USE/OCC TX-ROAD MAINTENANCE

Illinois General Assembly - Full Text of HB2509

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB2509

Introduced 2/4/2025, by Rep. Jed Davis

SYNOPSIS AS INTRODUCED:

35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5

Amends the Use Tax Act, the Service Use Tax Act, the Service
Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that
certain materials furnished to a common interest community association
pursuant to a contract entered into with the highway commissioner of a road
district are exempt from the taxes imposed under those Acts.
LRB104 11822 HLH 21912 b

A BILL FOR

HB2509
LRB104 11822 HLH 21912 b
1

AN ACT concerning revenue.

2

Be it enacted by the People of the State of Illinois,
3
represented in the General Assembly:

4

Section 5.
The Use Tax Act is amended by changing Section
5
3-5 as follows:

6

(35 ILCS 105/3-5)
7

Sec. 3-5.
Exemptions.
Use, which, on and after January 1,
8
2025, includes use by a lessee, of the following tangible
9
personal property is exempt from the tax imposed by this Act:
10

(1) Personal property purchased from a corporation,
11
society, association, foundation, institution, or
12
organization, other than a limited liability company, that is
13
organized and operated as a not-for-profit service enterprise
14
for the benefit of persons 65 years of age or older if the
15
personal property was not purchased by the enterprise for the
16
purpose of resale by the enterprise.
17

(2) Personal property purchased by a not-for-profit
18
Illinois county fair association for use in conducting,
19
operating, or promoting the county fair.
20

(3) Personal property purchased by a not-for-profit arts
21
or cultural organization that establishes, by proof required
22
by the Department by rule, that it has received an exemption
23
under Section 501(c)(3) of the Internal Revenue Code and that

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1
is organized and operated primarily for the presentation or
2
support of arts or cultural programming, activities, or
3
services. These organizations include, but are not limited to,
4
music and dramatic arts organizations such as symphony
5
orchestras and theatrical groups, arts and cultural service
6
organizations, local arts councils, visual arts organizations,
7
and media arts organizations. On and after July 1, 2001 (the
8
effective date of Public Act 92-35), however, an entity
9
otherwise eligible for this exemption shall not make tax-free
10
purchases unless it has an active identification number issued
11
by the Department.
12

(4) Except as otherwise provided in this Act, personal
13
property purchased by a governmental body, by a corporation,
14
society, association, foundation, or institution organized and
15
operated exclusively for charitable, religious, or educational
16
purposes, or by a not-for-profit corporation, society,
17
association, foundation, institution, or organization that has
18
no compensated officers or employees and that is organized and
19
operated primarily for the recreation of persons 55 years of
20
age or older. A limited liability company may qualify for the
21
exemption under this paragraph only if the limited liability
22
company is organized and operated exclusively for educational
23
purposes. On and after July 1, 1987, however, no entity
24
otherwise eligible for this exemption shall make tax-free
25
purchases unless it has an active exemption identification
26
number issued by the Department.

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1

(5) Until July 1, 2003, a passenger car that is a
2
replacement vehicle to the extent that the purchase price of
3
the car is subject to the Replacement Vehicle Tax.
4

(6) Until July 1, 2003 and beginning again on September 1,
5
2004 through August 30, 2014, graphic arts machinery and
6
equipment, including repair and replacement parts, both new
7
and used, and including that manufactured on special order,
8
certified by the purchaser to be used primarily for graphic
9
arts production, and including machinery and equipment
10
purchased for lease. Equipment includes chemicals or chemicals
11
acting as catalysts but only if the chemicals or chemicals
12
acting as catalysts effect a direct and immediate change upon
13
a graphic arts product. Beginning on July 1, 2017, graphic
14
arts machinery and equipment is included in the manufacturing
15
and assembling machinery and equipment exemption under
16
paragraph (18).
17

(7) Farm chemicals.
18

(8) Legal tender, currency, medallions, or gold or silver
19
coinage issued by the State of Illinois, the government of the
20
United States of America, or the government of any foreign
21
country, and bullion.
22

(9) Personal property purchased from a teacher-sponsored
23
student organization affiliated with an elementary or
24
secondary school located in Illinois.
25

(10) A motor vehicle that is used for automobile renting,
26
as defined in the Automobile Renting Occupation and Use Tax

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LRB104 11822 HLH 21912 b
1
Act.
2

(11) Farm machinery and equipment, both new and used,
3
including that manufactured on special order, certified by the
4
purchaser to be used primarily for production agriculture or
5
State or federal agricultural programs, including individual
6
replacement parts for the machinery and equipment, including
7
machinery and equipment purchased for lease, and including
8
implements of husbandry defined in Section 1-130 of the
9
Illinois Vehicle Code, farm machinery and agricultural
10
chemical and fertilizer spreaders, and nurse wagons required
11
to be registered under Section 3-809 of the Illinois Vehicle
12
Code, but excluding other motor vehicles required to be
13
registered under the Illinois Vehicle Code. Horticultural
14
polyhouses or hoop houses used for propagating, growing, or
15
overwintering plants shall be considered farm machinery and
16
equipment under this item (11). Agricultural chemical tender
17
tanks and dry boxes shall include units sold separately from a
18
motor vehicle required to be licensed and units sold mounted
19
on a motor vehicle required to be licensed if the selling price
20
of the tender is separately stated.
21

Farm machinery and equipment shall include precision
22
farming equipment that is installed or purchased to be
23
installed on farm machinery and equipment, including, but not
24
limited to, tractors, harvesters, sprayers, planters, seeders,
25
or spreaders. Precision farming equipment includes, but is not
26
limited to, soil testing sensors, computers, monitors,

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1
software, global positioning and mapping systems, and other
2
such equipment.
3

Farm machinery and equipment also includes computers,
4
sensors, software, and related equipment used primarily in the
5
computer-assisted operation of production agriculture
6
facilities, equipment, and activities such as, but not limited
7
to, the collection, monitoring, and correlation of animal and
8
crop data for the purpose of formulating animal diets and
9
agricultural chemicals.
10

Beginning on January 1, 2024, farm machinery and equipment
11
also includes electrical power generation equipment used
12
primarily for production agriculture.
13

This item (11) is exempt from the provisions of Section
14
3-90.
15

(12) Until June 30, 2013, fuel and petroleum products sold
16
to or used by an air common carrier, certified by the carrier
17
to be used for consumption, shipment, or storage in the
18
conduct of its business as an air common carrier, for a flight
19
destined for or returning from a location or locations outside
20
the United States without regard to previous or subsequent
21
domestic stopovers.
22

Beginning July 1, 2013, fuel and petroleum products sold
23
to or used by an air carrier, certified by the carrier to be
24
used for consumption, shipment, or storage in the conduct of
25
its business as an air common carrier, for a flight that (i) is
26
engaged in foreign trade or is engaged in trade between the

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LRB104 11822 HLH 21912 b
1
United States and any of its possessions and (ii) transports
2
at least one individual or package for hire from the city of
3
origination to the city of final destination on the same
4
aircraft, without regard to a change in the flight number of
5
that aircraft.
6

(13) Proceeds of mandatory service charges separately
7
stated on customers' bills for the purchase and consumption of
8
food and beverages purchased at retail from a retailer, to the
9
extent that the proceeds of the service charge are in fact
10
turned over as tips or as a substitute for tips to the
11
employees who participate directly in preparing, serving,
12
hosting or cleaning up the food or beverage function with
13
respect to which the service charge is imposed.
14

(14) Until July 1, 2003, oil field exploration, drilling,
15
and production equipment, including (i) rigs and parts of
16
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
17
pipe and tubular goods, including casing and drill strings,
18
(iii) pumps and pump-jack units, (iv) storage tanks and flow
19
lines, (v) any individual replacement part for oil field
20
exploration, drilling, and production equipment, and (vi)
21
machinery and equipment purchased for lease; but excluding
22
motor vehicles required to be registered under the Illinois
23
Vehicle Code.
24

(15) Photoprocessing machinery and equipment, including
25
repair and replacement parts, both new and used, including
26
that manufactured on special order, certified by the purchaser

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LRB104 11822 HLH 21912 b
1
to be used primarily for photoprocessing, and including
2
photoprocessing machinery and equipment purchased for lease.
3

(16) Until July 1, 2028, coal and aggregate exploration,
4
mining, off-highway hauling, processing, maintenance, and
5
reclamation equipment, including replacement parts and
6
equipment, and including equipment purchased for lease, but
7
excluding motor vehicles required to be registered under the
8
Illinois Vehicle Code. The changes made to this Section by
9
Public Act 97-767 apply on and after July 1, 2003, but no claim
10
for credit or refund is allowed on or after August 16, 2013
11
(the effective date of Public Act 98-456) for such taxes paid
12
during the period beginning July 1, 2003 and ending on August
13
16, 2013 (the effective date of Public Act 98-456).
14

(17) Until July 1, 2003, distillation machinery and
15
equipment, sold as a unit or kit, assembled or installed by the
16
retailer, certified by the user to be used only for the
17
production of ethyl alcohol that will be used for consumption
18
as motor fuel or as a component of motor fuel for the personal
19
use of the user, and not subject to sale or resale.
20

(18) Manufacturing and assembling machinery and equipment
21
used primarily in the process of manufacturing or assembling
22
tangible personal property for wholesale or retail sale or
23
lease, whether that sale or lease is made directly by the
24
manufacturer or by some other person, whether the materials
25
used in the process are owned by the manufacturer or some other
26
person, or whether that sale or lease is made apart from or as

HB2509
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LRB104 11822 HLH 21912 b
1
an incident to the seller's engaging in the service occupation
2
of producing machines, tools, dies, jigs, patterns, gauges, or
3
other similar items of no commercial value on special order
4
for a particular purchaser. The exemption provided by this
5
paragraph (18) includes production related tangible personal
6
property, as defined in Section 3-50, purchased on or after
7
July 1, 2019. The exemption provided by this paragraph (18)
8
does not include machinery and equipment used in (i) the
9
generation of electricity for wholesale or retail sale; (ii)
10
the generation or treatment of natural or artificial gas for
11
wholesale or retail sale that is delivered to customers
12
through pipes, pipelines, or mains; or (iii) the treatment of
13
water for wholesale or retail sale that is delivered to
14
customers through pipes, pipelines, or mains. The provisions
15
of Public Act 98-583 are declaratory of existing law as to the
16
meaning and scope of this exemption. Beginning on July 1,
17
2017, the exemption provided by this paragraph (18) includes,
18
but is not limited to, graphic arts machinery and equipment,
19
as defined in paragraph (6) of this Section.
20

(19) Personal property delivered to a purchaser or
21
purchaser's donee inside Illinois when the purchase order for
22
that personal property was received by a florist located
23
outside Illinois who has a florist located inside Illinois
24
deliver the personal property.
25

(20) Semen used for artificial insemination of livestock
26
for direct agricultural production.

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LRB104 11822 HLH 21912 b
1

(21) Horses, or interests in horses, registered with and
2
meeting the requirements of any of the Arabian Horse Club
3
Registry of America, Appaloosa Horse Club, American Quarter
4
Horse Association, United States Trotting Association, or
5
Jockey Club, as appropriate, used for purposes of breeding or
6
racing for prizes. This item (21) is exempt from the
7
provisions of Section 3-90, and the exemption provided for
8
under this item (21) applies for all periods beginning May 30,
9
1995, but no claim for credit or refund is allowed on or after
10
January 1, 2008 for such taxes paid during the period
11
beginning May 30, 2000 and ending on January 1, 2008.
12

(22) Computers and communications equipment utilized for
13
any hospital purpose and equipment used in the diagnosis,
14
analysis, or treatment of hospital patients purchased by a
15
lessor who leases the equipment, under a lease of one year or
16
longer executed or in effect at the time the lessor would
17
otherwise be subject to the tax imposed by this Act, to a
18
hospital that has been issued an active tax exemption
19
identification number by the Department under Section 1g of
20
the Retailers' Occupation Tax Act. If the equipment is leased
21
in a manner that does not qualify for this exemption or is used
22
in any other non-exempt manner, the lessor shall be liable for
23
the tax imposed under this Act or the Service Use Tax Act, as
24
the case may be, based on the fair market value of the property
25
at the time the non-qualifying use occurs. No lessor shall
26
collect or attempt to collect an amount (however designated)

HB2509
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LRB104 11822 HLH 21912 b
1
that purports to reimburse that lessor for the tax imposed by
2
this Act or the Service Use Tax Act, as the case may be, if the
3
tax has not been paid by the lessor. If a lessor improperly
4
collects any such amount from the lessee, the lessee shall
5
have a legal right to claim a refund of that amount from the
6
lessor. If, however, that amount is not refunded to the lessee
7
for any reason, the lessor is liable to pay that amount to the
8
Department.
9

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

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LRB104 11822 HLH 21912 b
1
lessor. If, however, that amount is not refunded to the lessee
2
for any reason, the lessor is liable to pay that amount to the
3
Department.
4

(24) Beginning with taxable years ending on or after
5
December 31, 1995 and ending with taxable years ending on or
6
before December 31, 2004, personal property that is donated
7
for disaster relief to be used in a State or federally declared
8
disaster area in Illinois or bordering Illinois by a
9
manufacturer or retailer that is registered in this State to a
10
corporation, society, association, foundation, or institution
11
that has been issued a sales tax exemption identification
12
number by the Department that assists victims of the disaster
13
who reside within the declared disaster area.
14

(25) Beginning with taxable years ending on or after
15
December 31, 1995 and ending with taxable years ending on or
16
before December 31, 2004, personal property that is used in
17
the performance of infrastructure repairs in this State,
18
including, but not limited to, municipal roads and streets,
19
access roads, bridges, sidewalks, waste disposal systems,
20
water and sewer line extensions, water distribution and
21
purification facilities, storm water drainage and retention
22
facilities, and sewage treatment facilities, resulting from a
23
State or federally declared disaster in Illinois or bordering
24
Illinois when such repairs are initiated on facilities located
25
in the declared disaster area within 6 months after the
26
disaster.

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LRB104 11822 HLH 21912 b
1

(26) Beginning July 1, 1999, game or game birds purchased
2
at a "game breeding and hunting preserve area" as that term is
3
used in the Wildlife Code. This paragraph is exempt from the
4
provisions of Section 3-90.
5

(27) A motor vehicle, as that term is defined in Section
6
1-146 of the Illinois Vehicle Code, that is donated to a
7
corporation, limited liability company, society, association,
8
foundation, or institution that is determined by the
9
Department to be organized and operated exclusively for
10
educational purposes. For purposes of this exemption, "a
11
corporation, limited liability company, society, association,
12
foundation, or institution organized and operated exclusively
13
for educational purposes" means all tax-supported public
14
schools, private schools that offer systematic instruction in
15
useful branches of learning by methods common to public
16
schools and that compare favorably in their scope and
17
intensity with the course of study presented in tax-supported
18
schools, and vocational or technical schools or institutes
19
organized and operated exclusively to provide a course of
20
study of not less than 6 weeks duration and designed to prepare
21
individuals to follow a trade or to pursue a manual,
22
technical, mechanical, industrial, business, or commercial
23
occupation.
24

(28) Beginning January 1, 2000, personal property,
25
including food, purchased through fundraising events for the
26
benefit of a public or private elementary or secondary school,

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LRB104 11822 HLH 21912 b
1
a group of those schools, or one or more school districts if
2
the events are sponsored by an entity recognized by the school
3
district that consists primarily of volunteers and includes
4
parents and teachers of the school children. This paragraph
5
does not apply to fundraising events (i) for the benefit of
6
private home instruction or (ii) for which the fundraising
7
entity purchases the personal property sold at the events from
8
another individual or entity that sold the property for the
9
purpose of resale by the fundraising entity and that profits
10
from the sale to the fundraising entity. This paragraph is
11
exempt from the provisions of Section 3-90.
12

(29) Beginning January 1, 2000 and through December 31,
13
2001, new or used automatic vending machines that prepare and
14
serve hot food and beverages, including coffee, soup, and
15
other items, and replacement parts for these machines.
16
Beginning January 1, 2002 and through June 30, 2003, machines
17
and parts for machines used in commercial, coin-operated
18
amusement and vending business if a use or occupation tax is
19
paid on the gross receipts derived from the use of the
20
commercial, coin-operated amusement and vending machines. This
21
paragraph is exempt from the provisions of Section 3-90.
22

(30) Beginning January 1, 2001 and through June 30, 2016,
23
food for human consumption that is to be consumed off the
24
premises where it is sold (other than alcoholic beverages,
25
soft drinks, and food that has been prepared for immediate
26
consumption) and prescription and nonprescription medicines,

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LRB104 11822 HLH 21912 b
1
drugs, medical appliances, and insulin, urine testing
2
materials, syringes, and needles used by diabetics, for human
3
use, when purchased for use by a person receiving medical
4
assistance under Article V of the Illinois Public Aid Code who
5
resides in a licensed long-term care facility, as defined in
6
the Nursing Home Care Act, or in a licensed facility as defined
7
in the ID/DD Community Care Act, the MC/DD Act, or the
8
Specialized Mental Health Rehabilitation Act of 2013.
9

(31) Beginning on August 2, 2001 (the effective date of
10
Public Act 92-227), computers and communications equipment
11
utilized for any hospital purpose and equipment used in the
12
diagnosis, analysis, or treatment of hospital patients
13
purchased by a lessor who leases the equipment, under a lease
14
of one year or longer executed or in effect at the time the
15
lessor would otherwise be subject to the tax imposed by this
16
Act, to a hospital that has been issued an active tax exemption
17
identification number by the Department under Section 1g of
18
the Retailers' Occupation Tax Act. If the equipment is leased
19
in a manner that does not qualify for this exemption or is used
20
in any other nonexempt manner, the lessor shall be liable for
21
the tax imposed under this Act or the Service Use Tax Act, as
22
the case may be, based on the fair market value of the property
23
at the time the nonqualifying use occurs. No lessor shall
24
collect or attempt to collect an amount (however designated)
25
that purports to reimburse that lessor for the tax imposed by
26
this Act or the Service Use Tax Act, as the case may be, if the

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LRB104 11822 HLH 21912 b
1
tax has not been paid by the lessor. If a lessor improperly
2
collects any such amount from the lessee, the lessee shall
3
have a legal right to claim a refund of that amount from the
4
lessor. If, however, that amount is not refunded to the lessee
5
for any reason, the lessor is liable to pay that amount to the
6
Department. This paragraph is exempt from the provisions of
7
Section 3-90.
8

(32) Beginning on August 2, 2001 (the effective date of
9
Public Act 92-227), personal property purchased by a lessor
10
who leases the property, under a lease of one year or longer
11
executed or in effect at the time the lessor would otherwise be
12
subject to the tax imposed by this Act, to a governmental body
13
that has been issued an active sales tax exemption
14
identification number by the Department under Section 1g of
15
the Retailers' Occupation Tax Act. If the property is leased
16
in a manner that does not qualify for this exemption or used in
17
any other nonexempt manner, the lessor shall be liable for the
18
tax imposed under this Act or the Service Use Tax Act, as the
19
case may be, based on the fair market value of the property at
20
the time the nonqualifying use occurs. No lessor shall collect
21
or attempt to collect an amount (however designated) that
22
purports to reimburse that lessor for the tax imposed by this
23
Act or the Service Use Tax Act, as the case may be, if the tax
24
has not been paid by the lessor. If a lessor improperly
25
collects any such amount from the lessee, the lessee shall
26
have a legal right to claim a refund of that amount from the

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LRB104 11822 HLH 21912 b
1
lessor. If, however, that amount is not refunded to the lessee
2
for any reason, the lessor is liable to pay that amount to the
3
Department. This paragraph is exempt from the provisions of
4
Section 3-90.
5

(33) On and after July 1, 2003 and through June 30, 2004,
6
the use in this State of motor vehicles of the second division
7
with a gross vehicle weight in excess of 8,000 pounds and that
8
are subject to the commercial distribution fee imposed under
9
Section 3-815.1 of the Illinois Vehicle Code. Beginning on
10
July 1, 2004 and through June 30, 2005, the use in this State
11
of motor vehicles of the second division: (i) with a gross
12
vehicle weight rating in excess of 8,000 pounds; (ii) that are
13
subject to the commercial distribution fee imposed under
14
Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
15
are primarily used for commercial purposes. Through June 30,
16
2005, this exemption applies to repair and replacement parts
17
added after the initial purchase of such a motor vehicle if
18
that motor vehicle is used in a manner that would qualify for
19
the rolling stock exemption otherwise provided for in this
20
Act. For purposes of this paragraph, the term "used for
21
commercial purposes" means the transportation of persons or
22
property in furtherance of any commercial or industrial
23
enterprise, whether for-hire or not.
24

(34) Beginning January 1, 2008, tangible personal property
25
used in the construction or maintenance of a community water
26
supply, as defined under Section 3.145 of the Environmental

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Protection Act, that is operated by a not-for-profit
2
corporation that holds a valid water supply permit issued
3
under Title IV of the Environmental Protection Act. This
4
paragraph is exempt from the provisions of Section 3-90.
5

(35) Beginning January 1, 2010 and continuing through
6
December 31, 2029, materials, parts, equipment, components,
7
and furnishings incorporated into or upon an aircraft as part
8
of the modification, refurbishment, completion, replacement,
9
repair, or maintenance of the aircraft. This exemption
10
includes consumable supplies used in the modification,
11
refurbishment, completion, replacement, repair, and
12
maintenance of aircraft. However, until January 1, 2024, this
13
exemption excludes any materials, parts, equipment,
14
components, and consumable supplies used in the modification,
15
replacement, repair, and maintenance of aircraft engines or
16
power plants, whether such engines or power plants are
17
installed or uninstalled upon any such aircraft. "Consumable
18
supplies" include, but are not limited to, adhesive, tape,
19
sandpaper, general purpose lubricants, cleaning solution,
20
latex gloves, and protective films.
21

Beginning January 1, 2010 and continuing through December
22
31, 2023, this exemption applies only to the use of qualifying
23
tangible personal property by persons who modify, refurbish,
24
complete, repair, replace, or maintain aircraft and who (i)
25
hold an Air Agency Certificate and are empowered to operate an
26
approved repair station by the Federal Aviation

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Administration, (ii) have a Class IV Rating, and (iii) conduct
2
operations in accordance with Part 145 of the Federal Aviation
3
Regulations. From January 1, 2024 through December 31, 2029,
4
this exemption applies only to the use of qualifying tangible
5
personal property by: (A) persons who modify, refurbish,
6
complete, repair, replace, or maintain aircraft and who (i)
7
hold an Air Agency Certificate and are empowered to operate an
8
approved repair station by the Federal Aviation
9
Administration, (ii) have a Class IV Rating, and (iii) conduct
10
operations in accordance with Part 145 of the Federal Aviation
11
Regulations; and (B) persons who engage in the modification,
12
replacement, repair, and maintenance of aircraft engines or
13
power plants without regard to whether or not those persons
14
meet the qualifications of item (A).
15

The exemption does not include aircraft operated by a
16
commercial air carrier providing scheduled passenger air
17
service pursuant to authority issued under Part 121 or Part
18
129 of the Federal Aviation Regulations. The changes made to
19
this paragraph (35) by Public Act 98-534 are declarative of
20
existing law. It is the intent of the General Assembly that the
21
exemption under this paragraph (35) applies continuously from
22
January 1, 2010 through December 31, 2024; however, no claim
23
for credit or refund is allowed for taxes paid as a result of
24
the disallowance of this exemption on or after January 1, 2015
25
and prior to February 5, 2020 (the effective date of Public Act
26
101-629).

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(36) Tangible personal property purchased by a
2
public-facilities corporation, as described in Section
3
11-65-10 of the Illinois Municipal Code, for purposes of
4
constructing or furnishing a municipal convention hall, but
5
only if the legal title to the municipal convention hall is
6
transferred to the municipality without any further
7
consideration by or on behalf of the municipality at the time
8
of the completion of the municipal convention hall or upon the
9
retirement or redemption of any bonds or other debt
10
instruments issued by the public-facilities corporation in
11
connection with the development of the municipal convention
12
hall. This exemption includes existing public-facilities
13
corporations as provided in Section 11-65-25 of the Illinois
14
Municipal Code. This paragraph is exempt from the provisions
15
of Section 3-90.
16

(37) Beginning January 1, 2017 and through December 31,
17
2026, menstrual pads, tampons, and menstrual cups.
18

(38) Merchandise that is subject to the Rental Purchase
19
Agreement Occupation and Use Tax. The purchaser must certify
20
that the item is purchased to be rented subject to a
21
rental-purchase agreement, as defined in the Rental-Purchase
22
Agreement Act, and provide proof of registration under the
23
Rental Purchase Agreement Occupation and Use Tax Act. This
24
paragraph is exempt from the provisions of Section 3-90.
25

(39) Tangible personal property purchased by a purchaser
26
who is exempt from the tax imposed by this Act by operation of

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federal law. This paragraph is exempt from the provisions of
2
Section 3-90.
3

(40) Qualified tangible personal property used in the
4
construction or operation of a data center that has been
5
granted a certificate of exemption by the Department of
6
Commerce and Economic Opportunity, whether that tangible
7
personal property is purchased by the owner, operator, or
8
tenant of the data center or by a contractor or subcontractor
9
of the owner, operator, or tenant. Data centers that would
10
have qualified for a certificate of exemption prior to January
11
1, 2020 had Public Act 101-31 been in effect may apply for and
12
obtain an exemption for subsequent purchases of computer
13
equipment or enabling software purchased or leased to upgrade,
14
supplement, or replace computer equipment or enabling software
15
purchased or leased in the original investment that would have
16
qualified.
17

The Department of Commerce and Economic Opportunity shall
18
grant a certificate of exemption under this item (40) to
19
qualified data centers as defined by Section 605-1025 of the
20
Department of Commerce and Economic Opportunity Law of the
21
Civil Administrative Code of Illinois.
22

For the purposes of this item (40):
23

"Data center" means a building or a series of
24

buildings rehabilitated or constructed to house working
25

servers in one physical location or multiple sites within
26

the State of Illinois.

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"Qualified tangible personal property" means:
2

electrical systems and equipment; climate control and
3

chilling equipment and systems; mechanical systems and
4

equipment; monitoring and secure systems; emergency
5

generators; hardware; computers; servers; data storage
6

devices; network connectivity equipment; racks; cabinets;
7

telecommunications cabling infrastructure; raised floor
8

systems; peripheral components or systems; software;
9

mechanical, electrical, or plumbing systems; battery
10

systems; cooling systems and towers; temperature control
11

systems; other cabling; and other data center
12

infrastructure equipment and systems necessary to operate
13

qualified tangible personal property, including fixtures;
14

and component parts of any of the foregoing, including
15

installation, maintenance, repair, refurbishment, and
16

replacement of qualified tangible personal property to
17

generate, transform, transmit, distribute, or manage
18

electricity necessary to operate qualified tangible
19

personal property; and all other tangible personal
20

property that is essential to the operations of a computer
21

data center. The term "qualified tangible personal
22

property" also includes building materials physically
23

incorporated into the qualifying data center. To document
24

the exemption allowed under this Section, the retailer
25

must obtain from the purchaser a copy of the certificate
26

of eligibility issued by the Department of Commerce and

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Economic Opportunity.
2

This item (40) is exempt from the provisions of Section
3
3-90.
4

(41) Beginning July 1, 2022, breast pumps, breast pump
5
collection and storage supplies, and breast pump kits. This
6
item (41) is exempt from the provisions of Section 3-90. As
7
used in this item (41):
8

"Breast pump" means an electrically controlled or
9

manually controlled pump device designed or marketed to be
10

used to express milk from a human breast during lactation,
11

including the pump device and any battery, AC adapter, or
12

other power supply unit that is used to power the pump
13

device and is packaged and sold with the pump device at the
14

time of sale.
15

"Breast pump collection and storage supplies" means
16

items of tangible personal property designed or marketed
17

to be used in conjunction with a breast pump to collect
18

milk expressed from a human breast and to store collected
19

milk until it is ready for consumption.
20

"Breast pump collection and storage supplies"
21

includes, but is not limited to: breast shields and breast
22

shield connectors; breast pump tubes and tubing adapters;
23

breast pump valves and membranes; backflow protectors and
24

backflow protector adaptors; bottles and bottle caps
25

specific to the operation of the breast pump; and breast
26

milk storage bags.

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"Breast pump collection and storage supplies" does not
2

include: (1) bottles and bottle caps not specific to the
3

operation of the breast pump; (2) breast pump travel bags
4

and other similar carrying accessories, including ice
5

packs, labels, and other similar products; (3) breast pump
6

cleaning supplies; (4) nursing bras, bra pads, breast
7

shells, and other similar products; and (5) creams,
8

ointments, and other similar products that relieve
9

breastfeeding-related symptoms or conditions of the
10

breasts or nipples, unless sold as part of a breast pump
11

kit that is pre-packaged by the breast pump manufacturer
12

or distributor.
13

"Breast pump kit" means a kit that: (1) contains no
14

more than a breast pump, breast pump collection and
15

storage supplies, a rechargeable battery for operating the
16

breast pump, a breastmilk cooler, bottle stands, ice
17

packs, and a breast pump carrying case; and (2) is
18

pre-packaged as a breast pump kit by the breast pump
19

manufacturer or distributor.
20

(42) Tangible personal property sold by or on behalf of
21
the State Treasurer pursuant to the Revised Uniform Unclaimed
22
Property Act. This item (42) is exempt from the provisions of
23
Section 3-90.
24

(43) Beginning on January 1, 2024, tangible personal
25
property purchased by an active duty member of the armed
26
forces of the United States who presents valid military

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identification and purchases the property using a form of
2
payment where the federal government is the payor. The member
3
of the armed forces must complete, at the point of sale, a form
4
prescribed by the Department of Revenue documenting that the
5
transaction is eligible for the exemption under this
6
paragraph. Retailers must keep the form as documentation of
7
the exemption in their records for a period of not less than 6
8
years. "Armed forces of the United States" means the United
9
States Army, Navy, Air Force, Space Force, Marine Corps, or
10
Coast Guard. This paragraph is exempt from the provisions of
11
Section 3-90.
12

(44) Beginning July 1, 2024, home-delivered meals provided
13
to Medicare or Medicaid recipients when payment is made by an
14
intermediary, such as a Medicare Administrative Contractor, a
15
Managed Care Organization, or a Medicare Advantage
16
Organization, pursuant to a government contract. This item
17
(44) is exempt from the provisions of Section 3-90.
18

(45)

(44)
Beginning on January 1, 2026, as further defined
19
in Section 3-10, food for human consumption that is to be
20
consumed off the premises where it is sold (other than
21
alcoholic beverages, food consisting of or infused with adult
22
use cannabis, soft drinks, candy, and food that has been
23
prepared for immediate consumption). This item
(45)

(44)
is
24
exempt from the provisions of Section 3-90.
25

(46)

(44)
Use by the lessee of the following leased
26
tangible personal property:

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(1) software transferred subject to a license that
2

meets the following requirements:
3

(A) it is evidenced by a written agreement signed
4

by the licensor and the customer;
5

(i) an electronic agreement in which the
6

customer accepts the license by means of an
7

electronic signature that is verifiable and can be
8

authenticated and is attached to or made part of
9

the license will comply with this requirement;
10

(ii) a license agreement in which the customer
11

electronically accepts the terms by clicking "I
12

agree" does not comply with this requirement;
13

(B) it restricts the customer's duplication and
14

use of the software;
15

(C) it prohibits the customer from licensing,
16

sublicensing, or transferring the software to a third
17

party (except to a related party) without the
18

permission and continued control of the licensor;
19

(D) the licensor has a policy of providing another
20

copy at minimal or no charge if the customer loses or
21

damages the software, or of permitting the licensee to
22

make and keep an archival copy, and such policy is
23

either stated in the license agreement, supported by
24

the licensor's books and records, or supported by a
25

notarized statement made under penalties of perjury by
26

the licensor; and

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(E) the customer must destroy or return all copies
2

of the software to the licensor at the end of the
3

license period; this provision is deemed to be met, in
4

the case of a perpetual license, without being set
5

forth in the license agreement; and
6

(2) property that is subject to a tax on lease
7

receipts imposed by a home rule unit of local government
8

if the ordinance imposing that tax was adopted prior to
9

January 1, 2023.
10

(47) Materials furnished to a common interest community
11
association pursuant to a contract entered into with the
12
highway commissioner of a road district under subsection (k)
13
of Section 1-30 of the Common Interest Community Association
14
Act. This paragraph is exempt from the provisions of Section
15
3-90.

16
(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
17
Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
18
eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
19
Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
20
eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
21
103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
22
7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; revised
23
11-26-24.)

24

Section 10.
The Service Use Tax Act is amended by changing
25
Section 3-5 as follows:

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(35 ILCS 110/3-5)
2

Sec. 3-5.
Exemptions.
Use of the following tangible
3
personal property is exempt from the tax imposed by this Act:
4

(1) Personal property purchased from a corporation,
5
society, association, foundation, institution, or
6
organization, other than a limited liability company, that is
7
organized and operated as a not-for-profit service enterprise
8
for the benefit of persons 65 years of age or older if the
9
personal property was not purchased by the enterprise for the
10
purpose of resale by the enterprise.
11

(2) Personal property purchased by a non-profit Illinois
12
county fair association for use in conducting, operating, or
13
promoting the county fair.
14

(3) Personal property purchased by a not-for-profit arts
15
or cultural organization that establishes, by proof required
16
by the Department by rule, that it has received an exemption
17
under Section 501(c)(3) of the Internal Revenue Code and that
18
is organized and operated primarily for the presentation or
19
support of arts or cultural programming, activities, or
20
services. These organizations include, but are not limited to,
21
music and dramatic arts organizations such as symphony
22
orchestras and theatrical groups, arts and cultural service
23
organizations, local arts councils, visual arts organizations,
24
and media arts organizations. On and after July 1, 2001 (the
25
effective date of Public Act 92-35), however, an entity

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otherwise eligible for this exemption shall not make tax-free
2
purchases unless it has an active identification number issued
3
by the Department.
4

(4) Legal tender, currency, medallions, or gold or silver
5
coinage issued by the State of Illinois, the government of the
6
United States of America, or the government of any foreign
7
country, and bullion.
8

(5) Until July 1, 2003 and beginning again on September 1,
9
2004 through August 30, 2014, graphic arts machinery and
10
equipment, including repair and replacement parts, both new
11
and used, and including that manufactured on special order or
12
purchased for lease, certified by the purchaser to be used
13
primarily for graphic arts production. Equipment includes
14
chemicals or chemicals acting as catalysts but only if the
15
chemicals or chemicals acting as catalysts effect a direct and
16
immediate change upon a graphic arts product. Beginning on
17
July 1, 2017, graphic arts machinery and equipment is included
18
in the manufacturing and assembling machinery and equipment
19
exemption under Section 2 of this Act.
20

(6) Personal property purchased from a teacher-sponsored
21
student organization affiliated with an elementary or
22
secondary school located in Illinois.
23

(7) Farm machinery and equipment, both new and used,
24
including that manufactured on special order, certified by the
25
purchaser to be used primarily for production agriculture or
26
State or federal agricultural programs, including individual

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replacement parts for the machinery and equipment, including
2
machinery and equipment purchased for lease, and including
3
implements of husbandry defined in Section 1-130 of the
4
Illinois Vehicle Code, farm machinery and agricultural
5
chemical and fertilizer spreaders, and nurse wagons required
6
to be registered under Section 3-809 of the Illinois Vehicle
7
Code, but excluding other motor vehicles required to be
8
registered under the Illinois Vehicle Code. Horticultural
9
polyhouses or hoop houses used for propagating, growing, or
10
overwintering plants shall be considered farm machinery and
11
equipment under this item (7). Agricultural chemical tender
12
tanks and dry boxes shall include units sold separately from a
13
motor vehicle required to be licensed and units sold mounted
14
on a motor vehicle required to be licensed if the selling price
15
of the tender is separately stated.
16

Farm machinery and equipment shall include precision
17
farming equipment that is installed or purchased to be
18
installed on farm machinery and equipment, including, but not
19
limited to, tractors, harvesters, sprayers, planters, seeders,
20
or spreaders. Precision farming equipment includes, but is not
21
limited to, soil testing sensors, computers, monitors,
22
software, global positioning and mapping systems, and other
23
such equipment.
24

Farm machinery and equipment also includes computers,
25
sensors, software, and related equipment used primarily in the
26
computer-assisted operation of production agriculture

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facilities, equipment, and activities such as, but not limited
2
to, the collection, monitoring, and correlation of animal and
3
crop data for the purpose of formulating animal diets and
4
agricultural chemicals.
5

Beginning on January 1, 2024, farm machinery and equipment
6
also includes electrical power generation equipment used
7
primarily for production agriculture.
8

This item (7) is exempt from the provisions of Section
9
3-75.
10

(8) Until June 30, 2013, fuel and petroleum products sold
11
to or used by an air common carrier, certified by the carrier
12
to be used for consumption, shipment, or storage in the
13
conduct of its business as an air common carrier, for a flight
14
destined for or returning from a location or locations outside
15
the United States without regard to previous or subsequent
16
domestic stopovers.
17

Beginning July 1, 2013, fuel and petroleum products sold
18
to or used by an air carrier, certified by the carrier to be
19
used for consumption, shipment, or storage in the conduct of
20
its business as an air common carrier, for a flight that (i) is
21
engaged in foreign trade or is engaged in trade between the
22
United States and any of its possessions and (ii) transports
23
at least one individual or package for hire from the city of
24
origination to the city of final destination on the same
25
aircraft, without regard to a change in the flight number of
26
that aircraft.

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(9) Proceeds of mandatory service charges separately
2
stated on customers' bills for the purchase and consumption of
3
food and beverages acquired as an incident to the purchase of a
4
service from a serviceman, to the extent that the proceeds of
5
the service charge are in fact turned over as tips or as a
6
substitute for tips to the employees who participate directly
7
in preparing, serving, hosting or cleaning up the food or
8
beverage function with respect to which the service charge is
9
imposed.
10

(10) Until July 1, 2003, oil field exploration, drilling,
11
and production equipment, including (i) rigs and parts of
12
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
13
pipe and tubular goods, including casing and drill strings,
14
(iii) pumps and pump-jack units, (iv) storage tanks and flow
15
lines, (v) any individual replacement part for oil field
16
exploration, drilling, and production equipment, and (vi)
17
machinery and equipment purchased for lease; but excluding
18
motor vehicles required to be registered under the Illinois
19
Vehicle Code.
20

(11) Proceeds from the sale of photoprocessing machinery
21
and equipment, including repair and replacement parts, both
22
new and used, including that manufactured on special order,
23
certified by the purchaser to be used primarily for
24
photoprocessing, and including photoprocessing machinery and
25
equipment purchased for lease.
26

(12) Until July 1, 2028, coal and aggregate exploration,

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mining, off-highway hauling, processing, maintenance, and
2
reclamation equipment, including replacement parts and
3
equipment, and including equipment purchased for lease, but
4
excluding motor vehicles required to be registered under the
5
Illinois Vehicle Code. The changes made to this Section by
6
Public Act 97-767 apply on and after July 1, 2003, but no claim
7
for credit or refund is allowed on or after August 16, 2013
8
(the effective date of Public Act 98-456) for such taxes paid
9
during the period beginning July 1, 2003 and ending on August
10
16, 2013 (the effective date of Public Act 98-456).
11

(13) Semen used for artificial insemination of livestock
12
for direct agricultural production.
13

(14) Horses, or interests in horses, registered with and
14
meeting the requirements of any of the Arabian Horse Club
15
Registry of America, Appaloosa Horse Club, American Quarter
16
Horse Association, United States Trotting Association, or
17
Jockey Club, as appropriate, used for purposes of breeding or
18
racing for prizes. This item (14) is exempt from the
19
provisions of Section 3-75, and the exemption provided for
20
under this item (14) applies for all periods beginning May 30,
21
1995, but no claim for credit or refund is allowed on or after
22
January 1, 2008 (the effective date of Public Act 95-88) for
23
such taxes paid during the period beginning May 30, 2000 and
24
ending on January 1, 2008 (the effective date of Public Act
25
95-88).
26

(15) Computers and communications equipment utilized for

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

(16) Personal property purchased by a lessor who leases
24
the property, under a lease of one year or longer executed or
25
in effect at the time the lessor would otherwise be subject to
26
the tax imposed by this Act, to a governmental body that has

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

(17) Beginning with taxable years ending on or after
18
December 31, 1995 and ending with taxable years ending on or
19
before December 31, 2004, personal property that is donated
20
for disaster relief to be used in a State or federally declared
21
disaster area in Illinois or bordering Illinois by a
22
manufacturer or retailer that is registered in this State to a
23
corporation, society, association, foundation, or institution
24
that has been issued a sales tax exemption identification
25
number by the Department that assists victims of the disaster
26
who reside within the declared disaster area.

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(18) Beginning with taxable years ending on or after
2
December 31, 1995 and ending with taxable years ending on or
3
before December 31, 2004, personal property that is used in
4
the performance of infrastructure repairs in this State,
5
including, but not limited to, municipal roads and streets,
6
access roads, bridges, sidewalks, waste disposal systems,
7
water and sewer line extensions, water distribution and
8
purification facilities, storm water drainage and retention
9
facilities, and sewage treatment facilities, resulting from a
10
State or federally declared disaster in Illinois or bordering
11
Illinois when such repairs are initiated on facilities located
12
in the declared disaster area within 6 months after the
13
disaster.
14

(19) Beginning July 1, 1999, game or game birds purchased
15
at a "game breeding and hunting preserve area" as that term is
16
used in the Wildlife Code. This paragraph is exempt from the
17
provisions of Section 3-75.
18

(20) A motor vehicle, as that term is defined in Section
19
1-146 of the Illinois Vehicle Code, that is donated to a
20
corporation, limited liability company, society, association,
21
foundation, or institution that is determined by the
22
Department to be organized and operated exclusively for
23
educational purposes. For purposes of this exemption, "a
24
corporation, limited liability company, society, association,
25
foundation, or institution organized and operated exclusively
26
for educational purposes" means all tax-supported public

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schools, private schools that offer systematic instruction in
2
useful branches of learning by methods common to public
3
schools and that compare favorably in their scope and
4
intensity with the course of study presented in tax-supported
5
schools, and vocational or technical schools or institutes
6
organized and operated exclusively to provide a course of
7
study of not less than 6 weeks duration and designed to prepare
8
individuals to follow a trade or to pursue a manual,
9
technical, mechanical, industrial, business, or commercial
10
occupation.
11

(21) Beginning January 1, 2000, personal property,
12
including food, purchased through fundraising events for the
13
benefit of a public or private elementary or secondary school,
14
a group of those schools, or one or more school districts if
15
the events are sponsored by an entity recognized by the school
16
district that consists primarily of volunteers and includes
17
parents and teachers of the school children. This paragraph
18
does not apply to fundraising events (i) for the benefit of
19
private home instruction or (ii) for which the fundraising
20
entity purchases the personal property sold at the events from
21
another individual or entity that sold the property for the
22
purpose of resale by the fundraising entity and that profits
23
from the sale to the fundraising entity. This paragraph is
24
exempt from the provisions of Section 3-75.
25

(22) Beginning January 1, 2000 and through December 31,
26
2001, new or used automatic vending machines that prepare and

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serve hot food and beverages, including coffee, soup, and
2
other items, and replacement parts for these machines.
3
Beginning January 1, 2002 and through June 30, 2003, machines
4
and parts for machines used in commercial, coin-operated
5
amusement and vending business if a use or occupation tax is
6
paid on the gross receipts derived from the use of the
7
commercial, coin-operated amusement and vending machines. This
8
paragraph is exempt from the provisions of Section 3-75.
9

(23) Beginning August 23, 2001 and through June 30, 2016,
10
food for human consumption that is to be consumed off the
11
premises where it is sold (other than alcoholic beverages,
12
soft drinks, and food that has been prepared for immediate
13
consumption) and prescription and nonprescription medicines,
14
drugs, medical appliances, and insulin, urine testing
15
materials, syringes, and needles used by diabetics, for human
16
use, when purchased for use by a person receiving medical
17
assistance under Article V of the Illinois Public Aid Code who
18
resides in a licensed long-term care facility, as defined in
19
the Nursing Home Care Act, or in a licensed facility as defined
20
in the ID/DD Community Care Act, the MC/DD Act, or the
21
Specialized Mental Health Rehabilitation Act of 2013.
22

(24) Beginning on August 2, 2001 (the effective date of
23
Public Act 92-227), computers and communications equipment
24
utilized for any hospital purpose and equipment used in the
25
diagnosis, analysis, or treatment of hospital patients
26
purchased by a lessor who leases the equipment, under a lease

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of one year or longer executed or in effect at the time the
2
lessor would otherwise be subject to the tax imposed by this
3
Act, to a hospital that has been issued an active tax exemption
4
identification number by the Department under Section 1g of
5
the Retailers' Occupation Tax Act. If the equipment is leased
6
in a manner that does not qualify for this exemption or is used
7
in any other nonexempt manner, the lessor shall be liable for
8
the tax imposed under this Act or the Use Tax Act, as the case
9
may be, based on the fair market value of the property at the
10
time the nonqualifying use occurs. No lessor shall collect or
11
attempt to collect an amount (however designated) that
12
purports to reimburse that lessor for the tax imposed by this
13
Act or the Use Tax Act, as the case may be, if the tax has not
14
been paid by the lessor. If a lessor improperly collects any
15
such amount from the lessee, the lessee shall have a legal
16
right to claim a refund of that amount from the lessor. If,
17
however, that amount is not refunded to the lessee for any
18
reason, the lessor is liable to pay that amount to the
19
Department. This paragraph is exempt from the provisions of
20
Section 3-75.
21

(25) Beginning on August 2, 2001 (the effective date of
22
Public Act 92-227), personal property purchased by a lessor
23
who leases the property, under a lease of one year or longer
24
executed or in effect at the time the lessor would otherwise be
25
subject to the tax imposed by this Act, to a governmental body
26
that has been issued an active tax exemption identification

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number by the Department under Section 1g of the Retailers'
2
Occupation Tax Act. If the property is leased in a manner that
3
does not qualify for this exemption or is used in any other
4
nonexempt manner, the lessor shall be liable for the tax
5
imposed under this Act or the Use Tax Act, as the case may be,
6
based on the fair market value of the property at the time the
7
nonqualifying use occurs. No lessor shall collect or attempt
8
to collect an amount (however designated) that purports to
9
reimburse that lessor for the tax imposed by this Act or the
10
Use Tax Act, as the case may be, if the tax has not been paid
11
by the lessor. If a lessor improperly collects any such amount
12
from the lessee, the lessee shall have a legal right to claim a
13
refund of that amount from the lessor. If, however, that
14
amount is not refunded to the lessee for any reason, the lessor
15
is liable to pay that amount to the Department. This paragraph
16
is exempt from the provisions of Section 3-75.
17

(26) Beginning January 1, 2008, tangible personal property
18
used in the construction or maintenance of a community water
19
supply, as defined under Section 3.145 of the Environmental
20
Protection Act, that is operated by a not-for-profit
21
corporation that holds a valid water supply permit issued
22
under Title IV of the Environmental Protection Act. This
23
paragraph is exempt from the provisions of Section 3-75.
24

(27) Beginning January 1, 2010 and continuing through
25
December 31, 2029, materials, parts, equipment, components,
26
and furnishings incorporated into or upon an aircraft as part

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of the modification, refurbishment, completion, replacement,
2
repair, or maintenance of the aircraft. This exemption
3
includes consumable supplies used in the modification,
4
refurbishment, completion, replacement, repair, and
5
maintenance of aircraft. However, until January 1, 2024, this
6
exemption excludes any materials, parts, equipment,
7
components, and consumable supplies used in the modification,
8
replacement, repair, and maintenance of aircraft engines or
9
power plants, whether such engines or power plants are
10
installed or uninstalled upon any such aircraft. "Consumable
11
supplies" include, but are not limited to, adhesive, tape,
12
sandpaper, general purpose lubricants, cleaning solution,
13
latex gloves, and protective films.
14

Beginning January 1, 2010 and continuing through December
15
31, 2023, this exemption applies only to the use of qualifying
16
tangible personal property transferred incident to the
17
modification, refurbishment, completion, replacement, repair,
18
or maintenance of aircraft by persons who (i) hold an Air
19
Agency Certificate and are empowered to operate an approved
20
repair station by the Federal Aviation Administration, (ii)
21
have a Class IV Rating, and (iii) conduct operations in
22
accordance with Part 145 of the Federal Aviation Regulations.
23
From January 1, 2024 through December 31, 2029, this exemption
24
applies only to the use of qualifying tangible personal
25
property transferred incident to: (A) the modification,
26
refurbishment, completion, repair, replacement, or maintenance

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of an aircraft by persons who (i) hold an Air Agency
2
Certificate and are empowered to operate an approved repair
3
station by the Federal Aviation Administration, (ii) have a
4
Class IV Rating, and (iii) conduct operations in accordance
5
with Part 145 of the Federal Aviation Regulations; and (B) the
6
modification, replacement, repair, and maintenance of aircraft
7
engines or power plants without regard to whether or not those
8
persons meet the qualifications of item (A).
9

The exemption does not include aircraft operated by a
10
commercial air carrier providing scheduled passenger air
11
service pursuant to authority issued under Part 121 or Part
12
129 of the Federal Aviation Regulations. The changes made to
13
this paragraph (27) by Public Act 98-534 are declarative of
14
existing law. It is the intent of the General Assembly that the
15
exemption under this paragraph (27) applies continuously from
16
January 1, 2010 through December 31, 2024; however, no claim
17
for credit or refund is allowed for taxes paid as a result of
18
the disallowance of this exemption on or after January 1, 2015
19
and prior to February 5, 2020 (the effective date of Public Act
20
101-629).
21

(28) Tangible personal property purchased by a
22
public-facilities corporation, as described in Section
23
11-65-10 of the Illinois Municipal Code, for purposes of
24
constructing or furnishing a municipal convention hall, but
25
only if the legal title to the municipal convention hall is
26
transferred to the municipality without any further

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consideration by or on behalf of the municipality at the time
2
of the completion of the municipal convention hall or upon the
3
retirement or redemption of any bonds or other debt
4
instruments issued by the public-facilities corporation in
5
connection with the development of the municipal convention
6
hall. This exemption includes existing public-facilities
7
corporations as provided in Section 11-65-25 of the Illinois
8
Municipal Code. This paragraph is exempt from the provisions
9
of Section 3-75.
10

(29) Beginning January 1, 2017 and through December 31,
11
2026, menstrual pads, tampons, and menstrual cups.
12

(30) Tangible personal property transferred to a purchaser
13
who is exempt from the tax imposed by this Act by operation of
14
federal law. This paragraph is exempt from the provisions of
15
Section 3-75.
16

(31) Qualified tangible personal property used in the
17
construction or operation of a data center that has been
18
granted a certificate of exemption by the Department of
19
Commerce and Economic Opportunity, whether that tangible
20
personal property is purchased by the owner, operator, or
21
tenant of the data center or by a contractor or subcontractor
22
of the owner, operator, or tenant. Data centers that would
23
have qualified for a certificate of exemption prior to January
24
1, 2020 had Public Act 101-31 been in effect, may apply for and
25
obtain an exemption for subsequent purchases of computer
26
equipment or enabling software purchased or leased to upgrade,

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supplement, or replace computer equipment or enabling software
2
purchased or leased in the original investment that would have
3
qualified.
4

The Department of Commerce and Economic Opportunity shall
5
grant a certificate of exemption under this item (31) to
6
qualified data centers as defined by Section 605-1025 of the
7
Department of Commerce and Economic Opportunity Law of the
8
Civil Administrative Code of Illinois.
9

For the purposes of this item (31):
10

"Data center" means a building or a series of
11

buildings rehabilitated or constructed to house working
12

servers in one physical location or multiple sites within
13

the State of Illinois.
14

"Qualified tangible personal property" means:
15

electrical systems and equipment; climate control and
16

chilling equipment and systems; mechanical systems and
17

equipment; monitoring and secure systems; emergency
18

generators; hardware; computers; servers; data storage
19

devices; network connectivity equipment; racks; cabinets;
20

telecommunications cabling infrastructure; raised floor
21

systems; peripheral components or systems; software;
22

mechanical, electrical, or plumbing systems; battery
23

systems; cooling systems and towers; temperature control
24

systems; other cabling; and other data center
25

infrastructure equipment and systems necessary to operate
26

qualified tangible personal property, including fixtures;

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and component parts of any of the foregoing, including
2

installation, maintenance, repair, refurbishment, and
3

replacement of qualified tangible personal property to
4

generate, transform, transmit, distribute, or manage
5

electricity necessary to operate qualified tangible
6

personal property; and all other tangible personal
7

property that is essential to the operations of a computer
8

data center. The term "qualified tangible personal
9

property" also includes building materials physically
10

incorporated into the qualifying data center. To document
11

the exemption allowed under this Section, the retailer
12

must obtain from the purchaser a copy of the certificate
13

of eligibility issued by the Department of Commerce and
14

Economic Opportunity.
15

This item (31) is exempt from the provisions of Section
16
3-75.
17

(32) Beginning July 1, 2022, breast pumps, breast pump
18
collection and storage supplies, and breast pump kits. This
19
item (32) is exempt from the provisions of Section 3-75. As
20
used in this item (32):
21

"Breast pump" means an electrically controlled or
22

manually controlled pump device designed or marketed to be
23

used to express milk from a human breast during lactation,
24

including the pump device and any battery, AC adapter, or
25

other power supply unit that is used to power the pump
26

device and is packaged and sold with the pump device at the

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time of sale.
2

"Breast pump collection and storage supplies" means
3

items of tangible personal property designed or marketed
4

to be used in conjunction with a breast pump to collect
5

milk expressed from a human breast and to store collected
6

milk until it is ready for consumption.
7

"Breast pump collection and storage supplies"
8

includes, but is not limited to: breast shields and breast
9

shield connectors; breast pump tubes and tubing adapters;
10

breast pump valves and membranes; backflow protectors and
11

backflow protector adaptors; bottles and bottle caps
12

specific to the operation of the breast pump; and breast
13

milk storage bags.
14

"Breast pump collection and storage supplies" does not
15

include: (1) bottles and bottle caps not specific to the
16

operation of the breast pump; (2) breast pump travel bags
17

and other similar carrying accessories, including ice
18

packs, labels, and other similar products; (3) breast pump
19

cleaning supplies; (4) nursing bras, bra pads, breast
20

shells, and other similar products; and (5) creams,
21

ointments, and other similar products that relieve
22

breastfeeding-related symptoms or conditions of the
23

breasts or nipples, unless sold as part of a breast pump
24

kit that is pre-packaged by the breast pump manufacturer
25

or distributor.
26

"Breast pump kit" means a kit that: (1) contains no

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more than a breast pump, breast pump collection and
2

storage supplies, a rechargeable battery for operating the
3

breast pump, a breastmilk cooler, bottle stands, ice
4

packs, and a breast pump carrying case; and (2) is
5

pre-packaged as a breast pump kit by the breast pump
6

manufacturer or distributor.
7

(33) Tangible personal property sold by or on behalf of
8
the State Treasurer pursuant to the Revised Uniform Unclaimed
9
Property Act. This item (33) is exempt from the provisions of
10
Section 3-75.
11

(34) Beginning on January 1, 2024, tangible personal
12
property purchased by an active duty member of the armed
13
forces of the United States who presents valid military
14
identification and purchases the property using a form of
15
payment where the federal government is the payor. The member
16
of the armed forces must complete, at the point of sale, a form
17
prescribed by the Department of Revenue documenting that the
18
transaction is eligible for the exemption under this
19
paragraph. Retailers must keep the form as documentation of
20
the exemption in their records for a period of not less than 6
21
years. "Armed forces of the United States" means the United
22
States Army, Navy, Air Force, Space Force, Marine Corps, or
23
Coast Guard. This paragraph is exempt from the provisions of
24
Section 3-75.
25

(35) Beginning July 1, 2024, home-delivered meals provided
26
to Medicare or Medicaid recipients when payment is made by an

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intermediary, such as a Medicare Administrative Contractor, a
2
Managed Care Organization, or a Medicare Advantage
3
Organization, pursuant to a government contract. This
4
paragraph (35) is exempt from the provisions of Section 3-75.
5

(36)

(35)
Beginning on January 1, 2026, as further defined
6
in Section 3-10, food prepared for immediate consumption and
7
transferred incident to a sale of service subject to this Act
8
or the Service Occupation Tax Act by an entity licensed under
9
the Hospital Licensing Act, the Nursing Home Care Act, the
10
Assisted Living and Shared Housing Act, the ID/DD Community
11
Care Act, the MC/DD Act, the Specialized Mental Health
12
Rehabilitation Act of 2013, or the Child Care Act of 1969
,
or
13
by an entity that holds a permit issued pursuant to the Life
14
Care Facilities Act. This item
(36)

(35)
is exempt from the
15
provisions of Section 3-75.
16

(37)

(36)
Beginning on January 1, 2026, as further defined
17
in Section 3-10, food for human consumption that is to be
18
consumed off the premises where it is sold (other than
19
alcoholic beverages, food consisting of or infused with adult
20
use cannabis, soft drinks, candy, and food that has been
21
prepared for immediate consumption). This item
(37)

(36)
is
22
exempt from the provisions of Section 3-75.
23

(38)

(35)
Use by a lessee of the following leased tangible
24
personal property:
25

(1) software transferred subject to a license that
26

meets the following requirements:

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(A) it is evidenced by a written agreement signed
2

by the licensor and the customer;
3

(i) an electronic agreement in which the
4

customer accepts the license by means of an
5

electronic signature that is verifiable and can be
6

authenticated and is attached to or made part of
7

the license will comply with this requirement;
8

(ii) a license agreement in which the customer
9

electronically accepts the terms by clicking "I
10

agree" does not comply with this requirement;
11

(B) it restricts the customer's duplication and
12

use of the software;
13

(C) it prohibits the customer from licensing,
14

sublicensing, or transferring the software to a third
15

party (except to a related party) without the
16

permission and continued control of the licensor;
17

(D) the licensor has a policy of providing another
18

copy at minimal or no charge if the customer loses or
19

damages the software, or of permitting the licensee to
20

make and keep an archival copy, and such policy is
21

either stated in the license agreement, supported by
22

the licensor's books and records, or supported by a
23

notarized statement made under penalties of perjury by
24

the licensor; and
25

(E) the customer must destroy or return all copies
26

of the software to the licensor at the end of the

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license period; this provision is deemed to be met, in
2

the case of a perpetual license, without being set
3

forth in the license agreement; and
4

(2) property that is subject to a tax on lease
5

receipts imposed by a home rule unit of local government
6

if the ordinance imposing that tax was adopted prior to
7

January 1, 2023.
8

(39) Materials furnished to a common interest community
9
association pursuant to a contract entered into with the
10
highway commissioner of a road district under subsection (k)
11
of Section 1-30 of the Common Interest Community Association
12
Act. This paragraph is exempt from the provisions of Section
13
3-75.

14
(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
15
Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
16
75-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
17
Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
18
eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
19
103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
20
7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995,
21
eff. 8-9-24; revised 11-26-24.)

22

Section 15.
The Service Occupation Tax Act is amended by
23
changing Section 3-5 as follows:

24

(35 ILCS 115/3-5)

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Sec. 3-5.
Exemptions.
The following tangible personal
2
property is exempt from the tax imposed by this Act:
3

(1) Personal property sold by a corporation, society,
4
association, foundation, institution, or organization, other
5
than a limited liability company, that is organized and
6
operated as a not-for-profit service enterprise for the
7
benefit of persons 65 years of age or older if the personal
8
property was not purchased by the enterprise for the purpose
9
of resale by the enterprise.
10

(2) Personal property purchased by a not-for-profit
11
Illinois county fair association for use in conducting,
12
operating, or promoting the county fair.
13

(3) Personal property purchased by any not-for-profit arts
14
or cultural organization that establishes, by proof required
15
by the Department by rule, that it has received an exemption
16
under Section 501(c)(3) of the Internal Revenue Code and that
17
is organized and operated primarily for the presentation or
18
support of arts or cultural programming, activities, or
19
services. These organizations include, but are not limited to,
20
music and dramatic arts organizations such as symphony
21
orchestras and theatrical groups, arts and cultural service
22
organizations, local arts councils, visual arts organizations,
23
and media arts organizations. On and after July 1, 2001 (the
24
effective date of Public Act 92-35), however, an entity
25
otherwise eligible for this exemption shall not make tax-free
26
purchases unless it has an active identification number issued

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by the Department.
2

(4) Legal tender, currency, medallions, or gold or silver
3
coinage issued by the State of Illinois, the government of the
4
United States of America, or the government of any foreign
5
country, and bullion.
6

(5) Until July 1, 2003 and beginning again on September 1,
7
2004 through August 30, 2014, graphic arts machinery and
8
equipment, including repair and replacement parts, both new
9
and used, and including that manufactured on special order or
10
purchased for lease, certified by the purchaser to be used
11
primarily for graphic arts production. Equipment includes
12
chemicals or chemicals acting as catalysts but only if the
13
chemicals or chemicals acting as catalysts effect a direct and
14
immediate change upon a graphic arts product. Beginning on
15
July 1, 2017, graphic arts machinery and equipment is included
16
in the manufacturing and assembling machinery and equipment
17
exemption under Section 2 of this Act.
18

(6) Personal property sold by a teacher-sponsored student
19
organization affiliated with an elementary or secondary school
20
located in Illinois.
21

(7) Farm machinery and equipment, both new and used,
22
including that manufactured on special order, certified by the
23
purchaser to be used primarily for production agriculture or
24
State or federal agricultural programs, including individual
25
replacement parts for the machinery and equipment, including
26
machinery and equipment purchased for lease, and including

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implements of husbandry defined in Section 1-130 of the
2
Illinois Vehicle Code, farm machinery and agricultural
3
chemical and fertilizer spreaders, and nurse wagons required
4
to be registered under Section 3-809 of the Illinois Vehicle
5
Code, but excluding other motor vehicles required to be
6
registered under the Illinois Vehicle Code. Horticultural
7
polyhouses or hoop houses used for propagating, growing, or
8
overwintering plants shall be considered farm machinery and
9
equipment under this item (7). Agricultural chemical tender
10
tanks and dry boxes shall include units sold separately from a
11
motor vehicle required to be licensed and units sold mounted
12
on a motor vehicle required to be licensed if the selling price
13
of the tender is separately stated.
14

Farm machinery and equipment shall include precision
15
farming equipment that is installed or purchased to be
16
installed on farm machinery and equipment, including, but not
17
limited to, tractors, harvesters, sprayers, planters, seeders,
18
or spreaders. Precision farming equipment includes, but is not
19
limited to, soil testing sensors, computers, monitors,
20
software, global positioning and mapping systems, and other
21
such equipment.
22

Farm machinery and equipment also includes computers,
23
sensors, software, and related equipment used primarily in the
24
computer-assisted operation of production agriculture
25
facilities, equipment, and activities such as, but not limited
26
to, the collection, monitoring, and correlation of animal and

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crop data for the purpose of formulating animal diets and
2
agricultural chemicals.
3

Beginning on January 1, 2024, farm machinery and equipment
4
also includes electrical power generation equipment used
5
primarily for production agriculture.
6

This item (7) is exempt from the provisions of Section
7
3-55.
8

(8) Until June 30, 2013, fuel and petroleum products sold
9
to or used by an air common carrier, certified by the carrier
10
to be used for consumption, shipment, or storage in the
11
conduct of its business as an air common carrier, for a flight
12
destined for or returning from a location or locations outside
13
the United States without regard to previous or subsequent
14
domestic stopovers.
15

Beginning July 1, 2013, fuel and petroleum products sold
16
to or used by an air carrier, certified by the carrier to be
17
used for consumption, shipment, or storage in the conduct of
18
its business as an air common carrier, for a flight that (i) is
19
engaged in foreign trade or is engaged in trade between the
20
United States and any of its possessions and (ii) transports
21
at least one individual or package for hire from the city of
22
origination to the city of final destination on the same
23
aircraft, without regard to a change in the flight number of
24
that aircraft.
25

(9) Proceeds of mandatory service charges separately
26
stated on customers' bills for the purchase and consumption of

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food and beverages, to the extent that the proceeds of the
2
service charge are in fact turned over as tips or as a
3
substitute for tips to the employees who participate directly
4
in preparing, serving, hosting or cleaning up the food or
5
beverage function with respect to which the service charge is
6
imposed.
7

(10) Until July 1, 2003, oil field exploration, drilling,
8
and production equipment, including (i) rigs and parts of
9
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
10
pipe and tubular goods, including casing and drill strings,
11
(iii) pumps and pump-jack units, (iv) storage tanks and flow
12
lines, (v) any individual replacement part for oil field
13
exploration, drilling, and production equipment, and (vi)
14
machinery and equipment purchased for lease; but excluding
15
motor vehicles required to be registered under the Illinois
16
Vehicle Code.
17

(11) Photoprocessing machinery and equipment, including
18
repair and replacement parts, both new and used, including
19
that manufactured on special order, certified by the purchaser
20
to be used primarily for photoprocessing, and including
21
photoprocessing machinery and equipment purchased for lease.
22

(12) Until July 1, 2028, coal and aggregate exploration,
23
mining, off-highway hauling, processing, maintenance, and
24
reclamation equipment, including replacement parts and
25
equipment, and including equipment purchased for lease, but
26
excluding motor vehicles required to be registered under the

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Illinois Vehicle Code. The changes made to this Section by
2
Public Act 97-767 apply on and after July 1, 2003, but no claim
3
for credit or refund is allowed on or after August 16, 2013
4
(the effective date of Public Act 98-456) for such taxes paid
5
during the period beginning July 1, 2003 and ending on August
6
16, 2013 (the effective date of Public Act 98-456).
7

(13) Beginning January 1, 1992 and through June 30, 2016,
8
food for human consumption that is to be consumed off the
9
premises where it is sold (other than alcoholic beverages,
10
soft drinks and food that has been prepared for immediate
11
consumption) and prescription and non-prescription medicines,
12
drugs, medical appliances, and insulin, urine testing
13
materials, syringes, and needles used by diabetics, for human
14
use, when purchased for use by a person receiving medical
15
assistance under Article V of the Illinois Public Aid Code who
16
resides in a licensed long-term care facility, as defined in
17
the Nursing Home Care Act, or in a licensed facility as defined
18
in the ID/DD Community Care Act, the MC/DD Act, or the
19
Specialized Mental Health Rehabilitation Act of 2013.
20

(14) Semen used for artificial insemination of livestock
21
for direct agricultural production.
22

(15) Horses, or interests in horses, registered with and
23
meeting the requirements of any of the Arabian Horse Club
24
Registry of America, Appaloosa Horse Club, American Quarter
25
Horse Association, United States Trotting Association, or
26
Jockey Club, as appropriate, used for purposes of breeding or

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racing for prizes. This item (15) is exempt from the
2
provisions of Section 3-55, and the exemption provided for
3
under this item (15) applies for all periods beginning May 30,
4
1995, but no claim for credit or refund is allowed on or after
5
January 1, 2008 (the effective date of Public Act 95-88) for
6
such taxes paid during the period beginning May 30, 2000 and
7
ending on January 1, 2008 (the effective date of Public Act
8
95-88).
9

(16) Computers and communications equipment utilized for
10
any hospital purpose and equipment used in the diagnosis,
11
analysis, or treatment of hospital patients sold to a lessor
12
who leases the equipment, under a lease of one year or longer
13
executed or in effect at the time of the purchase, to a
14
hospital that has been issued an active tax exemption
15
identification number by the Department under Section 1g of
16
the Retailers' Occupation Tax Act.
17

(17) Personal property sold to a lessor who leases the
18
property, under a lease of one year or longer executed or in
19
effect at the time of the purchase, to a governmental body that
20
has been issued an active tax exemption identification number
21
by the Department under Section 1g of the Retailers'
22
Occupation Tax Act.
23

(18) Beginning with taxable years ending on or after
24
December 31, 1995 and ending with taxable years ending on or
25
before December 31, 2004, personal property that is donated
26
for disaster relief to be used in a State or federally declared

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disaster area in Illinois or bordering Illinois by a
2
manufacturer or retailer that is registered in this State to a
3
corporation, society, association, foundation, or institution
4
that has been issued a sales tax exemption identification
5
number by the Department that assists victims of the disaster
6
who reside within the declared disaster area.
7

(19) Beginning with taxable years ending on or after
8
December 31, 1995 and ending with taxable years ending on or
9
before December 31, 2004, personal property that is used in
10
the performance of infrastructure repairs in this State,
11
including, but not limited to, municipal roads and streets,
12
access roads, bridges, sidewalks, waste disposal systems,
13
water and sewer line extensions, water distribution and
14
purification facilities, storm water drainage and retention
15
facilities, and sewage treatment facilities, resulting from a
16
State or federally declared disaster in Illinois or bordering
17
Illinois when such repairs are initiated on facilities located
18
in the declared disaster area within 6 months after the
19
disaster.
20

(20) Beginning July 1, 1999, game or game birds sold at a
21
"game breeding and hunting preserve area" as that term is used
22
in the Wildlife Code. This paragraph is exempt from the
23
provisions of Section 3-55.
24

(21) A motor vehicle, as that term is defined in Section
25
1-146 of the Illinois Vehicle Code, that is donated to a
26
corporation, limited liability company, society, association,

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foundation, or institution that is determined by the
2
Department to be organized and operated exclusively for
3
educational purposes. For purposes of this exemption, "a
4
corporation, limited liability company, society, association,
5
foundation, or institution organized and operated exclusively
6
for educational purposes" means all tax-supported public
7
schools, private schools that offer systematic instruction in
8
useful branches of learning by methods common to public
9
schools and that compare favorably in their scope and
10
intensity with the course of study presented in tax-supported
11
schools, and vocational or technical schools or institutes
12
organized and operated exclusively to provide a course of
13
study of not less than 6 weeks duration and designed to prepare
14
individuals to follow a trade or to pursue a manual,
15
technical, mechanical, industrial, business, or commercial
16
occupation.
17

(22) Beginning January 1, 2000, personal property,
18
including food, purchased through fundraising events for the
19
benefit of a public or private elementary or secondary school,
20
a group of those schools, or one or more school districts if
21
the events are sponsored by an entity recognized by the school
22
district that consists primarily of volunteers and includes
23
parents and teachers of the school children. This paragraph
24
does not apply to fundraising events (i) for the benefit of
25
private home instruction or (ii) for which the fundraising
26
entity purchases the personal property sold at the events from

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another individual or entity that sold the property for the
2
purpose of resale by the fundraising entity and that profits
3
from the sale to the fundraising entity. This paragraph is
4
exempt from the provisions of Section 3-55.
5

(23) Beginning January 1, 2000 and through December 31,
6
2001, new or used automatic vending machines that prepare and
7
serve hot food and beverages, including coffee, soup, and
8
other items, and replacement parts for these machines.
9
Beginning January 1, 2002 and through June 30, 2003, machines
10
and parts for machines used in commercial, coin-operated
11
amusement and vending business if a use or occupation tax is
12
paid on the gross receipts derived from the use of the
13
commercial, coin-operated amusement and vending machines. This
14
paragraph is exempt from the provisions of Section 3-55.
15

(24) Beginning on August 2, 2001 (the effective date of
16
Public Act 92-227), computers and communications equipment
17
utilized for any hospital purpose and equipment used in the
18
diagnosis, analysis, or treatment of hospital patients sold to
19
a lessor who leases the equipment, under a lease of one year or
20
longer executed or in effect at the time of the purchase, to a
21
hospital that has been issued an active tax exemption
22
identification number by the Department under Section 1g of
23
the Retailers' Occupation Tax Act. This paragraph is exempt
24
from the provisions of Section 3-55.
25

(25) Beginning on August 2, 2001 (the effective date of
26
Public Act 92-227), personal property sold to a lessor who

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leases the property, under a lease of one year or longer
2
executed or in effect at the time of the purchase, to a
3
governmental body that has been issued an active tax exemption
4
identification number by the Department under Section 1g of
5
the Retailers' Occupation Tax Act. This paragraph is exempt
6
from the provisions of Section 3-55.
7

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

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all necessary books and records to substantiate the use and
2
consumption of all such tangible personal property outside of
3
the State of Illinois.
4

(27) Beginning January 1, 2008, tangible personal property
5
used in the construction or maintenance of a community water
6
supply, as defined under Section 3.145 of the Environmental
7
Protection Act, that is operated by a not-for-profit
8
corporation that holds a valid water supply permit issued
9
under Title IV of the Environmental Protection Act. This
10
paragraph is exempt from the provisions of Section 3-55.
11

(28) Tangible personal property sold to a
12
public-facilities corporation, as described in Section
13
11-65-10 of the Illinois Municipal Code, for purposes of
14
constructing or furnishing a municipal convention hall, but
15
only if the legal title to the municipal convention hall is
16
transferred to the municipality without any further
17
consideration by or on behalf of the municipality at the time
18
of the completion of the municipal convention hall or upon the
19
retirement or redemption of any bonds or other debt
20
instruments issued by the public-facilities corporation in
21
connection with the development of the municipal convention
22
hall. This exemption includes existing public-facilities
23
corporations as provided in Section 11-65-25 of the Illinois
24
Municipal Code. This paragraph is exempt from the provisions
25
of Section 3-55.
26

(29) Beginning January 1, 2010 and continuing through

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December 31, 2029, materials, parts, equipment, components,
2
and furnishings incorporated into or upon an aircraft as part
3
of the modification, refurbishment, completion, replacement,
4
repair, or maintenance of the aircraft. This exemption
5
includes consumable supplies used in the modification,
6
refurbishment, completion, replacement, repair, and
7
maintenance of aircraft. However, until January 1, 2024, this
8
exemption excludes any materials, parts, equipment,
9
components, and consumable supplies used in the modification,
10
replacement, repair, and maintenance of aircraft engines or
11
power plants, whether such engines or power plants are
12
installed or uninstalled upon any such aircraft. "Consumable
13
supplies" include, but are not limited to, adhesive, tape,
14
sandpaper, general purpose lubricants, cleaning solution,
15
latex gloves, and protective films.
16

Beginning January 1, 2010 and continuing through December
17
31, 2023, this exemption applies only to the transfer of
18
qualifying tangible personal property incident to the
19
modification, refurbishment, completion, replacement, repair,
20
or maintenance of an aircraft by persons who (i) hold an Air
21
Agency Certificate and are empowered to operate an approved
22
repair station by the Federal Aviation Administration, (ii)
23
have a Class IV Rating, and (iii) conduct operations in
24
accordance with Part 145 of the Federal Aviation Regulations.
25
The exemption does not include aircraft operated by a
26
commercial air carrier providing scheduled passenger air

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service pursuant to authority issued under Part 121 or Part
2
129 of the Federal Aviation Regulations. From January 1, 2024
3
through December 31, 2029, this exemption applies only to the
4
transfer of qualifying tangible personal property incident to:
5
(A) the modification, refurbishment, completion, repair,
6
replacement, or maintenance of an aircraft by persons who (i)
7
hold an Air Agency Certificate and are empowered to operate an
8
approved repair station by the Federal Aviation
9
Administration, (ii) have a Class IV Rating, and (iii) conduct
10
operations in accordance with Part 145 of the Federal Aviation
11
Regulations; and (B) the modification, replacement, repair,
12
and maintenance of aircraft engines or power plants without
13
regard to whether or not those persons meet the qualifications
14
of item (A).
15

The changes made to this paragraph (29) by Public Act
16
98-534 are declarative of existing law. It is the intent of the
17
General Assembly that the exemption under this paragraph (29)
18
applies continuously from January 1, 2010 through December 31,
19
2024; however, no claim for credit or refund is allowed for
20
taxes paid as a result of the disallowance of this exemption on
21
or after January 1, 2015 and prior to February 5, 2020 (the
22
effective date of Public Act 101-629).
23

(30) Beginning January 1, 2017 and through December 31,
24
2026, menstrual pads, tampons, and menstrual cups.
25

(31) Tangible personal property transferred to a purchaser
26
who is exempt from tax by operation of federal law. This

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paragraph is exempt from the provisions of Section 3-55.
2

(32) Qualified tangible personal property used in the
3
construction or operation of a data center that has been
4
granted a certificate of exemption by the Department of
5
Commerce and Economic Opportunity, whether that tangible
6
personal property is purchased by the owner, operator, or
7
tenant of the data center or by a contractor or subcontractor
8
of the owner, operator, or tenant. Data centers that would
9
have qualified for a certificate of exemption prior to January
10
1, 2020 had Public Act 101-31 been in effect, may apply for and
11
obtain an exemption for subsequent purchases of computer
12
equipment or enabling software purchased or leased to upgrade,
13
supplement, or replace computer equipment or enabling software
14
purchased or leased in the original investment that would have
15
qualified.
16

The Department of Commerce and Economic Opportunity shall
17
grant a certificate of exemption under this item (32) to
18
qualified data centers as defined by Section 605-1025 of the
19
Department of Commerce and Economic Opportunity Law of the
20
Civil Administrative Code of Illinois.
21

For the purposes of this item (32):
22

"Data center" means a building or a series of
23

buildings rehabilitated or constructed to house working
24

servers in one physical location or multiple sites within
25

the State of Illinois.
26

"Qualified tangible personal property" means:

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electrical systems and equipment; climate control and
2

chilling equipment and systems; mechanical systems and
3

equipment; monitoring and secure systems; emergency
4

generators; hardware; computers; servers; data storage
5

devices; network connectivity equipment; racks; cabinets;
6

telecommunications cabling infrastructure; raised floor
7

systems; peripheral components or systems; software;
8

mechanical, electrical, or plumbing systems; battery
9

systems; cooling systems and towers; temperature control
10

systems; other cabling; and other data center
11

infrastructure equipment and systems necessary to operate
12

qualified tangible personal property, including fixtures;
13

and component parts of any of the foregoing, including
14

installation, maintenance, repair, refurbishment, and
15

replacement of qualified tangible personal property to
16

generate, transform, transmit, distribute, or manage
17

electricity necessary to operate qualified tangible
18

personal property; and all other tangible personal
19

property that is essential to the operations of a computer
20

data center. The term "qualified tangible personal
21

property" also includes building materials physically
22

incorporated into the qualifying data center. To document
23

the exemption allowed under this Section, the retailer
24

must obtain from the purchaser a copy of the certificate
25

of eligibility issued by the Department of Commerce and
26

Economic Opportunity.

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This item (32) is exempt from the provisions of Section
2
3-55.
3

(33) Beginning July 1, 2022, breast pumps, breast pump
4
collection and storage supplies, and breast pump kits. This
5
item (33) is exempt from the provisions of Section 3-55. As
6
used in this item (33):
7

"Breast pump" means an electrically controlled or
8

manually controlled pump device designed or marketed to be
9

used to express milk from a human breast during lactation,
10

including the pump device and any battery, AC adapter, or
11

other power supply unit that is used to power the pump
12

device and is packaged and sold with the pump device at the
13

time of sale.
14

"Breast pump collection and storage supplies" means
15

items of tangible personal property designed or marketed
16

to be used in conjunction with a breast pump to collect
17

milk expressed from a human breast and to store collected
18

milk until it is ready for consumption.
19

"Breast pump collection and storage supplies"
20

includes, but is not limited to: breast shields and breast
21

shield connectors; breast pump tubes and tubing adapters;
22

breast pump valves and membranes; backflow protectors and
23

backflow protector adaptors; bottles and bottle caps
24

specific to the operation of the breast pump; and breast
25

milk storage bags.
26

"Breast pump collection and storage supplies" does not

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include: (1) bottles and bottle caps not specific to the
2

operation of the breast pump; (2) breast pump travel bags
3

and other similar carrying accessories, including ice
4

packs, labels, and other similar products; (3) breast pump
5

cleaning supplies; (4) nursing bras, bra pads, breast
6

shells, and other similar products; and (5) creams,
7

ointments, and other similar products that relieve
8

breastfeeding-related symptoms or conditions of the
9

breasts or nipples, unless sold as part of a breast pump
10

kit that is pre-packaged by the breast pump manufacturer
11

or distributor.
12

"Breast pump kit" means a kit that: (1) contains no
13

more than a breast pump, breast pump collection and
14

storage supplies, a rechargeable battery for operating the
15

breast pump, a breastmilk cooler, bottle stands, ice
16

packs, and a breast pump carrying case; and (2) is
17

pre-packaged as a breast pump kit by the breast pump
18

manufacturer or distributor.
19

(34) Tangible personal property sold by or on behalf of
20
the State Treasurer pursuant to the Revised Uniform Unclaimed
21
Property Act. This item (34) is exempt from the provisions of
22
Section 3-55.
23

(35) Beginning on January 1, 2024, tangible personal
24
property purchased by an active duty member of the armed
25
forces of the United States who presents valid military
26
identification and purchases the property using a form of

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payment where the federal government is the payor. The member
2
of the armed forces must complete, at the point of sale, a form
3
prescribed by the Department of Revenue documenting that the
4
transaction is eligible for the exemption under this
5
paragraph. Retailers must keep the form as documentation of
6
the exemption in their records for a period of not less than 6
7
years. "Armed forces of the United States" means the United
8
States Army, Navy, Air Force, Space Force, Marine Corps, or
9
Coast Guard. This paragraph is exempt from the provisions of
10
Section 3-55.
11

(36) Beginning July 1, 2024, home-delivered meals provided
12
to Medicare or Medicaid recipients when payment is made by an
13
intermediary, such as a Medicare Administrative Contractor, a
14
Managed Care Organization, or a Medicare Advantage
15
Organization, pursuant to a government contract. This
16
paragraph
(36)

(35)
is exempt from the provisions of Section
17
3-55.
18

(37)

(36)
Beginning on January 1, 2026, as further defined
19
in Section 3-10, food prepared for immediate consumption and
20
transferred incident to a sale of service subject to this Act
21
or the Service Use Tax Act by an entity licensed under the
22
Hospital Licensing Act, the Nursing Home Care Act, the
23
Assisted Living and Shared Housing Act, the ID/DD Community
24
Care Act, the MC/DD Act, the Specialized Mental Health
25
Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
26
an entity that holds a permit issued pursuant to the Life Care

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Facilities Act. This item
(37)

(36)
is exempt from the
2
provisions of Section 3-55.
3

(38)

(37)
Beginning on January 1, 2026, as further defined
4
in Section 3-10, food for human consumption that is to be
5
consumed off the premises where it is sold (other than
6
alcoholic beverages, food consisting of or infused with adult
7
use cannabis, soft drinks, candy, and food that has been
8
prepared for immediate consumption). This item
(38)

(37)
is
9
exempt from the provisions of Section 3-55.
10

(39)

(36)
The lease of the following tangible personal
11
property:
12

(1) computer software transferred subject to a license
13

that meets the following requirements:
14

(A) it is evidenced by a written agreement signed
15

by the licensor and the customer;
16

(i) an electronic agreement in which the
17

customer accepts the license by means of an
18

electronic signature that is verifiable and can be
19

authenticated and is attached to or made part of
20

the license will comply with this requirement;
21

(ii) a license agreement in which the customer
22

electronically accepts the terms by clicking "I
23

agree" does not comply with this requirement;
24

(B) it restricts the customer's duplication and
25

use of the software;
26

(C) it prohibits the customer from licensing,

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sublicensing, or transferring the software to a third
2

party (except to a related party) without the
3

permission and continued control of the licensor;
4

(D) the licensor has a policy of providing another
5

copy at minimal or no charge if the customer loses or
6

damages the software, or of permitting the licensee to
7

make and keep an archival copy, and such policy is
8

either stated in the license agreement, supported by
9

the licensor's books and records, or supported by a
10

notarized statement made under penalties of perjury by
11

the licensor; and
12

(E) the customer must destroy or return all copies
13

of the software to the licensor at the end of the
14

license period; this provision is deemed to be met, in
15

the case of a perpetual license, without being set
16

forth in the license agreement; and
17

(2) property that is subject to a tax on lease
18

receipts imposed by a home rule unit of local government
19

if the ordinance imposing that tax was adopted prior to
20

January 1, 2023.
21

(40) Materials furnished to a common interest community
22
association pursuant to a contract entered into with the
23
highway commissioner of a road district under subsection (k)
24
of Section 1-30 of the Common Interest Community Association
25
Act. This paragraph is exempt from the provisions of Section
26
3-55.

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(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
2
Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
3
75-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
4
Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
5
eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
6
103-592, eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff.
7
7-1-24; 103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995,
8
eff. 8-9-24; revised 11-26-24.)

9

Section 20.
The Retailers' Occupation Tax Act is amended
10
by changing Section 2-5 as follows:

11

(35 ILCS 120/2-5)
12

Sec. 2-5.
Exemptions.
Gross receipts from proceeds from
13
the sale, which, on and after January 1, 2025, includes the
14
lease, of the following tangible personal property are exempt
15
from the tax imposed by this Act:
16

(1) Farm chemicals.
17

(2) Farm machinery and equipment, both new and used,
18

including that manufactured on special order, certified by
19

the purchaser to be used primarily for production
20

agriculture or State or federal agricultural programs,
21

including individual replacement parts for the machinery
22

and equipment, including machinery and equipment purchased
23

for lease, and including implements of husbandry defined
24

in Section 1-130 of the Illinois Vehicle Code, farm

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machinery and agricultural chemical and fertilizer
2

spreaders, and nurse wagons required to be registered
3

under Section 3-809 of the Illinois Vehicle Code, but
4

excluding other motor vehicles required to be registered
5

under the Illinois Vehicle Code. Horticultural polyhouses
6

or hoop houses used for propagating, growing, or
7

overwintering plants shall be considered farm machinery
8

and equipment under this item (2). Agricultural chemical
9

tender tanks and dry boxes shall include units sold
10

separately from a motor vehicle required to be licensed
11

and units sold mounted on a motor vehicle required to be
12

licensed, if the selling price of the tender is separately
13

stated.
14

Farm machinery and equipment shall include precision
15

farming equipment that is installed or purchased to be
16

installed on farm machinery and equipment including, but
17

not limited to, tractors, harvesters, sprayers, planters,
18

seeders, or spreaders. Precision farming equipment
19

includes, but is not limited to, soil testing sensors,
20

computers, monitors, software, global positioning and
21

mapping systems, and other such equipment.
22

Farm machinery and equipment also includes computers,
23

sensors, software, and related equipment used primarily in
24

the computer-assisted operation of production agriculture
25

facilities, equipment, and activities such as, but not
26

limited to, the collection, monitoring, and correlation of

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animal and crop data for the purpose of formulating animal
2

diets and agricultural chemicals.
3

Beginning on January 1, 2024, farm machinery and
4

equipment also includes electrical power generation
5

equipment used primarily for production agriculture.
6

This item (2) is exempt from the provisions of Section
7

2-70.
8

(3) Until July 1, 2003, distillation machinery and
9

equipment, sold as a unit or kit, assembled or installed
10

by the retailer, certified by the user to be used only for
11

the production of ethyl alcohol that will be used for
12

consumption as motor fuel or as a component of motor fuel
13

for the personal use of the user, and not subject to sale
14

or resale.
15

(4) Until July 1, 2003 and beginning again September
16

1, 2004 through August 30, 2014, graphic arts machinery
17

and equipment, including repair and replacement parts,
18

both new and used, and including that manufactured on
19

special order or purchased for lease, certified by the
20

purchaser to be used primarily for graphic arts
21

production. Equipment includes chemicals or chemicals
22

acting as catalysts but only if the chemicals or chemicals
23

acting as catalysts effect a direct and immediate change
24

upon a graphic arts product. Beginning on July 1, 2017,
25

graphic arts machinery and equipment is included in the
26

manufacturing and assembling machinery and equipment

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exemption under paragraph (14).
2

(5) A motor vehicle that is used for automobile
3

renting, as defined in the Automobile Renting Occupation
4

and Use Tax Act. This paragraph is exempt from the
5

provisions of Section 2-70.
6

(6) Personal property sold by a teacher-sponsored
7

student organization affiliated with an elementary or
8

secondary school located in Illinois.
9

(7) Until July 1, 2003, proceeds of that portion of
10

the selling price of a passenger car the sale of which is
11

subject to the Replacement Vehicle Tax.
12

(8) Personal property sold to an Illinois county fair
13

association for use in conducting, operating, or promoting
14

the county fair.
15

(9) Personal property sold to a not-for-profit arts or
16

cultural organization that establishes, by proof required
17

by the Department by rule, that it has received an
18

exemption under Section 501(c)(3) of the Internal Revenue
19

Code and that is organized and operated primarily for the
20

presentation or support of arts or cultural programming,
21

activities, or services. These organizations include, but
22

are not limited to, music and dramatic arts organizations
23

such as symphony orchestras and theatrical groups, arts
24

and cultural service organizations, local arts councils,
25

visual arts organizations, and media arts organizations.
26

On and after July 1, 2001 (the effective date of Public Act

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92-35), however, an entity otherwise eligible for this
2

exemption shall not make tax-free purchases unless it has
3

an active identification number issued by the Department.
4

(10) Personal property sold by a corporation, society,
5

association, foundation, institution, or organization,
6

other than a limited liability company, that is organized
7

and operated as a not-for-profit service enterprise for
8

the benefit of persons 65 years of age or older if the
9

personal property was not purchased by the enterprise for
10

the purpose of resale by the enterprise.
11

(11) Except as otherwise provided in this Section,
12

personal property sold to a governmental body, to a
13

corporation, society, association, foundation, or
14

institution organized and operated exclusively for
15

charitable, religious, or educational purposes, or to a
16

not-for-profit corporation, society, association,
17

foundation, institution, or organization that has no
18

compensated officers or employees and that is organized
19

and operated primarily for the recreation of persons 55
20

years of age or older. A limited liability company may
21

qualify for the exemption under this paragraph only if the
22

limited liability company is organized and operated
23

exclusively for educational purposes. On and after July 1,
24

1987, however, no entity otherwise eligible for this
25

exemption shall make tax-free purchases unless it has an
26

active identification number issued by the Department.

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(12) (Blank).
2

(12-5) On and after July 1, 2003 and through June 30,
3

2004, motor vehicles of the second division with a gross
4

vehicle weight in excess of 8,000 pounds that are subject
5

to the commercial distribution fee imposed under Section
6

3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
7

2004 and through June 30, 2005, the use in this State of
8

motor vehicles of the second division: (i) with a gross
9

vehicle weight rating in excess of 8,000 pounds; (ii) that
10

are subject to the commercial distribution fee imposed
11

under Section 3-815.1 of the Illinois Vehicle Code; and
12

(iii) that are primarily used for commercial purposes.
13

Through June 30, 2005, this exemption applies to repair
14

and replacement parts added after the initial purchase of
15

such a motor vehicle if that motor vehicle is used in a
16

manner that would qualify for the rolling stock exemption
17

otherwise provided for in this Act. For purposes of this
18

paragraph, "used for commercial purposes" means the
19

transportation of persons or property in furtherance of
20

any commercial or industrial enterprise whether for-hire
21

or not.
22

(13) Proceeds from sales to owners or lessors,
23

lessees, or shippers of tangible personal property that is
24

utilized by interstate carriers for hire for use as
25

rolling stock moving in interstate commerce and equipment
26

operated by a telecommunications provider, licensed as a

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common carrier by the Federal Communications Commission,
2

which is permanently installed in or affixed to aircraft
3

moving in interstate commerce.
4

(14) Machinery and equipment that will be used by the
5

purchaser, or a lessee of the purchaser, primarily in the
6

process of manufacturing or assembling tangible personal
7

property for wholesale or retail sale or lease, whether
8

the sale or lease is made directly by the manufacturer or
9

by some other person, whether the materials used in the
10

process are owned by the manufacturer or some other
11

person, or whether the sale or lease is made apart from or
12

as an incident to the seller's engaging in the service
13

occupation of producing machines, tools, dies, jigs,
14

patterns, gauges, or other similar items of no commercial
15

value on special order for a particular purchaser. The
16

exemption provided by this paragraph (14) does not include
17

machinery and equipment used in (i) the generation of
18

electricity for wholesale or retail sale; (ii) the
19

generation or treatment of natural or artificial gas for
20

wholesale or retail sale that is delivered to customers
21

through pipes, pipelines, or mains; or (iii) the treatment
22

of water for wholesale or retail sale that is delivered to
23

customers through pipes, pipelines, or mains. The
24

provisions of Public Act 98-583 are declaratory of
25

existing law as to the meaning and scope of this
26

exemption. Beginning on July 1, 2017, the exemption

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provided by this paragraph (14) includes, but is not
2

limited to, graphic arts machinery and equipment, as
3

defined in paragraph (4) of this Section.
4

(15) Proceeds of mandatory service charges separately
5

stated on customers' bills for purchase and consumption of
6

food and beverages, to the extent that the proceeds of the
7

service charge are in fact turned over as tips or as a
8

substitute for tips to the employees who participate
9

directly in preparing, serving, hosting or cleaning up the
10

food or beverage function with respect to which the
11

service charge is imposed.
12

(16) Tangible personal property sold to a purchaser if
13

the purchaser is exempt from use tax by operation of
14

federal law. This paragraph is exempt from the provisions
15

of Section 2-70.
16

(17) Tangible personal property sold to a common
17

carrier by rail or motor that receives the physical
18

possession of the property in Illinois and that transports
19

the property, or shares with another common carrier in the
20

transportation of the property, out of Illinois on a
21

standard uniform bill of lading showing the seller of the
22

property as the shipper or consignor of the property to a
23

destination outside Illinois, for use outside Illinois.
24

(18) Legal tender, currency, medallions, or gold or
25

silver coinage issued by the State of Illinois, the
26

government of the United States of America, or the

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government of any foreign country, and bullion.
2

(19) Until July 1, 2003, oil field exploration,
3

drilling, and production equipment, including (i) rigs and
4

parts of rigs, rotary rigs, cable tool rigs, and workover
5

rigs, (ii) pipe and tubular goods, including casing and
6

drill strings, (iii) pumps and pump-jack units, (iv)
7

storage tanks and flow lines, (v) any individual
8

replacement part for oil field exploration, drilling, and
9

production equipment, and (vi) machinery and equipment
10

purchased for lease; but excluding motor vehicles required
11

to be registered under the Illinois Vehicle Code.
12

(20) Photoprocessing machinery and equipment,
13

including repair and replacement parts, both new and used,
14

including that manufactured on special order, certified by
15

the purchaser to be used primarily for photoprocessing,
16

and including photoprocessing machinery and equipment
17

purchased for lease.
18

(21) Until July 1, 2028, coal and aggregate
19

exploration, mining, off-highway hauling, processing,
20

maintenance, and reclamation equipment, including
21

replacement parts and equipment, and including equipment
22

purchased for lease, but excluding motor vehicles required
23

to be registered under the Illinois Vehicle Code. The
24

changes made to this Section by Public Act 97-767 apply on
25

and after July 1, 2003, but no claim for credit or refund
26

is allowed on or after August 16, 2013 (the effective date

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of Public Act 98-456) for such taxes paid during the
2

period beginning July 1, 2003 and ending on August 16,
3

2013 (the effective date of Public Act 98-456).
4

(22) Until June 30, 2013, fuel and petroleum products
5

sold to or used by an air carrier, certified by the carrier
6

to be used for consumption, shipment, or storage in the
7

conduct of its business as an air common carrier, for a
8

flight destined for or returning from a location or
9

locations outside the United States without regard to
10

previous or subsequent domestic stopovers.
11

Beginning July 1, 2013, fuel and petroleum products
12

sold to or used by an air carrier, certified by the carrier
13

to be used for consumption, shipment, or storage in the
14

conduct of its business as an air common carrier, for a
15

flight that (i) is engaged in foreign trade or is engaged
16

in trade between the United States and any of its
17

possessions and (ii) transports at least one individual or
18

package for hire from the city of origination to the city
19

of final destination on the same aircraft, without regard
20

to a change in the flight number of that aircraft.
21

(23) A transaction in which the purchase order is
22

received by a florist who is located outside Illinois, but
23

who has a florist located in Illinois deliver the property
24

to the purchaser or the purchaser's donee in Illinois.
25

(24) Fuel consumed or used in the operation of ships,
26

barges, or vessels that are used primarily in or for the

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transportation of property or the conveyance of persons
2

for hire on rivers bordering on this State if the fuel is
3

delivered by the seller to the purchaser's barge, ship, or
4

vessel while it is afloat upon that bordering river.
5

(25) Except as provided in item (25-5) of this
6

Section, a motor vehicle sold in this State to a
7

nonresident even though the motor vehicle is delivered to
8

the nonresident in this State, if the motor vehicle is not
9

to be titled in this State, and if a drive-away permit is
10

issued to the motor vehicle as provided in Section 3-603
11

of the Illinois Vehicle Code or if the nonresident
12

purchaser has vehicle registration plates to transfer to
13

the motor vehicle upon returning to his or her home state.
14

The issuance of the drive-away permit or having the
15

out-of-state registration plates to be transferred is
16

prima facie evidence that the motor vehicle will not be
17

titled in this State.
18

(25-5) The exemption under item (25) does not apply if
19

the state in which the motor vehicle will be titled does
20

not allow a reciprocal exemption for a motor vehicle sold
21

and delivered in that state to an Illinois resident but
22

titled in Illinois. The tax collected under this Act on
23

the sale of a motor vehicle in this State to a resident of
24

another state that does not allow a reciprocal exemption
25

shall be imposed at a rate equal to the state's rate of tax
26

on taxable property in the state in which the purchaser is

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a resident, except that the tax shall not exceed the tax
2

that would otherwise be imposed under this Act. At the
3

time of the sale, the purchaser shall execute a statement,
4

signed under penalty of perjury, of his or her intent to
5

title the vehicle in the state in which the purchaser is a
6

resident within 30 days after the sale and of the fact of
7

the payment to the State of Illinois of tax in an amount
8

equivalent to the state's rate of tax on taxable property
9

in his or her state of residence and shall submit the
10

statement to the appropriate tax collection agency in his
11

or her state of residence. In addition, the retailer must
12

retain a signed copy of the statement in his or her
13

records. Nothing in this item shall be construed to
14

require the removal of the vehicle from this state
15

following the filing of an intent to title the vehicle in
16

the purchaser's state of residence if the purchaser titles
17

the vehicle in his or her state of residence within 30 days
18

after the date of sale. The tax collected under this Act in
19

accordance with this item (25-5) shall be proportionately
20

distributed as if the tax were collected at the 6.25%
21

general rate imposed under this Act.
22

(25-7) Beginning on July 1, 2007, no tax is imposed
23

under this Act on the sale of an aircraft, as defined in
24

Section 3 of the Illinois Aeronautics Act, if all of the
25

following conditions are met:
26

(1) the aircraft leaves this State within 15 days

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after the later of either the issuance of the final
2

billing for the sale of the aircraft, or the
3

authorized approval for return to service, completion
4

of the maintenance record entry, and completion of the
5

test flight and ground test for inspection, as
6

required by 14 CFR 91.407;
7

(2) the aircraft is not based or registered in
8

this State after the sale of the aircraft; and
9

(3) the seller retains in his or her books and
10

records and provides to the Department a signed and
11

dated certification from the purchaser, on a form
12

prescribed by the Department, certifying that the
13

requirements of this item (25-7) are met. The
14

certificate must also include the name and address of
15

the purchaser, the address of the location where the
16

aircraft is to be titled or registered, the address of
17

the primary physical location of the aircraft, and
18

other information that the Department may reasonably
19

require.
20

For purposes of this item (25-7):
21

"Based in this State" means hangared, stored, or
22

otherwise used, excluding post-sale customizations as
23

defined in this Section, for 10 or more days in each
24

12-month period immediately following the date of the sale
25

of the aircraft.
26

"Registered in this State" means an aircraft

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registered with the Department of Transportation,
2

Aeronautics Division, or titled or registered with the
3

Federal Aviation Administration to an address located in
4

this State.
5

This paragraph (25-7) is exempt from the provisions of
6

Section 2-70.
7

(26) Semen used for artificial insemination of
8

livestock for direct agricultural production.
9

(27) Horses, or interests in horses, registered with
10

and meeting the requirements of any of the Arabian Horse
11

Club Registry of America, Appaloosa Horse Club, American
12

Quarter Horse Association, United States Trotting
13

Association, or Jockey Club, as appropriate, used for
14

purposes of breeding or racing for prizes. This item (27)
15

is exempt from the provisions of Section 2-70, and the
16

exemption provided for under this item (27) applies for
17

all periods beginning May 30, 1995, but no claim for
18

credit or refund is allowed on or after January 1, 2008
19

(the effective date of Public Act 95-88) for such taxes
20

paid during the period beginning May 30, 2000 and ending
21

on January 1, 2008 (the effective date of Public Act
22

95-88).
23

(28) Computers and communications equipment utilized
24

for any hospital purpose and equipment used in the
25

diagnosis, analysis, or treatment of hospital patients
26

sold to a lessor who leases the equipment, under a lease of

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one year or longer executed or in effect at the time of the
2

purchase, to a hospital that has been issued an active tax
3

exemption identification number by the Department under
4

Section 1g of this Act.
5

(29) Personal property sold to a lessor who leases the
6

property, under a lease of one year or longer executed or
7

in effect at the time of the purchase, to a governmental
8

body that has been issued an active tax exemption
9

identification number by the Department under Section 1g
10

of this Act.
11

(30) Beginning with taxable years ending on or after
12

December 31, 1995 and ending with taxable years ending on
13

or before December 31, 2004, personal property that is
14

donated for disaster relief to be used in a State or
15

federally declared disaster area in Illinois or bordering
16

Illinois by a manufacturer or retailer that is registered
17

in this State to a corporation, society, association,
18

foundation, or institution that has been issued a sales
19

tax exemption identification number by the Department that
20

assists victims of the disaster who reside within the
21

declared disaster area.
22

(31) Beginning with taxable years ending on or after
23

December 31, 1995 and ending with taxable years ending on
24

or before December 31, 2004, personal property that is
25

used in the performance of infrastructure repairs in this
26

State, including, but not limited to, municipal roads and

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streets, access roads, bridges, sidewalks, waste disposal
2

systems, water and sewer line extensions, water
3

distribution and purification facilities, storm water
4

drainage and retention facilities, and sewage treatment
5

facilities, resulting from a State or federally declared
6

disaster in Illinois or bordering Illinois when such
7

repairs are initiated on facilities located in the
8

declared disaster area within 6 months after the disaster.
9

(32) Beginning July 1, 1999, game or game birds sold
10

at a "game breeding and hunting preserve area" as that
11

term is used in the Wildlife Code. This paragraph is
12

exempt from the provisions of Section 2-70.
13

(33) A motor vehicle, as that term is defined in
14

Section 1-146 of the Illinois Vehicle Code, that is
15

donated to a corporation, limited liability company,
16

society, association, foundation, or institution that is
17

determined by the Department to be organized and operated
18

exclusively for educational purposes. For purposes of this
19

exemption, "a corporation, limited liability company,
20

society, association, foundation, or institution organized
21

and operated exclusively for educational purposes" means
22

all tax-supported public schools, private schools that
23

offer systematic instruction in useful branches of
24

learning by methods common to public schools and that
25

compare favorably in their scope and intensity with the
26

course of study presented in tax-supported schools, and

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vocational or technical schools or institutes organized
2

and operated exclusively to provide a course of study of
3

not less than 6 weeks duration and designed to prepare
4

individuals to follow a trade or to pursue a manual,
5

technical, mechanical, industrial, business, or commercial
6

occupation.
7

(34) Beginning January 1, 2000, personal property,
8

including food, purchased through fundraising events for
9

the benefit of a public or private elementary or secondary
10

school, a group of those schools, or one or more school
11

districts if the events are sponsored by an entity
12

recognized by the school district that consists primarily
13

of volunteers and includes parents and teachers of the
14

school children. This paragraph does not apply to
15

fundraising events (i) for the benefit of private home
16

instruction or (ii) for which the fundraising entity
17

purchases the personal property sold at the events from
18

another individual or entity that sold the property for
19

the purpose of resale by the fundraising entity and that
20

profits from the sale to the fundraising entity. This
21

paragraph is exempt from the provisions of Section 2-70.
22

(35) Beginning January 1, 2000 and through December
23

31, 2001, new or used automatic vending machines that
24

prepare and serve hot food and beverages, including
25

coffee, soup, and other items, and replacement parts for
26

these machines. Beginning January 1, 2002 and through June

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30, 2003, machines and parts for machines used in
2

commercial, coin-operated amusement and vending business
3

if a use or occupation tax is paid on the gross receipts
4

derived from the use of the commercial, coin-operated
5

amusement and vending machines. This paragraph is exempt
6

from the provisions of Section 2-70.
7

(35-5) Beginning August 23, 2001 and through June 30,
8

2016, food for human consumption that is to be consumed
9

off the premises where it is sold (other than alcoholic
10

beverages, soft drinks, and food that has been prepared
11

for immediate consumption) and prescription and
12

nonprescription medicines, drugs, medical appliances, and
13

insulin, urine testing materials, syringes, and needles
14

used by diabetics, for human use, when purchased for use
15

by a person receiving medical assistance under Article V
16

of the Illinois Public Aid Code who resides in a licensed
17

long-term care facility, as defined in the Nursing Home
18

Care Act, or a licensed facility as defined in the ID/DD
19

Community Care Act, the MC/DD Act, or the Specialized
20

Mental Health Rehabilitation Act of 2013.
21

(36) Beginning August 2, 2001, computers and
22

communications equipment utilized for any hospital purpose
23

and equipment used in the diagnosis, analysis, or
24

treatment of hospital patients sold to a lessor who leases
25

the equipment, under a lease of one year or longer
26

executed or in effect at the time of the purchase, to a

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hospital that has been issued an active tax exemption
2

identification number by the Department under Section 1g
3

of this Act. This paragraph is exempt from the provisions
4

of Section 2-70.
5

(37) Beginning August 2, 2001, personal property sold
6

to a lessor who leases the property, under a lease of one
7

year or longer executed or in effect at the time of the
8

purchase, to a governmental body that has been issued an
9

active tax exemption identification number by the
10

Department under Section 1g of this Act. This paragraph is
11

exempt from the provisions of Section 2-70.
12

(38) Beginning on January 1, 2002 and through June 30,
13

2016, tangible personal property purchased from an
14

Illinois retailer by a taxpayer engaged in centralized
15

purchasing activities in Illinois who will, upon receipt
16

of the property in Illinois, temporarily store the
17

property in Illinois (i) for the purpose of subsequently
18

transporting it outside this State for use or consumption
19

thereafter solely outside this State or (ii) for the
20

purpose of being processed, fabricated, or manufactured
21

into, attached to, or incorporated into other tangible
22

personal property to be transported outside this State and
23

thereafter used or consumed solely outside this State. The
24

Director of Revenue shall, pursuant to rules adopted in
25

accordance with the Illinois Administrative Procedure Act,
26

issue a permit to any taxpayer in good standing with the

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Department who is eligible for the exemption under this
2

paragraph (38). The permit issued under this paragraph
3

(38) shall authorize the holder, to the extent and in the
4

manner specified in the rules adopted under this Act, to
5

purchase tangible personal property from a retailer exempt
6

from the taxes imposed by this Act. Taxpayers shall
7

maintain all necessary books and records to substantiate
8

the use and consumption of all such tangible personal
9

property outside of the State of Illinois.
10

(39) Beginning January 1, 2008, tangible personal
11

property used in the construction or maintenance of a
12

community water supply, as defined under Section 3.145 of
13

the Environmental Protection Act, that is operated by a
14

not-for-profit corporation that holds a valid water supply
15

permit issued under Title IV of the Environmental
16

Protection Act. This paragraph is exempt from the
17

provisions of Section 2-70.
18

(40) Beginning January 1, 2010 and continuing through
19

December 31, 2029, materials, parts, equipment,
20

components, and furnishings incorporated into or upon an
21

aircraft as part of the modification, refurbishment,
22

completion, replacement, repair, or maintenance of the
23

aircraft. This exemption includes consumable supplies used
24

in the modification, refurbishment, completion,
25

replacement, repair, and maintenance of aircraft. However,
26

until January 1, 2024, this exemption excludes any

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materials, parts, equipment, components, and consumable
2

supplies used in the modification, replacement, repair,
3

and maintenance of aircraft engines or power plants,
4

whether such engines or power plants are installed or
5

uninstalled upon any such aircraft. "Consumable supplies"
6

include, but are not limited to, adhesive, tape,
7

sandpaper, general purpose lubricants, cleaning solution,
8

latex gloves, and protective films.
9

Beginning January 1, 2010 and continuing through
10

December 31, 2023, this exemption applies only to the sale
11

of qualifying tangible personal property to persons who
12

modify, refurbish, complete, replace, or maintain an
13

aircraft and who (i) hold an Air Agency Certificate and
14

are empowered to operate an approved repair station by the
15

Federal Aviation Administration, (ii) have a Class IV
16

Rating, and (iii) conduct operations in accordance with
17

Part 145 of the Federal Aviation Regulations. The
18

exemption does not include aircraft operated by a
19

commercial air carrier providing scheduled passenger air
20

service pursuant to authority issued under Part 121 or
21

Part 129 of the Federal Aviation Regulations. From January
22

1, 2024 through December 31, 2029, this exemption applies
23

only to the sale of qualifying tangible personal property
24

to: (A) persons who modify, refurbish, complete, repair,
25

replace, or maintain aircraft and who (i) hold an Air
26

Agency Certificate and are empowered to operate an

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approved repair station by the Federal Aviation
2

Administration, (ii) have a Class IV Rating, and (iii)
3

conduct operations in accordance with Part 145 of the
4

Federal Aviation Regulations; and (B) persons who engage
5

in the modification, replacement, repair, and maintenance
6

of aircraft engines or power plants without regard to
7

whether or not those persons meet the qualifications of
8

item (A).
9

The changes made to this paragraph (40) by Public Act
10

98-534 are declarative of existing law. It is the intent
11

of the General Assembly that the exemption under this
12

paragraph (40) applies continuously from January 1, 2010
13

through December 31, 2024; however, no claim for credit or
14

refund is allowed for taxes paid as a result of the
15

disallowance of this exemption on or after January 1, 2015
16

and prior to February 5, 2020 (the effective date of
17

Public Act 101-629).
18

(41) Tangible personal property sold to a
19

public-facilities corporation, as described in Section
20

11-65-10 of the Illinois Municipal Code, for purposes of
21

constructing or furnishing a municipal convention hall,
22

but only if the legal title to the municipal convention
23

hall is transferred to the municipality without any
24

further consideration by or on behalf of the municipality
25

at the time of the completion of the municipal convention
26

hall or upon the retirement or redemption of any bonds or

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other debt instruments issued by the public-facilities
2

corporation in connection with the development of the
3

municipal convention hall. This exemption includes
4

existing public-facilities corporations as provided in
5

Section 11-65-25 of the Illinois Municipal Code. This
6

paragraph is exempt from the provisions of Section 2-70.
7

(42) Beginning January 1, 2017 and through December
8

31, 2026, menstrual pads, tampons, and menstrual cups.
9

(43) Merchandise that is subject to the Rental
10

Purchase Agreement Occupation and Use Tax. The purchaser
11

must certify that the item is purchased to be rented
12

subject to a rental-purchase agreement, as defined in the
13

Rental-Purchase Agreement Act, and provide proof of
14

registration under the Rental Purchase Agreement
15

Occupation and Use Tax Act. This paragraph is exempt from
16

the provisions of Section 2-70.
17

(44) Qualified tangible personal property used in the
18

construction or operation of a data center that has been
19

granted a certificate of exemption by the Department of
20

Commerce and Economic Opportunity, whether that tangible
21

personal property is purchased by the owner, operator, or
22

tenant of the data center or by a contractor or
23

subcontractor of the owner, operator, or tenant. Data
24

centers that would have qualified for a certificate of
25

exemption prior to January 1, 2020 had Public Act 101-31
26

been in effect, may apply for and obtain an exemption for

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subsequent purchases of computer equipment or enabling
2

software purchased or leased to upgrade, supplement, or
3

replace computer equipment or enabling software purchased
4

or leased in the original investment that would have
5

qualified.
6

The Department of Commerce and Economic Opportunity
7

shall grant a certificate of exemption under this item
8

(44) to qualified data centers as defined by Section
9

605-1025 of the Department of Commerce and Economic
10

Opportunity Law of the Civil Administrative Code of
11

Illinois.
12

For the purposes of this item (44):
13

"Data center" means a building or a series of
14

buildings rehabilitated or constructed to house
15

working servers in one physical location or multiple
16

sites within the State of Illinois.
17

"Qualified tangible personal property" means:
18

electrical systems and equipment; climate control and
19

chilling equipment and systems; mechanical systems and
20

equipment; monitoring and secure systems; emergency
21

generators; hardware; computers; servers; data storage
22

devices; network connectivity equipment; racks;
23

cabinets; telecommunications cabling infrastructure;
24

raised floor systems; peripheral components or
25

systems; software; mechanical, electrical, or plumbing
26

systems; battery systems; cooling systems and towers;

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temperature control systems; other cabling; and other
2

data center infrastructure equipment and systems
3

necessary to operate qualified tangible personal
4

property, including fixtures; and component parts of
5

any of the foregoing, including installation,
6

maintenance, repair, refurbishment, and replacement of
7

qualified tangible personal property to generate,
8

transform, transmit, distribute, or manage electricity
9

necessary to operate qualified tangible personal
10

property; and all other tangible personal property
11

that is essential to the operations of a computer data
12

center. The term "qualified tangible personal
13

property" also includes building materials physically
14

incorporated into the qualifying data center. To
15

document the exemption allowed under this Section, the
16

retailer must obtain from the purchaser a copy of the
17

certificate of eligibility issued by the Department of
18

Commerce and Economic Opportunity.
19

This item (44) is exempt from the provisions of
20

Section 2-70.
21

(45) Beginning January 1, 2020 and through December
22

31, 2020, sales of tangible personal property made by a
23

marketplace seller over a marketplace for which tax is due
24

under this Act but for which use tax has been collected and
25

remitted to the Department by a marketplace facilitator
26

under Section 2d of the Use Tax Act are exempt from tax

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1

under this Act. A marketplace seller claiming this
2

exemption shall maintain books and records demonstrating
3

that the use tax on such sales has been collected and
4

remitted by a marketplace facilitator. Marketplace sellers
5

that have properly remitted tax under this Act on such
6

sales may file a claim for credit as provided in Section 6
7

of this Act. No claim is allowed, however, for such taxes
8

for which a credit or refund has been issued to the
9

marketplace facilitator under the Use Tax Act, or for
10

which the marketplace facilitator has filed a claim for
11

credit or refund under the Use Tax Act.
12

(46) Beginning July 1, 2022, breast pumps, breast pump
13

collection and storage supplies, and breast pump kits.
14

This item (46) is exempt from the provisions of Section
15

2-70. As used in this item (46):
16

"Breast pump" means an electrically controlled or
17

manually controlled pump device designed or marketed to be
18

used to express milk from a human breast during lactation,
19

including the pump device and any battery, AC adapter, or
20

other power supply unit that is used to power the pump
21

device and is packaged and sold with the pump device at the
22

time of sale.
23

"Breast pump collection and storage supplies" means
24

items of tangible personal property designed or marketed
25

to be used in conjunction with a breast pump to collect
26

milk expressed from a human breast and to store collected

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milk until it is ready for consumption.
2

"Breast pump collection and storage supplies"
3

includes, but is not limited to: breast shields and breast
4

shield connectors; breast pump tubes and tubing adapters;
5

breast pump valves and membranes; backflow protectors and
6

backflow protector adaptors; bottles and bottle caps
7

specific to the operation of the breast pump; and breast
8

milk storage bags.
9

"Breast pump collection and storage supplies" does not
10

include: (1) bottles and bottle caps not specific to the
11

operation of the breast pump; (2) breast pump travel bags
12

and other similar carrying accessories, including ice
13

packs, labels, and other similar products; (3) breast pump
14

cleaning supplies; (4) nursing bras, bra pads, breast
15

shells, and other similar products; and (5) creams,
16

ointments, and other similar products that relieve
17

breastfeeding-related symptoms or conditions of the
18

breasts or nipples, unless sold as part of a breast pump
19

kit that is pre-packaged by the breast pump manufacturer
20

or distributor.
21

"Breast pump kit" means a kit that: (1) contains no
22

more than a breast pump, breast pump collection and
23

storage supplies, a rechargeable battery for operating the
24

breast pump, a breastmilk cooler, bottle stands, ice
25

packs, and a breast pump carrying case; and (2) is
26

pre-packaged as a breast pump kit by the breast pump

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manufacturer or distributor.
2

(47) Tangible personal property sold by or on behalf
3

of the State Treasurer pursuant to the Revised Uniform
4

Unclaimed Property Act. This item (47) is exempt from the
5

provisions of Section 2-70.
6

(48) Beginning on January 1, 2024, tangible personal
7

property purchased by an active duty member of the armed
8

forces of the United States who presents valid military
9

identification and purchases the property using a form of
10

payment where the federal government is the payor. The
11

member of the armed forces must complete, at the point of
12

sale, a form prescribed by the Department of Revenue
13

documenting that the transaction is eligible for the
14

exemption under this paragraph. Retailers must keep the
15

form as documentation of the exemption in their records
16

for a period of not less than 6 years. "Armed forces of the
17

United States" means the United States Army, Navy, Air
18

Force, Space Force, Marine Corps, or Coast Guard. This
19

paragraph is exempt from the provisions of Section 2-70.
20

(49) Beginning July 1, 2024, home-delivered meals
21

provided to Medicare or Medicaid recipients when payment
22

is made by an intermediary, such as a Medicare
23

Administrative Contractor, a Managed Care Organization, or
24

a Medicare Advantage Organization, pursuant to a
25

government contract. This paragraph (49) is exempt from
26

the provisions of Section 2-70.

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(50)

(49)
Beginning on January 1, 2026, as further
2

defined in Section 2-10, food for human consumption that
3

is to be consumed off the premises where it is sold (other
4

than alcoholic beverages, food consisting of or infused
5

with adult use cannabis, soft drinks, candy, and food that
6

has been prepared for immediate consumption). This item
7

(50)

(49)
is exempt from the provisions of Section 2-70.
8

(51)

(49)
Gross receipts from the lease of the
9

following tangible personal property:
10

(1) computer software transferred subject to a
11

license that meets the following requirements:
12

(A) it is evidenced by a written agreement
13

signed by the licensor and the customer;
14

(i) an electronic agreement in which the
15

customer accepts the license by means of an
16

electronic signature that is verifiable and
17

can be authenticated and is attached to or
18

made part of the license will comply with this
19

requirement;
20

(ii) a license agreement in which the
21

customer electronically accepts the terms by
22

clicking "I agree" does not comply with this
23

requirement;
24

(B) it restricts the customer's duplication
25

and use of the software;
26

(C) it prohibits the customer from licensing,

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sublicensing, or transferring the software to a
2

third party (except to a related party) without
3

the permission and continued control of the
4

licensor;
5

(D) the licensor has a policy of providing
6

another copy at minimal or no charge if the
7

customer loses or damages the software, or of
8

permitting the licensee to make and keep an
9

archival copy, and such policy is either stated in
10

the license agreement, supported by the licensor's
11

books and records, or supported by a notarized
12

statement made under penalties of perjury by the
13

licensor; and
14

(E) the customer must destroy or return all
15

copies of the software to the licensor at the end
16

of the license period; this provision is deemed to
17

be met, in the case of a perpetual license,
18

without being set forth in the license agreement;
19

and
20

(2) property that is subject to a tax on lease
21

receipts imposed by a home rule unit of local
22

government if the ordinance imposing that tax was
23

adopted prior to January 1, 2023.
24

(52) Materials furnished to a common interest
25

community association pursuant to a contract entered into
26

with the highway commissioner of a road district under

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subsection (k) of Section 1-30 of the Common Interest
2

Community Association Act. This paragraph is exempt from
3

the provisions of Section 2-70.

4
(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
5
102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
6
Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
7
5-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
8
5-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
9
6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; 103-592,
10
eff. 1-1-25; 103-605, eff. 7-1-24; 103-643, eff. 7-1-24;
11
103-746, eff. 1-1-25; 103-781, eff. 8-5-24; 103-995, eff.
12
8-9-24; revised 11-26-24.)

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