.

16 (3) Splitting of items normally sold together.

17 Articles that are normally sold as a single unit must

18 continue to be sold in that manner. Such articles cannot be

19 priced separately and sold as individual items in order to

20 obtain the reduced rate of tax. For example, a pair of

21 shoes cannot have each shoe sold separately so that the

22 sales price of each shoe is within a sales tax holiday

23 price threshold.

24 (4) Rain checks. A rain check is a procedure that

25 allows a customer to purchase an item at a certain price at

26 a later time because the particular item was out of stock.

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1 Eligible property that customers purchase during the Sales

2 Tax Holiday Period with the use of a rain check will

3 qualify for the reduced rate of tax regardless of when the

4 rain check was issued. Issuance of a rain check during the

5 Sales Tax Holiday Period will not qualify eligible property

6 for the reduced rate of tax if the property is actually

7 purchased after the Sales Tax Holiday Period.

8 (5) Exchanges. The procedure for an exchange in regards

9 to a sales tax holiday is as follows:

10 (A) If a customer purchases an item of eligible

11 property during the Sales Tax Holiday Period, but later

12 exchanges the item for a similar eligible item, even if

13 a different size, different color, or other feature, no

14 additional tax is due even if the exchange is made

15 after the Sales Tax Holiday Period.

16 (B) If a customer purchases an item of eligible

17 property during the Sales Tax Holiday Period, but after

18 the Sales Tax Holiday Period has ended, the customer

19 returns the item and receives credit on the purchase of

20 a different item, the~~6.25%~~ general merchandise sales

21 tax rate is due on the sale of the newly purchased

22 item.

23 (C) If a customer purchases an item of eligible

24 property before the Sales Tax Holiday Period, but

25 during the Sales Tax Holiday Period the customer

26 returns the item and receives credit on the purchase of

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1 a different item of eligible property, the reduced rate

2 of tax is due on the sale of the new item if the new

3 item is purchased during the Sales Tax Holiday Period.

4 (6) Delivery charges. Delivery charges, including

5 shipping, handling and service charges, are part of the

6 sales price of eligible property.

7 (7) Order date and back orders. For the purpose of a

8 sales tax holiday, eligible property qualifies for the

9 reduced rate of tax if: (i) the item is both delivered to

10 and paid for by the customer during the Sales Tax Holiday

11 Period or (ii) the customer orders and pays for the item

12 and the seller accepts the order during the Sales Tax

13 Holiday Period for immediate shipment, even if delivery is

14 made after the Sales Tax Holiday Period. The seller accepts

15 an order when the seller has taken action to fill the order

16 for immediate shipment. Actions to fill an order include

17 placement of an "in date" stamp on an order or assignment

18 of an "order number" to an order within the Sales Tax

19 Holiday Period. An order is for immediate shipment when the

20 customer does not request delayed shipment. An order is for

21 immediate shipment notwithstanding that the shipment may

22 be delayed because of a backlog of orders or because stock

23 is currently unavailable to, or on back order by, the

24 seller.

25 (8) Returns. For a 60-day period immediately after the

26 Sales Tax Holiday Period, if a customer returns an item

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1 that would qualify for the reduced rate of tax, credit for

2 or refund of sales tax shall be given only at the reduced

3 rate unless the customer provides a receipt or invoice that

4 shows tax was paid at the ~~6.25%~~general merchandise rate,

5 or the seller has sufficient documentation to show that tax

6 was paid at the ~~6.25%~~ general merchandise rate on the

7 specific item. This 60-day period is set solely for the

8 purpose of designating a time period during which the

9 customer must provide documentation that shows that the

10 appropriate sales tax rate was paid on returned

11 merchandise. The 60-day period is not intended to change a

12 seller's policy on the time period during which the seller

13 will accept returns.

14 (c) The Department may implement the provisions of this

15 Section through the use of emergency rules, along with

16 permanent rules filed concurrently with such emergency rules,

17 in accordance with the provisions of Section 5-45 of the

18 Illinois Administrative Procedure Act. For purposes of the

19 Illinois Administrative Procedure Act, the adoption of rules to

20 implement the provisions of this Section shall be deemed an

21 emergency and necessary for the public interest, safety, and

22 welfare.

23 (Source: P.A. 96-1012, eff. 7-7-10.)

24 (35 ILCS 105/3-10)

25 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 of7.25%

2 ~~6.25%~~of either the selling price or the fair market value, if

3 any, of the tangible personal property. In all cases where

4 property functionally used or consumed is the same as the

5 property that was purchased at retail, then the tax is imposed

6 on the selling price of the property. In all cases where

7 property functionally used or consumed is a by-product or waste

8 product that has been refined, manufactured, or produced from

9 property purchased at retail, then the tax is imposed on the

10 lower of the fair market value, if any, of the specific

11 property so used in this State or on the selling price of the

12 property purchased at retail. For purposes of this Section

13 "fair market value" means the price at which property would

14 change hands between a willing buyer and a willing seller,

15 neither being under any compulsion to buy or sell and both

16 having reasonable knowledge of the relevant facts. The fair

17 market value shall be established by Illinois sales by the

18 taxpayer of the same property as that functionally used or

19 consumed, or if there are no such sales by the taxpayer, then

20 comparable sales or purchases of property of like kind and

21 character in Illinois.

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

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

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

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

26 Beginning on August 6, 2010 through August 15, 2010, with

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1 respect to sales tax holiday items as defined in Section 3-6 of

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

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

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

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

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

7 before December 31, 2018, and (iii) 100% of the proceeds of

8 sales made thereafter. If, at any time, however, the tax under

9 this Act on sales of gasohol is imposed at the rate of 1.25%,

10 then the tax imposed by this Act applies to 100% of the

11 proceeds of sales of gasohol made during that time.

12 With respect to majority blended ethanol fuel, the tax

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

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

15 2018 but applies to 100% of the proceeds of sales made

16 thereafter.

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

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

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

20 2003 and on or before December 31, 2018 and (ii) 100% of the

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

22 the tax under this Act on sales of biodiesel blends with no

23 less than 1% and no more than 10% biodiesel is imposed at the

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

25 of the proceeds of sales of biodiesel blends with no less than

26 1% and no more than 10% biodiesel made during that time.

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1 With respect to 100% biodiesel and biodiesel blends with

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

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

4 after July 1, 2003 and on or before December 31, 2018 but

5 applies to 100% of the proceeds of sales made thereafter.

6 With respect to food for human consumption that is to be

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

8 alcoholic beverages, soft drinks, and food that has been

9 prepared for immediate consumption) and prescription and

10 nonprescription medicines, drugs, medical appliances,

11 modifications to a motor vehicle for the purpose of rendering

12 it usable by a disabled person, and insulin, urine testing

13 materials, syringes, and needles used by diabetics, for human

14 use, the tax is imposed at the rate of 1%. For the purposes of

15 this Section, until September 1, 2009: the term "soft drinks"

16 means any complete, finished, ready-to-use, non-alcoholic

17 drink, whether carbonated or not, including but not limited to

18 soda water, cola, fruit juice, vegetable juice, carbonated

19 water, and all other preparations commonly known as soft drinks

20 of whatever kind or description that are contained in any

21 closed or sealed bottle, can, carton, or container, regardless

22 of size; but "soft drinks" does not include coffee, tea,

23 non-carbonated water, infant formula, milk or milk products as

24 defined in the Grade A Pasteurized Milk and Milk Products Act,

25 or drinks containing 50% or more natural fruit or vegetable

26 juice.

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1 Notwithstanding any other provisions of this Act,

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

3 beverages that contain natural or artificial sweeteners. "Soft

4 drinks" do not include beverages that contain milk or milk

5 products, soy, rice or similar milk substitutes, or greater

6 than 50% of vegetable or fruit juice by volume.

7 Until August 1, 2009, and notwithstanding any other

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

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

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

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

12 regardless of the location of the vending machine. Beginning

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

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

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

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

17 products that are dispensed hot from a vending machine,

18 regardless of the location of the vending machine.

19 Notwithstanding any other provisions of this Act,

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

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

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

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

24 sweeteners in combination with chocolate, fruits, nuts or other

25 ingredients or flavorings in the form of bars, drops, or

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

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1 flour or requires refrigeration.

2 Notwithstanding any other provisions of this Act,

3 beginning September 1, 2009, "nonprescription medicines and

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

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

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

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

8 lotions and screens, unless those products are available by

9 prescription only, regardless of whether the products meet the

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

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

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

13 as required by 21 C.F.R. � 201.66. The "over-the-counter-drug"

14 label includes:

15 (A) A "Drug Facts" panel; or

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

17 list of those ingredients contained in the compound,

18 substance or preparation.

19 Beginning on the effective date of this amendatory Act of

20 the 98th General Assembly, "prescription and nonprescription

21 medicines and drugs" includes medical cannabis purchased from a

22 registered dispensing organization under the Compassionate Use

23 of Medical Cannabis Pilot Program Act.

24 If the property that is purchased at retail from a retailer

25 is acquired outside Illinois and used outside Illinois before

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

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

2 shall be reduced by an amount that represents a reasonable

3 allowance for depreciation for the period of prior out-of-state

4 use.

5 (Source: P.A. 97-636, eff. 6-1-12; 98-122, eff. 1-1-14.)

6 (35 ILCS 105/3-55) (from Ch. 120, par. 439.3-55)

7 Sec. 3-55. Multistate exemption. To prevent actual or

8 likely multistate taxation, the tax imposed by this Act does

9 not apply to the use of tangible personal property in this

10 State under the following circumstances:

11 (a) The use, in this State, of tangible personal property

12 acquired outside this State by a nonresident individual and

13 brought into this State by the individual for his or her own

14 use while temporarily within this State or while passing

15 through this State.

16 (b) The use, in this State, of tangible personal property

17 by an interstate carrier for hire as rolling stock moving in

18 interstate commerce or by lessors under a lease of one year or

19 longer executed or in effect at the time of purchase of

20 tangible personal property by interstate carriers for-hire for

21 use as rolling stock moving in interstate commerce as long as

22 so used by the interstate carriers for-hire, and equipment

23 operated by a telecommunications provider, licensed as a common

24 carrier by the Federal Communications Commission, which is

25 permanently installed in or affixed to aircraft moving in

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1 interstate commerce.

2 (c) The use, in this State, by owners, lessors, or shippers

3 of tangible personal property that is utilized by interstate

4 carriers for hire for use as rolling stock moving in interstate

5 commerce as long as so used by the interstate carriers for

6 hire, and equipment operated by a telecommunications provider,

7 licensed as a common carrier by the Federal Communications

8 Commission, which is permanently installed in or affixed to

9 aircraft moving in interstate commerce.

10 (d) The use, in this State, of tangible personal property

11 that is acquired outside this State and caused to be brought

12 into this State by a person who has already paid a tax in

13 another State in respect to the sale, purchase, or use of that

14 property, to the extent of the amount of the tax properly due

15 and paid in the other State.

16 (e) The temporary storage, in this State, of tangible

17 personal property that is acquired outside this State and that,

18 after being brought into this State and stored here

19 temporarily, is used solely outside this State or is physically

20 attached to or incorporated into other tangible personal

21 property that is used solely outside this State, or is altered

22 by converting, fabricating, manufacturing, printing,

23 processing, or shaping, and, as altered, is used solely outside

24 this State.

25 (f) The temporary storage in this State of building

26 materials and fixtures that are acquired either in this State

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1 or outside this State by an Illinois registered combination

2 retailer and construction contractor, and that the purchaser

3 thereafter uses outside this State by incorporating that

4 property into real estate located outside this State.

5 (g) The use or purchase of tangible personal property by a

6 common carrier by rail or motor that receives the physical

7 possession of the property in Illinois, and that transports the

8 property, or shares with another common carrier in the

9 transportation of the property, out of Illinois on a standard

10 uniform bill of lading showing the seller of the property as

11 the shipper or consignor of the property to a destination

12 outside Illinois, for use outside Illinois.

13 (h) Except as provided in subsection (h-1), the use, in

14 this State, of a motor vehicle that was sold in this State to a

15 nonresident, even though the motor vehicle is delivered to the

16 nonresident in this State, if the motor vehicle is not to be

17 titled in this State, and if a drive-away permit is issued to

18 the motor vehicle as provided in Section 3-603 of the Illinois

19 Vehicle Code or if the nonresident purchaser has vehicle

20 registration plates to transfer to the motor vehicle upon

21 returning to his or her home state. The issuance of the

22 drive-away permit or having the out-of-state registration

23 plates to be transferred shall be prima facie evidence that the

24 motor vehicle will not be titled in this State.

25 (h-1) The exemption under subsection (h) does not apply if

26 the state in which the motor vehicle will be titled does not

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1 allow a reciprocal exemption for the use in that state of a

2 motor vehicle sold and delivered in that state to an Illinois

3 resident but titled in Illinois. The tax collected under this

4 Act on the sale of a motor vehicle in this State to a resident

5 of another state that does not allow a reciprocal exemption

6 shall be imposed at a rate equal to the state's rate of tax on

7 taxable property in the state in which the purchaser is a

8 resident, except that the tax shall not exceed the tax that

9 would otherwise be imposed under this Act. At the time of the

10 sale, the purchaser shall execute a statement, signed under

11 penalty of perjury, of his or her intent to title the vehicle

12 in the state in which the purchaser is a resident within 30

13 days after the sale and of the fact of the payment to the State

14 of Illinois of tax in an amount equivalent to the state's rate

15 of tax on taxable property in his or her state of residence and

16 shall submit the statement to the appropriate tax collection

17 agency in his or her state of residence. In addition, the

18 retailer must retain a signed copy of the statement in his or

19 her records. Nothing in this subsection shall be construed to

20 require the removal of the vehicle from this state following

21 the filing of an intent to title the vehicle in the purchaser's

22 state of residence if the purchaser titles the vehicle in his

23 or her state of residence within 30 days after the date of

24 sale. The tax collected under this Act in accordance with this

25 subsection (h-1) shall be proportionately distributed as if the

26 tax were collected at the 7.25% ~~6.25%~~ general rate imposed

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1 under this Act.

2 (h-2) The following exemptions apply with respect to

3 certain aircraft:

4 (1) Beginning on July 1, 2007, no tax is imposed under

5 this Act on the purchase of an aircraft, as defined in

6 Section 3 of the Illinois Aeronautics Act, if all of the

7 following conditions are met:

8 (A) the aircraft leaves this State within 15 days

9 after the later of either the issuance of the final

10 billing for the purchase of the aircraft or the

11 authorized approval for return to service, completion

12 of the maintenance record entry, and completion of the

13 test flight and ground test for inspection, as required

14 by 14 C.F.R. 91.407;

15 (B) the aircraft is not based or registered in this

16 State after the purchase of the aircraft; and

17 (C) the purchaser provides the Department with a

18 signed and dated certification, on a form prescribed by

19 the Department, certifying that the requirements of

20 this item (1) are met. The certificate must also

21 include the name and address of the purchaser, the

22 address of the location where the aircraft is to be

23 titled or registered, the address of the primary

24 physical location of the aircraft, and other

25 information that the Department may reasonably

26 require.

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1 (2) Beginning on July 1, 2007, no tax is imposed under

2 this Act on the use of an aircraft, as defined in Section 3

3 of the Illinois Aeronautics Act, that is temporarily

4 located in this State for the purpose of a prepurchase

5 evaluation if all of the following conditions are met:

6 (A) the aircraft is not based or registered in this

7 State after the prepurchase evaluation; and

8 (B) the purchaser provides the Department with a

9 signed and dated certification, on a form prescribed by

10 the Department, certifying that the requirements of

11 this item (2) are met. The certificate must also

12 include the name and address of the purchaser, the

13 address of the location where the aircraft is to be

14 titled or registered, the address of the primary

15 physical location of the aircraft, and other

16 information that the Department may reasonably

17 require.

18 (3) Beginning on July 1, 2007, no tax is imposed under

19 this Act on the use of an aircraft, as defined in Section 3

20 of the Illinois Aeronautics Act, that is temporarily

21 located in this State for the purpose of a post-sale

22 customization if all of the following conditions are met:

23 (A) the aircraft leaves this State within 15 days

24 after the authorized approval for return to service,

25 completion of the maintenance record entry, and

26 completion of the test flight and ground test for

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1 inspection, as required by 14 C.F.R. 91.407;

2 (B) the aircraft is not based or registered in this

3 State either before or after the post-sale

4 customization; and

5 (C) the purchaser provides the Department with a

6 signed and dated certification, on a form prescribed by

7 the Department, certifying that the requirements of

8 this item (3) are met. The certificate must also

9 include the name and address of the purchaser, the

10 address of the location where the aircraft is to be

11 titled or registered, the address of the primary

12 physical location of the aircraft, and other

13 information that the Department may reasonably

14 require.

15 If tax becomes due under this subsection (h-2) because of

16 the purchaser's use of the aircraft in this State, the

17 purchaser shall file a return with the Department and pay the

18 tax on the fair market value of the aircraft. This return and

19 payment of the tax must be made no later than 30 days after the

20 aircraft is used in a taxable manner in this State. The tax is

21 based on the fair market value of the aircraft on the date that

22 it is first used in a taxable manner in this State.

23 For purposes of this subsection (h-2):

24 "Based in this State" means hangared, stored, or otherwise

25 used, excluding post-sale customizations as defined in this

26 Section, for 10 or more days in each 12-month period

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1 immediately following the date of the sale of the aircraft.

2 "Post-sale customization" means any improvement,

3 maintenance, or repair that is performed on an aircraft

4 following a transfer of ownership of the aircraft.

5 "Prepurchase evaluation" means an examination of an

6 aircraft to provide a potential purchaser with information

7 relevant to the potential purchase.

8 "Registered in this State" means an aircraft registered

9 with the Department of Transportation, Aeronautics Division,

10 or titled or registered with the Federal Aviation

11 Administration to an address located in this State.

12 This subsection (h-2) is exempt from the provisions of

13 Section 3-90.

14 (i) Beginning July 1, 1999, the use, in this State, of fuel

15 acquired outside this State and brought into this State in the

16 fuel supply tanks of locomotives engaged in freight hauling and

17 passenger service for interstate commerce. This subsection is

18 exempt from the provisions of Section 3-90.

19 (j) Beginning on January 1, 2002 and through June 30, 2016,

20 the use of tangible personal property purchased from an

21 Illinois retailer by a taxpayer engaged in centralized

22 purchasing activities in Illinois who will, upon receipt of the

23 property in Illinois, temporarily store the property in

24 Illinois (i) for the purpose of subsequently transporting it

25 outside this State for use or consumption thereafter solely

26 outside this State or (ii) for the purpose of being processed,

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1 fabricated, or manufactured into, attached to, or incorporated

2 into other tangible personal property to be transported outside

3 this State and thereafter used or consumed solely outside this

4 State. The Director of Revenue shall, pursuant to rules adopted

5 in accordance with the Illinois Administrative Procedure Act,

6 issue a permit to any taxpayer in good standing with the

7 Department who is eligible for the exemption under this

8 subsection (j). The permit issued under this subsection (j)

9 shall authorize the holder, to the extent and in the manner

10 specified in the rules adopted under this Act, to purchase

11 tangible personal property from a retailer exempt from the

12 taxes imposed by this Act. Taxpayers shall maintain all

13 necessary books and records to substantiate the use and

14 consumption of all such tangible personal property outside of

15 the State of Illinois.

16 (Source: P.A. 97-73, eff. 6-30-11.)

17 (35 ILCS 105/3-85)

18 Sec. 3-85. Manufacturer's Purchase Credit. For purchases

19 of machinery and equipment made on and after January 1, 1995

20 through June 30, 2003, and on and after September 1, 2004

21 through August 30, 2014, a purchaser of manufacturing machinery

22 and equipment that qualifies for the exemption provided by

23 paragraph (18) of Section 3-5 of this Act earns a credit in an

24 amount equal to a fixed percentage of the tax which would have

25 been incurred under this Act on those purchases. For purchases

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1 of graphic arts machinery and equipment made on or after July

2 1, 1996 and through June 30, 2003, and on and after September

3 1, 2004 through August 30, 2014, a purchaser of graphic arts

4 machinery and equipment that qualifies for the exemption

5 provided by paragraph (6) of Section 3-5 of this Act earns a

6 credit in an amount equal to a fixed percentage of the tax that

7 would have been incurred under this Act on those purchases. The

8 credit earned for purchases of manufacturing machinery and

9 equipment or graphic arts machinery and equipment shall be

10 referred to as the Manufacturer's Purchase Credit. A graphic

11 arts producer is a person engaged in graphic arts production as

12 defined in Section 2-30 of the Retailers' Occupation Tax Act.

13 Beginning July 1, 1996, all references in this Section to

14 manufacturers or manufacturing shall also be deemed to refer to

15 graphic arts producers or graphic arts production.

16 The amount of credit shall be a percentage of the tax that

17 would have been incurred on the purchase of manufacturing

18 machinery and equipment or graphic arts machinery and equipment

19 if the exemptions provided by paragraph (6) or paragraph (18)

20 of Section 3-5 of this Act had not been applicable. The

21 percentage shall be as follows:

22 (1) 15% for purchases made on or before June 30, 1995.

23 (2) 25% for purchases made after June 30, 1995, and on

24 or before June 30, 1996.

25 (3) 40% for purchases made after June 30, 1996, and on

26 or before June 30, 1997.

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1 (4) 50% for purchases made on or after July 1, 1997.

2 (a) Manufacturer's Purchase Credit earned prior to July 1,

3 2003. This subsection (a) applies to Manufacturer's Purchase

4 Credit earned prior to July 1, 2003. A purchaser of production

5 related tangible personal property desiring to use the

6 Manufacturer's Purchase Credit shall certify to the seller

7 prior to October 1, 2003 that the purchaser is satisfying all

8 or part of the liability under the Use Tax Act or the Service

9 Use Tax Act that is due on the purchase of the production

10 related tangible personal property by use of Manufacturer's

11 Purchase Credit. The Manufacturer's Purchase Credit

12 certification must be dated and shall include the name and

13 address of the purchaser, the purchaser's registration number,

14 if registered, the credit being applied, and a statement that

15 the State Use Tax or Service Use Tax liability is being

16 satisfied with the manufacturer's or graphic arts producer's

17 accumulated purchase credit. Certification may be incorporated

18 into the manufacturer's or graphic arts producer's purchase

19 order. Manufacturer's Purchase Credit certification provided

20 by the manufacturer or graphic arts producer prior to October

21 1, 2003 may be used to satisfy the retailer's or serviceman's

22 liability under the Retailers' Occupation Tax Act or Service

23 Occupation Tax Act for the credit claimed, not to exceed7.25%

24 ~~6.25%~~ of the receipts subject to tax from a qualifying

25 purchase, but only if the retailer or serviceman reports the

26 Manufacturer's Purchase Credit claimed as required by the

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1 Department. A Manufacturer's Purchase Credit reported on any

2 original or amended return filed under this Act after October

3 20, 2003 shall be disallowed. The Manufacturer's Purchase

4 Credit earned by purchase of exempt manufacturing machinery and

5 equipment or graphic arts machinery and equipment is a

6 non-transferable credit. A manufacturer or graphic arts

7 producer that enters into a contract involving the installation

8 of tangible personal property into real estate within a

9 manufacturing or graphic arts production facility may, prior to

10 October 1, 2003, authorize a construction contractor to utilize

11 credit accumulated by the manufacturer or graphic arts producer

12 to purchase the tangible personal property. A manufacturer or

13 graphic arts producer intending to use accumulated credit to

14 purchase such tangible personal property shall execute a

15 written contract authorizing the contractor to utilize a

16 specified dollar amount of credit. The contractor shall

17 furnish, prior to October 1, 2003, the supplier with the

18 manufacturer's or graphic arts producer's name, registration

19 or resale number, and a statement that a specific amount of the

20 Use Tax or Service Use Tax liability, not to exceed 6.25% of

21 the selling price, is being satisfied with the credit. The

22 manufacturer or graphic arts producer shall remain liable to

23 timely report all information required by the annual Report of

24 Manufacturer's Purchase Credit Used for all credit utilized by

25 a construction contractor.

26 No Manufacturer's Purchase Credit earned prior to July 1,

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1 2003 may be used after October 1, 2003. The Manufacturer's

2 Purchase Credit may be used to satisfy liability under the Use

3 Tax Act or the Service Use Tax Act due on the purchase of

4 production related tangible personal property (including

5 purchases by a manufacturer, by a graphic arts producer, or by

6 a lessor who rents or leases the use of the property to a

7 manufacturer or graphic arts producer) that does not otherwise

8 qualify for the manufacturing machinery and equipment

9 exemption or the graphic arts machinery and equipment

10 exemption. "Production related tangible personal property"

11 means (i) all tangible personal property used or consumed by

12 the purchaser in a manufacturing facility in which a

13 manufacturing process described in Section 2-45 of the

14 Retailers' Occupation Tax Act takes place, including tangible

15 personal property purchased for incorporation into real estate

16 within a manufacturing facility and including, but not limited

17 to, tangible personal property used or consumed in activities

18 such as preproduction material handling, receiving, quality

19 control, inventory control, storage, staging, and packaging

20 for shipping and transportation purposes; (ii) all tangible

21 personal property used or consumed by the purchaser in a

22 graphic arts facility in which graphic arts production as

23 described in Section 2-30 of the Retailers' Occupation Tax Act

24 takes place, including tangible personal property purchased

25 for incorporation into real estate within a graphic arts

26 facility and including, but not limited to, all tangible

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1 personal property used or consumed in activities such as

2 graphic arts preliminary or pre-press production,

3 pre-production material handling, receiving, quality control,

4 inventory control, storage, staging, sorting, labeling,

5 mailing, tying, wrapping, and packaging; and (iii) all tangible

6 personal property used or consumed by the purchaser for

7 research and development. "Production related tangible

8 personal property" does not include (i) tangible personal

9 property used, within or without a manufacturing facility, in

10 sales, purchasing, accounting, fiscal management, marketing,

11 personnel recruitment or selection, or landscaping or (ii)

12 tangible personal property required to be titled or registered

13 with a department, agency, or unit of federal, state, or local

14 government. The Manufacturer's Purchase Credit may be used,

15 prior to October 1, 2003, to satisfy the tax arising either

16 from the purchase of machinery and equipment on or after

17 January 1, 1995 for which the exemption provided by paragraph

18 (18) of Section 3-5 of this Act was erroneously claimed, or the

19 purchase of machinery and equipment on or after July 1, 1996

20 for which the exemption provided by paragraph (6) of Section

21 3-5 of this Act was erroneously claimed, but not in

22 satisfaction of penalty, if any, and interest for failure to

23 pay the tax when due. A purchaser of production related

24 tangible personal property who is required to pay Illinois Use

25 Tax or Service Use Tax on the purchase directly to the

26 Department may, prior to October 1, 2003, utilize the

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1 Manufacturer's Purchase Credit in satisfaction of the tax

2 arising from that purchase, but not in satisfaction of penalty

3 and interest. A purchaser who uses the Manufacturer's Purchase

4 Credit to purchase property which is later determined not to be

5 production related tangible personal property may be liable for

6 tax, penalty, and interest on the purchase of that property as

7 of the date of purchase but shall be entitled to use the

8 disallowed Manufacturer's Purchase Credit, so long as it has

9 not expired and is used prior to October 1, 2003, on qualifying

10 purchases of production related tangible personal property not

11 previously subject to credit usage. The Manufacturer's

12 Purchase Credit earned by a manufacturer or graphic arts

13 producer expires the last day of the second calendar year

14 following the calendar year in which the credit arose. No

15 Manufacturer's Purchase Credit may be used after September 30,

16 2003 regardless of when that credit was earned.

17 A purchaser earning Manufacturer's Purchase Credit shall

18 sign and file an annual Report of Manufacturer's Purchase

19 Credit Earned for each calendar year no later than the last day

20 of the sixth month following the calendar year in which a

21 Manufacturer's Purchase Credit is earned. A Report of

22 Manufacturer's Purchase Credit Earned shall be filed on forms

23 as prescribed or approved by the Department and shall state,

24 for each month of the calendar year: (i) the total purchase

25 price of all purchases of exempt manufacturing or graphic arts

26 machinery on which the credit was earned; (ii) the total State

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1 Use Tax or Service Use Tax which would have been due on those

2 items; (iii) the percentage used to calculate the amount of

3 credit earned; (iv) the amount of credit earned; and (v) such

4 other information as the Department may reasonably require. A

5 purchaser earning Manufacturer's Purchase Credit shall

6 maintain records which identify, as to each purchase of

7 manufacturing or graphic arts machinery and equipment on which

8 the purchaser earned Manufacturer's Purchase Credit, the

9 vendor (including, if applicable, either the vendor's

10 registration number or Federal Employer Identification

11 Number), the purchase price, and the amount of Manufacturer's

12 Purchase Credit earned on each purchase.

13 A purchaser using Manufacturer's Purchase Credit shall

14 sign and file an annual Report of Manufacturer's Purchase

15 Credit Used for each calendar year no later than the last day

16 of the sixth month following the calendar year in which a

17 Manufacturer's Purchase Credit is used. A Report of

18 Manufacturer's Purchase Credit Used shall be filed on forms as

19 prescribed or approved by the Department and shall state, for

20 each month of the calendar year: (i) the total purchase price

21 of production related tangible personal property purchased

22 from Illinois suppliers; (ii) the total purchase price of

23 production related tangible personal property purchased from

24 out-of-state suppliers; (iii) the total amount of credit used

25 during such month; and (iv) such other information as the

26 Department may reasonably require. A purchaser using

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1 Manufacturer's Purchase Credit shall maintain records that

2 identify, as to each purchase of production related tangible

3 personal property on which the purchaser used Manufacturer's

4 Purchase Credit, the vendor (including, if applicable, either

5 the vendor's registration number or Federal Employer

6 Identification Number), the purchase price, and the amount of

7 Manufacturer's Purchase Credit used on each purchase.

8 No annual report shall be filed before May 1, 1996 or after

9 June 30, 2004. A purchaser that fails to file an annual Report

10 of Manufacturer's Purchase Credit Earned or an annual Report of

11 Manufacturer's Purchase Credit Used by the last day of the

12 sixth month following the end of the calendar year shall

13 forfeit all Manufacturer's Purchase Credit for that calendar

14 year unless it establishes that its failure to file was due to

15 reasonable cause. Manufacturer's Purchase Credit reports may

16 be amended to report and claim credit on qualifying purchases

17 not previously reported at any time before the credit would

18 have expired, unless both the Department and the purchaser have

19 agreed to an extension of the statute of limitations for the

20 issuance of a notice of tax liability as provided in Section 4

21 of the Retailers' Occupation Tax Act. If the time for

22 assessment or refund has been extended, then amended reports

23 for a calendar year may be filed at any time prior to the date

24 to which the statute of limitations for the calendar year or

25 portion thereof has been extended. No Manufacturer's Purchase

26 Credit report filed with the Department for periods prior to

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1 January 1, 1995 shall be approved. Manufacturer's Purchase

2 Credit claimed on an amended report may be used, until October

3 1, 2003, to satisfy tax liability under the Use Tax Act or the

4 Service Use Tax Act (i) on qualifying purchases of production

5 related tangible personal property made after the date the

6 amended report is filed or (ii) assessed by the Department on

7 qualifying purchases of production related tangible personal

8 property made in the case of manufacturers on or after January

9 1, 1995, or in the case of graphic arts producers on or after

10 July 1, 1996.

11 If the purchaser is not the manufacturer or a graphic arts

12 producer, but rents or leases the use of the property to a

13 manufacturer or graphic arts producer, the purchaser may earn,

14 report, and use Manufacturer's Purchase Credit in the same

15 manner as a manufacturer or graphic arts producer.

16 A purchaser shall not be entitled to any Manufacturer's

17 Purchase Credit for a purchase that is required to be reported

18 and is not timely reported as provided in this Section. A

19 purchaser remains liable for (i) any tax that was satisfied by

20 use of a Manufacturer's Purchase Credit, as of the date of

21 purchase, if that use is not timely reported as required in

22 this Section and (ii) for any applicable penalties and interest

23 for failing to pay the tax when due. No Manufacturer's Purchase

24 Credit may be used after September 30, 2003 to satisfy any tax

25 liability imposed under this Act, including any audit

26 liability.

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1 (b) Manufacturer's Purchase Credit earned on and after

2 September 1, 2004. This subsection (b) applies to

3 Manufacturer's Purchase Credit earned on and after September 1,

4 2004. Manufacturer's Purchase Credit earned on or after

5 September 1, 2004 may only be used to satisfy the Use Tax or

6 Service Use Tax liability incurred on production related

7 tangible personal property purchased on or after September 1,

8 2004. A purchaser of production related tangible personal

9 property desiring to use the Manufacturer's Purchase Credit

10 shall certify to the seller that the purchaser is satisfying

11 all or part of the liability under the Use Tax Act or the

12 Service Use Tax Act that is due on the purchase of the

13 production related tangible personal property by use of

14 Manufacturer's Purchase Credit. The Manufacturer's Purchase

15 Credit certification must be dated and shall include the name

16 and address of the purchaser, the purchaser's registration

17 number, if registered, the credit being applied, and a

18 statement that the State Use Tax or Service Use Tax liability

19 is being satisfied with the manufacturer's or graphic arts

20 producer's accumulated purchase credit. Certification may be

21 incorporated into the manufacturer's or graphic arts

22 producer's purchase order. Manufacturer's Purchase Credit

23 certification provided by the manufacturer or graphic arts

24 producer may be used to satisfy the retailer's or serviceman's

25 liability under the Retailers' Occupation Tax Act or Service

26 Occupation Tax Act for the credit claimed, not to exceed 7.25%

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1 ~~6.25%~~ of the receipts subject to tax from a qualifying

2 purchase, but only if the retailer or serviceman reports the

3 Manufacturer's Purchase Credit claimed as required by the

4 Department. The Manufacturer's Purchase Credit earned by

5 purchase of exempt manufacturing machinery and equipment or

6 graphic arts machinery and equipment is a non-transferable

7 credit. A manufacturer or graphic arts producer that enters

8 into a contract involving the installation of tangible personal

9 property into real estate within a manufacturing or graphic

10 arts production facility may, on or after September 1, 2004,

11 authorize a construction contractor to utilize credit

12 accumulated by the manufacturer or graphic arts producer to

13 purchase the tangible personal property. A manufacturer or

14 graphic arts producer intending to use accumulated credit to

15 purchase such tangible personal property shall execute a

16 written contract authorizing the contractor to utilize a

17 specified dollar amount of credit. The contractor shall furnish

18 the supplier with the manufacturer's or graphic arts producer's

19 name, registration or resale number, and a statement that a

20 specific amount of the Use Tax or Service Use Tax liability,

21 not to exceed 7.25% ~~6.25%~~ of the selling price, is being

22 satisfied with the credit. The manufacturer or graphic arts

23 producer shall remain liable to timely report all information

24 required by the annual Report of Manufacturer's Purchase Credit

25 Used for all credit utilized by a construction contractor.

26 The Manufacturer's Purchase Credit may be used to satisfy

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1 liability under the Use Tax Act or the Service Use Tax Act due

2 on the purchase, made on or after September 1, 2004, of

3 production related tangible personal property (including

4 purchases by a manufacturer, by a graphic arts producer, or by

5 a lessor who rents or leases the use of the property to a

6 manufacturer or graphic arts producer) that does not otherwise

7 qualify for the manufacturing machinery and equipment

8 exemption or the graphic arts machinery and equipment

9 exemption. "Production related tangible personal property"

10 means (i) all tangible personal property used or consumed by

11 the purchaser in a manufacturing facility in which a

12 manufacturing process described in Section 2-45 of the

13 Retailers' Occupation Tax Act takes place, including tangible

14 personal property purchased for incorporation into real estate

15 within a manufacturing facility and including, but not limited

16 to, tangible personal property used or consumed in activities

17 such as preproduction material handling, receiving, quality

18 control, inventory control, storage, staging, and packaging

19 for shipping and transportation purposes; (ii) all tangible

20 personal property used or consumed by the purchaser in a

21 graphic arts facility in which graphic arts production as

22 described in Section 2-30 of the Retailers' Occupation Tax Act

23 takes place, including tangible personal property purchased

24 for incorporation into real estate within a graphic arts

25 facility and including, but not limited to, all tangible

26 personal property used or consumed in activities such as

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1 graphic arts preliminary or pre-press production,

2 pre-production material handling, receiving, quality control,

3 inventory control, storage, staging, sorting, labeling,

4 mailing, tying, wrapping, and packaging; and (iii) all tangible

5 personal property used or consumed by the purchaser for

6 research and development. "Production related tangible

7 personal property" does not include (i) tangible personal

8 property used, within or without a manufacturing facility, in

9 sales, purchasing, accounting, fiscal management, marketing,

10 personnel recruitment or selection, or landscaping or (ii)

11 tangible personal property required to be titled or registered

12 with a department, agency, or unit of federal, state, or local

13 government. The Manufacturer's Purchase Credit may be used to

14 satisfy the tax arising either from the purchase of machinery

15 and equipment on or after September 1, 2004 for which the

16 exemption provided by paragraph (18) of Section 3-5 of this Act

17 was erroneously claimed, or the purchase of machinery and

18 equipment on or after September 1, 2004 for which the exemption

19 provided by paragraph (6) of Section 3-5 of this Act was

20 erroneously claimed, but not in satisfaction of penalty, if

21 any, and interest for failure to pay the tax when due. A

22 purchaser of production related tangible personal property

23 that is purchased on or after September 1, 2004 who is required

24 to pay Illinois Use Tax or Service Use Tax on the purchase

25 directly to the Department may utilize the Manufacturer's

26 Purchase Credit in satisfaction of the tax arising from that

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1 purchase, but not in satisfaction of penalty and interest. A

2 purchaser who uses the Manufacturer's Purchase Credit to

3 purchase property on and after September 1, 2004 which is later

4 determined not to be production related tangible personal

5 property may be liable for tax, penalty, and interest on the

6 purchase of that property as of the date of purchase but shall

7 be entitled to use the disallowed Manufacturer's Purchase

8 Credit, so long as it has not expired and is used on qualifying

9 purchases of production related tangible personal property not

10 previously subject to credit usage. The Manufacturer's

11 Purchase Credit earned by a manufacturer or graphic arts

12 producer expires the last day of the second calendar year

13 following the calendar year in which the credit arose. A

14 purchaser earning Manufacturer's Purchase Credit shall sign

15 and file an annual Report of Manufacturer's Purchase Credit

16 Earned for each calendar year no later than the last day of the

17 sixth month following the calendar year in which a

18 Manufacturer's Purchase Credit is earned. A Report of

19 Manufacturer's Purchase Credit Earned shall be filed on forms

20 as prescribed or approved by the Department and shall state,

21 for each month of the calendar year: (i) the total purchase

22 price of all purchases of exempt manufacturing or graphic arts

23 machinery on which the credit was earned; (ii) the total State

24 Use Tax or Service Use Tax which would have been due on those

25 items; (iii) the percentage used to calculate the amount of

26 credit earned; (iv) the amount of credit earned; and (v) such

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1 other information as the Department may reasonably require. A

2 purchaser earning Manufacturer's Purchase Credit shall

3 maintain records which identify, as to each purchase of

4 manufacturing or graphic arts machinery and equipment on which

5 the purchaser earned Manufacturer's Purchase Credit, the

6 vendor (including, if applicable, either the vendor's

7 registration number or Federal Employer Identification

8 Number), the purchase price, and the amount of Manufacturer's

9 Purchase Credit earned on each purchase. A purchaser using

10 Manufacturer's Purchase Credit shall sign and file an annual

11 Report of Manufacturer's Purchase Credit Used for each calendar

12 year no later than the last day of the sixth month following

13 the calendar year in which a Manufacturer's Purchase Credit is

14 used. A Report of Manufacturer's Purchase Credit Used shall be

15 filed on forms as prescribed or approved by the Department and

16 shall state, for each month of the calendar year: (i) the total

17 purchase price of production related tangible personal

18 property purchased from Illinois suppliers; (ii) the total

19 purchase price of production related tangible personal

20 property purchased from out-of-state suppliers; (iii) the

21 total amount of credit used during such month; and (iv) such

22 other information as the Department may reasonably require. A

23 purchaser using Manufacturer's Purchase Credit shall maintain

24 records that identify, as to each purchase of production

25 related tangible personal property on which the purchaser used

26 Manufacturer's Purchase Credit, the vendor (including, if

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1 applicable, either the vendor's registration number or Federal

2 Employer Identification Number), the purchase price, and the

3 amount of Manufacturer's Purchase Credit used on each purchase.

4 A purchaser that fails to file an annual Report of

5 Manufacturer's Purchase Credit Earned or an annual Report of

6 Manufacturer's Purchase Credit Used by the last day of the

7 sixth month following the end of the calendar year shall

8 forfeit all Manufacturer's Purchase Credit for that calendar

9 year unless it establishes that its failure to file was due to

10 reasonable cause. Manufacturer's Purchase Credit reports may

11 be amended to report and claim credit on qualifying purchases

12 not previously reported at any time before the credit would

13 have expired, unless both the Department and the purchaser have

14 agreed to an extension of the statute of limitations for the

15 issuance of a notice of tax liability as provided in Section 4

16 of the Retailers' Occupation Tax Act. If the time for

17 assessment or refund has been extended, then amended reports

18 for a calendar year may be filed at any time prior to the date

19 to which the statute of limitations for the calendar year or

20 portion thereof has been extended. Manufacturer's Purchase

21 Credit claimed on an amended report may be used to satisfy tax

22 liability under the Use Tax Act or the Service Use Tax Act (i)

23 on qualifying purchases of production related tangible

24 personal property made after the date the amended report is

25 filed or (ii) assessed by the Department on qualifying

26 production related tangible personal property purchased on or

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1 after September 1, 2004. If the purchaser is not the

2 manufacturer or a graphic arts producer, but rents or leases

3 the use of the property to a manufacturer or graphic arts

4 producer, the purchaser may earn, report, and use

5 Manufacturer's Purchase Credit in the same manner as a

6 manufacturer or graphic arts producer. A purchaser shall not be

7 entitled to any Manufacturer's Purchase Credit for a purchase

8 that is required to be reported and is not timely reported as

9 provided in this Section. A purchaser remains liable for (i)

10 any tax that was satisfied by use of a Manufacturer's Purchase

11 Credit, as of the date of purchase, if that use is not timely

12 reported as required in this Section and (ii) for any

13 applicable penalties and interest for failing to pay the tax

14 when due.

15 (Source: P.A. 96-116, eff. 7-31-09.)

16 (35 ILCS 105/9) (from Ch. 120, par. 439.9)

17 Sec. 9. Except as to motor vehicles, watercraft, aircraft,

18 and trailers that are required to be registered with an agency

19 of this State, each retailer required or authorized to collect

20 the tax imposed by this Act shall pay to the Department the

21 amount of such tax (except as otherwise provided) at the time

22 when he is required to file his return for the period during

23 which such tax was collected, less a discount of 2.1% prior to

24 January 1, 1990, and 1.75% on and after January 1, 1990, or $5

25 per calendar year, whichever is greater, which is allowed to

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1 reimburse the retailer for expenses incurred in collecting the

2 tax, keeping records, preparing and filing returns, remitting

3 the tax and supplying data to the Department on request. In the

4 case of retailers who report and pay the tax on a transaction

5 by transaction basis, as provided in this Section, such

6 discount shall be taken with each such tax remittance instead

7 of when such retailer files his periodic return. The Department

8 may disallow the discount for retailers whose certificate of

9 registration is revoked at the time the return is filed, but

10 only if the Department's decision to revoke the certificate of

11 registration has become final. A retailer need not remit that

12 part of any tax collected by him to the extent that he is

13 required to remit and does remit the tax imposed by the

14 Retailers' Occupation Tax Act, with respect to the sale of the

15 same property.

16 Where such tangible personal property is sold under a

17 conditional sales contract, or under any other form of sale

18 wherein the payment of the principal sum, or a part thereof, is

19 extended beyond the close of the period for which the return is

20 filed, the retailer, in collecting the tax (except as to motor

21 vehicles, watercraft, aircraft, and trailers that are required

22 to be registered with an agency of this State), may collect for

23 each tax return period, only the tax applicable to that part of

24 the selling price actually received during such tax return

25 period.

26 Except as provided in this Section, on or before the

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1 twentieth day of each calendar month, such retailer shall file

2 a return for the preceding calendar month. Such return shall be

3 filed on forms prescribed by the Department and shall furnish

4 such information as the Department may reasonably require.

5 The Department may require returns to be filed on a

6 quarterly basis. If so required, a return for each calendar

7 quarter shall be filed on or before the twentieth day of the

8 calendar month following the end of such calendar quarter. The

9 taxpayer shall also file a return with the Department for each

10 of the first two months of each calendar quarter, on or before

11 the twentieth day of the following calendar month, stating:

12 1. The name of the seller;

13 2. The address of the principal place of business from

14 which he engages in the business of selling tangible

15 personal property at retail in this State;

16 3. The total amount of taxable receipts received by him

17 during the preceding calendar month from sales of tangible

18 personal property by him during such preceding calendar

19 month, including receipts from charge and time sales, but

20 less all deductions allowed by law;

21 4. The amount of credit provided in Section 2d of this

22 Act;

23 5. The amount of tax due;

24 5-5. The signature of the taxpayer; and

25 6. Such other reasonable information as the Department

26 may require.

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1 If a taxpayer fails to sign a return within 30 days after

2 the proper notice and demand for signature by the Department,

3 the return shall be considered valid and any amount shown to be

4 due on the return shall be deemed assessed.

5 Beginning October 1, 1993, a taxpayer who has an average

6 monthly tax liability of $150,000 or more shall make all

7 payments required by rules of the Department by electronic

8 funds transfer. Beginning October 1, 1994, a taxpayer who has

9 an average monthly tax liability of $100,000 or more shall make

10 all payments required by rules of the Department by electronic

11 funds transfer. Beginning October 1, 1995, a taxpayer who has

12 an average monthly tax liability of $50,000 or more shall make

13 all payments required by rules of the Department by electronic

14 funds transfer. Beginning October 1, 2000, a taxpayer who has

15 an annual tax liability of $200,000 or more shall make all

16 payments required by rules of the Department by electronic

17 funds transfer. The term "annual tax liability" shall be the

18 sum of the taxpayer's liabilities under this Act, and under all

19 other State and local occupation and use tax laws administered

20 by the Department, for the immediately preceding calendar year.

21 The term "average monthly tax liability" means the sum of the

22 taxpayer's liabilities under this Act, and under all other

23 State and local occupation and use tax laws administered by the

24 Department, for the immediately preceding calendar year

25 divided by 12. Beginning on October 1, 2002, a taxpayer who has

26 a tax liability in the amount set forth in subsection (b) of

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1 Section 2505-210 of the Department of Revenue Law shall make

2 all payments required by rules of the Department by electronic

3 funds transfer.

4 Before August 1 of each year beginning in 1993, the

5 Department shall notify all taxpayers required to make payments

6 by electronic funds transfer. All taxpayers required to make

7 payments by electronic funds transfer shall make those payments

8 for a minimum of one year beginning on October 1.

9 Any taxpayer 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 taxpayers 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 The Department shall adopt such rules as are necessary to

17 effectuate a program of electronic funds transfer and the

18 requirements of this Section.

19 Before October 1, 2000, if the taxpayer's average monthly

20 tax liability to the Department under this Act, the Retailers'

21 Occupation Tax Act, the Service Occupation Tax Act, the Service

22 Use Tax Act was $10,000 or more during the preceding 4 complete

23 calendar quarters, he shall file a return with the Department

24 each month by the 20th day of the month next following the

25 month during which such tax liability is incurred and shall

26 make payments to the Department on or before the 7th, 15th,

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1 22nd and last day of the month during which such liability is

2 incurred. On and after October 1, 2000, if the taxpayer's

3 average monthly tax liability to the Department under this Act,

4 the Retailers' Occupation Tax Act, the Service Occupation Tax

5 Act, and the Service Use Tax Act was $20,000 or more during the

6 preceding 4 complete calendar quarters, he shall file a return

7 with the Department each month by the 20th day of the month

8 next following the month during which such tax liability is

9 incurred and shall make payment to the Department on or before

10 the 7th, 15th, 22nd and last day of the month during which such

11 liability is incurred. If the month during which such tax

12 liability is incurred began prior to January 1, 1985, each

13 payment shall be in an amount equal to 1/4 of the taxpayer's

14 actual liability for the month or an amount set by the

15 Department not to exceed 1/4 of the average monthly liability

16 of the taxpayer to the Department for the preceding 4 complete

17 calendar quarters (excluding the month of highest liability and

18 the month of lowest liability in such 4 quarter period). If the

19 month during which such tax liability is incurred begins on or

20 after January 1, 1985, and prior to January 1, 1987, each

21 payment shall be in an amount equal to 22.5% of the taxpayer's

22 actual liability for the month or 27.5% of the taxpayer's

23 liability for the same calendar month of the preceding year. If

24 the month during which such tax liability is incurred begins on

25 or after January 1, 1987, and prior to January 1, 1988, each

26 payment shall be in an amount equal to 22.5% of the taxpayer's

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1 actual liability for the month or 26.25% of the taxpayer's

2 liability for the same calendar month of the preceding year. If

3 the month during which such tax liability is incurred begins on

4 or after January 1, 1988, and prior to January 1, 1989, or

5 begins on or after January 1, 1996, each payment shall be in an

6 amount equal to 22.5% of the taxpayer's actual liability for

7 the month or 25% of the taxpayer's liability for the same

8 calendar month of the preceding year. If the month during which

9 such tax liability is incurred begins on or after January 1,

10 1989, and prior to January 1, 1996, each payment shall be in an

11 amount equal to 22.5% of the taxpayer's actual liability for

12 the month or 25% of the taxpayer's liability for the same

13 calendar month of the preceding year or 100% of the taxpayer's

14 actual liability for the quarter monthly reporting period. The

15 amount of such quarter monthly payments shall be credited

16 against the final tax liability of the taxpayer's return for

17 that month. Before October 1, 2000, once applicable, the

18 requirement of the making of quarter monthly payments to the

19 Department shall continue until such taxpayer's average

20 monthly liability to the Department during the preceding 4

21 complete calendar quarters (excluding the month of highest

22 liability and the month of lowest liability) is less than

23 $9,000, or until such taxpayer's average monthly liability to

24 the Department as computed for each calendar quarter of the 4

25 preceding complete calendar quarter period is less than

26 $10,000. However, if a taxpayer can show the Department that a

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1 substantial change in the taxpayer's business has occurred

2 which causes the taxpayer to anticipate that his average

3 monthly tax liability for the reasonably foreseeable future

4 will fall below the $10,000 threshold stated above, then such

5 taxpayer may petition the Department for change in such

6 taxpayer's reporting status. On and after October 1, 2000, once

7 applicable, the requirement of the making of quarter monthly

8 payments to the Department shall continue until such taxpayer's

9 average monthly liability to the Department during the

10 preceding 4 complete calendar quarters (excluding the month of

11 highest liability and the month of lowest liability) is less

12 than $19,000 or until such taxpayer's average monthly liability

13 to the Department as computed for each calendar quarter of the

14 4 preceding complete calendar quarter period is less than

15 $20,000. However, if a taxpayer can show the Department that a

16 substantial change in the taxpayer's business has occurred

17 which causes the taxpayer to anticipate that his average

18 monthly tax liability for the reasonably foreseeable future

19 will fall below the $20,000 threshold stated above, then such

20 taxpayer may petition the Department for a change in such

21 taxpayer's reporting status. The Department shall change such

22 taxpayer's reporting status unless it finds that such change is

23 seasonal in nature and not likely to be long term. If any such

24 quarter monthly payment is not paid at the time or in the

25 amount required by this Section, then the taxpayer shall be

26 liable for penalties and interest on the difference between the

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1 minimum amount due and the amount of such quarter monthly

2 payment actually and timely paid, except insofar as the

3 taxpayer has previously made payments for that month to the

4 Department in excess of the minimum payments previously due as

5 provided in this Section. The Department shall make reasonable

6 rules and regulations to govern the quarter monthly payment

7 amount and quarter monthly payment dates for taxpayers who file

8 on other than a calendar monthly basis.

9 If any such payment provided for in this Section exceeds

10 the taxpayer's liabilities under this Act, the Retailers'

11 Occupation Tax Act, the Service Occupation Tax Act and the

12 Service Use Tax Act, as shown by an original monthly return,

13 the Department shall issue to the taxpayer a credit memorandum

14 no later than 30 days after the date of payment, which

15 memorandum may be submitted by the taxpayer to the Department

16 in payment of tax liability subsequently to be remitted by the

17 taxpayer to the Department or be assigned by the taxpayer to a

18 similar taxpayer under this Act, the Retailers' Occupation Tax

19 Act, the Service Occupation Tax Act or the Service Use Tax Act,

20 in accordance with reasonable rules and regulations to be

21 prescribed by the Department, except that if such excess

22 payment is shown on an original monthly return and is made

23 after December 31, 1986, no credit memorandum shall be issued,

24 unless requested by the taxpayer. If no such request is made,

25 the taxpayer may credit such excess payment against tax

26 liability subsequently to be remitted by the taxpayer to the

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1 Department under this Act, the Retailers' Occupation Tax Act,

2 the Service Occupation Tax Act or the Service Use Tax Act, in

3 accordance with reasonable rules and regulations prescribed by

4 the Department. If the Department subsequently determines that

5 all or any part of the credit taken was not actually due to the

6 taxpayer, the taxpayer's 2.1% or 1.75% vendor's discount shall

7 be reduced by 2.1% or 1.75% of the difference between the

8 credit taken and that actually due, and the taxpayer shall be

9 liable for penalties and interest on such difference.

10 If the retailer is otherwise required to file a monthly

11 return and if the retailer's average monthly tax liability to

12 the Department does not exceed $200, the Department may

13 authorize his returns to be filed on a quarter annual basis,

14 with the return for January, February, and March of a given

15 year being due by April 20 of such year; with the return for

16 April, May and June of a given year being due by July 20 of such

17 year; with the return for July, August and September of a given

18 year being due by October 20 of such year, and with the return

19 for October, November and December of a given year being due by

20 January 20 of the following year.

21 If the retailer is otherwise required to file a monthly or

22 quarterly return and if the retailer's average monthly tax

23 liability to the Department does not exceed $50, the Department

24 may authorize his returns to be filed on an annual basis, with

25 the return for a given year being due by January 20 of the

26 following year.

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1 Such quarter annual and annual returns, as to form and

2 substance, shall be subject to the same requirements as monthly

3 returns.

4 Notwithstanding any other provision in this Act concerning

5 the time within which a retailer may file his return, in the

6 case of any retailer who ceases to engage in a kind of business

7 which makes him responsible for filing returns under this Act,

8 such retailer shall file a final return under this Act with the

9 Department not more than one month after discontinuing such

10 business.

11 In addition, with respect to motor vehicles, watercraft,

12 aircraft, and trailers that are required to be registered with

13 an agency of this State, every retailer selling this kind of

14 tangible personal property shall file, with the Department,

15 upon a form to be prescribed and supplied by the Department, a

16 separate return for each such item of tangible personal

17 property which the retailer sells, except that if, in the same

18 transaction, (i) a retailer of aircraft, watercraft, motor

19 vehicles or trailers transfers more than one aircraft,

20 watercraft, motor vehicle or trailer to another aircraft,

21 watercraft, motor vehicle or trailer retailer for the purpose

22 of resale or (ii) a retailer of aircraft, watercraft, motor

23 vehicles, or trailers transfers more than one aircraft,

24 watercraft, motor vehicle, or trailer to a purchaser for use as

25 a qualifying rolling stock as provided in Section 3-55 of this

26 Act, then that seller may report the transfer of all the

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1 aircraft, watercraft, motor vehicles or trailers involved in

2 that transaction to the Department on the same uniform

3 invoice-transaction reporting return form. For purposes of

4 this Section, "watercraft" means a Class 2, Class 3, or Class 4

5 watercraft as defined in Section 3-2 of the Boat Registration

6 and Safety Act, a personal watercraft, or any boat equipped

7 with an inboard motor.

8 The transaction reporting return in the case of motor

9 vehicles or trailers that are required to be registered with an

10 agency of this State, shall be the same document as the Uniform

11 Invoice referred to in Section 5-402 of the Illinois Vehicle

12 Code and must show the name and address of the seller; the name

13 and address of the purchaser; the amount of the selling price

14 including the amount allowed by the retailer for traded-in

15 property, if any; the amount allowed by the retailer for the

16 traded-in tangible personal property, if any, to the extent to

17 which Section 2 of this Act allows an exemption for the value

18 of traded-in property; the balance payable after deducting such

19 trade-in allowance from the total selling price; the amount of

20 tax due from the retailer with respect to such transaction; the

21 amount of tax collected from the purchaser by the retailer on

22 such transaction (or satisfactory evidence that such tax is not

23 due in that particular instance, if that is claimed to be the

24 fact); the place and date of the sale; a sufficient

25 identification of the property sold; such other information as

26 is required in Section 5-402 of the Illinois Vehicle Code, and

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1 such other information as the Department may reasonably

2 require.

3 The transaction reporting return in the case of watercraft

4 and aircraft must show the name and address of the seller; the

5 name and address of the purchaser; the amount of the selling

6 price including the amount allowed by the retailer for

7 traded-in property, if any; the amount allowed by the retailer

8 for the traded-in tangible personal property, if any, to the

9 extent to which Section 2 of this Act allows an exemption for

10 the value of traded-in property; the balance payable after

11 deducting such trade-in allowance from the total selling price;

12 the amount of tax due from the retailer with respect to such

13 transaction; the amount of tax collected from the purchaser by

14 the retailer on such transaction (or satisfactory evidence that

15 such tax is not due in that particular instance, if that is

16 claimed to be the fact); the place and date of the sale, a

17 sufficient identification of the property sold, and such other

18 information as the Department may reasonably require.

19 Such transaction reporting return shall be filed not later

20 than 20 days after the date of delivery of the item that is

21 being sold, but may be filed by the retailer at any time sooner

22 than that if he chooses to do so. The transaction reporting

23 return and tax remittance or proof of exemption from the tax

24 that is imposed by this Act may be transmitted to the

25 Department by way of the State agency with which, or State

26 officer with whom, the tangible personal property must be

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1 titled or registered (if titling or registration is required)

2 if the Department and such agency or State officer determine

3 that this procedure will expedite the processing of

4 applications for title or registration.

5 With each such transaction reporting return, the retailer

6 shall remit the proper amount of tax due (or shall submit

7 satisfactory evidence that the sale is not taxable if that is

8 the case), to the Department or its agents, whereupon the

9 Department shall issue, in the purchaser's name, a tax receipt

10 (or a certificate of exemption if the Department is satisfied

11 that the particular sale is tax exempt) which such purchaser

12 may submit to the agency with which, or State officer with

13 whom, he must title or register the tangible personal property

14 that is involved (if titling or registration is required) in

15 support of such purchaser's application for an Illinois

16 certificate or other evidence of title or registration to such

17 tangible personal property.

18 No retailer's failure or refusal to remit tax under this

19 Act precludes a user, who has paid the proper tax to the

20 retailer, from obtaining his certificate of title or other

21 evidence of title or registration (if titling or registration

22 is required) upon satisfying the Department that such user has

23 paid the proper tax (if tax is due) to the retailer. The

24 Department shall adopt appropriate rules to carry out the

25 mandate of this paragraph.

26 If the user who would otherwise pay tax to the retailer

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1 wants the transaction reporting return filed and the payment of

2 tax or proof of exemption made to the Department before the

3 retailer is willing to take these actions and such user has not

4 paid the tax to the retailer, such user may certify to the fact

5 of such delay by the retailer, and may (upon the Department

6 being satisfied of the truth of such certification) transmit

7 the information required by the transaction reporting return

8 and the remittance for tax or proof of exemption directly to

9 the Department and obtain his tax receipt or exemption

10 determination, in which event the transaction reporting return

11 and tax remittance (if a tax payment was required) shall be

12 credited by the Department to the proper retailer's account

13 with the Department, but without the 2.1% or 1.75% discount

14 provided for in this Section being allowed. When the user pays

15 the tax directly to the Department, he shall pay the tax in the

16 same amount and in the same form in which it would be remitted

17 if the tax had been remitted to the Department by the retailer.

18 Where a retailer collects the tax with respect to the

19 selling price of tangible personal property which he sells and

20 the purchaser thereafter returns such tangible personal

21 property and the retailer refunds the selling price thereof to

22 the purchaser, such retailer shall also refund, to the

23 purchaser, the tax so collected from the purchaser. When filing

24 his return for the period in which he refunds such tax to the

25 purchaser, the retailer may deduct the amount of the tax so

26 refunded by him to the purchaser from any other use tax which

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1 such retailer may be required to pay or remit to the

2 Department, as shown by such return, if the amount of the tax

3 to be deducted was previously remitted to the Department by

4 such retailer. If the retailer has not previously remitted the

5 amount of such tax to the Department, he is entitled to no

6 deduction under this Act upon refunding such tax to the

7 purchaser.

8 Any retailer filing a return under this Section shall also

9 include (for the purpose of paying tax thereon) the total tax

10 covered by such return upon the selling price of tangible

11 personal property purchased by him at retail from a retailer,

12 but as to which the tax imposed by this Act was not collected

13 from the retailer filing such return, and such retailer shall

14 remit the amount of such tax to the Department when filing such

15 return.

16 If experience indicates such action to be practicable, the

17 Department may prescribe and furnish a combination or joint

18 return which will enable retailers, who are required to file

19 returns hereunder and also under the Retailers' Occupation Tax

20 Act, to furnish all the return information required by both

21 Acts on the one form.

22 Where the retailer has more than one business registered

23 with the Department under separate registration under this Act,

24 such retailer may not file each return that is due as a single

25 return covering all such registered businesses, but shall file

26 separate returns for each such registered business.

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1 Beginning January 1, 1990, each month the Department shall

2 pay into the State and Local Sales Tax Reform Fund, a special

3 fund in the State Treasury which is hereby created, the net

4 revenue realized for the preceding month from the 1% tax on

5 sales of food for human consumption which is to be consumed off

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

7 soft drinks and food which has been prepared for immediate

8 consumption) and prescription and nonprescription medicines,

9 drugs, medical appliances and insulin, urine testing

10 materials, syringes and needles used by diabetics.

11 Beginning January 1, 1990, each month the Department shall

12 pay into the County and Mass Transit District Fund 4% of the

13 net revenue realized for the preceding month from the7.25%

14 ~~6.25%~~general rate on the selling price of tangible personal

15 property which is purchased outside Illinois at retail from a

16 retailer and which is titled or registered by an agency of this

17 State's government.

18 Beginning January 1, 1990, each month the Department shall

19 pay into the State and Local Sales Tax Reform Fund, a special

20 fund in the State Treasury, 20% of the net revenue realized for

21 the preceding month from the 7.25% ~~6.25%~~ general rate on the

22 selling price of tangible personal property, other than

23 tangible personal property which is purchased outside Illinois

24 at retail from a retailer and which is titled or registered by

25 an agency of this State's government.

26 Beginning August 1, 2000, each month the Department shall

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1 pay into the State and Local Sales Tax Reform Fund 100% of the

2 net revenue realized for the preceding month from the 1.25%

3 rate on the selling price of motor fuel and gasohol. Beginning

4 September 1, 2010, each month the Department shall pay into the

5 State and Local Sales Tax Reform Fund 100% of the net revenue

6 realized for the preceding month from the 1.25% rate on the

7 selling price of sales tax holiday items.

8 Beginning January 1, 1990, each month the Department shall

9 pay into the Local Government Tax Fund 16% of the net revenue

10 realized for the preceding month from the7.25% ~~6.25%~~ general

11 rate on the selling price of tangible personal property which

12 is purchased outside Illinois at retail from a retailer and

13 which is titled or registered by an agency of this State's

14 government.

15 Beginning October 1, 2009, each month the Department shall

16 pay into the Capital Projects Fund an amount that is equal to

17 an amount estimated by the Department to represent 80% of the

18 net revenue realized for the preceding month from the sale of

19 candy, grooming and hygiene products, and soft drinks that had

20 been taxed at a rate of 1% prior to September 1, 2009 but that

21 are now taxed at 7.25% ~~6.25%~~.

22 Beginning July 1, 2011, each month the Department shall pay

23 into the Clean Air Act (CAA) Permit Fund 80% of the net revenue

24 realized for the preceding month from the7.25% ~~6.25%~~ general

25 rate on the selling price of sorbents used in Illinois in the

26 process of sorbent injection as used to comply with the

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1 Environmental Protection Act or the federal Clean Air Act, but

2 the total payment into the Clean Air Act (CAA) Permit Fund

3 under this Act and the Retailers' Occupation Tax Act shall not

4 exceed $2,000,000 in any fiscal year.

5 Beginning August 1, 2015, each month the Department shall

6 pay into the School Infrastructure Support Fund, a special fund

7 created in the State treasury, 13% of the net revenue realized

8 for the preceding month from the 7.25% general rate on the

9 selling price of tangible personal property, other than (i)

10 sorbents used in Illinois in the process of sorbent injection

11 as used to comply with the Environmental Protection Act or the

12 federal Clean Air Act, (ii) candy, (iii) grooming and hygiene

13 products, and (iv) soft drinks. Moneys in the School

14 Infrastructure Support Fund shall be used to make grants to

15 school districts in the State for safety and security upgrades,

16 energy efficient heating and cooling systems, building

17 projects, and facility enhancements, and for the payment of

18 obligations issued by the school district.

19 Beginning July 1, 2013, each month the Department shall pay

20 into the Underground Storage Tank Fund from the proceeds

21 collected under this Act, the Service Use Tax Act, the Service

22 Occupation Tax Act, and the Retailers' Occupation Tax Act an

23 amount equal to the average monthly deficit in the Underground

24 Storage Tank Fund during the prior year, as certified annually

25 by the Illinois Environmental Protection Agency, but the total

26 payment into the Underground Storage Tank Fund under this Act,

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1 the Service Use Tax Act, the Service Occupation Tax Act, and

2 the Retailers' Occupation Tax Act shall not exceed $18,000,000

3 in any State fiscal year. As used in this paragraph, the

4 "average monthly deficit" shall be equal to the difference

5 between the average monthly claims for payment by the fund and

6 the average monthly revenues deposited into the fund, excluding

7 payments made pursuant to this paragraph.

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

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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

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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

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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`

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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`

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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 67% ~~80%~~ of the net revenue realized for

23 the preceding month from the7.25% ~~6.25%~~ general rate on the

24 selling 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

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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 Fund67% ~~80%~~ of the net revenue realized from

6 the 7.25% ~~6.25%~~general rate on the selling price of

7 Illinois-mined coal that was sold to an eligible business. For

8 purposes of this paragraph, the term "eligible business" means

9 a new electric generating facility certified pursuant to

10 Section 605-332 of the Department of Commerce and Economic

11 Opportunity Law of the 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 the effective date of this

18 amendatory Act of the 98th General Assembly, each month, from

19 the collections made under Section 9 of the Use Tax Act,

20 Section 9 of the Service Use Tax Act, Section 9 of the Service

21 Occupation Tax Act, and Section 3 of the Retailers' Occupation

22 Tax Act, the Department shall pay into the Tax Compliance and

23 Administration Fund, to be used, subject to appropriation, to

24 fund additional auditors and compliance personnel at the

25 Department of Revenue, an amount equal to 1/12 of 5% of 80% of

26 the cash receipts collected during the preceding fiscal year by

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1 the Audit Bureau of the Department under the Use Tax Act, the

2 Service Use Tax Act, the Service Occupation Tax Act, the

3 Retailers' Occupation Tax Act, and associated local occupation

4 and use taxes administered by the Department.

5 Of the remainder of the moneys received by the Department

6 pursuant to this Act, 75% thereof shall be paid into the State

7 Treasury and 25% shall be reserved in a special account and

8 used only for the transfer to the Common School Fund as part of

9 the monthly transfer from the General Revenue Fund in

10 accordance with Section 8a of the State Finance Act.

11 As soon as possible after the first day of each month, upon

12 certification of the Department of Revenue, the Comptroller

13 shall order transferred and the Treasurer shall transfer from

14 the General Revenue Fund to the Motor Fuel Tax Fund an amount

15 equal to 1.7% of 80% of the net revenue realized under this Act

16 for the second preceding month. Beginning April 1, 2000, this

17 transfer is no longer required and shall not be made.

18 Net revenue realized for a month shall be the revenue

19 collected by the State pursuant to this Act, less the amount

20 paid out during that month as refunds to taxpayers for

21 overpayment of liability.

22 For greater simplicity of administration, manufacturers,

23 importers and wholesalers whose products are sold at retail in

24 Illinois by numerous retailers, and who wish to do so, may

25 assume the responsibility for accounting and paying to the

26 Department all tax accruing under this Act with respect to such

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1 sales, if the retailers who are affected do not make written

2 objection to the Department to this arrangement.

3 (Source: P.A. 97-95, eff. 7-12-11; 97-333, eff. 8-12-11; 98-24,

4 eff. 6-19-13; 98-109, eff. 7-25-13; 98-496, eff. 1-1-14;

5 98-756, eff. 7-16-14; 98-1098, eff. 8-26-14.)

6 Section 25. The Service Use Tax Act is amended by changing

7 Sections 3-10, 3-70, and 9 as follows:

8 (35 ILCS 110/3-10) (from Ch. 120, par. 439.33-10)

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

10 Section, the tax imposed by this Act is at the rate of7.25%

11 ~~6.25%~~of the selling price of tangible personal property

12 transferred as an incident to the sale of service, but, for the

13 purpose of computing this tax, in no event shall the selling

14 price be less than the cost price of the property to the

15 serviceman.

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

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

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

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

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

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

2 December 31, 2018, and (iii) 100% of the selling price

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

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

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

6 100% of the proceeds of sales of gasohol made during that time.

7 With respect to majority blended ethanol fuel, as defined

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

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

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

11 December 31, 2018 but applies to 100% of the selling price

12 thereafter.

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

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

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

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

17 on or after July 1, 2003 and on or before December 31, 2018 and

18 (ii) 100% of the proceeds of the selling price thereafter. If,

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

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

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

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

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

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

25 With respect to 100% biodiesel, as defined in the Use Tax

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

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

2 by this Act does not apply to the proceeds of the selling price

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

4 on or after July 1, 2003 and on or before December 31, 2018 but

5 applies to 100% of the selling price thereafter.

6 At the election of any registered serviceman made for each

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

8 cost price of tangible personal property transferred as an

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

10 the case of servicemen transferring prescription drugs or

11 servicemen engaged in graphic arts production, of the aggregate

12 annual total gross receipts from all sales of service, the tax

13 imposed by this Act shall be based on the serviceman's cost

14 price of the tangible personal property transferred as an

15 incident to the sale of those services.

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

17 for immediate consumption and transferred incident to a sale of

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

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

20 Nursing Home Care Act, the ID/DD Community Care Act, the

21 Specialized Mental Health Rehabilitation Act of 2013, or the

22 Child Care Act of 1969. The tax shall also be imposed at the

23 rate of 1% on food for human consumption that is to be consumed

24 off the premises where it is sold (other than alcoholic

25 beverages, soft drinks, and food that has been prepared for

26 immediate consumption and is not otherwise included in this

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1 paragraph) and prescription and nonprescription medicines,

2 drugs, medical appliances, modifications to a motor vehicle for

3 the purpose of rendering it usable by a disabled person, and

4 insulin, urine testing materials, syringes, and needles used by

5 diabetics, for human use. 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 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 Pilot Program Act.

14 If the property that is acquired from a serviceman is

15 acquired outside Illinois and used outside Illinois before

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

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

18 shall be reduced by an amount that represents a reasonable

19 allowance for depreciation for the period of prior out-of-state

20 use.

21 (Source: P.A. 97-38, eff. 6-28-11; 97-227, eff. 1-1-12; 97-636,

22 eff. 6-1-12; 98-104, eff. 7-22-13; 98-122, eff. 1-1-14; 98-756,

23 eff. 7-16-14.)

24 (35 ILCS 110/3-70)

25 Sec. 3-70. Manufacturer's Purchase Credit. For purchases

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1 of machinery and equipment made on and after January 1, 1995

2 and through June 30, 2003, and on and after September 1, 2004

3 through August 30, 2014, a purchaser of manufacturing machinery

4 and equipment that qualifies for the exemption provided by

5 Section 2 of this Act earns a credit in an amount equal to a

6 fixed percentage of the tax which would have been incurred

7 under this Act on those purchases. For purchases of graphic

8 arts machinery and equipment made on or after July 1, 1996

9 through June 30, 2003, and on and after September 1, 2004

10 through August 30, 2014, a purchase of graphic arts machinery

11 and equipment that qualifies for the exemption provided by

12 paragraph (5) of Section 3-5 of this Act earns a credit in an

13 amount equal to a fixed percentage of the tax that would have

14 been incurred under this Act on those purchases. The credit

15 earned for the purchase of manufacturing machinery and

16 equipment and graphic arts machinery and equipment shall be

17 referred to as the Manufacturer's Purchase Credit. A graphic

18 arts producer is a person engaged in graphic arts production as

19 defined in Section 3-30 of the Service Occupation Tax Act.

20 Beginning July 1, 1996, all references in this Section to

21 manufacturers or manufacturing shall also refer to graphic arts

22 producers or graphic arts production.

23 The amount of credit shall be a percentage of the tax that

24 would have been incurred on the purchase of the manufacturing

25 machinery and equipment or graphic arts machinery and equipment

26 if the exemptions provided by Section 2 or paragraph (5) of

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1 Section 3-5 of this Act had not been applicable.

2 All purchases prior to October 1, 2003 of manufacturing

3 machinery and equipment and graphic arts machinery and

4 equipment that qualify for the exemptions provided by paragraph

5 (5) of Section 2 or paragraph (5) of Section 3-5 of this Act

6 qualify for the credit without regard to whether the serviceman

7 elected, or could have elected, under paragraph (7) of Section

8 2 of this Act to exclude the transaction from this Act. If the

9 serviceman's billing to the service customer separately states

10 a selling price for the exempt manufacturing machinery or

11 equipment or the exempt graphic arts machinery and equipment,

12 the credit shall be calculated, as otherwise provided herein,

13 based on that selling price. If the serviceman's billing does

14 not separately state a selling price for the exempt

15 manufacturing machinery and equipment or the exempt graphic

16 arts machinery and equipment, the credit shall be calculated,

17 as otherwise provided herein, based on 50% of the entire

18 billing. If the serviceman contracts to design, develop, and

19 produce special order manufacturing machinery and equipment or

20 special order graphic arts machinery and equipment, and the

21 billing does not separately state a selling price for such

22 special order machinery and equipment, the credit shall be

23 calculated, as otherwise provided herein, based on 50% of the

24 entire billing. The provisions of this paragraph are effective

25 for purchases made on or after January 1, 1995.

26 The percentage shall be as follows:

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1 (1) 15% for purchases made on or before June 30, 1995.

2 (2) 25% for purchases made after June 30, 1995, and on

3 or before June 30, 1996.

4 (3) 40% for purchases made after June 30, 1996, and on

5 or before June 30, 1997.

6 (4) 50% for purchases made on or after July 1, 1997.

7 (a) Manufacturer's Purchase Credit earned prior to July 1,

8 2003. This subsection (a) applies to Manufacturer's Purchase

9 Credit earned prior to July 1, 2003. A purchaser of production

10 related tangible personal property desiring to use the

11 Manufacturer's Purchase Credit shall certify to the seller

12 prior to October 1, 2003 that the purchaser is satisfying all

13 or part of the liability under the Use Tax Act or the Service

14 Use Tax Act that is due on the purchase of the production

15 related tangible personal property by use of a Manufacturer's

16 Purchase Credit. The Manufacturer's Purchase Credit

17 certification must be dated and shall include the name and

18 address of the purchaser, the purchaser's registration number,

19 if registered, the credit being applied, and a statement that

20 the State Use Tax or Service Use Tax liability is being

21 satisfied with the manufacturer's or graphic arts producer's

22 accumulated purchase credit. Certification may be incorporated

23 into the manufacturer's or graphic arts producer's purchase

24 order. Manufacturer's Purchase Credit certification provided

25 by the manufacturer or graphic arts producer prior to October

26 1, 2003 may be used to satisfy the retailer's or serviceman's

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1 liability under the Retailers' Occupation Tax Act or Service

2 Occupation Tax Act for the credit claimed, not to exceed7.25%

3 ~~6.25%~~ of the receipts subject to tax from a qualifying

4 purchase, but only if the retailer or serviceman reports the

5 Manufacturer's Purchase Credit claimed as required by the

6 Department. A Manufacturer's Purchase Credit reported on any

7 original or amended return filed under this Act after October

8 20, 2003 shall be disallowed. The Manufacturer's Purchase

9 Credit earned by purchase of exempt manufacturing machinery and

10 equipment or graphic arts machinery and equipment is a

11 non-transferable credit. A manufacturer or graphic arts

12 producer that enters into a contract involving the installation

13 of tangible personal property into real estate within a

14 manufacturing or graphic arts production facility, prior to

15 October 1, 2003, may authorize a construction contractor to

16 utilize credit accumulated by the manufacturer or graphic arts

17 producer to purchase the tangible personal property. A

18 manufacturer or graphic arts producer intending to use

19 accumulated credit to purchase such tangible personal property

20 shall execute a written contract authorizing the contractor to

21 utilize a specified dollar amount of credit. The contractor

22 shall furnish, prior to October 1, 2003, the supplier with the

23 manufacturer's or graphic arts producer's name, registration

24 or resale number, and a statement that a specific amount of the

25 Use Tax or Service Use Tax liability, not to exceed7.25% ~~6.25%~~

26 of the selling price, is being satisfied with the credit. The

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1 manufacturer or graphic arts producer shall remain liable to

2 timely report all information required by the annual Report of

3 Manufacturer's Purchase Credit Used for credit utilized by a

4 construction contractor.

5 No Manufacturer's Purchase Credit earned prior to July 1,

6 2003 may be used after October 1, 2003. The Manufacturer's

7 Purchase Credit may be used to satisfy liability under the Use

8 Tax Act or the Service Use Tax Act due on the purchase of

9 production related tangible personal property (including

10 purchases by a manufacturer, by a graphic arts producer, or a

11 lessor who rents or leases the use of the property to a

12 manufacturer or graphic arts producer) that does not otherwise

13 qualify for the manufacturing machinery and equipment

14 exemption or the graphic arts machinery and equipment

15 exemption. "Production related tangible personal property"

16 means (i) all tangible personal property used or consumed by

17 the purchaser in a manufacturing facility in which a

18 manufacturing process described in Section 2-45 of the

19 Retailers' Occupation Tax Act takes place, including tangible

20 personal property purchased for incorporation into real estate

21 within a manufacturing facility and including, but not limited

22 to, tangible personal property used or consumed in activities

23 such as pre-production material handling, receiving, quality

24 control, inventory control, storage, staging, and packaging

25 for shipping and transportation purposes; (ii) all tangible

26 personal property used or consumed by the purchaser in a

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1 graphic arts facility in which graphic arts production as

2 described in Section 2-30 of the Retailers' Occupation Tax Act

3 takes place, including tangible personal property purchased

4 for incorporation into real estate within a graphic arts

5 facility and including, but not limited to, all tangible

6 personal property used or consumed in activities such as

7 graphic arts preliminary or pre-press production,

8 pre-production material handling, receiving, quality control,

9 inventory control, storage, staging, sorting, labeling,

10 mailing, tying, wrapping, and packaging; and (iii) all tangible

11 personal property used or consumed by the purchaser for

12 research and development. "Production related tangible

13 personal property" does not include (i) tangible personal

14 property used, within or without a manufacturing or graphic

15 arts facility, in sales, purchasing, accounting, fiscal

16 management, marketing, personnel recruitment or selection, or

17 landscaping or (ii) tangible personal property required to be

18 titled or registered with a department, agency, or unit of

19 federal, state, or local government. The Manufacturer's

20 Purchase Credit may be used, prior to October 1, 2003, to

21 satisfy the tax arising either from the purchase of machinery

22 and equipment on or after January 1, 1995 for which the

23 manufacturing machinery and equipment exemption provided by

24 Section 2 of this Act was erroneously claimed, or the purchase

25 of machinery and equipment on or after July 1, 1996 for which

26 the exemption provided by paragraph (5) of Section 3-5 of this

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1 Act was erroneously claimed, but not in satisfaction of

2 penalty, if any, and interest for failure to pay the tax when

3 due. A purchaser of production related tangible personal

4 property who is required to pay Illinois Use Tax or Service Use

5 Tax on the purchase directly to the Department may, prior to

6 October 1, 2003, utilize the Manufacturer's Purchase Credit in

7 satisfaction of the tax arising from that purchase, but not in

8 satisfaction of penalty and interest. A purchaser who uses the

9 Manufacturer's Purchase Credit to purchase property which is

10 later determined not to be production related tangible personal

11 property may be liable for tax, penalty, and interest on the

12 purchase of that property as of the date of purchase but shall

13 be entitled to use the disallowed Manufacturer's Purchase

14 Credit, so long as it has not expired and is used prior to

15 October 1, 2003, on qualifying purchases of production related

16 tangible personal property not previously subject to credit

17 usage. The Manufacturer's Purchase Credit earned by a

18 manufacturer or graphic arts producer expires the last day of

19 the second calendar year following the calendar year in which

20 the credit arose. No Manufacturer's Purchase Credit may be used

21 after September 30, 2003 regardless of when that credit was

22 earned.

23 A purchaser earning Manufacturer's Purchase Credit shall

24 sign and file an annual Report of Manufacturer's Purchase

25 Credit Earned for each calendar year no later than the last day

26 of the sixth month following the calendar year in which a

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1 Manufacturer's Purchase Credit is earned. A Report of

2 Manufacturer's Purchase Credit Earned shall be filed on forms

3 as prescribed or approved by the Department and shall state,

4 for each month of the calendar year: (i) the total purchase

5 price of all purchases of exempt manufacturing or graphic arts

6 machinery on which the credit was earned; (ii) the total State

7 Use Tax or Service Use Tax which would have been due on those

8 items; (iii) the percentage used to calculate the amount of

9 credit earned; (iv) the amount of credit earned; and (v) such

10 other information as the Department may reasonably require. A

11 purchaser earning Manufacturer's Purchase Credit shall

12 maintain records which identify, as to each purchase of

13 manufacturing or graphic arts machinery and equipment on which

14 the purchaser earned Manufacturer's Purchase Credit, the

15 vendor (including, if applicable, either the vendor's

16 registration number or Federal Employer Identification

17 Number), the purchase price, and the amount of Manufacturer's

18 Purchase Credit earned on each purchase.

19 A purchaser using Manufacturer's Purchase Credit shall

20 sign and file an annual Report of Manufacturer's Purchase

21 Credit Used for each calendar year no later than the last day

22 of the sixth month following the calendar year in which a

23 Manufacturer's Purchase Credit is used. A Report of

24 Manufacturer's Purchase Credit Used shall be filed on forms as

25 prescribed or approved by the Department and shall state, for

26 each month of the calendar year: (i) the total purchase price

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1 of production related tangible personal property purchased

2 from Illinois suppliers; (ii) the total purchase price of

3 production related tangible personal property purchased from

4 out-of-state suppliers; (iii) the total amount of credit used

5 during such month; and (iv) such other information as the

6 Department may reasonably require. A purchaser using

7 Manufacturer's Purchase Credit shall maintain records that

8 identify, as to each purchase of production related tangible

9 personal property on which the purchaser used Manufacturer's

10 Purchase Credit, the vendor (including, if applicable, either

11 the vendor's registration number or Federal Employer

12 Identification Number), the purchase price, and the amount of

13 Manufacturer's Purchase Credit used on each purchase.

14 No annual report shall be filed before May 1, 1996 or after

15 June 30, 2004. A purchaser that fails to file an annual Report

16 of Manufacturer's Purchase Credit Earned or an annual Report of

17 Manufacturer's Purchase Credit Used by the last day of the

18 sixth month following the end of the calendar year shall

19 forfeit all Manufacturer's Purchase Credit for that calendar

20 year unless it establishes that its failure to file was due to

21 reasonable cause. Manufacturer's Purchase Credit reports may

22 be amended to report and claim credit on qualifying purchases

23 not previously reported at any time before the credit would

24 have expired, unless both the Department and the purchaser have

25 agreed to an extension of the statute of limitations for the

26 issuance of a notice of tax liability as provided in Section 4

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1 of the Retailers' Occupation Tax Act. If the time for

2 assessment or refund has been extended, then amended reports

3 for a calendar year may be filed at any time prior to the date

4 to which the statute of limitations for the calendar year or

5 portion thereof has been extended. No Manufacturer's Purchase

6 Credit report filed with the Department for periods prior to

7 January 1, 1995 shall be approved. Manufacturer's Purchase

8 Credit claimed on an amended report may be used, prior to

9 October 1, 2003, to satisfy tax liability under the Use Tax Act

10 or the Service Use Tax Act (i) on qualifying purchases of

11 production related tangible personal property made after the

12 date the amended report is filed or (ii) assessed by the

13 Department on qualifying purchases of production related

14 tangible personal property made in the case of manufacturers on

15 or after January 1, 1995, or in the case of graphic arts

16 producers on or after July 1, 1996.

17 If the purchaser is not the manufacturer or a graphic arts

18 producer, but rents or leases the use of the property to a

19 manufacturer or a graphic arts producer, the purchaser may

20 earn, report, and use Manufacturer's Purchase Credit in the

21 same manner as a manufacturer or graphic arts producer.

22 A purchaser shall not be entitled to any Manufacturer's

23 Purchase Credit for a purchase that is required to be reported

24 and is not timely reported as provided in this Section. A

25 purchaser remains liable for (i) any tax that was satisfied by

26 use of a Manufacturer's Purchase Credit, as of the date of

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1 purchase, if that use is not timely reported as required in

2 this Section and (ii) for any applicable penalties and interest

3 for failing to pay the tax when due. No Manufacturer's Purchase

4 Credit may be used after September 30, 2003 to satisfy any tax

5 liability imposed under this Act, including any audit

6 liability.

7 (b) Manufacturer's Purchase Credit earned on and after

8 September 1, 2004. This subsection (b) applies to

9 Manufacturer's Purchase Credit earned on or after September 1,

10 2004. Manufacturer's Purchase Credit earned on or after

11 September 1, 2004 may only be used to satisfy the Use Tax or

12 Service Use Tax liability incurred on production related

13 tangible personal property purchased on or after September 1,

14 2004. A purchaser of production related tangible personal

15 property desiring to use the Manufacturer's Purchase Credit

16 shall certify to the seller that the purchaser is satisfying

17 all or part of the liability under the Use Tax Act or the

18 Service Use Tax Act that is due on the purchase of the

19 production related tangible personal property by use of a

20 Manufacturer's Purchase Credit. The Manufacturer's Purchase

21 Credit certification must be dated and shall include the name

22 and address of the purchaser, the purchaser's registration

23 number, if registered, the credit being applied, and a

24 statement that the State Use Tax or Service Use Tax liability

25 is being satisfied with the manufacturer's or graphic arts

26 producer's accumulated purchase credit. Certification may be

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1 incorporated into the manufacturer's or graphic arts

2 producer's purchase order. Manufacturer's Purchase Credit

3 certification provided by the manufacturer or graphic arts

4 producer may be used to satisfy the retailer's or serviceman's

5 liability under the Retailers' Occupation Tax Act or Service

6 Occupation Tax Act for the credit claimed, not to exceed 7.25%

7 ~~6.25%~~ of the receipts subject to tax from a qualifying

8 purchase, but only if the retailer or serviceman reports the

9 Manufacturer's Purchase Credit claimed as required by the

10 Department. The Manufacturer's Purchase Credit earned by

11 purchase of exempt manufacturing machinery and equipment or

12 graphic arts machinery and equipment is a non-transferable

13 credit. A manufacturer or graphic arts producer that enters

14 into a contract involving the installation of tangible personal

15 property into real estate within a manufacturing or graphic

16 arts production facility may, on or after September 1, 2004,

17 authorize a construction contractor to utilize credit

18 accumulated by the manufacturer or graphic arts producer to

19 purchase the tangible personal property. A manufacturer or

20 graphic arts producer intending to use accumulated credit to

21 purchase such tangible personal property shall execute a

22 written contract authorizing the contractor to utilize a

23 specified dollar amount of credit. The contractor shall furnish

24 the supplier with the manufacturer's or graphic arts producer's

25 name, registration or resale number, and a statement that a

26 specific amount of the Use Tax or Service Use Tax liability,

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1 not to exceed 7.25% ~~6.25%~~ of the selling price, is being

2 satisfied with the credit. The manufacturer or graphic arts

3 producer shall remain liable to timely report all information

4 required by the annual Report of Manufacturer's Purchase Credit

5 Used for credit utilized by a construction contractor.

6 The Manufacturer's Purchase Credit may be used to satisfy

7 liability under the Use Tax Act or the Service Use Tax Act due

8 on the purchase, made on or after September 1, 2004, of