USE/OCC TX-FARM MACHINERY

Illinois General Assembly - Full Text of HB5531

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5531

Introduced 2/13/2026, by Rep. Travis Weaver

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
an exemption for farm machinery and equipment applies if the equipment is
used for certain purposes (currently, primarily used for those purposes).
LRB104 19795 HLH 33245 b

A BILL FOR

HB5531
LRB104 19795 HLH 33245 b
1

AN ACT concerning revenue.

2

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

4

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

6

(35 ILCS 105/3-5)
7

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

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

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

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

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

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

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(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 19795 HLH 33245 b
1
Act.
2

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

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

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LRB104 19795 HLH 33245 b
1
software, global positioning and mapping systems, and other
2
such equipment.
3

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

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

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

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

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

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

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

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

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

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LRB104 19795 HLH 33245 b
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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

HB5531
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LRB104 19795 HLH 33245 b
1
an incident to the seller's engaging in the service occupation
2
of producing machines, tools, dies, jigs, patterns, gauges, or
3
other similar items of no commercial value on special order
4
for a particular purchaser. The exemption provided by this
5
paragraph (18) includes production related tangible personal
6
property, as defined in Section 3-50, purchased on or after
7
July 1, 2019. The exemption provided by this paragraph (18)
8
does not include machinery and equipment used in (i) the
9
generation of electricity for wholesale or retail sale; (ii)
10
the generation or treatment of natural or artificial gas for
11
wholesale or retail sale that is delivered to customers
12
through pipes, pipelines, or mains; or (iii) the treatment of
13
water for wholesale or retail sale that is delivered to
14
customers through pipes, pipelines, or mains. The provisions
15
of Public Act 98-583 are declaratory of existing law as to the
16
meaning and scope of this exemption. Beginning on July 1,
17
2017, the exemption provided by this paragraph (18) includes,
18
but is not limited to, graphic arts machinery and equipment,
19
as defined in paragraph (6) of this Section.
20

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

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

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LRB104 19795 HLH 33245 b
1

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

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

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LRB104 19795 HLH 33245 b
1
that purports to reimburse that lessor for the tax imposed by
2
this Act or the Service Use Tax Act, as the case may be, if the
3
tax has not been paid by the lessor. If a lessor improperly
4
collects any such amount from the lessee, the lessee shall
5
have a legal right to claim a refund of that amount from the
6
lessor. If, however, that amount is not refunded to the lessee
7
for any reason, the lessor is liable to pay that amount to the
8
Department.
9

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

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LRB104 19795 HLH 33245 b
1
lessor. If, however, that amount is not refunded to the lessee
2
for any reason, the lessor is liable to pay that amount to the
3
Department.
4

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

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

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LRB104 19795 HLH 33245 b
1

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

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

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

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LRB104 19795 HLH 33245 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 19795 HLH 33245 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 19795 HLH 33245 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 19795 HLH 33245 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
(Source: P.A. 103-9, Article 5, Section 5-5, eff. 6-7-23;
11
103-9, Article 15, Section 15-5, 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; 104-417, eff. 8-15-25.)

15

Section 10.
The Service Use Tax Act is amended by changing
16
Section 3-5 as follows:

17

(35 ILCS 110/3-5)
18

Sec. 3-5.
Exemptions.
Use of the following tangible
19
personal property is exempt from the tax imposed by this Act:
20

(1) Personal property purchased from a corporation,
21
society, association, foundation, institution, or
22
organization, other than a limited liability company, that is
23
organized and operated as a not-for-profit service enterprise
24
for the benefit of persons 65 years of age or older if the

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personal property was not purchased by the enterprise for the
2
purpose of resale by the enterprise.
3

(2) Personal property purchased by a non-profit Illinois
4
county fair association for use in conducting, operating, or
5
promoting the county fair.
6

(3) Personal property purchased by a not-for-profit arts
7
or cultural organization that establishes, by proof required
8
by the Department by rule, that it has received an exemption
9
under Section 501(c)(3) of the Internal Revenue Code and that
10
is organized and operated primarily for the presentation or
11
support of arts or cultural programming, activities, or
12
services. These organizations include, but are not limited to,
13
music and dramatic arts organizations such as symphony
14
orchestras and theatrical groups, arts and cultural service
15
organizations, local arts councils, visual arts organizations,
16
and media arts organizations. On and after July 1, 2001 (the
17
effective date of Public Act 92-35), however, an entity
18
otherwise eligible for this exemption shall not make tax-free
19
purchases unless it has an active identification number issued
20
by the Department.
21

(4) Legal tender, currency, medallions, or gold or silver
22
coinage issued by the State of Illinois, the government of the
23
United States of America, or the government of any foreign
24
country, and bullion.
25

(5) Until July 1, 2003 and beginning again on September 1,
26
2004 through August 30, 2014, graphic arts machinery and

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equipment, including repair and replacement parts, both new
2
and used, and including that manufactured on special order or
3
purchased for lease, certified by the purchaser to be used
4
primarily for graphic arts production. Equipment includes
5
chemicals or chemicals acting as catalysts but only if the
6
chemicals or chemicals acting as catalysts effect a direct and
7
immediate change upon a graphic arts product. Beginning on
8
July 1, 2017, graphic arts machinery and equipment is included
9
in the manufacturing and assembling machinery and equipment
10
exemption under Section 2 of this Act.
11

(6) Personal property purchased from a teacher-sponsored
12
student organization affiliated with an elementary or
13
secondary school located in Illinois.
14

(7) Farm machinery and equipment, both new and used,
15
including that manufactured on special order, certified by the
16
purchaser to be used
primarily
for production agriculture or
17
State or federal agricultural programs, including individual
18
replacement parts for the machinery and equipment, including
19
machinery and equipment purchased for lease, and including
20
implements of husbandry defined in Section 1-130 of the
21
Illinois Vehicle Code, farm machinery and agricultural
22
chemical and fertilizer spreaders, and nurse wagons required
23
to be registered under Section 3-809 of the Illinois Vehicle
24
Code, but excluding other motor vehicles required to be
25
registered under the Illinois Vehicle Code. Horticultural
26
polyhouses or hoop houses used for propagating, growing, or

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overwintering plants shall be considered farm machinery and
2
equipment under this item (7). Agricultural chemical tender
3
tanks and dry boxes shall include units sold separately from a
4
motor vehicle required to be licensed and units sold mounted
5
on a motor vehicle required to be licensed if the selling price
6
of the tender is separately stated.
7

Farm machinery and equipment shall include precision
8
farming equipment that is installed or purchased to be
9
installed on farm machinery and equipment, including, but not
10
limited to, tractors, harvesters, sprayers, planters, seeders,
11
or spreaders. Precision farming equipment includes, but is not
12
limited to, soil testing sensors, computers, monitors,
13
software, global positioning and mapping systems, and other
14
such equipment.
15

Farm machinery and equipment also includes computers,
16
sensors, software, and related equipment used
primarily
in the
17
computer-assisted operation of production agriculture
18
facilities, equipment, and activities such as, but not limited
19
to, the collection, monitoring, and correlation of animal and
20
crop data for the purpose of formulating animal diets and
21
agricultural chemicals.
22

Beginning on January 1, 2024, farm machinery and equipment
23
also includes electrical power generation equipment used
24
primarily
for production agriculture.
25

This item (7) is exempt from the provisions of Section
26
3-75.

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(8) Until June 30, 2013, fuel and petroleum products sold
2
to or used by an air common carrier, certified by the carrier
3
to be used for consumption, shipment, or storage in the
4
conduct of its business as an air common carrier, for a flight
5
destined for or returning from a location or locations outside
6
the United States without regard to previous or subsequent
7
domestic stopovers.
8

Beginning July 1, 2013, fuel and petroleum products sold
9
to or used by an air carrier, certified by the carrier to be
10
used for consumption, shipment, or storage in the conduct of
11
its business as an air common carrier, for a flight that (i) is
12
engaged in foreign trade or is engaged in trade between the
13
United States and any of its possessions and (ii) transports
14
at least one individual or package for hire from the city of
15
origination to the city of final destination on the same
16
aircraft, without regard to a change in the flight number of
17
that aircraft.
18

(9) Proceeds of mandatory service charges separately
19
stated on customers' bills for the purchase and consumption of
20
food and beverages acquired as an incident to the purchase of a
21
service from a serviceman, to the extent that the proceeds of
22
the service charge are in fact turned over as tips or as a
23
substitute for tips to the employees who participate directly
24
in preparing, serving, hosting or cleaning up the food or
25
beverage function with respect to which the service charge is
26
imposed.

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(10) Until July 1, 2003, oil field exploration, drilling,
2
and production equipment, including (i) rigs and parts of
3
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
4
pipe and tubular goods, including casing and drill strings,
5
(iii) pumps and pump-jack units, (iv) storage tanks and flow
6
lines, (v) any individual replacement part for oil field
7
exploration, drilling, and production equipment, and (vi)
8
machinery and equipment purchased for lease; but excluding
9
motor vehicles required to be registered under the Illinois
10
Vehicle Code.
11

(11) Proceeds from the sale of photoprocessing machinery
12
and equipment, including repair and replacement parts, both
13
new and used, including that manufactured on special order,
14
certified by the purchaser to be used primarily for
15
photoprocessing, and including photoprocessing machinery and
16
equipment purchased for lease.
17

(12) Until July 1, 2028, coal and aggregate exploration,
18
mining, off-highway hauling, processing, maintenance, and
19
reclamation equipment, including replacement parts and
20
equipment, and including equipment purchased for lease, but
21
excluding motor vehicles required to be registered under the
22
Illinois Vehicle Code. The changes made to this Section by
23
Public Act 97-767 apply on and after July 1, 2003, but no claim
24
for credit or refund is allowed on or after August 16, 2013
25
(the effective date of Public Act 98-456) for such taxes paid
26
during the period beginning July 1, 2003 and ending on August

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16, 2013 (the effective date of Public Act 98-456).
2

(13) Semen used for artificial insemination of livestock
3
for direct agricultural production.
4

(14) Horses, or interests in horses, registered with and
5
meeting the requirements of any of the Arabian Horse Club
6
Registry of America, Appaloosa Horse Club, American Quarter
7
Horse Association, United States Trotting Association, or
8
Jockey Club, as appropriate, used for purposes of breeding or
9
racing for prizes. This item (14) is exempt from the
10
provisions of Section 3-75, and the exemption provided for
11
under this item (14) applies for all periods beginning May 30,
12
1995, but no claim for credit or refund is allowed on or after
13
January 1, 2008 (the effective date of Public Act 95-88) for
14
such taxes paid during the period beginning May 30, 2000 and
15
ending on January 1, 2008 (the effective date of Public Act
16
95-88).
17

(15) Computers and communications equipment utilized for
18
any hospital purpose and equipment used in the diagnosis,
19
analysis, or treatment of hospital patients purchased by a
20
lessor who leases the equipment, under a lease of one year or
21
longer executed or in effect at the time the lessor would
22
otherwise be subject to the tax imposed by this Act, to a
23
hospital that has been issued an active tax exemption
24
identification number by the Department under Section 1g of
25
the Retailers' Occupation Tax Act. If the equipment is leased
26
in a manner that does not qualify for this exemption or is used

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

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

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

(17) Beginning with taxable years ending on or after
9
December 31, 1995 and ending with taxable years ending on or
10
before December 31, 2004, personal property that is donated
11
for disaster relief to be used in a State or federally declared
12
disaster area in Illinois or bordering Illinois by a
13
manufacturer or retailer that is registered in this State to a
14
corporation, society, association, foundation, or institution
15
that has been issued a sales tax exemption identification
16
number by the Department that assists victims of the disaster
17
who reside within the declared disaster area.
18

(18) Beginning with taxable years ending on or after
19
December 31, 1995 and ending with taxable years ending on or
20
before December 31, 2004, personal property that is used in
21
the performance of infrastructure repairs in this State,
22
including, but not limited to, municipal roads and streets,
23
access roads, bridges, sidewalks, waste disposal systems,
24
water and sewer line extensions, water distribution and
25
purification facilities, storm water drainage and retention
26
facilities, and sewage treatment facilities, resulting from a

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1
State or federally declared disaster in Illinois or bordering
2
Illinois when such repairs are initiated on facilities located
3
in the declared disaster area within 6 months after the
4
disaster.
5

(19) Beginning July 1, 1999, game or game birds purchased
6
at a "game breeding and hunting preserve area" as that term is
7
used in the Wildlife Code. This paragraph is exempt from the
8
provisions of Section 3-75.
9

(20) A motor vehicle, as that term is defined in Section
10
1-146 of the Illinois Vehicle Code, that is donated to a
11
corporation, limited liability company, society, association,
12
foundation, or institution that is determined by the
13
Department to be organized and operated exclusively for
14
educational purposes. For purposes of this exemption, "a
15
corporation, limited liability company, society, association,
16
foundation, or institution organized and operated exclusively
17
for educational purposes" means all tax-supported public
18
schools, private schools that offer systematic instruction in
19
useful branches of learning by methods common to public
20
schools and that compare favorably in their scope and
21
intensity with the course of study presented in tax-supported
22
schools, and vocational or technical schools or institutes
23
organized and operated exclusively to provide a course of
24
study of not less than 6 weeks duration and designed to prepare
25
individuals to follow a trade or to pursue a manual,
26
technical, mechanical, industrial, business, or commercial

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occupation.
2

(21) Beginning January 1, 2000, personal property,
3
including food, purchased through fundraising events for the
4
benefit of a public or private elementary or secondary school,
5
a group of those schools, or one or more school districts if
6
the events are sponsored by an entity recognized by the school
7
district that consists primarily of volunteers and includes
8
parents and teachers of the school children. This paragraph
9
does not apply to fundraising events (i) for the benefit of
10
private home instruction or (ii) for which the fundraising
11
entity purchases the personal property sold at the events from
12
another individual or entity that sold the property for the
13
purpose of resale by the fundraising entity and that profits
14
from the sale to the fundraising entity. This paragraph is
15
exempt from the provisions of Section 3-75.
16

(22) Beginning January 1, 2000 and through December 31,
17
2001, new or used automatic vending machines that prepare and
18
serve hot food and beverages, including coffee, soup, and
19
other items, and replacement parts for these machines.
20
Beginning January 1, 2002 and through June 30, 2003, machines
21
and parts for machines used in commercial, coin-operated
22
amusement and vending business if a use or occupation tax is
23
paid on the gross receipts derived from the use of the
24
commercial, coin-operated amusement and vending machines. This
25
paragraph is exempt from the provisions of Section 3-75.
26

(23) Beginning August 23, 2001 and through June 30, 2016,

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food for human consumption that is to be consumed off the
2
premises where it is sold (other than alcoholic beverages,
3
soft drinks, and food that has been prepared for immediate
4
consumption) and prescription and nonprescription medicines,
5
drugs, medical appliances, and insulin, urine testing
6
materials, syringes, and needles used by diabetics, for human
7
use, when purchased for use by a person receiving medical
8
assistance under Article V of the Illinois Public Aid Code who
9
resides in a licensed long-term care facility, as defined in
10
the Nursing Home Care Act, or in a licensed facility as defined
11
in the ID/DD Community Care Act, the MC/DD Act, or the
12
Specialized Mental Health Rehabilitation Act of 2013.
13

(24) Beginning on August 2, 2001 (the effective date of
14
Public Act 92-227), computers and communications equipment
15
utilized for any hospital purpose and equipment used in the
16
diagnosis, analysis, or treatment of hospital patients
17
purchased by a lessor who leases the equipment, under a lease
18
of one year or longer executed or in effect at the time the
19
lessor would otherwise be subject to the tax imposed by this
20
Act, to a hospital that has been issued an active tax exemption
21
identification number by the Department under Section 1g of
22
the Retailers' Occupation Tax Act. If the equipment is leased
23
in a manner that does not qualify for this exemption or is used
24
in any other nonexempt manner, the lessor shall be liable for
25
the tax imposed under this Act or the Use Tax Act, as the case
26
may be, based on the fair market value of the property at the

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

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

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Use Tax Act, as the case may be, if the tax has not been paid
2
by the lessor. If a lessor improperly collects any such amount
3
from the lessee, the lessee shall have a legal right to claim a
4
refund of that amount from the lessor. If, however, that
5
amount is not refunded to the lessee for any reason, the lessor
6
is liable to pay that amount to the Department. This paragraph
7
is exempt from the provisions of Section 3-75.
8

(26) Beginning January 1, 2008, tangible personal property
9
used in the construction or maintenance of a community water
10
supply, as defined under Section 3.145 of the Environmental
11
Protection Act, that is operated by a not-for-profit
12
corporation that holds a valid water supply permit issued
13
under Title IV of the Environmental Protection Act. This
14
paragraph is exempt from the provisions of Section 3-75.
15

(27) Beginning January 1, 2010 and continuing through
16
December 31, 2029, materials, parts, equipment, components,
17
and furnishings incorporated into or upon an aircraft as part
18
of the modification, refurbishment, completion, replacement,
19
repair, or maintenance of the aircraft. This exemption
20
includes consumable supplies used in the modification,
21
refurbishment, completion, replacement, repair, and
22
maintenance of aircraft. However, until January 1, 2024, this
23
exemption excludes any materials, parts, equipment,
24
components, and consumable supplies used in the modification,
25
replacement, repair, and maintenance of aircraft engines or
26
power plants, whether such engines or power plants are

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installed or uninstalled upon any such aircraft. "Consumable
2
supplies" include, but are not limited to, adhesive, tape,
3
sandpaper, general purpose lubricants, cleaning solution,
4
latex gloves, and protective films.
5

Beginning January 1, 2010 and continuing through December
6
31, 2023, this exemption applies only to the use of qualifying
7
tangible personal property transferred incident to the
8
modification, refurbishment, completion, replacement, repair,
9
or maintenance of aircraft by persons who (i) hold an Air
10
Agency Certificate and are empowered to operate an approved
11
repair station by the Federal Aviation Administration, (ii)
12
have a Class IV Rating, and (iii) conduct operations in
13
accordance with Part 145 of the Federal Aviation Regulations.
14
From January 1, 2024 through December 31, 2029, this exemption
15
applies only to the use of qualifying tangible personal
16
property transferred incident to: (A) the modification,
17
refurbishment, completion, repair, replacement, or maintenance
18
of an aircraft by persons who (i) hold an Air Agency
19
Certificate and are empowered to operate an approved repair
20
station by the Federal Aviation Administration, (ii) have a
21
Class IV Rating, and (iii) conduct operations in accordance
22
with Part 145 of the Federal Aviation Regulations; and (B) the
23
modification, replacement, repair, and maintenance of aircraft
24
engines or power plants without regard to whether or not those
25
persons meet the qualifications of item (A).
26

The exemption does not include aircraft operated by a

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commercial air carrier providing scheduled passenger air
2
service pursuant to authority issued under Part 121 or Part
3
129 of the Federal Aviation Regulations. The changes made to
4
this paragraph (27) by Public Act 98-534 are declarative of
5
existing law. It is the intent of the General Assembly that the
6
exemption under this paragraph (27) applies continuously from
7
January 1, 2010 through December 31, 2024; however, no claim
8
for credit or refund is allowed for taxes paid as a result of
9
the disallowance of this exemption on or after January 1, 2015
10
and prior to February 5, 2020 (the effective date of Public Act
11
101-629).
12

(28) Tangible personal property purchased by a
13
public-facilities corporation, as described in Section
14
11-65-10 of the Illinois Municipal Code, for purposes of
15
constructing or furnishing a municipal convention hall, but
16
only if the legal title to the municipal convention hall is
17
transferred to the municipality without any further
18
consideration by or on behalf of the municipality at the time
19
of the completion of the municipal convention hall or upon the
20
retirement or redemption of any bonds or other debt
21
instruments issued by the public-facilities corporation in
22
connection with the development of the municipal convention
23
hall. This exemption includes existing public-facilities
24
corporations as provided in Section 11-65-25 of the Illinois
25
Municipal Code. This paragraph is exempt from the provisions
26
of Section 3-75.

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(29) Beginning January 1, 2017 and through December 31,
2
2026, menstrual pads, tampons, and menstrual cups.
3

(30) Tangible personal property transferred to a purchaser
4
who is exempt from the tax imposed by this Act by operation of
5
federal law. This paragraph is exempt from the provisions of
6
Section 3-75.
7

(31) Qualified tangible personal property used in the
8
construction or operation of a data center that has been
9
granted a certificate of exemption by the Department of
10
Commerce and Economic Opportunity, whether that tangible
11
personal property is purchased by the owner, operator, or
12
tenant of the data center or by a contractor or subcontractor
13
of the owner, operator, or tenant. Data centers that would
14
have qualified for a certificate of exemption prior to January
15
1, 2020 had Public Act 101-31 been in effect, may apply for and
16
obtain an exemption for subsequent purchases of computer
17
equipment or enabling software purchased or leased to upgrade,
18
supplement, or replace computer equipment or enabling software
19
purchased or leased in the original investment that would have
20
qualified.
21

The Department of Commerce and Economic Opportunity shall
22
grant a certificate of exemption under this item (31) to
23
qualified data centers as defined by Section 605-1025 of the
24
Department of Commerce and Economic Opportunity Law of the
25
Civil Administrative Code of Illinois.
26

For the purposes of this item (31):

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"Data center" means a building or a series of
2

buildings rehabilitated or constructed to house working
3

servers in one physical location or multiple sites within
4

the State of Illinois.
5

"Qualified tangible personal property" means:
6

electrical systems and equipment; climate control and
7

chilling equipment and systems; mechanical systems and
8

equipment; monitoring and secure systems; emergency
9

generators; hardware; computers; servers; data storage
10

devices; network connectivity equipment; racks; cabinets;
11

telecommunications cabling infrastructure; raised floor
12

systems; peripheral components or systems; software;
13

mechanical, electrical, or plumbing systems; battery
14

systems; cooling systems and towers; temperature control
15

systems; other cabling; and other data center
16

infrastructure equipment and systems necessary to operate
17

qualified tangible personal property, including fixtures;
18

and component parts of any of the foregoing, including
19

installation, maintenance, repair, refurbishment, and
20

replacement of qualified tangible personal property to
21

generate, transform, transmit, distribute, or manage
22

electricity necessary to operate qualified tangible
23

personal property; and all other tangible personal
24

property that is essential to the operations of a computer
25

data center. The term "qualified tangible personal
26

property" also includes building materials physically

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incorporated into the qualifying data center. To document
2

the exemption allowed under this Section, the retailer
3

must obtain from the purchaser a copy of the certificate
4

of eligibility issued by the Department of Commerce and
5

Economic Opportunity.
6

This item (31) is exempt from the provisions of Section
7
3-75.
8

(32) Beginning July 1, 2022, breast pumps, breast pump
9
collection and storage supplies, and breast pump kits. This
10
item (32) is exempt from the provisions of Section 3-75. As
11
used in this item (32):
12

"Breast pump" means an electrically controlled or
13

manually controlled pump device designed or marketed to be
14

used to express milk from a human breast during lactation,
15

including the pump device and any battery, AC adapter, or
16

other power supply unit that is used to power the pump
17

device and is packaged and sold with the pump device at the
18

time of sale.
19

"Breast pump collection and storage supplies" means
20

items of tangible personal property designed or marketed
21

to be used in conjunction with a breast pump to collect
22

milk expressed from a human breast and to store collected
23

milk until it is ready for consumption.
24

"Breast pump collection and storage supplies"
25

includes, but is not limited to: breast shields and breast
26

shield connectors; breast pump tubes and tubing adapters;

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breast pump valves and membranes; backflow protectors and
2

backflow protector adaptors; bottles and bottle caps
3

specific to the operation of the breast pump; and breast
4

milk storage bags.
5

"Breast pump collection and storage supplies" does not
6

include: (1) bottles and bottle caps not specific to the
7

operation of the breast pump; (2) breast pump travel bags
8

and other similar carrying accessories, including ice
9

packs, labels, and other similar products; (3) breast pump
10

cleaning supplies; (4) nursing bras, bra pads, breast
11

shells, and other similar products; and (5) creams,
12

ointments, and other similar products that relieve
13

breastfeeding-related symptoms or conditions of the
14

breasts or nipples, unless sold as part of a breast pump
15

kit that is pre-packaged by the breast pump manufacturer
16

or distributor.
17

"Breast pump kit" means a kit that: (1) contains no
18

more than a breast pump, breast pump collection and
19

storage supplies, a rechargeable battery for operating the
20

breast pump, a breastmilk cooler, bottle stands, ice
21

packs, and a breast pump carrying case; and (2) is
22

pre-packaged as a breast pump kit by the breast pump
23

manufacturer or distributor.
24

(33) Tangible personal property sold by or on behalf of
25
the State Treasurer pursuant to the Revised Uniform Unclaimed
26
Property Act. This item (33) is exempt from the provisions of

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Section 3-75.
2

(34) Beginning on January 1, 2024, tangible personal
3
property purchased by an active duty member of the armed
4
forces of the United States who presents valid military
5
identification and purchases the property using a form of
6
payment where the federal government is the payor. The member
7
of the armed forces must complete, at the point of sale, a form
8
prescribed by the Department of Revenue documenting that the
9
transaction is eligible for the exemption under this
10
paragraph. Retailers must keep the form as documentation of
11
the exemption in their records for a period of not less than 6
12
years. "Armed forces of the United States" means the United
13
States Army, Navy, Air Force, Space Force, Marine Corps, or
14
Coast Guard. This paragraph is exempt from the provisions of
15
Section 3-75.
16

(35) Beginning July 1, 2024, home-delivered meals provided
17
to Medicare or Medicaid recipients when payment is made by an
18
intermediary, such as a Medicare Administrative Contractor, a
19
Managed Care Organization, or a Medicare Advantage
20
Organization, pursuant to a government contract. This
21
paragraph (35) is exempt from the provisions of Section 3-75.
22

(36) Beginning on January 1, 2026, as further defined in
23
Section 3-10, food prepared for immediate consumption and
24
transferred incident to a sale of service subject to this Act
25
or the Service Occupation Tax Act by an entity licensed under
26
the Hospital Licensing Act, the Nursing Home Care Act, the

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Assisted Living and Shared Housing Act, the ID/DD Community
2
Care Act, the MC/DD Act, the Specialized Mental Health
3
Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
4
an entity that holds a permit issued pursuant to the Life Care
5
Facilities Act. This item (36) is exempt from the provisions
6
of Section 3-75.
7

(37) Beginning on January 1, 2026, as further defined in
8
Section 3-10, food for human consumption that is to be
9
consumed off the premises where it is sold (other than
10
alcoholic beverages, food consisting of or infused with adult
11
use cannabis, soft drinks, candy, and food that has been
12
prepared for immediate consumption). This item (37) is exempt
13
from the provisions of Section 3-75.
14

(38) Use by a lessee of the following leased tangible
15
personal property:
16

(1) software transferred subject to a license that
17

meets the following requirements:
18

(A) it is evidenced by a written agreement signed
19

by the licensor and the customer;
20

(i) an electronic agreement in which the
21

customer accepts the license by means of an
22

electronic signature that is verifiable and can be
23

authenticated and is attached to or made part of
24

the license will comply with this requirement;
25

(ii) a license agreement in which the customer
26

electronically accepts the terms by clicking "I

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agree" does not comply with this requirement;
2

(B) it restricts the customer's duplication and
3

use of the software;
4

(C) it prohibits the customer from licensing,
5

sublicensing, or transferring the software to a third
6

party (except to a related party) without the
7

permission and continued control of the licensor;
8

(D) the licensor has a policy of providing another
9

copy at minimal or no charge if the customer loses or
10

damages the software, or of permitting the licensee to
11

make and keep an archival copy, and such policy is
12

either stated in the license agreement, supported by
13

the licensor's books and records, or supported by a
14

notarized statement made under penalties of perjury by
15

the licensor; and
16

(E) the customer must destroy or return all copies
17

of the software to the licensor at the end of the
18

license period; this provision is deemed to be met, in
19

the case of a perpetual license, without being set
20

forth in the license agreement; and
21

(2) property that is subject to a tax on lease
22

receipts imposed by a home rule unit of local government
23

if the ordinance imposing that tax was adopted prior to
24

January 1, 2023.
25
(Source: P.A. 103-9, Article 5, Section 5-10, eff. 6-7-23;
26
103-9, Article 15, Section 15-10, eff. 6-7-23; 103-154, eff.

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6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
2
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
3
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-417, eff.
4
8-15-25.)

5

Section 15.
The Service Occupation Tax Act is amended by
6
changing Section 3-5 as follows:

7

(35 ILCS 115/3-5)
8

Sec. 3-5.
Exemptions.
The following tangible personal
9
property is exempt from the tax imposed by this Act:
10

(1) Personal property sold by a corporation, society,
11
association, foundation, institution, or organization, other
12
than a limited liability company, that is organized and
13
operated as a not-for-profit service enterprise for the
14
benefit of persons 65 years of age or older if the personal
15
property was not purchased by the enterprise for the purpose
16
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 any 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
24
is organized and operated primarily for the presentation or

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

(4) Legal tender, currency, medallions, or gold or silver
12
coinage issued by the State of Illinois, the government of the
13
United States of America, or the government of any foreign
14
country, and bullion.
15

(5) Until July 1, 2003 and beginning again on September 1,
16
2004 through August 30, 2014, graphic arts machinery and
17
equipment, including repair and replacement parts, both new
18
and used, and including that manufactured on special order or
19
purchased for lease, certified by the purchaser to be used
20
primarily for graphic arts production. Equipment includes
21
chemicals or chemicals acting as catalysts but only if the
22
chemicals or chemicals acting as catalysts effect a direct and
23
immediate change upon a graphic arts product. Beginning on
24
July 1, 2017, graphic arts machinery and equipment is included
25
in the manufacturing and assembling machinery and equipment
26
exemption under Section 2 of this Act.

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(6) Personal property sold by a teacher-sponsored student
2
organization affiliated with an elementary or secondary school
3
located in Illinois.
4

(7) Farm machinery and equipment, both new and used,
5
including that manufactured on special order, certified by the
6
purchaser to be used
primarily
for production agriculture or
7
State or federal agricultural programs, including individual
8
replacement parts for the machinery and equipment, including
9
machinery and equipment purchased for lease, and including
10
implements of husbandry defined in Section 1-130 of the
11
Illinois Vehicle Code, farm machinery and agricultural
12
chemical and fertilizer spreaders, and nurse wagons required
13
to be registered under Section 3-809 of the Illinois Vehicle
14
Code, but excluding other motor vehicles required to be
15
registered under the Illinois Vehicle Code. Horticultural
16
polyhouses or hoop houses used for propagating, growing, or
17
overwintering plants shall be considered farm machinery and
18
equipment under this item (7). Agricultural chemical tender
19
tanks and dry boxes shall include units sold separately from a
20
motor vehicle required to be licensed and units sold mounted
21
on a motor vehicle required to be licensed if the selling price
22
of the tender is separately stated.
23

Farm machinery and equipment shall include precision
24
farming equipment that is installed or purchased to be
25
installed on farm machinery and equipment, including, but not
26
limited to, tractors, harvesters, sprayers, planters, seeders,

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or spreaders. Precision farming equipment includes, but is not
2
limited to, soil testing sensors, computers, monitors,
3
software, global positioning and mapping systems, and other
4
such equipment.
5

Farm machinery and equipment also includes computers,
6
sensors, software, and related equipment used
primarily
in the
7
computer-assisted operation of production agriculture
8
facilities, equipment, and activities such as, but not limited
9
to, the collection, monitoring, and correlation of animal and
10
crop data for the purpose of formulating animal diets and
11
agricultural chemicals.
12

Beginning on January 1, 2024, farm machinery and equipment
13
also includes electrical power generation equipment used
14
primarily
for production agriculture.
15

This item (7) is exempt from the provisions of Section
16
3-55.
17

(8) Until June 30, 2013, fuel and petroleum products sold
18
to or used by an air common carrier, certified by the carrier
19
to be used for consumption, shipment, or storage in the
20
conduct of its business as an air common carrier, for a flight
21
destined for or returning from a location or locations outside
22
the United States without regard to previous or subsequent
23
domestic stopovers.
24

Beginning July 1, 2013, fuel and petroleum products sold
25
to or used by an air carrier, certified by the carrier to be
26
used for consumption, shipment, or storage in the conduct of

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its business as an air common carrier, for a flight that (i) is
2
engaged in foreign trade or is engaged in trade between the
3
United States and any of its possessions and (ii) transports
4
at least one individual or package for hire from the city of
5
origination to the city of final destination on the same
6
aircraft, without regard to a change in the flight number of
7
that aircraft.
8

(9) Proceeds of mandatory service charges separately
9
stated on customers' bills for the purchase and consumption of
10
food and beverages, to the extent that the proceeds of the
11
service charge are in fact turned over as tips or as a
12
substitute for tips to the employees who participate directly
13
in preparing, serving, hosting or cleaning up the food or
14
beverage function with respect to which the service charge is
15
imposed.
16

(10) Until July 1, 2003, oil field exploration, drilling,
17
and production equipment, including (i) rigs and parts of
18
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
19
pipe and tubular goods, including casing and drill strings,
20
(iii) pumps and pump-jack units, (iv) storage tanks and flow
21
lines, (v) any individual replacement part for oil field
22
exploration, drilling, and production equipment, and (vi)
23
machinery and equipment purchased for lease; but excluding
24
motor vehicles required to be registered under the Illinois
25
Vehicle Code.
26

(11) Photoprocessing machinery and equipment, including

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repair and replacement parts, both new and used, including
2
that manufactured on special order, certified by the purchaser
3
to be used primarily for photoprocessing, and including
4
photoprocessing machinery and equipment purchased for lease.
5

(12) Until July 1, 2028, coal and aggregate exploration,
6
mining, off-highway hauling, processing, maintenance, and
7
reclamation equipment, including replacement parts and
8
equipment, and including equipment purchased for lease, but
9
excluding motor vehicles required to be registered under the
10
Illinois Vehicle Code. The changes made to this Section by
11
Public Act 97-767 apply on and after July 1, 2003, but no claim
12
for credit or refund is allowed on or after August 16, 2013
13
(the effective date of Public Act 98-456) for such taxes paid
14
during the period beginning July 1, 2003 and ending on August
15
16, 2013 (the effective date of Public Act 98-456).
16

(13) Beginning January 1, 1992 and through June 30, 2016,
17
food for human consumption that is to be consumed off the
18
premises where it is sold (other than alcoholic beverages,
19
soft drinks and food that has been prepared for immediate
20
consumption) and prescription and non-prescription medicines,
21
drugs, medical appliances, and insulin, urine testing
22
materials, syringes, and needles used by diabetics, for human
23
use, when purchased for use by a person receiving medical
24
assistance under Article V of the Illinois Public Aid Code who
25
resides in a licensed long-term care facility, as defined in
26
the Nursing Home Care Act, or in a licensed facility as defined

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in the ID/DD Community Care Act, the MC/DD Act, or the
2
Specialized Mental Health Rehabilitation Act of 2013.
3

(14) Semen used for artificial insemination of livestock
4
for direct agricultural production.
5

(15) Horses, or interests in horses, registered with and
6
meeting the requirements of any of the Arabian Horse Club
7
Registry of America, Appaloosa Horse Club, American Quarter
8
Horse Association, United States Trotting Association, or
9
Jockey Club, as appropriate, used for purposes of breeding or
10
racing for prizes. This item (15) is exempt from the
11
provisions of Section 3-55, and the exemption provided for
12
under this item (15) applies for all periods beginning May 30,
13
1995, but no claim for credit or refund is allowed on or after
14
January 1, 2008 (the effective date of Public Act 95-88) for
15
such taxes paid during the period beginning May 30, 2000 and
16
ending on January 1, 2008 (the effective date of Public Act
17
95-88).
18

(16) Computers and communications equipment utilized for
19
any hospital purpose and equipment used in the diagnosis,
20
analysis, or treatment of hospital patients sold to a lessor
21
who leases the equipment, under a lease of one year or longer
22
executed or in effect at the time of the purchase, to a
23
hospital that has been issued an active tax exemption
24
identification number by the Department under Section 1g of
25
the Retailers' Occupation Tax Act.
26

(17) Personal property sold to a lessor who leases the

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

(18) Beginning with taxable years ending on or after
7
December 31, 1995 and ending with taxable years ending on or
8
before December 31, 2004, personal property that is donated
9
for disaster relief to be used in a State or federally declared
10
disaster area in Illinois or bordering Illinois by a
11
manufacturer or retailer that is registered in this State to a
12
corporation, society, association, foundation, or institution
13
that has been issued a sales tax exemption identification
14
number by the Department that assists victims of the disaster
15
who reside within the declared disaster area.
16

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

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in the declared disaster area within 6 months after the
2
disaster.
3

(20) Beginning July 1, 1999, game or game birds sold at a
4
"game breeding and hunting preserve area" as that term is used
5
in the Wildlife Code. This paragraph is exempt from the
6
provisions of Section 3-55.
7

(21) A motor vehicle, as that term is defined in Section
8
1-146 of the Illinois Vehicle Code, that is donated to a
9
corporation, limited liability company, society, association,
10
foundation, or institution that is determined by the
11
Department to be organized and operated exclusively for
12
educational purposes. For purposes of this exemption, "a
13
corporation, limited liability company, society, association,
14
foundation, or institution organized and operated exclusively
15
for educational purposes" means all tax-supported public
16
schools, private schools that offer systematic instruction in
17
useful branches of learning by methods common to public
18
schools and that compare favorably in their scope and
19
intensity with the course of study presented in tax-supported
20
schools, and vocational or technical schools or institutes
21
organized and operated exclusively to provide a course of
22
study of not less than 6 weeks duration and designed to prepare
23
individuals to follow a trade or to pursue a manual,
24
technical, mechanical, industrial, business, or commercial
25
occupation.
26

(22) Beginning January 1, 2000, personal property,

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including food, purchased through fundraising events for the
2
benefit of a public or private elementary or secondary school,
3
a group of those schools, or one or more school districts if
4
the events are sponsored by an entity recognized by the school
5
district that consists primarily of volunteers and includes
6
parents and teachers of the school children. This paragraph
7
does not apply to fundraising events (i) for the benefit of
8
private home instruction or (ii) for which the fundraising
9
entity purchases the personal property sold at the events from
10
another individual or entity that sold the property for the
11
purpose of resale by the fundraising entity and that profits
12
from the sale to the fundraising entity. This paragraph is
13
exempt from the provisions of Section 3-55.
14

(23) Beginning January 1, 2000 and through December 31,
15
2001, new or used automatic vending machines that prepare and
16
serve hot food and beverages, including coffee, soup, and
17
other items, and replacement parts for these machines.
18
Beginning January 1, 2002 and through June 30, 2003, machines
19
and parts for machines used in commercial, coin-operated
20
amusement and vending business if a use or occupation tax is
21
paid on the gross receipts derived from the use of the
22
commercial, coin-operated amusement and vending machines. This
23
paragraph is exempt from the provisions of Section 3-55.
24

(24) Beginning on August 2, 2001 (the effective date of
25
Public Act 92-227), computers and communications equipment
26
utilized for any hospital purpose and equipment used in the

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diagnosis, analysis, or treatment of hospital patients sold to
2
a lessor who leases the equipment, under a lease of one year or
3
longer executed or in effect at the time of the purchase, 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. This paragraph is exempt
7
from the provisions of Section 3-55.
8

(25) Beginning on August 2, 2001 (the effective date of
9
Public Act 92-227), personal property sold to a lessor who
10
leases the property, under a lease of one year or longer
11
executed or in effect at the time of the purchase, to a
12
governmental body that has been issued an active tax exemption
13
identification number by the Department under Section 1g of
14
the Retailers' Occupation Tax Act. This paragraph is exempt
15
from the provisions of Section 3-55.
16

(26) Beginning on January 1, 2002 and through June 30,
17
2016, tangible personal property purchased from an Illinois
18
retailer by a taxpayer engaged in centralized purchasing
19
activities in Illinois who will, upon receipt of the property
20
in Illinois, temporarily store the property in Illinois (i)
21
for the purpose of subsequently transporting it outside this
22
State for use or consumption thereafter solely outside this
23
State or (ii) for the purpose of being processed, fabricated,
24
or manufactured into, attached to, or incorporated into other
25
tangible personal property to be transported outside this
26
State and thereafter used or consumed solely outside this

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State. The Director of Revenue shall, pursuant to rules
2
adopted in accordance with the Illinois Administrative
3
Procedure Act, issue a permit to any taxpayer in good standing
4
with the Department who is eligible for the exemption under
5
this paragraph (26). The permit issued under this paragraph
6
(26) shall authorize the holder, to the extent and in the
7
manner specified in the rules adopted under this Act, to
8
purchase tangible personal property from a retailer exempt
9
from the taxes imposed by this Act. Taxpayers shall maintain
10
all necessary books and records to substantiate the use and
11
consumption of all such tangible personal property outside of
12
the State of Illinois.
13

(27) Beginning January 1, 2008, tangible personal property
14
used in the construction or maintenance of a community water
15
supply, as defined under Section 3.145 of the Environmental
16
Protection Act, that is operated by a not-for-profit
17
corporation that holds a valid water supply permit issued
18
under Title IV of the Environmental Protection Act. This
19
paragraph is exempt from the provisions of Section 3-55.
20

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

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of the completion of the municipal convention hall or upon the
2
retirement or redemption of any bonds or other debt
3
instruments issued by the public-facilities corporation in
4
connection with the development of the municipal convention
5
hall. This exemption includes existing public-facilities
6
corporations as provided in Section 11-65-25 of the Illinois
7
Municipal Code. This paragraph is exempt from the provisions
8
of Section 3-55.
9

(29) Beginning January 1, 2010 and continuing through
10
December 31, 2029, materials, parts, equipment, components,
11
and furnishings incorporated into or upon an aircraft as part
12
of the modification, refurbishment, completion, replacement,
13
repair, or maintenance of the aircraft. This exemption
14
includes consumable supplies used in the modification,
15
refurbishment, completion, replacement, repair, and
16
maintenance of aircraft. However, until January 1, 2024, this
17
exemption excludes any materials, parts, equipment,
18
components, and consumable supplies used in the modification,
19
replacement, repair, and maintenance of aircraft engines or
20
power plants, whether such engines or power plants are
21
installed or uninstalled upon any such aircraft. "Consumable
22
supplies" include, but are not limited to, adhesive, tape,
23
sandpaper, general purpose lubricants, cleaning solution,
24
latex gloves, and protective films.
25

Beginning January 1, 2010 and continuing through December
26
31, 2023, this exemption applies only to the transfer of

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qualifying tangible personal property incident to the
2
modification, refurbishment, completion, replacement, repair,
3
or maintenance of an aircraft by persons who (i) hold an Air
4
Agency Certificate and are empowered to operate an approved
5
repair station by the Federal Aviation Administration, (ii)
6
have a Class IV Rating, and (iii) conduct operations in
7
accordance with Part 145 of the Federal Aviation Regulations.
8
The exemption does not include aircraft operated by a
9
commercial air carrier providing scheduled passenger air
10
service pursuant to authority issued under Part 121 or Part
11
129 of the Federal Aviation Regulations. From January 1, 2024
12
through December 31, 2029, this exemption applies only to the
13
transfer of qualifying tangible personal property incident to:
14
(A) the modification, refurbishment, completion, repair,
15
replacement, or maintenance of an aircraft by persons who (i)
16
hold an Air Agency Certificate and are empowered to operate an
17
approved repair station by the Federal Aviation
18
Administration, (ii) have a Class IV Rating, and (iii) conduct
19
operations in accordance with Part 145 of the Federal Aviation
20
Regulations; and (B) the modification, replacement, repair,
21
and maintenance of aircraft engines or power plants without
22
regard to whether or not those persons meet the qualifications
23
of item (A).
24

The changes made to this paragraph (29) by Public Act
25
98-534 are declarative of existing law. It is the intent of the
26
General Assembly that the exemption under this paragraph (29)

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applies continuously from January 1, 2010 through December 31,
2
2024; however, no claim for credit or refund is allowed for
3
taxes paid as a result of the disallowance of this exemption on
4
or after January 1, 2015 and prior to February 5, 2020 (the
5
effective date of Public Act 101-629).
6

(30) Beginning January 1, 2017 and through December 31,
7
2026, menstrual pads, tampons, and menstrual cups.
8

(31) Tangible personal property transferred to a purchaser
9
who is exempt from tax by operation of federal law. This
10
paragraph is exempt from the provisions of Section 3-55.
11

(32) Qualified tangible personal property used in the
12
construction or operation of a data center that has been
13
granted a certificate of exemption by the Department of
14
Commerce and Economic Opportunity, whether that tangible
15
personal property is purchased by the owner, operator, or
16
tenant of the data center or by a contractor or subcontractor
17
of the owner, operator, or tenant. Data centers that would
18
have qualified for a certificate of exemption prior to January
19
1, 2020 had Public Act 101-31 been in effect, may apply for and
20
obtain an exemption for subsequent purchases of computer
21
equipment or enabling software purchased or leased to upgrade,
22
supplement, or replace computer equipment or enabling software
23
purchased or leased in the original investment that would have
24
qualified.
25

The Department of Commerce and Economic Opportunity shall
26
grant a certificate of exemption under this item (32) to

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qualified data centers as defined by Section 605-1025 of the
2
Department of Commerce and Economic Opportunity Law of the
3
Civil Administrative Code of Illinois.
4

For the purposes of this item (32):
5

"Data center" means a building or a series of
6

buildings rehabilitated or constructed to house working
7

servers in one physical location or multiple sites within
8

the State of Illinois.
9

"Qualified tangible personal property" means:
10

electrical systems and equipment; climate control and
11

chilling equipment and systems; mechanical systems and
12

equipment; monitoring and secure systems; emergency
13

generators; hardware; computers; servers; data storage
14

devices; network connectivity equipment; racks; cabinets;
15

telecommunications cabling infrastructure; raised floor
16

systems; peripheral components or systems; software;
17

mechanical, electrical, or plumbing systems; battery
18

systems; cooling systems and towers; temperature control
19

systems; other cabling; and other data center
20

infrastructure equipment and systems necessary to operate
21

qualified tangible personal property, including fixtures;
22

and component parts of any of the foregoing, including
23

installation, maintenance, repair, refurbishment, and
24

replacement of qualified tangible personal property to
25

generate, transform, transmit, distribute, or manage
26

electricity necessary to operate qualified tangible

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personal property; and all other tangible personal
2

property that is essential to the operations of a computer
3

data center. The term "qualified tangible personal
4

property" also includes building materials physically
5

incorporated into the qualifying data center. To document
6

the exemption allowed under this Section, the retailer
7

must obtain from the purchaser a copy of the certificate
8

of eligibility issued by the Department of Commerce and
9

Economic Opportunity.
10

This item (32) is exempt from the provisions of Section
11
3-55.
12

(33) Beginning July 1, 2022, breast pumps, breast pump
13
collection and storage supplies, and breast pump kits. This
14
item (33) is exempt from the provisions of Section 3-55. As
15
used in this item (33):
16

"Breast pump" means an electrically controlled or
17

manually controlled pump device designed or marketed to be
18

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

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

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

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

time of sale.
23

"Breast pump collection and storage supplies" means
24

items of tangible personal property designed or marketed
25

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

milk expressed from a human breast and to store collected

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milk until it is ready for consumption.
2

"Breast pump collection and storage supplies"
3

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

shield connectors; breast pump tubes and tubing adapters;
5

breast pump valves and membranes; backflow protectors and
6

backflow protector adaptors; bottles and bottle caps
7

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

milk storage bags.
9

"Breast pump collection and storage supplies" does not
10

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

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

and other similar carrying accessories, including ice
13

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

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

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

ointments, and other similar products that relieve
17

breastfeeding-related symptoms or conditions of the
18

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

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

or distributor.
21

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

more than a breast pump, breast pump collection and
23

storage supplies, a rechargeable battery for operating the
24

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

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

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

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manufacturer or distributor.
2

(34) Tangible personal property sold by or on behalf of
3
the State Treasurer pursuant to the Revised Uniform Unclaimed
4
Property Act. This item (34) is exempt from the provisions of
5
Section 3-55.
6

(35) Beginning on January 1, 2024, tangible personal
7
property purchased by an active duty member of the armed
8
forces of the United States who presents valid military
9
identification and purchases the property using a form of
10
payment where the federal government is the payor. The member
11
of the armed forces must complete, at the point of sale, a form
12
prescribed by the Department of Revenue documenting that the
13
transaction is eligible for the exemption under this
14
paragraph. Retailers must keep the form as documentation of
15
the exemption in their records for a period of not less than 6
16
years. "Armed forces of the United States" means the United
17
States Army, Navy, Air Force, Space Force, Marine Corps, or
18
Coast Guard. This paragraph is exempt from the provisions of
19
Section 3-55.
20

(36) Beginning July 1, 2024, home-delivered meals provided
21
to Medicare or Medicaid recipients when payment is made by an
22
intermediary, such as a Medicare Administrative Contractor, a
23
Managed Care Organization, or a Medicare Advantage
24
Organization, pursuant to a government contract. This
25
paragraph (36) is exempt from the provisions of Section 3-55.
26

(37) Beginning on January 1, 2026, as further defined in

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Section 3-10, food prepared for immediate consumption and
2
transferred incident to a sale of service subject to this Act
3
or the Service Use Tax Act by an entity licensed under the
4
Hospital Licensing Act, the Nursing Home Care Act, the
5
Assisted Living and Shared Housing Act, the ID/DD Community
6
Care Act, the MC/DD Act, the Specialized Mental Health
7
Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
8
an entity that holds a permit issued pursuant to the Life Care
9
Facilities Act. This item (37) is exempt from the provisions
10
of Section 3-55.
11

(38) Beginning on January 1, 2026, as further defined in
12
Section 3-10, food for human consumption that is to be
13
consumed off the premises where it is sold (other than
14
alcoholic beverages, food consisting of or infused with adult
15
use cannabis, soft drinks, candy, and food that has been
16
prepared for immediate consumption). This item (38) is exempt
17
from the provisions of Section 3-55.
18

(39) The lease of the following tangible personal
19
property:
20

(1) computer software transferred subject to a license
21

that meets the following requirements:
22

(A) it is evidenced by a written agreement signed
23

by the licensor and the customer;
24

(i) an electronic agreement in which the
25

customer accepts the license by means of an
26

electronic signature that is verifiable and can be

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authenticated and is attached to or made part of
2

the license will comply with this requirement;
3

(ii) a license agreement in which the customer
4

electronically accepts the terms by clicking "I
5

agree" does not comply with this requirement;
6

(B) it restricts the customer's duplication and
7

use of the software;
8

(C) it prohibits the customer from licensing,
9

sublicensing, or transferring the software to a third
10

party (except to a related party) without the
11

permission and continued control of the licensor;
12

(D) the licensor has a policy of providing another
13

copy at minimal or no charge if the customer loses or
14

damages the software, or of permitting the licensee to
15

make and keep an archival copy, and such policy is
16

either stated in the license agreement, supported by
17

the licensor's books and records, or supported by a
18

notarized statement made under penalties of perjury by
19

the licensor; and
20

(E) the customer must destroy or return all copies
21

of the software to the licensor at the end of the
22

license period; this provision is deemed to be met, in
23

the case of a perpetual license, without being set
24

forth in the license agreement; and
25

(2) property that is subject to a tax on lease
26

receipts imposed by a home rule unit of local government

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if the ordinance imposing that tax was adopted prior to
2

January 1, 2023.
3
(Source: P.A. 103-9, Article 5, Section 5-15, eff. 6-7-23;
4
103-9, Article 15, Section 15-15, eff. 6-7-23; 103-154, eff.
5
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
6
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
7
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-417, eff.
8
8-15-25.)

9

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

11

(35 ILCS 120/2-5)
12

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

(1) Farm chemicals.
17

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

including that manufactured on special order, certified by
19

the purchaser to be used
primarily
for production
20

agriculture or State or federal agricultural programs,
21

including individual replacement parts for the machinery
22

and equipment, including machinery and equipment purchased
23

for lease, and including implements of husbandry defined
24

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

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machinery and agricultural chemical and fertilizer
2

spreaders, and nurse wagons required to be registered
3

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

excluding other motor vehicles required to be registered
5

under the Illinois Vehicle Code. Horticultural polyhouses
6

or hoop houses used for propagating, growing, or
7

overwintering plants shall be considered farm machinery
8

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

tender tanks and dry boxes shall include units sold
10

separately from a motor vehicle required to be licensed
11

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

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

stated.
14

Farm machinery and equipment shall include precision
15

farming equipment that is installed or purchased to be
16

installed on farm machinery and equipment including, but
17

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

seeders, or spreaders. Precision farming equipment
19

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

computers, monitors, software, global positioning and
21

mapping systems, and other such equipment.
22

Farm machinery and equipment also includes computers,
23

sensors, software, and related equipment used
primarily
in
24

the computer-assisted operation of production agriculture
25

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

limited to, the collection, monitoring, and correlation of

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animal and crop data for the purpose of formulating animal
2

diets and agricultural chemicals.
3

Beginning on January 1, 2024, farm machinery and
4

equipment also includes electrical power generation
5

equipment used
primarily
for production agriculture.
6

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

2-70.
8

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

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

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

the production of ethyl alcohol that will be used for
12

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

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

or resale.
15

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

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

and equipment, including repair and replacement parts,
18

both new and used, and including that manufactured on
19

special order or purchased for lease, certified by the
20

purchaser to be used primarily for graphic arts
21

production. Equipment includes chemicals or chemicals
22

acting as catalysts but only if the chemicals or chemicals
23

acting as catalysts effect a direct and immediate change
24

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

graphic arts machinery and equipment is included in the
26

manufacturing and assembling machinery and equipment

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exemption under paragraph (14).
2

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

renting, as defined in the Automobile Renting Occupation
4

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

provisions of Section 2-70.
6

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

student organization affiliated with an elementary or
8

secondary school located in Illinois.
9

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

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

subject to the Replacement Vehicle Tax.
12

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

association for use in conducting, operating, or promoting
14

the county fair.
15

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

cultural organization that establishes, by proof required
17

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

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

Code and that is organized and operated primarily for the
20

presentation or support of arts or cultural programming,
21

activities, or services. These organizations include, but
22

are not limited to, music and dramatic arts organizations
23

such as symphony orchestras and theatrical groups, arts
24

and cultural service organizations, local arts councils,
25

visual arts organizations, and media arts organizations.
26

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

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

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

an active identification number issued by the Department.
4

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

association, foundation, institution, or organization,
6

other than a limited liability company, that is organized
7

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

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

personal property was not purchased by the enterprise for
10

the purpose of resale by the enterprise.
11

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

personal property sold to a governmental body, to a
13

corporation, society, association, foundation, or
14

institution organized and operated exclusively for
15

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

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

foundation, institution, or organization that has no
18

compensated officers or employees and that is organized
19

and operated primarily for the recreation of persons 55
20

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

qualify for the exemption under this paragraph only if the
22

limited liability company is organized and operated
23

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

1987, however, no entity otherwise eligible for this
25

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

active identification number issued by the Department.

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(12) (Blank).
2

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

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

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

to the commercial distribution fee imposed under Section
6

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

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

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

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

are subject to the commercial distribution fee imposed
11

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

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

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

and replacement parts added after the initial purchase of
15

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

manner that would qualify for the rolling stock exemption
17

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

paragraph, "used for commercial purposes" means the
19

transportation of persons or property in furtherance of
20

any commercial or industrial enterprise whether for-hire
21

or not.
22

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

lessees, or shippers of tangible personal property that is
24

utilized by interstate carriers for hire for use as
25

rolling stock moving in interstate commerce and equipment
26

operated by a telecommunications provider, licensed as a

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common carrier by the Federal Communications Commission,
2

which is permanently installed in or affixed to aircraft
3

moving in interstate commerce.
4

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

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

process of manufacturing or assembling tangible personal
7

property for wholesale or retail sale or lease, whether
8

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

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

process are owned by the manufacturer or some other
11

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

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

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

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

value on special order for a particular purchaser. The
16

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

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

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

generation or treatment of natural or artificial gas for
20

wholesale or retail sale that is delivered to customers
21

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

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

customers through pipes, pipelines, or mains. The
24

provisions of Public Act 98-583 are declaratory of
25

existing law as to the meaning and scope of this
26

exemption. Beginning on July 1, 2017, the exemption

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

limited to, graphic arts machinery and equipment, as
3

defined in paragraph (4) of this Section.
4

(15) Proceeds of mandatory service charges separately
5

stated on customers' bills for purchase and consumption of
6

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

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

substitute for tips to the employees who participate
9

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

food or beverage function with respect to which the
11

service charge is imposed.
12

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

the purchaser is exempt from use tax by operation of
14

federal law. This paragraph is exempt from the provisions
15

of Section 2-70.
16

(17) Tangible personal property sold to a common
17

carrier by rail or motor that receives the physical
18

possession of the property in Illinois and that transports
19

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

transportation of the property, out of Illinois on a
21

standard uniform bill of lading showing the seller of the
22

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

destination outside Illinois, for use outside Illinois.
24

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

silver coinage issued by the State of Illinois, the
26

government of the United States of America, or the

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government of any foreign country, and bullion.
2

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

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

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

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

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

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

replacement part for oil field exploration, drilling, and
9

production equipment, and (vi) machinery and equipment
10

purchased for lease; but excluding motor vehicles required
11

to be registered under the Illinois Vehicle Code.
12

(20) Photoprocessing machinery and equipment,
13

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

including that manufactured on special order, certified by
15

the purchaser to be used primarily for photoprocessing,
16

and including photoprocessing machinery and equipment
17

purchased for lease.
18

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

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

maintenance, and reclamation equipment, including
21

replacement parts and equipment, and including equipment
22

purchased for lease, but excluding motor vehicles required
23

to be registered under the Illinois Vehicle Code. The
24

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

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

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

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

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

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

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

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

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

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

flight destined for or returning from a location or
9

locations outside the United States without regard to
10

previous or subsequent domestic stopovers.
11

Beginning July 1, 2013, fuel and petroleum products
12

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

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

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

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

in trade between the United States and any of its
17

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

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

of final destination on the same aircraft, without regard
20

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

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

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

who has a florist located in Illinois deliver the property
24

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

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

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

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transportation of property or the conveyance of persons
2

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

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

vessel while it is afloat upon that bordering river.
5

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

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

nonresident even though the motor vehicle is delivered to
8

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

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

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

of the Illinois Vehicle Code or if the nonresident
12

purchaser has vehicle registration plates to transfer to
13

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

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

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

prima facie evidence that the motor vehicle will not be
17

titled in this State.
18

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

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

not allow a reciprocal exemption for a motor vehicle sold
21

and delivered in that state to an Illinois resident but
22

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

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

another state that does not allow a reciprocal exemption
25

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

on taxable property in the state in which the purchaser is

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

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

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

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

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

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

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

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

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

statement to the appropriate tax collection agency in his
11

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

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

records. Nothing in this item shall be construed to
14

require the removal of the vehicle from this state
15

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

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

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

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

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

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

general rate imposed under this Act.
22

(25-6) There is a rebuttable presumption that the
23

exemption under item (25) does not apply if the purchaser
24

is a limited liability company and a member of the limited
25

liability company is a resident of Illinois. This
26

presumption may be rebutted by other evidence, such as

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evidence the motor vehicle is insured at a garaging or
2

storage address outside Illinois or other evidence of the
3

physical address at which the motor vehicle will be
4

permanently stored or garaged outside Illinois.
5

(25-7) Beginning on July 1, 2007, no tax is imposed
6

under this Act on the sale of an aircraft, as defined in
7

Section 3 of the Illinois Aeronautics Act, if all of the
8

following conditions are met:
9

(1) the aircraft leaves this State within 15 days
10

after the later of either the issuance of the final
11

billing for the sale of the aircraft, or the
12

authorized approval for return to service, completion
13

of the maintenance record entry, and completion of the
14

test flight and ground test for inspection, as
15

required by 14 CFR 91.407;
16

(2) the aircraft is not based or registered in
17

this State after the sale of the aircraft; and
18

(3) the seller retains in his or her books and
19

records and provides to the Department a signed and
20

dated certification from the purchaser, on a form
21

prescribed by the Department, certifying that the
22

requirements of this item (25-7) are met. The
23

certificate must also include the name and address of
24

the purchaser, the address of the location where the
25

aircraft is to be titled or registered, the address of
26

the primary physical location of the aircraft, and

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other information that the Department may reasonably
2

require.
3

For purposes of this item (25-7):
4

"Based in this State" means hangared, stored, or
5

otherwise used, excluding post-sale customizations as
6

defined in this Section, for 10 or more days in each
7

12-month period immediately following the date of the sale
8

of the aircraft.
9

"Registered in this State" means an aircraft
10

registered with the Department of Transportation,
11

Aeronautics Division, or titled or registered with the
12

Federal Aviation Administration to an address located in
13

this State.
14

This paragraph (25-7) is exempt from the provisions of
15

Section 2-70.
16

(26) Semen used for artificial insemination of
17

livestock for direct agricultural production.
18

(27) Horses, or interests in horses, registered with
19

and meeting the requirements of any of the Arabian Horse
20

Club Registry of America, Appaloosa Horse Club, American
21

Quarter Horse Association, United States Trotting
22

Association, or Jockey Club, as appropriate, used for
23

purposes of breeding or racing for prizes. This item (27)
24

is exempt from the provisions of Section 2-70, and the
25

exemption provided for under this item (27) applies for
26

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

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credit or refund is allowed on or after January 1, 2008
2

(the effective date of Public Act 95-88) for such taxes
3

paid during the period beginning May 30, 2000 and ending
4

on January 1, 2008 (the effective date of Public Act
5

95-88).
6

(28) Computers and communications equipment utilized
7

for any hospital purpose and equipment used in the
8

diagnosis, analysis, or treatment of hospital patients
9

sold to a lessor who leases the equipment, under a lease of
10

one year or longer executed or in effect at the time of the
11

purchase, to a hospital that has been issued an active tax
12

exemption identification number by the Department under
13

Section 1g of this Act.
14

(29) Personal property sold to a lessor who leases the
15

property, under a lease of one year or longer executed or
16

in effect at the time of the purchase, to a governmental
17

body that has been issued an active tax exemption
18

identification number by the Department under Section 1g
19

of this Act.
20

(30) Beginning with taxable years ending on or after
21

December 31, 1995 and ending with taxable years ending on
22

or before December 31, 2004, personal property that is
23

donated for disaster relief to be used in a State or
24

federally declared disaster area in Illinois or bordering
25

Illinois by a manufacturer or retailer that is registered
26

in this State to a corporation, society, association,

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foundation, or institution that has been issued a sales
2

tax exemption identification number by the Department that
3

assists victims of the disaster who reside within the
4

declared disaster area.
5

(31) Beginning with taxable years ending on or after
6

December 31, 1995 and ending with taxable years ending on
7

or before December 31, 2004, personal property that is
8

used in the performance of infrastructure repairs in this
9

State, including, but not limited to, municipal roads and
10

streets, access roads, bridges, sidewalks, waste disposal
11

systems, water and sewer line extensions, water
12

distribution and purification facilities, storm water
13

drainage and retention facilities, and sewage treatment
14

facilities, resulting from a State or federally declared
15

disaster in Illinois or bordering Illinois when such
16

repairs are initiated on facilities located in the
17

declared disaster area within 6 months after the disaster.
18

(32) Beginning July 1, 1999, game or game birds sold
19

at a "game breeding and hunting preserve area" as that
20

term is used in the Wildlife Code. This paragraph is
21

exempt from the provisions of Section 2-70.
22

(33) A motor vehicle, as that term is defined in
23

Section 1-146 of the Illinois Vehicle Code, that is
24

donated to a corporation, limited liability company,
25

society, association, foundation, or institution that is
26

determined by the Department to be organized and operated

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exclusively for educational purposes. For purposes of this
2

exemption, "a corporation, limited liability company,
3

society, association, foundation, or institution organized
4

and operated exclusively for educational purposes" means
5

all tax-supported public schools, private schools that
6

offer systematic instruction in useful branches of
7

learning by methods common to public schools and that
8

compare favorably in their scope and intensity with the
9

course of study presented in tax-supported schools, and
10

vocational or technical schools or institutes organized
11

and operated exclusively to provide a course of study of
12

not less than 6 weeks duration and designed to prepare
13

individuals to follow a trade or to pursue a manual,
14

technical, mechanical, industrial, business, or commercial
15

occupation.
16

(34) Beginning January 1, 2000, personal property,
17

including food, purchased through fundraising events for
18

the benefit of a public or private elementary or secondary
19

school, a group of those schools, or one or more school
20

districts if the events are sponsored by an entity
21

recognized by the school district that consists primarily
22

of volunteers and includes parents and teachers of the
23

school children. This paragraph does not apply to
24

fundraising events (i) for the benefit of private home
25

instruction or (ii) for which the fundraising entity
26

purchases the personal property sold at the events from

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another individual or entity that sold the property for
2

the purpose of resale by the fundraising entity and that
3

profits from the sale to the fundraising entity. This
4

paragraph is exempt from the provisions of Section 2-70.
5

(35) Beginning January 1, 2000 and through December
6

31, 2001, new or used automatic vending machines that
7

prepare and serve hot food and beverages, including
8

coffee, soup, and other items, and replacement parts for
9

these machines. Beginning January 1, 2002 and through June
10

30, 2003, machines and parts for machines used in
11

commercial, coin-operated amusement and vending business
12

if a use or occupation tax is paid on the gross receipts
13

derived from the use of the commercial, coin-operated
14

amusement and vending machines. This paragraph is exempt
15

from the provisions of Section 2-70.
16

(35-5) Beginning August 23, 2001 and through June 30,
17

2016, food for human consumption that is to be consumed
18

off the premises where it is sold (other than alcoholic
19

beverages, soft drinks, and food that has been prepared
20

for immediate consumption) and prescription and
21

nonprescription medicines, drugs, medical appliances, and
22

insulin, urine testing materials, syringes, and needles
23

used by diabetics, for human use, when purchased for use
24

by a person receiving medical assistance under Article V
25

of the Illinois Public Aid Code who resides in a licensed
26

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

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Care Act, or a licensed facility as defined in the ID/DD
2

Community Care Act, the MC/DD Act, or the Specialized
3

Mental Health Rehabilitation Act of 2013.
4

(36) Beginning August 2, 2001, computers and
5

communications equipment utilized for any hospital purpose
6

and equipment used in the diagnosis, analysis, or
7

treatment of hospital patients sold to a lessor who leases
8

the equipment, under a lease of one year or longer
9

executed or in effect at the time of the purchase, to a
10

hospital that has been issued an active tax exemption
11

identification number by the Department under Section 1g
12

of this Act. This paragraph is exempt from the provisions
13

of Section 2-70.
14

(37) Beginning August 2, 2001, personal property sold
15

to a lessor who leases the property, under a lease of one
16

year or longer executed or in effect at the time of the
17

purchase, to a governmental body that has been issued an
18

active tax exemption identification number by the
19

Department under Section 1g of this Act. This paragraph is
20

exempt from the provisions of Section 2-70.
21

(38) Beginning on January 1, 2002 and through June 30,
22

2016, tangible personal property purchased from an
23

Illinois retailer by a taxpayer engaged in centralized
24

purchasing activities in Illinois who will, upon receipt
25

of the property in Illinois, temporarily store the
26

property in Illinois (i) for the purpose of subsequently

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transporting it outside this State for use or consumption
2

thereafter solely outside this State or (ii) for the
3

purpose of being processed, fabricated, or manufactured
4

into, attached to, or incorporated into other tangible
5

personal property to be transported outside this State and
6

thereafter used or consumed solely outside this State. The
7

Director of Revenue shall, pursuant to rules adopted in
8

accordance with the Illinois Administrative Procedure Act,
9

issue a permit to any taxpayer in good standing with the
10

Department who is eligible for the exemption under this
11

paragraph (38). The permit issued under this paragraph
12

(38) shall authorize the holder, to the extent and in the
13

manner specified in the rules adopted under this Act, to
14

purchase tangible personal property from a retailer exempt
15

from the taxes imposed by this Act. Taxpayers shall
16

maintain all necessary books and records to substantiate
17

the use and consumption of all such tangible personal
18

property outside of the State of Illinois.
19

(39) Beginning January 1, 2008, tangible personal
20

property used in the construction or maintenance of a
21

community water supply, as defined under Section 3.145 of
22

the Environmental Protection Act, that is operated by a
23

not-for-profit corporation that holds a valid water supply
24

permit issued under Title IV of the Environmental
25

Protection Act. This paragraph is exempt from the
26

provisions of Section 2-70.

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(40) Beginning January 1, 2010 and continuing through
2

December 31, 2029, materials, parts, equipment,
3

components, and furnishings incorporated into or upon an
4

aircraft as part of the modification, refurbishment,
5

completion, replacement, repair, or maintenance of the
6

aircraft. This exemption includes consumable supplies used
7

in the modification, refurbishment, completion,
8

replacement, repair, and maintenance of aircraft. However,
9

until January 1, 2024, this exemption excludes any
10

materials, parts, equipment, components, and consumable
11

supplies used in the modification, replacement, repair,
12

and maintenance of aircraft engines or power plants,
13

whether such engines or power plants are installed or
14

uninstalled upon any such aircraft. "Consumable supplies"
15

include, but are not limited to, adhesive, tape,
16

sandpaper, general purpose lubricants, cleaning solution,
17

latex gloves, and protective films.
18

Beginning January 1, 2010 and continuing through
19

December 31, 2023, this exemption applies only to the sale
20

of qualifying tangible personal property to persons who
21

modify, refurbish, complete, replace, or maintain an
22

aircraft and who (i) hold an Air Agency Certificate and
23

are empowered to operate an approved repair station by the
24

Federal Aviation Administration, (ii) have a Class IV
25

Rating, and (iii) conduct operations in accordance with
26

Part 145 of the Federal Aviation Regulations. The

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exemption does not include aircraft operated by a
2

commercial air carrier providing scheduled passenger air
3

service pursuant to authority issued under Part 121 or
4

Part 129 of the Federal Aviation Regulations. From January
5

1, 2024 through December 31, 2029, this exemption applies
6

only to the sale of qualifying tangible personal property
7

to: (A) persons who modify, refurbish, complete, repair,
8

replace, or maintain aircraft and who (i) hold an Air
9

Agency Certificate and are empowered to operate an
10

approved repair station by the Federal Aviation
11

Administration, (ii) have a Class IV Rating, and (iii)
12

conduct operations in accordance with Part 145 of the
13

Federal Aviation Regulations; and (B) persons who engage
14

in the modification, replacement, repair, and maintenance
15

of aircraft engines or power plants without regard to
16

whether or not those persons meet the qualifications of
17

item (A).
18

The changes made to this paragraph (40) by Public Act
19

98-534 are declarative of existing law. It is the intent
20

of the General Assembly that the exemption under this
21

paragraph (40) applies continuously from January 1, 2010
22

through December 31, 2024; however, no claim for credit or
23

refund is allowed for taxes paid as a result of the
24

disallowance of this exemption on or after January 1, 2015
25

and prior to February 5, 2020 (the effective date of
26

Public Act 101-629).

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(41) Tangible personal property sold to 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,
5

but only if the legal title to the municipal convention
6

hall is transferred to the municipality without any
7

further consideration by or on behalf of the municipality
8

at the time of the completion of the municipal convention
9

hall or upon the retirement or redemption of any bonds or
10

other debt instruments issued by the public-facilities
11

corporation in connection with the development of the
12

municipal convention hall. This exemption includes
13

existing public-facilities corporations as provided in
14

Section 11-65-25 of the Illinois Municipal Code. This
15

paragraph is exempt from the provisions of Section 2-70.
16

(42) Beginning January 1, 2017 and through December
17

31, 2026, menstrual pads, tampons, and menstrual cups.
18

(43) Merchandise that is subject to the Rental
19

Purchase Agreement Occupation and Use Tax. The purchaser
20

must certify that the item is purchased to be rented
21

subject to a rental-purchase agreement, as defined in the
22

Rental-Purchase Agreement Act, and provide proof of
23

registration under the Rental Purchase Agreement
24

Occupation and Use Tax Act. This paragraph is exempt from
25

the provisions of Section 2-70.
26

(44) Qualified tangible personal property used in the

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construction or operation of a data center that has been
2

granted a certificate of exemption by the Department of
3

Commerce and Economic Opportunity, whether that tangible
4

personal property is purchased by the owner, operator, or
5

tenant of the data center or by a contractor or
6

subcontractor of the owner, operator, or tenant. Data
7

centers that would have qualified for a certificate of
8

exemption prior to January 1, 2020 had Public Act 101-31
9

been in effect, may apply for and obtain an exemption for
10

subsequent purchases of computer equipment or enabling
11

software purchased or leased to upgrade, supplement, or
12

replace computer equipment or enabling software purchased
13

or leased in the original investment that would have
14

qualified.
15

The Department of Commerce and Economic Opportunity
16

shall grant a certificate of exemption under this item
17

(44) to qualified data centers as defined by Section
18

605-1025 of the Department of Commerce and Economic
19

Opportunity Law of the Civil Administrative Code of
20

Illinois.
21

For the purposes of this item (44):
22

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

buildings rehabilitated or constructed to house
24

working servers in one physical location or multiple
25

sites within the State of Illinois.
26

"Qualified tangible personal property" means:

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electrical systems and equipment; climate control and
2

chilling equipment and systems; mechanical systems and
3

equipment; monitoring and secure systems; emergency
4

generators; hardware; computers; servers; data storage
5

devices; network connectivity equipment; racks;
6

cabinets; telecommunications cabling infrastructure;
7

raised floor systems; peripheral components or
8

systems; software; mechanical, electrical, or plumbing
9

systems; battery systems; cooling systems and towers;
10

temperature control systems; other cabling; and other
11

data center infrastructure equipment and systems
12

necessary to operate qualified tangible personal
13

property, including fixtures; and component parts of
14

any of the foregoing, including installation,
15

maintenance, repair, refurbishment, and replacement of
16

qualified tangible personal property to generate,
17

transform, transmit, distribute, or manage electricity
18

necessary to operate qualified tangible personal
19

property; and all other tangible personal property
20

that is essential to the operations of a computer data
21

center. The term "qualified tangible personal
22

property" also includes building materials physically
23

incorporated into the qualifying data center. To
24

document the exemption allowed under this Section, the
25

retailer must obtain from the purchaser a copy of the
26

certificate of eligibility issued by the Department of

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Commerce and Economic Opportunity.
2

This item (44) is exempt from the provisions of
3

Section 2-70.
4

(45) Beginning January 1, 2020 and through December
5

31, 2020, sales of tangible personal property made by a
6

marketplace seller over a marketplace for which tax is due
7

under this Act but for which use tax has been collected and
8

remitted to the Department by a marketplace facilitator
9

under Section 2d of the Use Tax Act are exempt from tax
10

under this Act. A marketplace seller claiming this
11

exemption shall maintain books and records demonstrating
12

that the use tax on such sales has been collected and
13

remitted by a marketplace facilitator. Marketplace sellers
14

that have properly remitted tax under this Act on such
15

sales may file a claim for credit as provided in Section 6
16

of this Act. No claim is allowed, however, for such taxes
17

for which a credit or refund has been issued to the
18

marketplace facilitator under the Use Tax Act, or for
19

which the marketplace facilitator has filed a claim for
20

credit or refund under the Use Tax Act.
21

(46) Beginning July 1, 2022, breast pumps, breast pump
22

collection and storage supplies, and breast pump kits.
23

This item (46) is exempt from the provisions of Section
24

2-70. As used in this item (46):
25

"Breast pump" means an electrically controlled or
26

manually controlled pump device designed or marketed to be

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used to express milk from a human breast during lactation,
2

including the pump device and any battery, AC adapter, or
3

other power supply unit that is used to power the pump
4

device and is packaged and sold with the pump device at the
5

time of sale.
6

"Breast pump collection and storage supplies" means
7

items of tangible personal property designed or marketed
8

to be used in conjunction with a breast pump to collect
9

milk expressed from a human breast and to store collected
10

milk until it is ready for consumption.
11

"Breast pump collection and storage supplies"
12

includes, but is not limited to: breast shields and breast
13

shield connectors; breast pump tubes and tubing adapters;
14

breast pump valves and membranes; backflow protectors and
15

backflow protector adaptors; bottles and bottle caps
16

specific to the operation of the breast pump; and breast
17

milk storage bags.
18

"Breast pump collection and storage supplies" does not
19

include: (1) bottles and bottle caps not specific to the
20

operation of the breast pump; (2) breast pump travel bags
21

and other similar carrying accessories, including ice
22

packs, labels, and other similar products; (3) breast pump
23

cleaning supplies; (4) nursing bras, bra pads, breast
24

shells, and other similar products; and (5) creams,
25

ointments, and other similar products that relieve
26

breastfeeding-related symptoms or conditions of the

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breasts or nipples, unless sold as part of a breast pump
2

kit that is pre-packaged by the breast pump manufacturer
3

or distributor.
4

"Breast pump kit" means a kit that: (1) contains no
5

more than a breast pump, breast pump collection and
6

storage supplies, a rechargeable battery for operating the
7

breast pump, a breastmilk cooler, bottle stands, ice
8

packs, and a breast pump carrying case; and (2) is
9

pre-packaged as a breast pump kit by the breast pump
10

manufacturer or distributor.
11

(47) Tangible personal property sold by or on behalf
12

of the State Treasurer pursuant to the Revised Uniform
13

Unclaimed Property Act. This item (47) is exempt from the
14

provisions of Section 2-70.
15

(48) Beginning on January 1, 2024, tangible personal
16

property purchased by an active duty member of the armed
17

forces of the United States who presents valid military
18

identification and purchases the property using a form of
19

payment where the federal government is the payor. The
20

member of the armed forces must complete, at the point of
21

sale, a form prescribed by the Department of Revenue
22

documenting that the transaction is eligible for the
23

exemption under this paragraph. Retailers must keep the
24

form as documentation of the exemption in their records
25

for a period of not less than 6 years. "Armed forces of the
26

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

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Force, Space Force, Marine Corps, or Coast Guard. This
2

paragraph is exempt from the provisions of Section 2-70.
3

(49) Beginning July 1, 2024, home-delivered meals
4

provided to Medicare or Medicaid recipients when payment
5

is made by an intermediary, such as a Medicare
6

Administrative Contractor, a Managed Care Organization, or
7

a Medicare Advantage Organization, pursuant to a
8

government contract. This paragraph (49) is exempt from
9

the provisions of Section 2-70.
10

(50) Beginning on January 1, 2026, as further defined
11

in Section 2-10, food for human consumption that is to be
12

consumed off the premises where it is sold (other than
13

alcoholic beverages, food consisting of or infused with
14

adult use cannabis, soft drinks, candy, and food that has
15

been prepared for immediate consumption). This item (50)
16

is exempt from the provisions of Section 2-70.
17

(51) Gross receipts from the lease of the following
18

tangible personal property:
19

(1) computer software transferred subject to a
20

license that meets the following requirements:
21

(A) it is evidenced by a written agreement
22

signed by the licensor and the customer;
23

(i) an electronic agreement in which the
24

customer accepts the license by means of an
25

electronic signature that is verifiable and
26

can be authenticated and is attached to or

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made part of the license will comply with this
2

requirement;
3

(ii) a license agreement in which the
4

customer electronically accepts the terms by
5

clicking "I agree" does not comply with this
6

requirement;
7

(B) it restricts the customer's duplication
8

and use of the software;
9

(C) it prohibits the customer from licensing,
10

sublicensing, or transferring the software to a
11

third party (except to a related party) without
12

the permission and continued control of the
13

licensor;
14

(D) the licensor has a policy of providing
15

another copy at minimal or no charge if the
16

customer loses or damages the software, or of
17

permitting the licensee to make and keep an
18

archival copy, and such policy is either stated in
19

the license agreement, supported by the licensor's
20

books and records, or supported by a notarized
21

statement made under penalties of perjury by the
22

licensor; and
23

(E) the customer must destroy or return all
24

copies of the software to the licensor at the end
25

of the license period; this provision is deemed to
26

be met, in the case of a perpetual license,

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without being set forth in the license agreement;
2

and
3

(2) property that is subject to a tax on lease
4

receipts imposed by a home rule unit of local
5

government if the ordinance imposing that tax was
6

adopted prior to January 1, 2023.
7
(Source: P.A. 103-9, Article 5, Section 5-20, eff. 6-7-23;
8
103-9, Article 15, Section 15-20, eff. 6-7-23; 103-154, eff.
9
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
10
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
11
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-6, eff.
12
6-16-25; 104-417, eff. 8-15-25.)

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