USE/OCC TAX-HEARING AIDS

Illinois General Assembly - Full Text of HB4205

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB4205

Introduced 1/14/2026, by Rep. Norine K. Hammond

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,
beginning on January 1, 2027, hearing aids are exempt from the taxes under
those Acts. Effective immediately.
LRB104 15978 HLH 29223 b

A BILL FOR

HB4205
LRB104 15978 HLH 29223 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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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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(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 15978 HLH 29223 b
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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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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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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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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

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LRB104 15978 HLH 29223 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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(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)

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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 15978 HLH 29223 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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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 15978 HLH 29223 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 15978 HLH 29223 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 15978 HLH 29223 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 15978 HLH 29223 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) Beginning on January 1, 2026, as further defined in
19
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) is exempt
24
from the provisions of Section 3-90.
25

(46) Use by the lessee of the following leased tangible
26
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) On and after January 1, 2027, hearing aids. As used in
11
this item (47), "hearing aid" means any wearable
12
non-disposable, non-experimental instrument or device designed
13
to aid or compensate for impaired human hearing and any parts,
14
attachments, or accessories for the instrument or device,
15
including an ear mold but excluding batteries and cords. This
16
item (47) is exempt from the provisions of Section 3-90.

17
(Source: P.A. 103-9, Article 5, Section 5-5, eff. 6-7-23;
18
103-9, Article 15, Section 15-5, eff. 6-7-23; 103-154, eff.
19
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
20
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
21
103-781, eff. 8-5-24; 104-417, eff. 8-15-25.)

22

Section 10.
The Service Use Tax Act is amended by changing
23
Section 3-5 as follows:

24

(35 ILCS 110/3-5)

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

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

(2) Personal property purchased by a non-profit Illinois
11
county fair association for use in conducting, operating, or
12
promoting the county fair.
13

(3) Personal property purchased by a 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 purchased from a teacher-sponsored
19
student organization affiliated with an elementary or
20
secondary school 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
3-75.
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 acquired as an incident to the purchase of a
2
service from a serviceman, to the extent that the proceeds of
3
the service charge are in fact turned over as tips or as a
4
substitute for tips to the employees who participate directly
5
in preparing, serving, hosting or cleaning up the food or
6
beverage function with respect to which the service charge is
7
imposed.
8

(10) Until July 1, 2003, oil field exploration, drilling,
9
and production equipment, including (i) rigs and parts of
10
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
11
pipe and tubular goods, including casing and drill strings,
12
(iii) pumps and pump-jack units, (iv) storage tanks and flow
13
lines, (v) any individual replacement part for oil field
14
exploration, drilling, and production equipment, and (vi)
15
machinery and equipment purchased for lease; but excluding
16
motor vehicles required to be registered under the Illinois
17
Vehicle Code.
18

(11) Proceeds from the sale of photoprocessing machinery
19
and equipment, including repair and replacement parts, both
20
new and used, including that manufactured on special order,
21
certified by the purchaser to be used primarily for
22
photoprocessing, and including photoprocessing machinery and
23
equipment purchased for lease.
24

(12) Until July 1, 2028, coal and aggregate exploration,
25
mining, off-highway hauling, processing, maintenance, and
26
reclamation equipment, including replacement parts and

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

(13) Semen used for artificial insemination of livestock
10
for direct agricultural production.
11

(14) Horses, or interests in horses, registered with and
12
meeting the requirements of any of the Arabian Horse Club
13
Registry of America, Appaloosa Horse Club, American Quarter
14
Horse Association, United States Trotting Association, or
15
Jockey Club, as appropriate, used for purposes of breeding or
16
racing for prizes. This item (14) is exempt from the
17
provisions of Section 3-75, and the exemption provided for
18
under this item (14) applies for all periods beginning May 30,
19
1995, but no claim for credit or refund is allowed on or after
20
January 1, 2008 (the effective date of Public Act 95-88) for
21
such taxes paid during the period beginning May 30, 2000 and
22
ending on January 1, 2008 (the effective date of Public Act
23
95-88).
24

(15) Computers and communications equipment utilized for
25
any hospital purpose and equipment used in the diagnosis,
26
analysis, or treatment of hospital patients purchased by a

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

(16) Personal property purchased by a lessor who leases
22
the property, under a lease of one year or longer executed or
23
in effect at the time the lessor would otherwise be subject to
24
the tax imposed by this Act, to a governmental body that has
25
been issued an active tax exemption identification number by
26
the Department under Section 1g of the Retailers' Occupation

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

(17) Beginning with taxable years ending on or after
16
December 31, 1995 and ending with taxable years ending on or
17
before December 31, 2004, personal property that is donated
18
for disaster relief to be used in a State or federally declared
19
disaster area in Illinois or bordering Illinois by a
20
manufacturer or retailer that is registered in this State to a
21
corporation, society, association, foundation, or institution
22
that has been issued a sales tax exemption identification
23
number by the Department that assists victims of the disaster
24
who reside within the declared disaster area.
25

(18) Beginning with taxable years ending on or after
26
December 31, 1995 and ending with taxable years ending on or

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

(19) Beginning July 1, 1999, game or game birds purchased
13
at a "game breeding and hunting preserve area" as that term is
14
used in the Wildlife Code. This paragraph is exempt from the
15
provisions of Section 3-75.
16

(20) A motor vehicle, as that term is defined in Section
17
1-146 of the Illinois Vehicle Code, that is donated to a
18
corporation, limited liability company, society, association,
19
foundation, or institution that is determined by the
20
Department to be organized and operated exclusively for
21
educational purposes. For purposes of this exemption, "a
22
corporation, limited liability company, society, association,
23
foundation, or institution organized and operated exclusively
24
for educational purposes" means all tax-supported public
25
schools, private schools that offer systematic instruction in
26
useful branches of learning by methods common to public

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

(21) Beginning January 1, 2000, personal property,
10
including food, purchased through fundraising events for the
11
benefit of a public or private elementary or secondary school,
12
a group of those schools, or one or more school districts if
13
the events are sponsored by an entity recognized by the school
14
district that consists primarily of volunteers and includes
15
parents and teachers of the school children. This paragraph
16
does not apply to fundraising events (i) for the benefit of
17
private home instruction or (ii) for which the fundraising
18
entity purchases the personal property sold at the events from
19
another individual or entity that sold the property for the
20
purpose of resale by the fundraising entity and that profits
21
from the sale to the fundraising entity. This paragraph is
22
exempt from the provisions of Section 3-75.
23

(22) Beginning January 1, 2000 and through December 31,
24
2001, new or used automatic vending machines that prepare and
25
serve hot food and beverages, including coffee, soup, and
26
other items, and replacement parts for these machines.

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Beginning January 1, 2002 and through June 30, 2003, machines
2
and parts for machines used in commercial, coin-operated
3
amusement and vending business if a use or occupation tax is
4
paid on the gross receipts derived from the use of the
5
commercial, coin-operated amusement and vending machines. This
6
paragraph is exempt from the provisions of Section 3-75.
7

(23) Beginning August 23, 2001 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 nonprescription 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

(24) Beginning on August 2, 2001 (the effective date of
21
Public Act 92-227), computers and communications equipment
22
utilized for any hospital purpose and equipment used in the
23
diagnosis, analysis, or treatment of hospital patients
24
purchased by a lessor who leases the equipment, under a lease
25
of one year or longer executed or in effect at the time the
26
lessor would otherwise be subject to the tax imposed by this

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

(25) Beginning on August 2, 2001 (the effective date of
20
Public Act 92-227), personal property purchased by a lessor
21
who leases the property, under a lease of one year or longer
22
executed or in effect at the time the lessor would otherwise be
23
subject to the tax imposed by this Act, to a governmental body
24
that has been issued an active tax exemption identification
25
number by the Department under Section 1g of the Retailers'
26
Occupation Tax Act. If the property is leased in a manner that

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

(26) Beginning January 1, 2008, tangible personal property
16
used in the construction or maintenance of a community water
17
supply, as defined under Section 3.145 of the Environmental
18
Protection Act, that is operated by a not-for-profit
19
corporation that holds a valid water supply permit issued
20
under Title IV of the Environmental Protection Act. This
21
paragraph is exempt from the provisions of Section 3-75.
22

(27) Beginning January 1, 2010 and continuing through
23
December 31, 2029, materials, parts, equipment, components,
24
and furnishings incorporated into or upon an aircraft as part
25
of the modification, refurbishment, completion, replacement,
26
repair, or maintenance of the aircraft. This exemption

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

Beginning January 1, 2010 and continuing through December
13
31, 2023, this exemption applies only to the use of qualifying
14
tangible personal property transferred incident to the
15
modification, refurbishment, completion, replacement, repair,
16
or maintenance of aircraft by persons who (i) hold an Air
17
Agency Certificate and are empowered to operate an approved
18
repair station by the Federal Aviation Administration, (ii)
19
have a Class IV Rating, and (iii) conduct operations in
20
accordance with Part 145 of the Federal Aviation Regulations.
21
From January 1, 2024 through December 31, 2029, this exemption
22
applies only to the use of qualifying tangible personal
23
property transferred incident to: (A) the modification,
24
refurbishment, completion, repair, replacement, or maintenance
25
of an aircraft by persons who (i) hold an Air Agency
26
Certificate and are empowered to operate an approved repair

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

The exemption does not include aircraft operated by a
8
commercial air carrier providing scheduled passenger air
9
service pursuant to authority issued under Part 121 or Part
10
129 of the Federal Aviation Regulations. The changes made to
11
this paragraph (27) by Public Act 98-534 are declarative of
12
existing law. It is the intent of the General Assembly that the
13
exemption under this paragraph (27) applies continuously from
14
January 1, 2010 through December 31, 2024; however, no claim
15
for credit or refund is allowed for taxes paid as a result of
16
the disallowance of this exemption on or after January 1, 2015
17
and prior to February 5, 2020 (the effective date of Public Act
18
101-629).
19

(28) Tangible personal property purchased by a
20
public-facilities corporation, as described in Section
21
11-65-10 of the Illinois Municipal Code, for purposes of
22
constructing or furnishing a municipal convention hall, but
23
only if the legal title to the municipal convention hall is
24
transferred to the municipality without any further
25
consideration by or on behalf of the municipality at the time
26
of the completion of the municipal convention hall or upon the

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

(29) Beginning January 1, 2017 and through December 31,
9
2026, menstrual pads, tampons, and menstrual cups.
10

(30) Tangible personal property transferred to a purchaser
11
who is exempt from the tax imposed by this Act by operation of
12
federal law. This paragraph is exempt from the provisions of
13
Section 3-75.
14

(31) Qualified tangible personal property used in the
15
construction or operation of a data center that has been
16
granted a certificate of exemption by the Department of
17
Commerce and Economic Opportunity, whether that tangible
18
personal property is purchased by the owner, operator, or
19
tenant of the data center or by a contractor or subcontractor
20
of the owner, operator, or tenant. Data centers that would
21
have qualified for a certificate of exemption prior to January
22
1, 2020 had Public Act 101-31 been in effect, may apply for and
23
obtain an exemption for subsequent purchases of computer
24
equipment or enabling software purchased or leased to upgrade,
25
supplement, or replace computer equipment or enabling software
26
purchased or leased in the original investment that would have

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qualified.
2

The Department of Commerce and Economic Opportunity shall
3
grant a certificate of exemption under this item (31) to
4
qualified data centers as defined by Section 605-1025 of the
5
Department of Commerce and Economic Opportunity Law of the
6
Civil Administrative Code of Illinois.
7

For the purposes of this item (31):
8

"Data center" means a building or a series of
9

buildings rehabilitated or constructed to house working
10

servers in one physical location or multiple sites within
11

the State of Illinois.
12

"Qualified tangible personal property" means:
13

electrical systems and equipment; climate control and
14

chilling equipment and systems; mechanical systems and
15

equipment; monitoring and secure systems; emergency
16

generators; hardware; computers; servers; data storage
17

devices; network connectivity equipment; racks; cabinets;
18

telecommunications cabling infrastructure; raised floor
19

systems; peripheral components or systems; software;
20

mechanical, electrical, or plumbing systems; battery
21

systems; cooling systems and towers; temperature control
22

systems; other cabling; and other data center
23

infrastructure equipment and systems necessary to operate
24

qualified tangible personal property, including fixtures;
25

and component parts of any of the foregoing, including
26

installation, maintenance, repair, refurbishment, and

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replacement of qualified tangible personal property to
2

generate, transform, transmit, distribute, or manage
3

electricity necessary to operate qualified tangible
4

personal property; and all other tangible personal
5

property that is essential to the operations of a computer
6

data center. The term "qualified tangible personal
7

property" also includes building materials physically
8

incorporated into the qualifying data center. To document
9

the exemption allowed under this Section, the retailer
10

must obtain from the purchaser a copy of the certificate
11

of eligibility issued by the Department of Commerce and
12

Economic Opportunity.
13

This item (31) is exempt from the provisions of Section
14
3-75.
15

(32) Beginning July 1, 2022, breast pumps, breast pump
16
collection and storage supplies, and breast pump kits. This
17
item (32) is exempt from the provisions of Section 3-75. As
18
used in this item (32):
19

"Breast pump" means an electrically controlled or
20

manually controlled pump device designed or marketed to be
21

used to express milk from a human breast during lactation,
22

including the pump device and any battery, AC adapter, or
23

other power supply unit that is used to power the pump
24

device and is packaged and sold with the pump device at the
25

time of sale.
26

"Breast pump collection and storage supplies" means

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items of tangible personal property designed or marketed
2

to be used in conjunction with a breast pump to collect
3

milk expressed from a human breast and to store collected
4

milk until it is ready for consumption.
5

"Breast pump collection and storage supplies"
6

includes, but is not limited to: breast shields and breast
7

shield connectors; breast pump tubes and tubing adapters;
8

breast pump valves and membranes; backflow protectors and
9

backflow protector adaptors; bottles and bottle caps
10

specific to the operation of the breast pump; and breast
11

milk storage bags.
12

"Breast pump collection and storage supplies" does not
13

include: (1) bottles and bottle caps not specific to the
14

operation of the breast pump; (2) breast pump travel bags
15

and other similar carrying accessories, including ice
16

packs, labels, and other similar products; (3) breast pump
17

cleaning supplies; (4) nursing bras, bra pads, breast
18

shells, and other similar products; and (5) creams,
19

ointments, and other similar products that relieve
20

breastfeeding-related symptoms or conditions of the
21

breasts or nipples, unless sold as part of a breast pump
22

kit that is pre-packaged by the breast pump manufacturer
23

or distributor.
24

"Breast pump kit" means a kit that: (1) contains no
25

more than a breast pump, breast pump collection and
26

storage supplies, a rechargeable battery for operating the

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breast pump, a breastmilk cooler, bottle stands, ice
2

packs, and a breast pump carrying case; and (2) is
3

pre-packaged as a breast pump kit by the breast pump
4

manufacturer or distributor.
5

(33) Tangible personal property sold by or on behalf of
6
the State Treasurer pursuant to the Revised Uniform Unclaimed
7
Property Act. This item (33) is exempt from the provisions of
8
Section 3-75.
9

(34) Beginning on January 1, 2024, tangible personal
10
property purchased by an active duty member of the armed
11
forces of the United States who presents valid military
12
identification and purchases the property using a form of
13
payment where the federal government is the payor. The member
14
of the armed forces must complete, at the point of sale, a form
15
prescribed by the Department of Revenue documenting that the
16
transaction is eligible for the exemption under this
17
paragraph. Retailers must keep the form as documentation of
18
the exemption in their records for a period of not less than 6
19
years. "Armed forces of the United States" means the United
20
States Army, Navy, Air Force, Space Force, Marine Corps, or
21
Coast Guard. This paragraph is exempt from the provisions of
22
Section 3-75.
23

(35) Beginning July 1, 2024, home-delivered meals provided
24
to Medicare or Medicaid recipients when payment is made by an
25
intermediary, such as a Medicare Administrative Contractor, a
26
Managed Care Organization, or a Medicare Advantage

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Organization, pursuant to a government contract. This
2
paragraph (35) is exempt from the provisions of Section 3-75.
3

(36) Beginning on January 1, 2026, as further defined in
4
Section 3-10, food prepared for immediate consumption and
5
transferred incident to a sale of service subject to this Act
6
or the Service Occupation Tax Act by an entity licensed under
7
the Hospital Licensing Act, the Nursing Home Care Act, the
8
Assisted Living and Shared Housing Act, the ID/DD Community
9
Care Act, the MC/DD Act, the Specialized Mental Health
10
Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
11
an entity that holds a permit issued pursuant to the Life Care
12
Facilities Act. This item (36) is exempt from the provisions
13
of Section 3-75.
14

(37) Beginning on January 1, 2026, as further defined in
15
Section 3-10, food for human consumption that is to be
16
consumed off the premises where it is sold (other than
17
alcoholic beverages, food consisting of or infused with adult
18
use cannabis, soft drinks, candy, and food that has been
19
prepared for immediate consumption). This item (37) is exempt
20
from the provisions of Section 3-75.
21

(38) Use by a lessee of the following leased tangible
22
personal property:
23

(1) software transferred subject to a license that
24

meets the following requirements:
25

(A) it is evidenced by a written agreement signed
26

by the licensor and the customer;

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(i) an electronic agreement in which the
2

customer accepts the license by means of an
3

electronic signature that is verifiable and can be
4

authenticated and is attached to or made part of
5

the license will comply with this requirement;
6

(ii) a license agreement in which the customer
7

electronically accepts the terms by clicking "I
8

agree" does not comply with this requirement;
9

(B) it restricts the customer's duplication and
10

use of the software;
11

(C) it prohibits the customer from licensing,
12

sublicensing, or transferring the software to a third
13

party (except to a related party) without the
14

permission and continued control of the licensor;
15

(D) the licensor has a policy of providing another
16

copy at minimal or no charge if the customer loses or
17

damages the software, or of permitting the licensee to
18

make and keep an archival copy, and such policy is
19

either stated in the license agreement, supported by
20

the licensor's books and records, or supported by a
21

notarized statement made under penalties of perjury by
22

the licensor; and
23

(E) the customer must destroy or return all copies
24

of the software to the licensor at the end of the
25

license period; this provision is deemed to be met, in
26

the case of a perpetual license, without being set

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forth in the license agreement; and
2

(2) property that is subject to a tax on lease
3

receipts imposed by a home rule unit of local government
4

if the ordinance imposing that tax was adopted prior to
5

January 1, 2023.
6

(39) On and after January 1, 2027, hearing aids. As used in
7
this item (39), "hearing aid" means any wearable
8
non-disposable, non-experimental instrument or device designed
9
to aid or compensate for impaired human hearing and any parts,
10
attachments, or accessories for the instrument or device,
11
including an ear mold but excluding batteries and cords. This
12
item (39) is exempt from the provisions of Section 3-75.

13
(Source: P.A. 103-9, Article 5, Section 5-10, eff. 6-7-23;
14
103-9, Article 15, Section 15-10, eff. 6-7-23; 103-154, eff.
15
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
16
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
17
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-417, eff.
18
8-15-25.)

19

Section 15.
The Service Occupation Tax Act is amended by
20
changing Section 3-5 as follows:

21

(35 ILCS 115/3-5)
22

Sec. 3-5.
Exemptions.
The following tangible personal
23
property is exempt from the tax imposed by this Act:
24

(1) Personal property sold by a corporation, society,

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association, foundation, institution, or organization, other
2
than a limited liability company, that is organized and
3
operated as a not-for-profit service enterprise for the
4
benefit of persons 65 years of age or older if the personal
5
property was not purchased by the enterprise for the purpose
6
of resale by the enterprise.
7

(2) Personal property purchased by a not-for-profit
8
Illinois county fair association for use in conducting,
9
operating, or promoting the county fair.
10

(3) Personal property purchased by any not-for-profit arts
11
or cultural organization that establishes, by proof required
12
by the Department by rule, that it has received an exemption
13
under Section 501(c)(3) of the Internal Revenue Code and that
14
is organized and operated primarily for the presentation or
15
support of arts or cultural programming, activities, or
16
services. These organizations include, but are not limited to,
17
music and dramatic arts organizations such as symphony
18
orchestras and theatrical groups, arts and cultural service
19
organizations, local arts councils, visual arts organizations,
20
and media arts organizations. On and after July 1, 2001 (the
21
effective date of Public Act 92-35), however, an entity
22
otherwise eligible for this exemption shall not make tax-free
23
purchases unless it has an active identification number issued
24
by the Department.
25

(4) Legal tender, currency, medallions, or gold or silver
26
coinage issued by the State of Illinois, the government of the

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United States of America, or the government of any foreign
2
country, and bullion.
3

(5) Until July 1, 2003 and beginning again on September 1,
4
2004 through August 30, 2014, graphic arts machinery and
5
equipment, including repair and replacement parts, both new
6
and used, and including that manufactured on special order or
7
purchased for lease, certified by the purchaser to be used
8
primarily for graphic arts production. Equipment includes
9
chemicals or chemicals acting as catalysts but only if the
10
chemicals or chemicals acting as catalysts effect a direct and
11
immediate change upon a graphic arts product. Beginning on
12
July 1, 2017, graphic arts machinery and equipment is included
13
in the manufacturing and assembling machinery and equipment
14
exemption under Section 2 of this Act.
15

(6) Personal property sold by a teacher-sponsored student
16
organization affiliated with an elementary or secondary school
17
located in Illinois.
18

(7) Farm machinery and equipment, both new and used,
19
including that manufactured on special order, certified by the
20
purchaser to be used primarily for production agriculture or
21
State or federal agricultural programs, including individual
22
replacement parts for the machinery and equipment, including
23
machinery and equipment purchased for lease, and including
24
implements of husbandry defined in Section 1-130 of the
25
Illinois Vehicle Code, farm machinery and agricultural
26
chemical and fertilizer spreaders, and nurse wagons required

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

Farm machinery and equipment shall include precision
12
farming equipment that is installed or purchased to be
13
installed on farm machinery and equipment, including, but not
14
limited to, tractors, harvesters, sprayers, planters, seeders,
15
or spreaders. Precision farming equipment includes, but is not
16
limited to, soil testing sensors, computers, monitors,
17
software, global positioning and mapping systems, and other
18
such equipment.
19

Farm machinery and equipment also includes computers,
20
sensors, software, and related equipment used primarily in the
21
computer-assisted operation of production agriculture
22
facilities, equipment, and activities such as, but not limited
23
to, the collection, monitoring, and correlation of animal and
24
crop data for the purpose of formulating animal diets and
25
agricultural chemicals.
26

Beginning on January 1, 2024, farm machinery and equipment

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also includes electrical power generation equipment used
2
primarily for production agriculture.
3

This item (7) is exempt from the provisions of Section
4
3-55.
5

(8) Until June 30, 2013, fuel and petroleum products sold
6
to or used by an air common carrier, certified by the carrier
7
to be used for consumption, shipment, or storage in the
8
conduct of its business as an air common carrier, for a flight
9
destined for or returning from a location or locations outside
10
the United States without regard to previous or subsequent
11
domestic stopovers.
12

Beginning July 1, 2013, fuel and petroleum products sold
13
to or used by an air carrier, certified by the carrier to be
14
used for consumption, shipment, or storage in the conduct of
15
its business as an air common carrier, for a flight that (i) is
16
engaged in foreign trade or is engaged in trade between the
17
United States and any of its possessions and (ii) transports
18
at least one individual or package for hire from the city of
19
origination to the city of final destination on the same
20
aircraft, without regard to a change in the flight number of
21
that aircraft.
22

(9) Proceeds of mandatory service charges separately
23
stated on customers' bills for the purchase and consumption of
24
food and beverages, to the extent that the proceeds of the
25
service charge are in fact turned over as tips or as a
26
substitute for tips to the employees who participate directly

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in preparing, serving, hosting or cleaning up the food or
2
beverage function with respect to which the service charge is
3
imposed.
4

(10) Until July 1, 2003, oil field exploration, drilling,
5
and production equipment, including (i) rigs and parts of
6
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
7
pipe and tubular goods, including casing and drill strings,
8
(iii) pumps and pump-jack units, (iv) storage tanks and flow
9
lines, (v) any individual replacement part for oil field
10
exploration, drilling, and production equipment, and (vi)
11
machinery and equipment purchased for lease; but excluding
12
motor vehicles required to be registered under the Illinois
13
Vehicle Code.
14

(11) Photoprocessing machinery and equipment, including
15
repair and replacement parts, both new and used, including
16
that manufactured on special order, certified by the purchaser
17
to be used primarily for photoprocessing, and including
18
photoprocessing machinery and equipment purchased for lease.
19

(12) Until July 1, 2028, coal and aggregate exploration,
20
mining, off-highway hauling, processing, maintenance, and
21
reclamation equipment, including replacement parts and
22
equipment, and including equipment purchased for lease, but
23
excluding motor vehicles required to be registered under the
24
Illinois Vehicle Code. The changes made to this Section by
25
Public Act 97-767 apply on and after July 1, 2003, but no claim
26
for credit or refund is allowed on or after August 16, 2013

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(the effective date of Public Act 98-456) for such taxes paid
2
during the period beginning July 1, 2003 and ending on August
3
16, 2013 (the effective date of Public Act 98-456).
4

(13) Beginning January 1, 1992 and through June 30, 2016,
5
food for human consumption that is to be consumed off the
6
premises where it is sold (other than alcoholic beverages,
7
soft drinks and food that has been prepared for immediate
8
consumption) and prescription and non-prescription medicines,
9
drugs, medical appliances, and insulin, urine testing
10
materials, syringes, and needles used by diabetics, for human
11
use, when purchased for use by a person receiving medical
12
assistance under Article V of the Illinois Public Aid Code who
13
resides in a licensed long-term care facility, as defined in
14
the Nursing Home Care Act, or in a licensed facility as defined
15
in the ID/DD Community Care Act, the MC/DD Act, or the
16
Specialized Mental Health Rehabilitation Act of 2013.
17

(14) Semen used for artificial insemination of livestock
18
for direct agricultural production.
19

(15) Horses, or interests in horses, registered with and
20
meeting the requirements of any of the Arabian Horse Club
21
Registry of America, Appaloosa Horse Club, American Quarter
22
Horse Association, United States Trotting Association, or
23
Jockey Club, as appropriate, used for purposes of breeding or
24
racing for prizes. This item (15) is exempt from the
25
provisions of Section 3-55, and the exemption provided for
26
under this item (15) applies for all periods beginning May 30,

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1995, but no claim for credit or refund is allowed on or after
2
January 1, 2008 (the effective date of Public Act 95-88) for
3
such taxes paid during the period beginning May 30, 2000 and
4
ending on January 1, 2008 (the effective date of Public Act
5
95-88).
6

(16) Computers and communications equipment utilized for
7
any hospital purpose and equipment used in the diagnosis,
8
analysis, or treatment of hospital patients sold to a lessor
9
who leases the equipment, under a lease of one year or longer
10
executed or in effect at the time of the purchase, to a
11
hospital that has been issued an active tax exemption
12
identification number by the Department under Section 1g of
13
the Retailers' Occupation Tax Act.
14

(17) Personal property sold to a lessor who leases the
15
property, under a lease of one year or longer executed or in
16
effect at the time of the purchase, to a governmental body that
17
has been issued an active tax exemption identification number
18
by the Department under Section 1g of the Retailers'
19
Occupation Tax Act.
20

(18) Beginning with taxable years ending on or after
21
December 31, 1995 and ending with taxable years ending on or
22
before December 31, 2004, personal property that is donated
23
for disaster relief to be used in a State or federally declared
24
disaster area in Illinois or bordering Illinois by a
25
manufacturer or retailer that is registered in this State to a
26
corporation, society, association, foundation, or institution

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that has been issued a sales tax exemption identification
2
number by the Department that assists victims of the disaster
3
who reside within the declared disaster area.
4

(19) Beginning with taxable years ending on or after
5
December 31, 1995 and ending with taxable years ending on or
6
before December 31, 2004, personal property that is used in
7
the performance of infrastructure repairs in this State,
8
including, but not limited to, municipal roads and streets,
9
access roads, bridges, sidewalks, waste disposal systems,
10
water and sewer line extensions, water distribution and
11
purification facilities, storm water drainage and retention
12
facilities, and sewage treatment facilities, resulting from a
13
State or federally declared disaster in Illinois or bordering
14
Illinois when such repairs are initiated on facilities located
15
in the declared disaster area within 6 months after the
16
disaster.
17

(20) Beginning July 1, 1999, game or game birds sold at a
18
"game breeding and hunting preserve area" as that term is used
19
in the Wildlife Code. This paragraph is exempt from the
20
provisions of Section 3-55.
21

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

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

(22) Beginning January 1, 2000, personal property,
15
including food, purchased through fundraising events for the
16
benefit of a public or private elementary or secondary school,
17
a group of those schools, or one or more school districts if
18
the events are sponsored by an entity recognized by the school
19
district that consists primarily of volunteers and includes
20
parents and teachers of the school children. This paragraph
21
does not apply to fundraising events (i) for the benefit of
22
private home instruction or (ii) for which the fundraising
23
entity purchases the personal property sold at the events from
24
another individual or entity that sold the property for the
25
purpose of resale by the fundraising entity and that profits
26
from the sale to the fundraising entity. This paragraph is

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exempt from the provisions of Section 3-55.
2

(23) Beginning January 1, 2000 and through December 31,
3
2001, new or used automatic vending machines that prepare and
4
serve hot food and beverages, including coffee, soup, and
5
other items, and replacement parts for these machines.
6
Beginning January 1, 2002 and through June 30, 2003, machines
7
and parts for machines used in commercial, coin-operated
8
amusement and vending business if a use or occupation tax is
9
paid on the gross receipts derived from the use of the
10
commercial, coin-operated amusement and vending machines. This
11
paragraph is exempt from the provisions of Section 3-55.
12

(24) Beginning on August 2, 2001 (the effective date of
13
Public Act 92-227), computers and communications equipment
14
utilized for any hospital purpose and equipment used in the
15
diagnosis, analysis, or treatment of hospital patients sold to
16
a lessor who leases the equipment, under a lease of one year or
17
longer executed or in effect at the time of the purchase, 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. This paragraph is exempt
21
from the provisions of Section 3-55.
22

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

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identification number by the Department under Section 1g of
2
the Retailers' Occupation Tax Act. This paragraph is exempt
3
from the provisions of Section 3-55.
4

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

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(27) Beginning January 1, 2008, tangible personal property
2
used in the construction or maintenance of a community water
3
supply, as defined under Section 3.145 of the Environmental
4
Protection Act, that is operated by a not-for-profit
5
corporation that holds a valid water supply permit issued
6
under Title IV of the Environmental Protection Act. This
7
paragraph is exempt from the provisions of Section 3-55.
8

(28) Tangible personal property sold to a
9
public-facilities corporation, as described in Section
10
11-65-10 of the Illinois Municipal Code, for purposes of
11
constructing or furnishing a municipal convention hall, but
12
only if the legal title to the municipal convention hall is
13
transferred to the municipality without any further
14
consideration by or on behalf of the municipality at the time
15
of the completion of the municipal convention hall or upon the
16
retirement or redemption of any bonds or other debt
17
instruments issued by the public-facilities corporation in
18
connection with the development of the municipal convention
19
hall. This exemption includes existing public-facilities
20
corporations as provided in Section 11-65-25 of the Illinois
21
Municipal Code. This paragraph is exempt from the provisions
22
of Section 3-55.
23

(29) Beginning January 1, 2010 and continuing through
24
December 31, 2029, materials, parts, equipment, components,
25
and furnishings incorporated into or upon an aircraft as part
26
of the modification, refurbishment, completion, replacement,

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

Beginning January 1, 2010 and continuing through December
14
31, 2023, this exemption applies only to the transfer of
15
qualifying tangible personal property incident to the
16
modification, refurbishment, completion, replacement, repair,
17
or maintenance of an aircraft by persons who (i) hold an Air
18
Agency Certificate and are empowered to operate an approved
19
repair station by the Federal Aviation Administration, (ii)
20
have a Class IV Rating, and (iii) conduct operations in
21
accordance with Part 145 of the Federal Aviation Regulations.
22
The exemption does not include aircraft operated by a
23
commercial air carrier providing scheduled passenger air
24
service pursuant to authority issued under Part 121 or Part
25
129 of the Federal Aviation Regulations. From January 1, 2024
26
through December 31, 2029, this exemption applies only to the

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transfer of qualifying tangible personal property incident to:
2
(A) the modification, refurbishment, completion, repair,
3
replacement, or maintenance of an aircraft by persons who (i)
4
hold an Air Agency Certificate and are empowered to operate an
5
approved repair station by the Federal Aviation
6
Administration, (ii) have a Class IV Rating, and (iii) conduct
7
operations in accordance with Part 145 of the Federal Aviation
8
Regulations; and (B) the modification, replacement, repair,
9
and maintenance of aircraft engines or power plants without
10
regard to whether or not those persons meet the qualifications
11
of item (A).
12

The changes made to this paragraph (29) by Public Act
13
98-534 are declarative of existing law. It is the intent of the
14
General Assembly that the exemption under this paragraph (29)
15
applies continuously from January 1, 2010 through December 31,
16
2024; however, no claim for credit or refund is allowed for
17
taxes paid as a result of the disallowance of this exemption on
18
or after January 1, 2015 and prior to February 5, 2020 (the
19
effective date of Public Act 101-629).
20

(30) Beginning January 1, 2017 and through December 31,
21
2026, menstrual pads, tampons, and menstrual cups.
22

(31) Tangible personal property transferred to a purchaser
23
who is exempt from tax by operation of federal law. This
24
paragraph is exempt from the provisions of Section 3-55.
25

(32) Qualified tangible personal property used in the
26
construction or operation of a data center that has been

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granted a certificate of exemption by the Department of
2
Commerce and Economic Opportunity, whether that tangible
3
personal property is purchased by the owner, operator, or
4
tenant of the data center or by a contractor or subcontractor
5
of the owner, operator, or tenant. Data centers that would
6
have qualified for a certificate of exemption prior to January
7
1, 2020 had Public Act 101-31 been in effect, may apply for and
8
obtain an exemption for subsequent purchases of computer
9
equipment or enabling software purchased or leased to upgrade,
10
supplement, or replace computer equipment or enabling software
11
purchased or leased in the original investment that would have
12
qualified.
13

The Department of Commerce and Economic Opportunity shall
14
grant a certificate of exemption under this item (32) to
15
qualified data centers as defined by Section 605-1025 of the
16
Department of Commerce and Economic Opportunity Law of the
17
Civil Administrative Code of Illinois.
18

For the purposes of this item (32):
19

"Data center" means a building or a series of
20

buildings rehabilitated or constructed to house working
21

servers in one physical location or multiple sites within
22

the State of Illinois.
23

"Qualified tangible personal property" means:
24

electrical systems and equipment; climate control and
25

chilling equipment and systems; mechanical systems and
26

equipment; monitoring and secure systems; emergency

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generators; hardware; computers; servers; data storage
2

devices; network connectivity equipment; racks; cabinets;
3

telecommunications cabling infrastructure; raised floor
4

systems; peripheral components or systems; software;
5

mechanical, electrical, or plumbing systems; battery
6

systems; cooling systems and towers; temperature control
7

systems; other cabling; and other data center
8

infrastructure equipment and systems necessary to operate
9

qualified tangible personal property, including fixtures;
10

and component parts of any of the foregoing, including
11

installation, maintenance, repair, refurbishment, and
12

replacement of qualified tangible personal property to
13

generate, transform, transmit, distribute, or manage
14

electricity necessary to operate qualified tangible
15

personal property; and all other tangible personal
16

property that is essential to the operations of a computer
17

data center. The term "qualified tangible personal
18

property" also includes building materials physically
19

incorporated into the qualifying data center. To document
20

the exemption allowed under this Section, the retailer
21

must obtain from the purchaser a copy of the certificate
22

of eligibility issued by the Department of Commerce and
23

Economic Opportunity.
24

This item (32) is exempt from the provisions of Section
25
3-55.
26

(33) Beginning July 1, 2022, breast pumps, breast pump

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collection and storage supplies, and breast pump kits. This
2
item (33) is exempt from the provisions of Section 3-55. As
3
used in this item (33):
4

"Breast pump" means an electrically controlled or
5

manually controlled pump device designed or marketed to be
6

used to express milk from a human breast during lactation,
7

including the pump device and any battery, AC adapter, or
8

other power supply unit that is used to power the pump
9

device and is packaged and sold with the pump device at the
10

time of sale.
11

"Breast pump collection and storage supplies" means
12

items of tangible personal property designed or marketed
13

to be used in conjunction with a breast pump to collect
14

milk expressed from a human breast and to store collected
15

milk until it is ready for consumption.
16

"Breast pump collection and storage supplies"
17

includes, but is not limited to: breast shields and breast
18

shield connectors; breast pump tubes and tubing adapters;
19

breast pump valves and membranes; backflow protectors and
20

backflow protector adaptors; bottles and bottle caps
21

specific to the operation of the breast pump; and breast
22

milk storage bags.
23

"Breast pump collection and storage supplies" does not
24

include: (1) bottles and bottle caps not specific to the
25

operation of the breast pump; (2) breast pump travel bags
26

and other similar carrying accessories, including ice

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packs, labels, and other similar products; (3) breast pump
2

cleaning supplies; (4) nursing bras, bra pads, breast
3

shells, and other similar products; and (5) creams,
4

ointments, and other similar products that relieve
5

breastfeeding-related symptoms or conditions of the
6

breasts or nipples, unless sold as part of a breast pump
7

kit that is pre-packaged by the breast pump manufacturer
8

or distributor.
9

"Breast pump kit" means a kit that: (1) contains no
10

more than a breast pump, breast pump collection and
11

storage supplies, a rechargeable battery for operating the
12

breast pump, a breastmilk cooler, bottle stands, ice
13

packs, and a breast pump carrying case; and (2) is
14

pre-packaged as a breast pump kit by the breast pump
15

manufacturer or distributor.
16

(34) Tangible personal property sold by or on behalf of
17
the State Treasurer pursuant to the Revised Uniform Unclaimed
18
Property Act. This item (34) is exempt from the provisions of
19
Section 3-55.
20

(35) Beginning on January 1, 2024, tangible personal
21
property purchased by an active duty member of the armed
22
forces of the United States who presents valid military
23
identification and purchases the property using a form of
24
payment where the federal government is the payor. The member
25
of the armed forces must complete, at the point of sale, a form
26
prescribed by the Department of Revenue documenting that the

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transaction is eligible for the exemption under this
2
paragraph. Retailers must keep the form as documentation of
3
the exemption in their records for a period of not less than 6
4
years. "Armed forces of the United States" means the United
5
States Army, Navy, Air Force, Space Force, Marine Corps, or
6
Coast Guard. This paragraph is exempt from the provisions of
7
Section 3-55.
8

(36) Beginning July 1, 2024, home-delivered meals provided
9
to Medicare or Medicaid recipients when payment is made by an
10
intermediary, such as a Medicare Administrative Contractor, a
11
Managed Care Organization, or a Medicare Advantage
12
Organization, pursuant to a government contract. This
13
paragraph (36) is exempt from the provisions of Section 3-55.
14

(37) Beginning on January 1, 2026, as further defined in
15
Section 3-10, food prepared for immediate consumption and
16
transferred incident to a sale of service subject to this Act
17
or the Service Use Tax Act by an entity licensed under the
18
Hospital Licensing Act, the Nursing Home Care Act, the
19
Assisted Living and Shared Housing Act, the ID/DD Community
20
Care Act, the MC/DD Act, the Specialized Mental Health
21
Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
22
an entity that holds a permit issued pursuant to the Life Care
23
Facilities Act. This item (37) is exempt from the provisions
24
of Section 3-55.
25

(38) Beginning on January 1, 2026, as further defined in
26
Section 3-10, food for human consumption that is to be

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consumed off the premises where it is sold (other than
2
alcoholic beverages, food consisting of or infused with adult
3
use cannabis, soft drinks, candy, and food that has been
4
prepared for immediate consumption). This item (38) is exempt
5
from the provisions of Section 3-55.
6

(39) The lease of the following tangible personal
7
property:
8

(1) computer software transferred subject to a license
9

that meets the following requirements:
10

(A) it is evidenced by a written agreement signed
11

by the licensor and the customer;
12

(i) an electronic agreement in which the
13

customer accepts the license by means of an
14

electronic signature that is verifiable and can be
15

authenticated and is attached to or made part of
16

the license will comply with this requirement;
17

(ii) a license agreement in which the customer
18

electronically accepts the terms by clicking "I
19

agree" does not comply with this requirement;
20

(B) it restricts the customer's duplication and
21

use of the software;
22

(C) it prohibits the customer from licensing,
23

sublicensing, or transferring the software to a third
24

party (except to a related party) without the
25

permission and continued control of the licensor;
26

(D) the licensor has a policy of providing another

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copy at minimal or no charge if the customer loses or
2

damages the software, or of permitting the licensee to
3

make and keep an archival copy, and such policy is
4

either stated in the license agreement, supported by
5

the licensor's books and records, or supported by a
6

notarized statement made under penalties of perjury by
7

the licensor; and
8

(E) the customer must destroy or return all copies
9

of the software to the licensor at the end of the
10

license period; this provision is deemed to be met, in
11

the case of a perpetual license, without being set
12

forth in the license agreement; and
13

(2) property that is subject to a tax on lease
14

receipts imposed by a home rule unit of local government
15

if the ordinance imposing that tax was adopted prior to
16

January 1, 2023.
17

(40) On and after January 1, 2027, hearing aids. As used in
18
this item (40), "hearing aid" means any wearable
19
non-disposable, non-experimental instrument or device designed
20
to aid or compensate for impaired human hearing and any parts,
21
attachments, or accessories for the instrument or device,
22
including an ear mold but excluding batteries and cords. This
23
item (40) is exempt from the provisions of Section 3-55.

24
(Source: P.A. 103-9, Article 5, Section 5-15, eff. 6-7-23;
25
103-9, Article 15, Section 15-15, eff. 6-7-23; 103-154, eff.
26
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,

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eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
2
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-417, eff.
3
8-15-25.)

4

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

6

(35 ILCS 120/2-5)
7

Sec. 2-5.
Exemptions.
Gross receipts from proceeds from
8
the sale, which, on and after January 1, 2025, includes the
9
lease, of the following tangible personal property are exempt
10
from the tax imposed by this Act:
11

(1) Farm chemicals.
12

(2) Farm machinery and equipment, both new and used,
13

including that manufactured on special order, certified by
14

the purchaser to be used primarily for production
15

agriculture or State or federal agricultural programs,
16

including individual replacement parts for the machinery
17

and equipment, including machinery and equipment purchased
18

for lease, and including implements of husbandry defined
19

in Section 1-130 of the Illinois Vehicle Code, farm
20

machinery and agricultural chemical and fertilizer
21

spreaders, and nurse wagons required to be registered
22

under Section 3-809 of the Illinois Vehicle Code, but
23

excluding other motor vehicles required to be registered
24

under the Illinois Vehicle Code. Horticultural polyhouses

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or hoop houses used for propagating, growing, or
2

overwintering plants shall be considered farm machinery
3

and equipment under this item (2). Agricultural chemical
4

tender tanks and dry boxes shall include units sold
5

separately from a motor vehicle required to be licensed
6

and units sold mounted on a motor vehicle required to be
7

licensed, if the selling price of the tender is separately
8

stated.
9

Farm machinery and equipment shall include precision
10

farming equipment that is installed or purchased to be
11

installed on farm machinery and equipment including, but
12

not limited to, tractors, harvesters, sprayers, planters,
13

seeders, or spreaders. Precision farming equipment
14

includes, but is not limited to, soil testing sensors,
15

computers, monitors, software, global positioning and
16

mapping systems, and other such equipment.
17

Farm machinery and equipment also includes computers,
18

sensors, software, and related equipment used primarily in
19

the computer-assisted operation of production agriculture
20

facilities, equipment, and activities such as, but not
21

limited to, the collection, monitoring, and correlation of
22

animal and crop data for the purpose of formulating animal
23

diets and agricultural chemicals.
24

Beginning on January 1, 2024, farm machinery and
25

equipment also includes electrical power generation
26

equipment used primarily for production agriculture.

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

2-70.
3

(3) Until July 1, 2003, distillation machinery and
4

equipment, sold as a unit or kit, assembled or installed
5

by the retailer, certified by the user to be used only for
6

the production of ethyl alcohol that will be used for
7

consumption as motor fuel or as a component of motor fuel
8

for the personal use of the user, and not subject to sale
9

or resale.
10

(4) Until July 1, 2003 and beginning again September
11

1, 2004 through August 30, 2014, graphic arts machinery
12

and equipment, including repair and replacement parts,
13

both new and used, and including that manufactured on
14

special order or purchased for lease, certified by the
15

purchaser to be used primarily for graphic arts
16

production. Equipment includes chemicals or chemicals
17

acting as catalysts but only if the chemicals or chemicals
18

acting as catalysts effect a direct and immediate change
19

upon a graphic arts product. Beginning on July 1, 2017,
20

graphic arts machinery and equipment is included in the
21

manufacturing and assembling machinery and equipment
22

exemption under paragraph (14).
23

(5) A motor vehicle that is used for automobile
24

renting, as defined in the Automobile Renting Occupation
25

and Use Tax Act. This paragraph is exempt from the
26

provisions of Section 2-70.

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(6) Personal property sold by a teacher-sponsored
2

student organization affiliated with an elementary or
3

secondary school located in Illinois.
4

(7) Until July 1, 2003, proceeds of that portion of
5

the selling price of a passenger car the sale of which is
6

subject to the Replacement Vehicle Tax.
7

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

association for use in conducting, operating, or promoting
9

the county fair.
10

(9) Personal property sold to a not-for-profit arts or
11

cultural organization that establishes, by proof required
12

by the Department by rule, that it has received an
13

exemption under Section 501(c)(3) of the Internal Revenue
14

Code and that is organized and operated primarily for the
15

presentation or support of arts or cultural programming,
16

activities, or services. These organizations include, but
17

are not limited to, music and dramatic arts organizations
18

such as symphony orchestras and theatrical groups, arts
19

and cultural service organizations, local arts councils,
20

visual arts organizations, and media arts organizations.
21

On and after July 1, 2001 (the effective date of Public Act
22

92-35), however, an entity otherwise eligible for this
23

exemption shall not make tax-free purchases unless it has
24

an active identification number issued by the Department.
25

(10) Personal property sold by a corporation, society,
26

association, foundation, institution, or organization,

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other than a limited liability company, that is organized
2

and operated as a not-for-profit service enterprise for
3

the benefit of persons 65 years of age or older if the
4

personal property was not purchased by the enterprise for
5

the purpose of resale by the enterprise.
6

(11) Except as otherwise provided in this Section,
7

personal property sold to a governmental body, to a
8

corporation, society, association, foundation, or
9

institution organized and operated exclusively for
10

charitable, religious, or educational purposes, or to a
11

not-for-profit corporation, society, association,
12

foundation, institution, or organization that has no
13

compensated officers or employees and that is organized
14

and operated primarily for the recreation of persons 55
15

years of age or older. A limited liability company may
16

qualify for the exemption under this paragraph only if the
17

limited liability company is organized and operated
18

exclusively for educational purposes. On and after July 1,
19

1987, however, no entity otherwise eligible for this
20

exemption shall make tax-free purchases unless it has an
21

active identification number issued by the Department.
22

(12) (Blank).
23

(12-5) On and after July 1, 2003 and through June 30,
24

2004, motor vehicles of the second division with a gross
25

vehicle weight in excess of 8,000 pounds that are subject
26

to the commercial distribution fee imposed under Section

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3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
2

2004 and through June 30, 2005, the use in this State of
3

motor vehicles of the second division: (i) with a gross
4

vehicle weight rating in excess of 8,000 pounds; (ii) that
5

are subject to the commercial distribution fee imposed
6

under Section 3-815.1 of the Illinois Vehicle Code; and
7

(iii) that are primarily used for commercial purposes.
8

Through June 30, 2005, this exemption applies to repair
9

and replacement parts added after the initial purchase of
10

such a motor vehicle if that motor vehicle is used in a
11

manner that would qualify for the rolling stock exemption
12

otherwise provided for in this Act. For purposes of this
13

paragraph, "used for commercial purposes" means the
14

transportation of persons or property in furtherance of
15

any commercial or industrial enterprise whether for-hire
16

or not.
17

(13) Proceeds from sales to owners or lessors,
18

lessees, or shippers of tangible personal property that is
19

utilized by interstate carriers for hire for use as
20

rolling stock moving in interstate commerce and equipment
21

operated by a telecommunications provider, licensed as a
22

common carrier by the Federal Communications Commission,
23

which is permanently installed in or affixed to aircraft
24

moving in interstate commerce.
25

(14) Machinery and equipment that will be used by the
26

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

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process of manufacturing or assembling tangible personal
2

property for wholesale or retail sale or lease, whether
3

the sale or lease is made directly by the manufacturer or
4

by some other person, whether the materials used in the
5

process are owned by the manufacturer or some other
6

person, or whether the sale or lease is made apart from or
7

as an incident to the seller's engaging in the service
8

occupation of producing machines, tools, dies, jigs,
9

patterns, gauges, or other similar items of no commercial
10

value on special order for a particular purchaser. The
11

exemption provided by this paragraph (14) does not include
12

machinery and equipment used in (i) the generation of
13

electricity for wholesale or retail sale; (ii) the
14

generation or treatment of natural or artificial gas for
15

wholesale or retail sale that is delivered to customers
16

through pipes, pipelines, or mains; or (iii) the treatment
17

of water for wholesale or retail sale that is delivered to
18

customers through pipes, pipelines, or mains. The
19

provisions of Public Act 98-583 are declaratory of
20

existing law as to the meaning and scope of this
21

exemption. Beginning on July 1, 2017, the exemption
22

provided by this paragraph (14) includes, but is not
23

limited to, graphic arts machinery and equipment, as
24

defined in paragraph (4) of this Section.
25

(15) Proceeds of mandatory service charges separately
26

stated on customers' bills for 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
4

directly in preparing, serving, hosting or cleaning up the
5

food or beverage function with respect to which the
6

service charge is imposed.
7

(16) Tangible personal property sold to a purchaser if
8

the purchaser is exempt from use tax by operation of
9

federal law. This paragraph is exempt from the provisions
10

of Section 2-70.
11

(17) Tangible personal property sold to a common
12

carrier by rail or motor that receives the physical
13

possession of the property in Illinois and that transports
14

the property, or shares with another common carrier in the
15

transportation of the property, out of Illinois on a
16

standard uniform bill of lading showing the seller of the
17

property as the shipper or consignor of the property to a
18

destination outside Illinois, for use outside Illinois.
19

(18) Legal tender, currency, medallions, or gold or
20

silver coinage issued by the State of Illinois, the
21

government of the United States of America, or the
22

government of any foreign country, and bullion.
23

(19) Until July 1, 2003, oil field exploration,
24

drilling, and production equipment, including (i) rigs and
25

parts of rigs, rotary rigs, cable tool rigs, and workover
26

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

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drill strings, (iii) pumps and pump-jack units, (iv)
2

storage tanks and flow lines, (v) any individual
3

replacement part for oil field exploration, drilling, and
4

production equipment, and (vi) machinery and equipment
5

purchased for lease; but excluding motor vehicles required
6

to be registered under the Illinois Vehicle Code.
7

(20) Photoprocessing machinery and equipment,
8

including repair and replacement parts, both new and used,
9

including that manufactured on special order, certified by
10

the purchaser to be used primarily for photoprocessing,
11

and including photoprocessing machinery and equipment
12

purchased for lease.
13

(21) Until July 1, 2028, coal and aggregate
14

exploration, mining, off-highway hauling, processing,
15

maintenance, and reclamation equipment, including
16

replacement parts and equipment, and including equipment
17

purchased for lease, but excluding motor vehicles required
18

to be registered under the Illinois Vehicle Code. The
19

changes made to this Section by Public Act 97-767 apply on
20

and after July 1, 2003, but no claim for credit or refund
21

is allowed on or after August 16, 2013 (the effective date
22

of Public Act 98-456) for such taxes paid during the
23

period beginning July 1, 2003 and ending on August 16,
24

2013 (the effective date of Public Act 98-456).
25

(22) Until June 30, 2013, fuel and petroleum products
26

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

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to be used for consumption, shipment, or storage in the
2

conduct of its business as an air common carrier, for a
3

flight destined for or returning from a location or
4

locations outside the United States without regard to
5

previous or subsequent domestic stopovers.
6

Beginning July 1, 2013, fuel and petroleum products
7

sold to or used by an air carrier, certified by the carrier
8

to be used for consumption, shipment, or storage in the
9

conduct of its business as an air common carrier, for a
10

flight that (i) is engaged in foreign trade or is engaged
11

in trade between the United States and any of its
12

possessions and (ii) transports at least one individual or
13

package for hire from the city of origination to the city
14

of final destination on the same aircraft, without regard
15

to a change in the flight number of that aircraft.
16

(23) A transaction in which the purchase order is
17

received by a florist who is located outside Illinois, but
18

who has a florist located in Illinois deliver the property
19

to the purchaser or the purchaser's donee in Illinois.
20

(24) Fuel consumed or used in the operation of ships,
21

barges, or vessels that are used primarily in or for the
22

transportation of property or the conveyance of persons
23

for hire on rivers bordering on this State if the fuel is
24

delivered by the seller to the purchaser's barge, ship, or
25

vessel while it is afloat upon that bordering river.
26

(25) Except as provided in items (25-5) and (25-6) of

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this Section, a motor vehicle sold in this State to a
2

nonresident even though the motor vehicle is delivered to
3

the nonresident in this State, if the motor vehicle is not
4

to be titled in this State, and if a drive-away permit is
5

issued to the motor vehicle as provided in Section 3-603
6

of the Illinois Vehicle Code or if the nonresident
7

purchaser has vehicle registration plates to transfer to
8

the motor vehicle upon returning to his or her home state.
9

The issuance of the drive-away permit or having the
10

out-of-state registration plates to be transferred is
11

prima facie evidence that the motor vehicle will not be
12

titled in this State.
13

(25-5) The exemption under item (25) does not apply if
14

the state in which the motor vehicle will be titled does
15

not allow a reciprocal exemption for a motor vehicle sold
16

and delivered in that state to an Illinois resident but
17

titled in Illinois. The tax collected under this Act on
18

the sale of a motor vehicle in this State to a resident of
19

another state that does not allow a reciprocal exemption
20

shall be imposed at a rate equal to the state's rate of tax
21

on taxable property in the state in which the purchaser is
22

a resident, except that the tax shall not exceed the tax
23

that would otherwise be imposed under this Act. At the
24

time of the sale, the purchaser shall execute a statement,
25

signed under penalty of perjury, of his or her intent to
26

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

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resident within 30 days after the sale and of the fact of
2

the payment to the State of Illinois of tax in an amount
3

equivalent to the state's rate of tax on taxable property
4

in his or her state of residence and shall submit the
5

statement to the appropriate tax collection agency in his
6

or her state of residence. In addition, the retailer must
7

retain a signed copy of the statement in his or her
8

records. Nothing in this item shall be construed to
9

require the removal of the vehicle from this state
10

following the filing of an intent to title the vehicle in
11

the purchaser's state of residence if the purchaser titles
12

the vehicle in his or her state of residence within 30 days
13

after the date of sale. The tax collected under this Act in
14

accordance with this item (25-5) shall be proportionately
15

distributed as if the tax were collected at the 6.25%
16

general rate imposed under this Act.
17

(25-6) There is a rebuttable presumption that the
18

exemption under item (25) does not apply if the purchaser
19

is a limited liability company and a member of the limited
20

liability company is a resident of Illinois. This
21

presumption may be rebutted by other evidence, such as
22

evidence the motor vehicle is insured at a garaging or
23

storage address outside Illinois or other evidence of the
24

physical address at which the motor vehicle will be
25

permanently stored or garaged outside Illinois.
26

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

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under this Act on the sale of an aircraft, as defined in
2

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

following conditions are met:
4

(1) the aircraft leaves this State within 15 days
5

after the later of either the issuance of the final
6

billing for the sale of the aircraft, or the
7

authorized approval for return to service, completion
8

of the maintenance record entry, and completion of the
9

test flight and ground test for inspection, as
10

required by 14 CFR 91.407;
11

(2) the aircraft is not based or registered in
12

this State after the sale of the aircraft; and
13

(3) the seller retains in his or her books and
14

records and provides to the Department a signed and
15

dated certification from the purchaser, on a form
16

prescribed by the Department, certifying that the
17

requirements of this item (25-7) are met. The
18

certificate must also include the name and address of
19

the purchaser, the address of the location where the
20

aircraft is to be titled or registered, the address of
21

the primary physical location of the aircraft, and
22

other information that the Department may reasonably
23

require.
24

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

"Based in this State" means hangared, stored, or
26

otherwise used, excluding post-sale customizations as

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defined in this Section, for 10 or more days in each
2

12-month period immediately following the date of the sale
3

of the aircraft.
4

"Registered in this State" means an aircraft
5

registered with the Department of Transportation,
6

Aeronautics Division, or titled or registered with the
7

Federal Aviation Administration to an address located in
8

this State.
9

This paragraph (25-7) is exempt from the provisions of
10

Section 2-70.
11

(26) Semen used for artificial insemination of
12

livestock for direct agricultural production.
13

(27) Horses, or interests in horses, registered with
14

and meeting the requirements of any of the Arabian Horse
15

Club Registry of America, Appaloosa Horse Club, American
16

Quarter Horse Association, United States Trotting
17

Association, or Jockey Club, as appropriate, used for
18

purposes of breeding or racing for prizes. This item (27)
19

is exempt from the provisions of Section 2-70, and the
20

exemption provided for under this item (27) applies for
21

all periods beginning May 30, 1995, but no claim for
22

credit or refund is allowed on or after January 1, 2008
23

(the effective date of Public Act 95-88) for such taxes
24

paid during the period beginning May 30, 2000 and ending
25

on January 1, 2008 (the effective date of Public Act
26

95-88).

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(28) Computers and communications equipment utilized
2

for any hospital purpose and equipment used in the
3

diagnosis, analysis, or treatment of hospital patients
4

sold to a lessor who leases the equipment, under a lease of
5

one year or longer executed or in effect at the time of the
6

purchase, to a hospital that has been issued an active tax
7

exemption identification number by the Department under
8

Section 1g of this Act.
9

(29) Personal property sold to a lessor who leases the
10

property, under a lease of one year or longer executed or
11

in effect at the time of the purchase, to a governmental
12

body that has been issued an active tax exemption
13

identification number by the Department under Section 1g
14

of this Act.
15

(30) Beginning with taxable years ending on or after
16

December 31, 1995 and ending with taxable years ending on
17

or before December 31, 2004, personal property that is
18

donated for disaster relief to be used in a State or
19

federally declared disaster area in Illinois or bordering
20

Illinois by a manufacturer or retailer that is registered
21

in this State to a corporation, society, association,
22

foundation, or institution that has been issued a sales
23

tax exemption identification number by the Department that
24

assists victims of the disaster who reside within the
25

declared disaster area.
26

(31) Beginning with taxable years ending on or after

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December 31, 1995 and ending with taxable years ending on
2

or before December 31, 2004, personal property that is
3

used in the performance of infrastructure repairs in this
4

State, including, but not limited to, municipal roads and
5

streets, access roads, bridges, sidewalks, waste disposal
6

systems, water and sewer line extensions, water
7

distribution and purification facilities, storm water
8

drainage and retention facilities, and sewage treatment
9

facilities, resulting from a State or federally declared
10

disaster in Illinois or bordering Illinois when such
11

repairs are initiated on facilities located in the
12

declared disaster area within 6 months after the disaster.
13

(32) Beginning July 1, 1999, game or game birds sold
14

at a "game breeding and hunting preserve area" as that
15

term is used in the Wildlife Code. This paragraph is
16

exempt from the provisions of Section 2-70.
17

(33) A motor vehicle, as that term is defined in
18

Section 1-146 of the Illinois Vehicle Code, that is
19

donated to a corporation, limited liability company,
20

society, association, foundation, or institution that is
21

determined by the Department to be organized and operated
22

exclusively for educational purposes. For purposes of this
23

exemption, "a corporation, limited liability company,
24

society, association, foundation, or institution organized
25

and operated exclusively for educational purposes" means
26

all tax-supported public schools, private schools that

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offer systematic instruction in useful branches of
2

learning by methods common to public schools and that
3

compare favorably in their scope and intensity with the
4

course of study presented in tax-supported schools, and
5

vocational or technical schools or institutes organized
6

and operated exclusively to provide a course of study of
7

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

(34) Beginning January 1, 2000, personal property,
12

including food, purchased through fundraising events for
13

the benefit of a public or private elementary or secondary
14

school, a group of those schools, or one or more school
15

districts if the events are sponsored by an entity
16

recognized by the school district that consists primarily
17

of volunteers and includes parents and teachers of the
18

school children. This paragraph does not apply to
19

fundraising events (i) for the benefit of private home
20

instruction or (ii) for which the fundraising entity
21

purchases the personal property sold at the events from
22

another individual or entity that sold the property for
23

the purpose of resale by the fundraising entity and that
24

profits from the sale to the fundraising entity. This
25

paragraph is exempt from the provisions of Section 2-70.
26

(35) Beginning January 1, 2000 and through December

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31, 2001, new or used automatic vending machines that
2

prepare and serve hot food and beverages, including
3

coffee, soup, and other items, and replacement parts for
4

these machines. Beginning January 1, 2002 and through June
5

30, 2003, machines and parts for machines used in
6

commercial, coin-operated amusement and vending business
7

if a use or occupation tax is paid on the gross receipts
8

derived from the use of the commercial, coin-operated
9

amusement and vending machines. This paragraph is exempt
10

from the provisions of Section 2-70.
11

(35-5) Beginning August 23, 2001 and through June 30,
12

2016, food for human consumption that is to be consumed
13

off the premises where it is sold (other than alcoholic
14

beverages, soft drinks, and food that has been prepared
15

for immediate consumption) and prescription and
16

nonprescription medicines, drugs, medical appliances, and
17

insulin, urine testing materials, syringes, and needles
18

used by diabetics, for human use, when purchased for use
19

by a person receiving medical assistance under Article V
20

of the Illinois Public Aid Code who resides in a licensed
21

long-term care facility, as defined in the Nursing Home
22

Care Act, or a licensed facility as defined in the ID/DD
23

Community Care Act, the MC/DD Act, or the Specialized
24

Mental Health Rehabilitation Act of 2013.
25

(36) Beginning August 2, 2001, computers and
26

communications equipment utilized for any hospital purpose

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and equipment used in the diagnosis, analysis, or
2

treatment of hospital patients sold to a lessor who leases
3

the equipment, under a lease of one year or longer
4

executed or in effect at the time of the purchase, to a
5

hospital that has been issued an active tax exemption
6

identification number by the Department under Section 1g
7

of this Act. This paragraph is exempt from the provisions
8

of Section 2-70.
9

(37) Beginning August 2, 2001, personal property sold
10

to a lessor who leases the property, under a lease of one
11

year or longer executed or in effect at the time of the
12

purchase, to a governmental body that has been issued an
13

active tax exemption identification number by the
14

Department under Section 1g of this Act. This paragraph is
15

exempt from the provisions of Section 2-70.
16

(38) Beginning on January 1, 2002 and through June 30,
17

2016, tangible personal property purchased from an
18

Illinois retailer by a taxpayer engaged in centralized
19

purchasing activities in Illinois who will, upon receipt
20

of the property in Illinois, temporarily store the
21

property in Illinois (i) for the purpose of subsequently
22

transporting it outside this State for use or consumption
23

thereafter solely outside this State or (ii) for the
24

purpose of being processed, fabricated, or manufactured
25

into, attached to, or incorporated into other tangible
26

personal property to be transported outside this State and

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thereafter used or consumed solely outside this State. The
2

Director of Revenue shall, pursuant to rules adopted in
3

accordance with the Illinois Administrative Procedure Act,
4

issue a permit to any taxpayer in good standing with the
5

Department who is eligible for the exemption under this
6

paragraph (38). The permit issued under this paragraph
7

(38) shall authorize the holder, to the extent and in the
8

manner specified in the rules adopted under this Act, to
9

purchase tangible personal property from a retailer exempt
10

from the taxes imposed by this Act. Taxpayers shall
11

maintain all necessary books and records to substantiate
12

the use and consumption of all such tangible personal
13

property outside of the State of Illinois.
14

(39) Beginning January 1, 2008, tangible personal
15

property used in the construction or maintenance of a
16

community water supply, as defined under Section 3.145 of
17

the Environmental Protection Act, that is operated by a
18

not-for-profit corporation that holds a valid water supply
19

permit issued under Title IV of the Environmental
20

Protection Act. This paragraph is exempt from the
21

provisions of Section 2-70.
22

(40) Beginning January 1, 2010 and continuing through
23

December 31, 2029, materials, parts, equipment,
24

components, and furnishings incorporated into or upon an
25

aircraft as part of the modification, refurbishment,
26

completion, replacement, repair, or maintenance of the

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aircraft. This exemption includes consumable supplies used
2

in the modification, refurbishment, completion,
3

replacement, repair, and maintenance of aircraft. However,
4

until January 1, 2024, this exemption excludes any
5

materials, parts, equipment, components, and consumable
6

supplies used in the modification, replacement, repair,
7

and maintenance of aircraft engines or power plants,
8

whether such engines or power plants are installed or
9

uninstalled upon any such aircraft. "Consumable supplies"
10

include, but are not limited to, adhesive, tape,
11

sandpaper, general purpose lubricants, cleaning solution,
12

latex gloves, and protective films.
13

Beginning January 1, 2010 and continuing through
14

December 31, 2023, this exemption applies only to the sale
15

of qualifying tangible personal property to persons who
16

modify, refurbish, complete, replace, or maintain an
17

aircraft and who (i) hold an Air Agency Certificate and
18

are empowered to operate an approved repair station by the
19

Federal Aviation Administration, (ii) have a Class IV
20

Rating, and (iii) conduct operations in accordance with
21

Part 145 of the Federal Aviation Regulations. The
22

exemption does not include aircraft operated by a
23

commercial air carrier providing scheduled passenger air
24

service pursuant to authority issued under Part 121 or
25

Part 129 of the Federal Aviation Regulations. From January
26

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

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only to the sale of qualifying tangible personal property
2

to: (A) persons who modify, refurbish, complete, repair,
3

replace, or maintain aircraft and who (i) hold an Air
4

Agency Certificate and are empowered to operate an
5

approved repair station by the Federal Aviation
6

Administration, (ii) have a Class IV Rating, and (iii)
7

conduct operations in accordance with Part 145 of the
8

Federal Aviation Regulations; and (B) persons who engage
9

in the modification, replacement, repair, and maintenance
10

of aircraft engines or power plants without regard to
11

whether or not those persons meet the qualifications of
12

item (A).
13

The changes made to this paragraph (40) by Public Act
14

98-534 are declarative of existing law. It is the intent
15

of the General Assembly that the exemption under this
16

paragraph (40) applies continuously from January 1, 2010
17

through December 31, 2024; however, no claim for credit or
18

refund is allowed for taxes paid as a result of the
19

disallowance of this exemption on or after January 1, 2015
20

and prior to February 5, 2020 (the effective date of
21

Public Act 101-629).
22

(41) Tangible personal property sold to a
23

public-facilities corporation, as described in Section
24

11-65-10 of the Illinois Municipal Code, for purposes of
25

constructing or furnishing a municipal convention hall,
26

but only if the legal title to the municipal convention

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hall is transferred to the municipality without any
2

further consideration by or on behalf of the municipality
3

at the time of the completion of the municipal convention
4

hall or upon the retirement or redemption of any bonds or
5

other debt instruments issued by the public-facilities
6

corporation in connection with the development of the
7

municipal convention hall. This exemption includes
8

existing public-facilities corporations as provided in
9

Section 11-65-25 of the Illinois Municipal Code. This
10

paragraph is exempt from the provisions of Section 2-70.
11

(42) Beginning January 1, 2017 and through December
12

31, 2026, menstrual pads, tampons, and menstrual cups.
13

(43) Merchandise that is subject to the Rental
14

Purchase Agreement Occupation and Use Tax. The purchaser
15

must certify that the item is purchased to be rented
16

subject to a rental-purchase agreement, as defined in the
17

Rental-Purchase Agreement Act, and provide proof of
18

registration under the Rental Purchase Agreement
19

Occupation and Use Tax Act. This paragraph is exempt from
20

the provisions of Section 2-70.
21

(44) Qualified tangible personal property used in the
22

construction or operation of a data center that has been
23

granted a certificate of exemption by the Department of
24

Commerce and Economic Opportunity, whether that tangible
25

personal property is purchased by the owner, operator, or
26

tenant of the data center or by a contractor or

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subcontractor of the owner, operator, or tenant. Data
2

centers that would have qualified for a certificate of
3

exemption prior to January 1, 2020 had Public Act 101-31
4

been in effect, may apply for and obtain an exemption for
5

subsequent purchases of computer equipment or enabling
6

software purchased or leased to upgrade, supplement, or
7

replace computer equipment or enabling software purchased
8

or leased in the original investment that would have
9

qualified.
10

The Department of Commerce and Economic Opportunity
11

shall grant a certificate of exemption under this item
12

(44) to qualified data centers as defined by Section
13

605-1025 of the Department of Commerce and Economic
14

Opportunity Law of the Civil Administrative Code of
15

Illinois.
16

For the purposes of this item (44):
17

"Data center" means a building or a series of
18

buildings rehabilitated or constructed to house
19

working servers in one physical location or multiple
20

sites within the State of Illinois.
21

"Qualified tangible personal property" means:
22

electrical systems and equipment; climate control and
23

chilling equipment and systems; mechanical systems and
24

equipment; monitoring and secure systems; emergency
25

generators; hardware; computers; servers; data storage
26

devices; network connectivity equipment; racks;

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cabinets; telecommunications cabling infrastructure;
2

raised floor systems; peripheral components or
3

systems; software; mechanical, electrical, or plumbing
4

systems; battery systems; cooling systems and towers;
5

temperature control systems; other cabling; and other
6

data center infrastructure equipment and systems
7

necessary to operate qualified tangible personal
8

property, including fixtures; and component parts of
9

any of the foregoing, including installation,
10

maintenance, repair, refurbishment, and replacement of
11

qualified tangible personal property to generate,
12

transform, transmit, distribute, or manage electricity
13

necessary to operate qualified tangible personal
14

property; and all other tangible personal property
15

that is essential to the operations of a computer data
16

center. The term "qualified tangible personal
17

property" also includes building materials physically
18

incorporated into the qualifying data center. To
19

document the exemption allowed under this Section, the
20

retailer must obtain from the purchaser a copy of the
21

certificate of eligibility issued by the Department of
22

Commerce and Economic Opportunity.
23

This item (44) is exempt from the provisions of
24

Section 2-70.
25

(45) Beginning January 1, 2020 and through December
26

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

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marketplace seller over a marketplace for which tax is due
2

under this Act but for which use tax has been collected and
3

remitted to the Department by a marketplace facilitator
4

under Section 2d of the Use Tax Act are exempt from tax
5

under this Act. A marketplace seller claiming this
6

exemption shall maintain books and records demonstrating
7

that the use tax on such sales has been collected and
8

remitted by a marketplace facilitator. Marketplace sellers
9

that have properly remitted tax under this Act on such
10

sales may file a claim for credit as provided in Section 6
11

of this Act. No claim is allowed, however, for such taxes
12

for which a credit or refund has been issued to the
13

marketplace facilitator under the Use Tax Act, or for
14

which the marketplace facilitator has filed a claim for
15

credit or refund under the Use Tax Act.
16

(46) Beginning July 1, 2022, breast pumps, breast pump
17

collection and storage supplies, and breast pump kits.
18

This item (46) is exempt from the provisions of Section
19

2-70. As used in this item (46):
20

"Breast pump" means an electrically controlled or
21

manually controlled pump device designed or marketed to be
22

used to express milk from a human breast during lactation,
23

including the pump device and any battery, AC adapter, or
24

other power supply unit that is used to power the pump
25

device and is packaged and sold with the pump device at the
26

time of sale.

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"Breast pump collection and storage supplies" means
2

items of tangible personal property designed or marketed
3

to be used in conjunction with a breast pump to collect
4

milk expressed from a human breast and to store collected
5

milk until it is ready for consumption.
6

"Breast pump collection and storage supplies"
7

includes, but is not limited to: breast shields and breast
8

shield connectors; breast pump tubes and tubing adapters;
9

breast pump valves and membranes; backflow protectors and
10

backflow protector adaptors; bottles and bottle caps
11

specific to the operation of the breast pump; and breast
12

milk storage bags.
13

"Breast pump collection and storage supplies" does not
14

include: (1) bottles and bottle caps not specific to the
15

operation of the breast pump; (2) breast pump travel bags
16

and other similar carrying accessories, including ice
17

packs, labels, and other similar products; (3) breast pump
18

cleaning supplies; (4) nursing bras, bra pads, breast
19

shells, and other similar products; and (5) creams,
20

ointments, and other similar products that relieve
21

breastfeeding-related symptoms or conditions of the
22

breasts or nipples, unless sold as part of a breast pump
23

kit that is pre-packaged by the breast pump manufacturer
24

or distributor.
25

"Breast pump kit" means a kit that: (1) contains no
26

more than a breast pump, breast pump collection and

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storage supplies, a rechargeable battery for operating the
2

breast pump, a breastmilk cooler, bottle stands, ice
3

packs, and a breast pump carrying case; and (2) is
4

pre-packaged as a breast pump kit by the breast pump
5

manufacturer or distributor.
6

(47) Tangible personal property sold by or on behalf
7

of the State Treasurer pursuant to the Revised Uniform
8

Unclaimed Property Act. This item (47) is exempt from the
9

provisions of Section 2-70.
10

(48) Beginning on January 1, 2024, tangible personal
11

property purchased by an active duty member of the armed
12

forces of the United States who presents valid military
13

identification and purchases the property using a form of
14

payment where the federal government is the payor. The
15

member of the armed forces must complete, at the point of
16

sale, a form prescribed by the Department of Revenue
17

documenting that the transaction is eligible for the
18

exemption under this paragraph. Retailers must keep the
19

form as documentation of the exemption in their records
20

for a period of not less than 6 years. "Armed forces of the
21

United States" means the United States Army, Navy, Air
22

Force, Space Force, Marine Corps, or Coast Guard. This
23

paragraph is exempt from the provisions of Section 2-70.
24

(49) Beginning July 1, 2024, home-delivered meals
25

provided to Medicare or Medicaid recipients when payment
26

is made by an intermediary, such as a Medicare

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Administrative Contractor, a Managed Care Organization, or
2

a Medicare Advantage Organization, pursuant to a
3

government contract. This paragraph (49) is exempt from
4

the provisions of Section 2-70.
5

(50) Beginning on January 1, 2026, as further defined
6

in Section 2-10, food for human consumption that is to be
7

consumed off the premises where it is sold (other than
8

alcoholic beverages, food consisting of or infused with
9

adult use cannabis, soft drinks, candy, and food that has
10

been prepared for immediate consumption). This item (50)
11

is exempt from the provisions of Section 2-70.
12

(51) Gross receipts from the lease of the following
13

tangible personal property:
14

(1) computer software transferred subject to a
15

license that meets the following requirements:
16

(A) it is evidenced by a written agreement
17

signed by the licensor and the customer;
18

(i) an electronic agreement in which the
19

customer accepts the license by means of an
20

electronic signature that is verifiable and
21

can be authenticated and is attached to or
22

made part of the license will comply with this
23

requirement;
24

(ii) a license agreement in which the
25

customer electronically accepts the terms by
26

clicking "I agree" does not comply with this

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requirement;
2

(B) it restricts the customer's duplication
3

and use of the software;
4

(C) it prohibits the customer from licensing,
5

sublicensing, or transferring the software to a
6

third party (except to a related party) without
7

the permission and continued control of the
8

licensor;
9

(D) the licensor has a policy of providing
10

another copy at minimal or no charge if the
11

customer loses or damages the software, or of
12

permitting the licensee to make and keep an
13

archival copy, and such policy is either stated in
14

the license agreement, supported by the licensor's
15

books and records, or supported by a notarized
16

statement made under penalties of perjury by the
17

licensor; and
18

(E) the customer must destroy or return all
19

copies of the software to the licensor at the end
20

of the license period; this provision is deemed to
21

be met, in the case of a perpetual license,
22

without being set forth in the license agreement;
23

and
24

(2) property that is subject to a tax on lease
25

receipts imposed by a home rule unit of local
26

government if the ordinance imposing that tax was

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adopted prior to January 1, 2023.
2

(52) On and after January 1, 2027, hearing aids. As
3

used in this item (52), "hearing aid" means any wearable
4

non-disposable, non-experimental instrument or device
5

designed to aid or compensate for impaired human hearing
6

and any parts, attachments, or accessories for the
7

instrument or device, including an ear mold but excluding
8

batteries and cords. This item (52) is exempt from the
9

provisions of Section 2-70.

10
(Source: P.A. 103-9, Article 5, Section 5-20, eff. 6-7-23;
11
103-9, Article 15, Section 15-20, eff. 6-7-23; 103-154, eff.
12
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
13
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
14
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-6, eff.
15
6-16-25; 104-417, eff. 8-15-25.)

16

Section 99.
Effective date.
This Act takes effect upon
17
becoming law.

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