REVENUE-HOMEBUILDER CREDIT

Illinois General Assembly - Full Text of SB3918

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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
SB3918

Introduced 2/6/2026, by Sen. Darby A. Hills

SYNOPSIS AS INTRODUCED:

20 ILCS 3805/33.1 new
35 ILCS 5/246 new
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5

Amends the Illinois Housing Development Act. Provides that the
Illinois Housing Development Authority shall issue to home builders who
build single-family homes in the State (i) certificates of exemption from
the Retailers' Occupation Tax Act, the Use Tax Act, the Service Use Tax
Act, and the Service Occupation Tax Act and (ii) credit certifications
against the taxes imposed under the Illinois Income Tax Act.
LRB104 19344 HLH 32791 b

A BILL FOR

SB3918
LRB104 19344 HLH 32791 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 Illinois Housing Development Act is amended
5
by adding Section 33.1 as follows:

6

(20 ILCS 3805/33.1 new)
7

Sec. 33.1.
Home builder incentives.
The Authority shall
8
issue to home builders who build single-family homes in the
9
State (i) certificates of exemption from the Retailers'
10
Occupation Tax Act, the Use Tax Act, the Service Use Tax Act,
11
and the Service Occupation Tax Act and (ii) credit
12
certifications against the taxes imposed under subsections (a)
13
and (b) of Section 201 of the Illinois Income Tax Act.

14

Section 10.
The Illinois Income Tax Act is amended by
15
adding Section 246 as follows:

16

(35 ILCS 5/246 new)
17

Sec. 246.
Home builder credit.

18

(a) A taxpayer who has been awarded a credit by the
19
Illinois Housing Development Authority under Section 33.1 of
20
the Illinois Housing Development Act is entitled to a credit
21
against the taxes imposed under subsections (a) and (b) of

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Section 201 of this Act. The amount of the credit shall be 20%
2
of the wages paid during the taxable year to a full-time or
3
part-time employee of the taxpayer.
4

(b) In no event shall a credit under this Section reduce
5
the taxpayer's liability to less than zero. If the amount of
6
the credit exceeds the tax liability for the year, the excess
7
may be carried forward and applied to the tax liability of the
8
5 taxable years following the excess credit year. The tax
9
credit shall be applied to the earliest year for which there is
10
a tax liability. If there are credits for more than one year
11
that are available to offset a liability, the earlier credit
12
shall be applied first.

13

(c) This Section is exempt from the provisions of Section
14
250.

15

Section 15.
The Use Tax Act is amended by changing Section
16
3-5 as follows:

17

(35 ILCS 105/3-5)
18

Sec. 3-5.
Exemptions.
Use, which, on and after January 1,
19
2025, includes use by a lessee, of the following tangible
20
personal property is exempt from the tax imposed by this Act:
21

(1) Personal property purchased from a corporation,
22
society, association, foundation, institution, or
23
organization, other than a limited liability company, that is
24
organized and operated as a not-for-profit service enterprise

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for the benefit of persons 65 years of age or older if the
2
personal property was not purchased by the enterprise for the
3
purpose of resale by the enterprise.
4

(2) Personal property purchased by a not-for-profit
5
Illinois county fair association for use in conducting,
6
operating, or promoting the county fair.
7

(3) Personal property purchased by a not-for-profit arts
8
or cultural organization that establishes, by proof required
9
by the Department by rule, that it has received an exemption
10
under Section 501(c)(3) of the Internal Revenue Code and that
11
is organized and operated primarily for the presentation or
12
support of arts or cultural programming, activities, or
13
services. These organizations include, but are not limited to,
14
music and dramatic arts organizations such as symphony
15
orchestras and theatrical groups, arts and cultural service
16
organizations, local arts councils, visual arts organizations,
17
and media arts organizations. On and after July 1, 2001 (the
18
effective date of Public Act 92-35), however, an entity
19
otherwise eligible for this exemption shall not make tax-free
20
purchases unless it has an active identification number issued
21
by the Department.
22

(4) Except as otherwise provided in this Act, personal
23
property purchased by a governmental body, by a corporation,
24
society, association, foundation, or institution organized and
25
operated exclusively for charitable, religious, or educational
26
purposes, or by a not-for-profit corporation, society,

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association, foundation, institution, or organization that has
2
no compensated officers or employees and that is organized and
3
operated primarily for the recreation of persons 55 years of
4
age or older. A limited liability company may qualify for the
5
exemption under this paragraph only if the limited liability
6
company is organized and operated exclusively for educational
7
purposes. On and after July 1, 1987, however, no entity
8
otherwise eligible for this exemption shall make tax-free
9
purchases unless it has an active exemption identification
10
number issued by the Department.
11

(5) Until July 1, 2003, a passenger car that is a
12
replacement vehicle to the extent that the purchase price of
13
the car is subject to the Replacement Vehicle Tax.
14

(6) Until July 1, 2003 and beginning again on September 1,
15
2004 through August 30, 2014, graphic arts machinery and
16
equipment, including repair and replacement parts, both new
17
and used, and including that manufactured on special order,
18
certified by the purchaser to be used primarily for graphic
19
arts production, and including machinery and equipment
20
purchased for lease. Equipment includes chemicals or chemicals
21
acting as catalysts but only if the chemicals or chemicals
22
acting as catalysts effect a direct and immediate change upon
23
a graphic arts product. Beginning on July 1, 2017, graphic
24
arts machinery and equipment is included in the manufacturing
25
and assembling machinery and equipment exemption under
26
paragraph (18).

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(7) Farm chemicals.
2

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

(9) Personal property purchased from a teacher-sponsored
7
student organization affiliated with an elementary or
8
secondary school located in Illinois.
9

(10) A motor vehicle that is used for automobile renting,
10
as defined in the Automobile Renting Occupation and Use Tax
11
Act.
12

(11) Farm machinery and equipment, both new and used,
13
including that manufactured on special order, certified by the
14
purchaser to be used primarily for production agriculture or
15
State or federal agricultural programs, including individual
16
replacement parts for the machinery and equipment, including
17
machinery and equipment purchased for lease, and including
18
implements of husbandry defined in Section 1-130 of the
19
Illinois Vehicle Code, farm machinery and agricultural
20
chemical and fertilizer spreaders, and nurse wagons required
21
to be registered under Section 3-809 of the Illinois Vehicle
22
Code, but excluding other motor vehicles required to be
23
registered under the Illinois Vehicle Code. Horticultural
24
polyhouses or hoop houses used for propagating, growing, or
25
overwintering plants shall be considered farm machinery and
26
equipment under this item (11). Agricultural chemical tender

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tanks and dry boxes shall include units sold separately from a
2
motor vehicle required to be licensed and units sold mounted
3
on a motor vehicle required to be licensed if the selling price
4
of the tender is separately stated.
5

Farm machinery and equipment shall include precision
6
farming equipment that is installed or purchased to be
7
installed on farm machinery and equipment, including, but not
8
limited to, tractors, harvesters, sprayers, planters, seeders,
9
or spreaders. Precision farming equipment includes, but is not
10
limited to, soil testing sensors, computers, monitors,
11
software, global positioning and mapping systems, and other
12
such equipment.
13

Farm machinery and equipment also includes computers,
14
sensors, software, and related equipment used primarily in the
15
computer-assisted operation of production agriculture
16
facilities, equipment, and activities such as, but not limited
17
to, the collection, monitoring, and correlation of animal and
18
crop data for the purpose of formulating animal diets and
19
agricultural chemicals.
20

Beginning on January 1, 2024, farm machinery and equipment
21
also includes electrical power generation equipment used
22
primarily for production agriculture.
23

This item (11) is exempt from the provisions of Section
24
3-90.
25

(12) Until June 30, 2013, fuel and petroleum products sold
26
to or used by an air common carrier, certified by the carrier

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to be used for consumption, shipment, or storage in the
2
conduct of its business as an air common carrier, for a flight
3
destined for or returning from a location or locations outside
4
the United States without regard to previous or subsequent
5
domestic stopovers.
6

Beginning July 1, 2013, fuel and petroleum products sold
7
to or used by an air carrier, certified by the carrier to be
8
used for consumption, shipment, or storage in the conduct of
9
its business as an air common carrier, for a flight that (i) is
10
engaged in foreign trade or is engaged in trade between the
11
United States and any of its possessions and (ii) transports
12
at least one individual or package for hire from the city of
13
origination to the city of final destination on the same
14
aircraft, without regard to a change in the flight number of
15
that aircraft.
16

(13) Proceeds of mandatory service charges separately
17
stated on customers' bills for the purchase and consumption of
18
food and beverages purchased at retail from a retailer, to the
19
extent that the proceeds of the service charge are in fact
20
turned over as tips or as a substitute for tips to the
21
employees who participate directly in preparing, serving,
22
hosting or cleaning up the food or beverage function with
23
respect to which the service charge is imposed.
24

(14) Until July 1, 2003, oil field exploration, drilling,
25
and production equipment, including (i) rigs and parts of
26
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)

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pipe and tubular goods, including casing and drill strings,
2
(iii) pumps and pump-jack units, (iv) storage tanks and flow
3
lines, (v) any individual replacement part for oil field
4
exploration, drilling, and production equipment, and (vi)
5
machinery and equipment purchased for lease; but excluding
6
motor vehicles required to be registered under the Illinois
7
Vehicle Code.
8

(15) Photoprocessing machinery and equipment, including
9
repair and replacement parts, both new and used, including
10
that manufactured on special order, certified by the purchaser
11
to be used primarily for photoprocessing, and including
12
photoprocessing machinery and equipment purchased for lease.
13

(16) Until July 1, 2028, coal and aggregate exploration,
14
mining, off-highway hauling, processing, maintenance, and
15
reclamation equipment, including replacement parts and
16
equipment, and including equipment purchased for lease, but
17
excluding motor vehicles required to be registered under the
18
Illinois Vehicle Code. The changes made to this Section by
19
Public Act 97-767 apply on and after July 1, 2003, but no claim
20
for credit or refund is allowed on or after August 16, 2013
21
(the effective date of Public Act 98-456) for such taxes paid
22
during the period beginning July 1, 2003 and ending on August
23
16, 2013 (the effective date of Public Act 98-456).
24

(17) Until July 1, 2003, distillation machinery and
25
equipment, sold as a unit or kit, assembled or installed by the
26
retailer, certified by the user to be used only for the

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production of ethyl alcohol that will be used for consumption
2
as motor fuel or as a component of motor fuel for the personal
3
use of the user, and not subject to sale or resale.
4

(18) Manufacturing and assembling machinery and equipment
5
used primarily in the process of manufacturing or assembling
6
tangible personal property for wholesale or retail sale or
7
lease, whether that sale or lease is made directly by the
8
manufacturer or by some other person, whether the materials
9
used in the process are owned by the manufacturer or some other
10
person, or whether that sale or lease is made apart from or as
11
an incident to the seller's engaging in the service occupation
12
of producing machines, tools, dies, jigs, patterns, gauges, or
13
other similar items of no commercial value on special order
14
for a particular purchaser. The exemption provided by this
15
paragraph (18) includes production related tangible personal
16
property, as defined in Section 3-50, purchased on or after
17
July 1, 2019. The exemption provided by this paragraph (18)
18
does not include machinery and equipment used in (i) the
19
generation of electricity for wholesale or retail sale; (ii)
20
the generation or treatment of natural or artificial gas for
21
wholesale or retail sale that is delivered to customers
22
through pipes, pipelines, or mains; or (iii) the treatment of
23
water for wholesale or retail sale that is delivered to
24
customers through pipes, pipelines, or mains. The provisions
25
of Public Act 98-583 are declaratory of existing law as to the
26
meaning and scope of this exemption. Beginning on July 1,

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1
2017, the exemption provided by this paragraph (18) includes,
2
but is not limited to, graphic arts machinery and equipment,
3
as defined in paragraph (6) of this Section.
4

(19) Personal property delivered to a purchaser or
5
purchaser's donee inside Illinois when the purchase order for
6
that personal property was received by a florist located
7
outside Illinois who has a florist located inside Illinois
8
deliver the personal property.
9

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

(21) Horses, or interests in horses, registered with and
12
meeting the requirements of any of the Arabian Horse Club
13
Registry of America, Appaloosa Horse Club, American Quarter
14
Horse Association, United States Trotting Association, or
15
Jockey Club, as appropriate, used for purposes of breeding or
16
racing for prizes. This item (21) is exempt from the
17
provisions of Section 3-90, and the exemption provided for
18
under this item (21) applies for all periods beginning May 30,
19
1995, but no claim for credit or refund is allowed on or after
20
January 1, 2008 for such taxes paid during the period
21
beginning May 30, 2000 and ending on January 1, 2008.
22

(22) Computers and communications equipment utilized for
23
any hospital purpose and equipment used in the diagnosis,
24
analysis, or treatment of hospital patients purchased by a
25
lessor who leases the equipment, under a lease of one year or
26
longer executed or in effect at the time the lessor would

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

(23) Personal property purchased by a lessor who leases
20
the property, under a lease of one year or longer executed or
21
in effect at the time the lessor would otherwise be subject to
22
the tax imposed by this Act, to a governmental body that has
23
been issued an active sales tax exemption identification
24
number by the Department under Section 1g of the Retailers'
25
Occupation Tax Act. If the property is leased in a manner that
26
does not qualify for this exemption or used in any other

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non-exempt manner, the lessor shall be liable for the tax
2
imposed under this Act or the Service 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 Service Use Tax Act, as the case may be, if the tax
8
has not been paid by the lessor. If a lessor improperly
9
collects any such amount from the lessee, the lessee shall
10
have a legal right to claim a refund of that amount from the
11
lessor. If, however, that amount is not refunded to the lessee
12
for any reason, the lessor is liable to pay that amount to the
13
Department.
14

(24) 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 donated
17
for disaster relief to be used in a State or federally declared
18
disaster area in Illinois or bordering Illinois by a
19
manufacturer or retailer that is registered in this State to a
20
corporation, society, association, foundation, or institution
21
that has been issued a sales tax exemption identification
22
number by the Department that assists victims of the disaster
23
who reside within the declared disaster area.
24

(25) Beginning with taxable years ending on or after
25
December 31, 1995 and ending with taxable years ending on or
26
before December 31, 2004, personal property that is used in

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

(26) Beginning July 1, 1999, game or game birds purchased
12
at a "game breeding and hunting preserve area" as that term is
13
used in the Wildlife Code. This paragraph is exempt from the
14
provisions of Section 3-90.
15

(27) A motor vehicle, as that term is defined in Section
16
1-146 of the Illinois Vehicle Code, that is donated to a
17
corporation, limited liability company, society, association,
18
foundation, or institution that is determined by the
19
Department to be organized and operated exclusively for
20
educational purposes. For purposes of this exemption, "a
21
corporation, limited liability company, society, association,
22
foundation, or institution organized and operated exclusively
23
for educational purposes" means all tax-supported public
24
schools, private schools that offer systematic instruction in
25
useful branches of learning by methods common to public
26
schools and that compare favorably in their scope and

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1
intensity with the course of study presented in tax-supported
2
schools, and vocational or technical schools or institutes
3
organized and operated exclusively to provide a course of
4
study of not less than 6 weeks duration and designed to prepare
5
individuals to follow a trade or to pursue a manual,
6
technical, mechanical, industrial, business, or commercial
7
occupation.
8

(28) Beginning January 1, 2000, personal property,
9
including food, purchased through fundraising events for the
10
benefit of a public or private elementary or secondary school,
11
a group of those schools, or one or more school districts if
12
the events are sponsored by an entity recognized by the school
13
district that consists primarily of volunteers and includes
14
parents and teachers of the school children. This paragraph
15
does not apply to fundraising events (i) for the benefit of
16
private home instruction or (ii) for which the fundraising
17
entity purchases the personal property sold at the events from
18
another individual or entity that sold the property for the
19
purpose of resale by the fundraising entity and that profits
20
from the sale to the fundraising entity. This paragraph is
21
exempt from the provisions of Section 3-90.
22

(29) Beginning January 1, 2000 and through December 31,
23
2001, new or used automatic vending machines that prepare and
24
serve hot food and beverages, including coffee, soup, and
25
other items, and replacement parts for these machines.
26
Beginning January 1, 2002 and through June 30, 2003, machines

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and parts for machines used in commercial, coin-operated
2
amusement and vending business if a use or occupation tax is
3
paid on the gross receipts derived from the use of the
4
commercial, coin-operated amusement and vending machines. This
5
paragraph is exempt from the provisions of Section 3-90.
6

(30) Beginning January 1, 2001 and through June 30, 2016,
7
food for human consumption that is to be consumed off the
8
premises where it is sold (other than alcoholic beverages,
9
soft drinks, and food that has been prepared for immediate
10
consumption) and prescription and nonprescription medicines,
11
drugs, medical appliances, and insulin, urine testing
12
materials, syringes, and needles used by diabetics, for human
13
use, when purchased for use by a person receiving medical
14
assistance under Article V of the Illinois Public Aid Code who
15
resides in a licensed long-term care facility, as defined in
16
the Nursing Home Care Act, or in a licensed facility as defined
17
in the ID/DD Community Care Act, the MC/DD Act, or the
18
Specialized Mental Health Rehabilitation Act of 2013.
19

(31) Beginning on August 2, 2001 (the effective date of
20
Public Act 92-227), computers and communications equipment
21
utilized for any hospital purpose and equipment used in the
22
diagnosis, analysis, or treatment of hospital patients
23
purchased by a lessor who leases the equipment, under a lease
24
of one year or longer executed or in effect at the time the
25
lessor would otherwise be subject to the tax imposed by this
26
Act, to a hospital that has been issued an active tax exemption

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1
identification number by the Department under Section 1g of
2
the Retailers' Occupation Tax Act. If the equipment is leased
3
in a manner that does not qualify for this exemption or is used
4
in any other nonexempt manner, the lessor shall be liable for
5
the tax imposed under this Act or the Service Use Tax Act, as
6
the case may be, based on the fair market value of the property
7
at the time the nonqualifying use occurs. No lessor shall
8
collect or attempt to collect an amount (however designated)
9
that purports to reimburse that lessor for the tax imposed by
10
this Act or the Service Use Tax Act, as the case may be, if the
11
tax has not been paid by the lessor. If a lessor improperly
12
collects any such amount from the lessee, the lessee shall
13
have a legal right to claim a refund of that amount from the
14
lessor. If, however, that amount is not refunded to the lessee
15
for any reason, the lessor is liable to pay that amount to the
16
Department. This paragraph is exempt from the provisions of
17
Section 3-90.
18

(32) Beginning on August 2, 2001 (the effective date of
19
Public Act 92-227), personal property purchased by a lessor
20
who leases the property, under a lease of one year or longer
21
executed or in effect at the time the lessor would otherwise be
22
subject to the tax imposed by this Act, to a governmental body
23
that has been issued an active sales tax exemption
24
identification number by the Department under Section 1g of
25
the Retailers' Occupation Tax Act. If the property is leased
26
in a manner that does not qualify for this exemption or used in

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any other nonexempt manner, the lessor shall be liable for the
2
tax imposed under this Act or the Service Use Tax Act, as the
3
case may be, based on the fair market value of the property at
4
the time the nonqualifying use occurs. No lessor shall collect
5
or attempt to collect an amount (however designated) that
6
purports to reimburse that lessor for the tax imposed by this
7
Act or the Service Use Tax Act, as the case may be, if the tax
8
has not been paid by the lessor. If a lessor improperly
9
collects any such amount from the lessee, the lessee shall
10
have a legal right to claim a refund of that amount from the
11
lessor. If, however, that amount is not refunded to the lessee
12
for any reason, the lessor is liable to pay that amount to the
13
Department. This paragraph is exempt from the provisions of
14
Section 3-90.
15

(33) On and after July 1, 2003 and through June 30, 2004,
16
the use in this State of motor vehicles of the second division
17
with a gross vehicle weight in excess of 8,000 pounds and that
18
are subject to the commercial distribution fee imposed under
19
Section 3-815.1 of the Illinois Vehicle Code. Beginning on
20
July 1, 2004 and through June 30, 2005, the use in this State
21
of motor vehicles of the second division: (i) with a gross
22
vehicle weight rating in excess of 8,000 pounds; (ii) that are
23
subject to the commercial distribution fee imposed under
24
Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
25
are primarily used for commercial purposes. Through June 30,
26
2005, this exemption applies to repair and replacement parts

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added after the initial purchase of such a motor vehicle if
2
that motor vehicle is used in a manner that would qualify for
3
the rolling stock exemption otherwise provided for in this
4
Act. For purposes of this paragraph, the term "used for
5
commercial purposes" means the transportation of persons or
6
property in furtherance of any commercial or industrial
7
enterprise, whether for-hire or not.
8

(34) 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 3-90.
15

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

The exemption does not include aircraft operated by a
26
commercial air carrier providing scheduled passenger air

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service pursuant to authority issued under Part 121 or Part
2
129 of the Federal Aviation Regulations. The changes made to
3
this paragraph (35) by Public Act 98-534 are declarative of
4
existing law. It is the intent of the General Assembly that the
5
exemption under this paragraph (35) applies continuously from
6
January 1, 2010 through December 31, 2024; however, no claim
7
for credit or refund is allowed for taxes paid as a result of
8
the disallowance of this exemption on or after January 1, 2015
9
and prior to February 5, 2020 (the effective date of Public Act
10
101-629).
11

(36) Tangible personal property purchased by a
12
public-facilities corporation, as described in Section
13
11-65-10 of the Illinois Municipal Code, for purposes of
14
constructing or furnishing a municipal convention hall, but
15
only if the legal title to the municipal convention hall is
16
transferred to the municipality without any further
17
consideration by or on behalf of the municipality at the time
18
of the completion of the municipal convention hall or upon the
19
retirement or redemption of any bonds or other debt
20
instruments issued by the public-facilities corporation in
21
connection with the development of the municipal convention
22
hall. This exemption includes existing public-facilities
23
corporations as provided in Section 11-65-25 of the Illinois
24
Municipal Code. This paragraph is exempt from the provisions
25
of Section 3-90.
26

(37) Beginning January 1, 2017 and through December 31,

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2026, menstrual pads, tampons, and menstrual cups.
2

(38) Merchandise that is subject to the Rental Purchase
3
Agreement Occupation and Use Tax. The purchaser must certify
4
that the item is purchased to be rented subject to a
5
rental-purchase agreement, as defined in the Rental-Purchase
6
Agreement Act, and provide proof of registration under the
7
Rental Purchase Agreement Occupation and Use Tax Act. This
8
paragraph is exempt from the provisions of Section 3-90.
9

(39) Tangible personal property purchased by a purchaser
10
who is exempt from the tax imposed by this Act by operation of
11
federal law. This paragraph is exempt from the provisions of
12
Section 3-90.
13

(40) Qualified tangible personal property used in the
14
construction or operation of a data center that has been
15
granted a certificate of exemption by the Department of
16
Commerce and Economic Opportunity, whether that tangible
17
personal property is purchased by the owner, operator, or
18
tenant of the data center or by a contractor or subcontractor
19
of the owner, operator, or tenant. Data centers that would
20
have qualified for a certificate of exemption prior to January
21
1, 2020 had Public Act 101-31 been in effect may apply for and
22
obtain an exemption for subsequent purchases of computer
23
equipment or enabling software purchased or leased to upgrade,
24
supplement, or replace computer equipment or enabling software
25
purchased or leased in the original investment that would have
26
qualified.

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The Department of Commerce and Economic Opportunity shall
2
grant a certificate of exemption under this item (40) to
3
qualified data centers as defined by Section 605-1025 of the
4
Department of Commerce and Economic Opportunity Law of the
5
Civil Administrative Code of Illinois.
6

For the purposes of this item (40):
7

"Data center" means a building or a series of
8

buildings rehabilitated or constructed to house working
9

servers in one physical location or multiple sites within
10

the State of Illinois.
11

"Qualified tangible personal property" means:
12

electrical systems and equipment; climate control and
13

chilling equipment and systems; mechanical systems and
14

equipment; monitoring and secure systems; emergency
15

generators; hardware; computers; servers; data storage
16

devices; network connectivity equipment; racks; cabinets;
17

telecommunications cabling infrastructure; raised floor
18

systems; peripheral components or systems; software;
19

mechanical, electrical, or plumbing systems; battery
20

systems; cooling systems and towers; temperature control
21

systems; other cabling; and other data center
22

infrastructure equipment and systems necessary to operate
23

qualified tangible personal property, including fixtures;
24

and component parts of any of the foregoing, including
25

installation, maintenance, repair, refurbishment, and
26

replacement of qualified tangible personal property to

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generate, transform, transmit, distribute, or manage
2

electricity necessary to operate qualified tangible
3

personal property; and all other tangible personal
4

property that is essential to the operations of a computer
5

data center. The term "qualified tangible personal
6

property" also includes building materials physically
7

incorporated into the qualifying data center. To document
8

the exemption allowed under this Section, the retailer
9

must obtain from the purchaser a copy of the certificate
10

of eligibility issued by the Department of Commerce and
11

Economic Opportunity.
12

This item (40) is exempt from the provisions of Section
13
3-90.
14

(41) Beginning July 1, 2022, breast pumps, breast pump
15
collection and storage supplies, and breast pump kits. This
16
item (41) is exempt from the provisions of Section 3-90. As
17
used in this item (41):
18

"Breast pump" means an electrically controlled or
19

manually controlled pump device designed or marketed to be
20

used to express milk from a human breast during lactation,
21

including the pump device and any battery, AC adapter, or
22

other power supply unit that is used to power the pump
23

device and is packaged and sold with the pump device at the
24

time of sale.
25

"Breast pump collection and storage supplies" means
26

items of tangible personal property designed or marketed

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to be used in conjunction with a breast pump to collect
2

milk expressed from a human breast and to store collected
3

milk until it is ready for consumption.
4

"Breast pump collection and storage supplies"
5

includes, but is not limited to: breast shields and breast
6

shield connectors; breast pump tubes and tubing adapters;
7

breast pump valves and membranes; backflow protectors and
8

backflow protector adaptors; bottles and bottle caps
9

specific to the operation of the breast pump; and breast
10

milk storage bags.
11

"Breast pump collection and storage supplies" does not
12

include: (1) bottles and bottle caps not specific to the
13

operation of the breast pump; (2) breast pump travel bags
14

and other similar carrying accessories, including ice
15

packs, labels, and other similar products; (3) breast pump
16

cleaning supplies; (4) nursing bras, bra pads, breast
17

shells, and other similar products; and (5) creams,
18

ointments, and other similar products that relieve
19

breastfeeding-related symptoms or conditions of the
20

breasts or nipples, unless sold as part of a breast pump
21

kit that is pre-packaged by the breast pump manufacturer
22

or distributor.
23

"Breast pump kit" means a kit that: (1) contains no
24

more than a breast pump, breast pump collection and
25

storage supplies, a rechargeable battery for operating the
26

breast pump, a breastmilk cooler, bottle stands, ice

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

pre-packaged as a breast pump kit by the breast pump
3

manufacturer or distributor.
4

(42) Tangible personal property sold by or on behalf of
5
the State Treasurer pursuant to the Revised Uniform Unclaimed
6
Property Act. This item (42) is exempt from the provisions of
7
Section 3-90.
8

(43) Beginning on January 1, 2024, tangible personal
9
property purchased by an active duty member of the armed
10
forces of the United States who presents valid military
11
identification and purchases the property using a form of
12
payment where the federal government is the payor. The member
13
of the armed forces must complete, at the point of sale, a form
14
prescribed by the Department of Revenue documenting that the
15
transaction is eligible for the exemption under this
16
paragraph. Retailers must keep the form as documentation of
17
the exemption in their records for a period of not less than 6
18
years. "Armed forces of the United States" means the United
19
States Army, Navy, Air Force, Space Force, Marine Corps, or
20
Coast Guard. This paragraph is exempt from the provisions of
21
Section 3-90.
22

(44) Beginning July 1, 2024, home-delivered meals provided
23
to Medicare or Medicaid recipients when payment is made by an
24
intermediary, such as a Medicare Administrative Contractor, a
25
Managed Care Organization, or a Medicare Advantage
26
Organization, pursuant to a government contract. This item

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(44) is exempt from the provisions of Section 3-90.
2

(45) Beginning on January 1, 2026, as further defined in
3
Section 3-10, food for human consumption that is to be
4
consumed off the premises where it is sold (other than
5
alcoholic beverages, food consisting of or infused with adult
6
use cannabis, soft drinks, candy, and food that has been
7
prepared for immediate consumption). This item (45) is exempt
8
from the provisions of Section 3-90.
9

(46) Use by the lessee of the following leased tangible
10
personal property:
11

(1) software transferred subject to a license that
12

meets the following requirements:
13

(A) it is evidenced by a written agreement signed
14

by the licensor and the customer;
15

(i) an electronic agreement in which the
16

customer accepts the license by means of an
17

electronic signature that is verifiable and can be
18

authenticated and is attached to or made part of
19

the license will comply with this requirement;
20

(ii) a license agreement in which the customer
21

electronically accepts the terms by clicking "I
22

agree" does not comply with this requirement;
23

(B) it restricts the customer's duplication and
24

use of the software;
25

(C) it prohibits the customer from licensing,
26

sublicensing, or transferring the software to a third

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party (except to a related party) without the
2

permission and continued control of the licensor;
3

(D) the licensor has a policy of providing another
4

copy at minimal or no charge if the customer loses or
5

damages the software, or of permitting the licensee to
6

make and keep an archival copy, and such policy is
7

either stated in the license agreement, supported by
8

the licensor's books and records, or supported by a
9

notarized statement made under penalties of perjury by
10

the licensor; and
11

(E) the customer must destroy or return all copies
12

of the software to the licensor at the end of the
13

license period; this provision is deemed to be met, in
14

the case of a perpetual license, without being set
15

forth in the license agreement; and
16

(2) property that is subject to a tax on lease
17

receipts imposed by a home rule unit of local government
18

if the ordinance imposing that tax was adopted prior to
19

January 1, 2023.
20

(47) Tangible personal property to be incorporated into
21
the construction of a single-family home in the State by a home
22
builder who has been issued a certificate of exemption by the
23
Illinois Housing Development Authority under Section 33.1 of
24
the Illinois Housing Development Act. This item (47) is exempt
25
from the provisions of Section 3-90.

26
(Source: P.A. 103-9, Article 5, Section 5-5, eff. 6-7-23;

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103-9, Article 15, Section 15-5, eff. 6-7-23; 103-154, eff.
2
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
3
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
4
103-781, eff. 8-5-24; 104-417, eff. 8-15-25.)

5

Section 20.
The Service Use Tax Act is amended by changing
6
Section 3-5 as follows:

7

(35 ILCS 110/3-5)
8

Sec. 3-5.
Exemptions.
Use 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 non-profit Illinois
18
county fair association for use in conducting, operating, or
19
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
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 purchased from a teacher-sponsored
2
student organization affiliated with an elementary or
3
secondary school 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
3-75.
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 acquired as an incident to the purchase of a
11
service from a serviceman, to the extent that the proceeds of
12
the service charge are in fact turned over as tips or as a
13
substitute for tips to the employees who participate directly
14
in preparing, serving, hosting or cleaning up the food or
15
beverage function with respect to which the service charge is
16
imposed.
17

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

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(11) Proceeds from the sale of photoprocessing machinery
2
and equipment, including repair and replacement parts, both
3
new and used, including that manufactured on special order,
4
certified by the purchaser to be used primarily for
5
photoprocessing, and including photoprocessing machinery and
6
equipment purchased for lease.
7

(12) Until July 1, 2028, coal and aggregate exploration,
8
mining, off-highway hauling, processing, maintenance, and
9
reclamation equipment, including replacement parts and
10
equipment, and including equipment purchased for lease, but
11
excluding motor vehicles required to be registered under the
12
Illinois Vehicle Code. The changes made to this Section by
13
Public Act 97-767 apply on and after July 1, 2003, but no claim
14
for credit or refund is allowed on or after August 16, 2013
15
(the effective date of Public Act 98-456) for such taxes paid
16
during the period beginning July 1, 2003 and ending on August
17
16, 2013 (the effective date of Public Act 98-456).
18

(13) Semen used for artificial insemination of livestock
19
for direct agricultural production.
20

(14) Horses, or interests in horses, registered with and
21
meeting the requirements of any of the Arabian Horse Club
22
Registry of America, Appaloosa Horse Club, American Quarter
23
Horse Association, United States Trotting Association, or
24
Jockey Club, as appropriate, used for purposes of breeding or
25
racing for prizes. This item (14) is exempt from the
26
provisions of Section 3-75, and the exemption provided for

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under this item (14) applies for all periods beginning May 30,
2
1995, but no claim for credit or refund is allowed on or after
3
January 1, 2008 (the effective date of Public Act 95-88) for
4
such taxes paid during the period beginning May 30, 2000 and
5
ending on January 1, 2008 (the effective date of Public Act
6
95-88).
7

(15) Computers and communications equipment utilized for
8
any hospital purpose and equipment used in the diagnosis,
9
analysis, or treatment of hospital patients purchased by a
10
lessor who leases the equipment, under a lease of one year or
11
longer executed or in effect at the time the lessor would
12
otherwise be subject to the tax imposed by this Act, to a
13
hospital that has been issued an active tax exemption
14
identification number by the Department under Section 1g of
15
the Retailers' Occupation Tax Act. If the equipment is leased
16
in a manner that does not qualify for this exemption or is used
17
in any other non-exempt manner, the lessor shall be liable for
18
the tax imposed under this Act or the 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 Use Tax Act, as the case may be, if the tax has not
24
been paid by the lessor. If a lessor improperly collects any
25
such amount from the lessee, the lessee shall have a legal
26
right to claim a refund of that amount from the lessor. If,

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however, that amount is not refunded to the lessee for any
2
reason, the lessor is liable to pay that amount to the
3
Department.
4

(16) Personal property purchased by a lessor who leases
5
the property, under a lease of one year or longer executed or
6
in effect at the time the lessor would otherwise be subject to
7
the tax imposed by this Act, to a governmental body that has
8
been issued an active tax exemption identification number by
9
the Department under Section 1g of the Retailers' Occupation
10
Tax Act. If the property is leased in a manner that does not
11
qualify for this exemption or is used in any other non-exempt
12
manner, the lessor shall be liable for the tax imposed under
13
this Act or the Use Tax Act, as the case may be, based on the
14
fair market value of the property at the time the
15
non-qualifying use occurs. No lessor shall collect or attempt
16
to collect an amount (however designated) that purports to
17
reimburse that lessor for the tax imposed by this Act or the
18
Use Tax Act, as the case may be, if the tax has not been paid
19
by the lessor. If a lessor improperly collects any such amount
20
from the lessee, the lessee shall have a legal right to claim a
21
refund of that amount from the lessor. If, however, that
22
amount is not refunded to the lessee for any reason, the lessor
23
is liable to pay that amount to the Department.
24

(17) Beginning with taxable years ending on or after
25
December 31, 1995 and ending with taxable years ending on or
26
before December 31, 2004, personal property that is donated

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for disaster relief to be used in a State or federally declared
2
disaster area in Illinois or bordering Illinois by a
3
manufacturer or retailer that is registered in this State to a
4
corporation, society, association, foundation, or institution
5
that has been issued a sales tax exemption identification
6
number by the Department that assists victims of the disaster
7
who reside within the declared disaster area.
8

(18) 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 used in
11
the performance of infrastructure repairs in this State,
12
including, but not limited to, municipal roads and streets,
13
access roads, bridges, sidewalks, waste disposal systems,
14
water and sewer line extensions, water distribution and
15
purification facilities, storm water drainage and retention
16
facilities, and sewage treatment facilities, resulting from a
17
State or federally declared disaster in Illinois or bordering
18
Illinois when such repairs are initiated on facilities located
19
in the declared disaster area within 6 months after the
20
disaster.
21

(19) Beginning July 1, 1999, game or game birds purchased
22
at a "game breeding and hunting preserve area" as that term is
23
used in the Wildlife Code. This paragraph is exempt from the
24
provisions of Section 3-75.
25

(20) A motor vehicle, as that term is defined in Section
26
1-146 of the Illinois Vehicle Code, that is donated to a

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corporation, limited liability company, society, association,
2
foundation, or institution that is determined by the
3
Department to be organized and operated exclusively for
4
educational purposes. For purposes of this exemption, "a
5
corporation, limited liability company, society, association,
6
foundation, or institution organized and operated exclusively
7
for educational purposes" means all tax-supported public
8
schools, private schools that offer systematic instruction in
9
useful branches of learning by methods common to public
10
schools and that compare favorably in their scope and
11
intensity with the course of study presented in tax-supported
12
schools, and vocational or technical schools or institutes
13
organized and operated exclusively to provide a course of
14
study of not less than 6 weeks duration and designed to prepare
15
individuals to follow a trade or to pursue a manual,
16
technical, mechanical, industrial, business, or commercial
17
occupation.
18

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

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entity purchases the personal property sold at the events from
2
another individual or entity that sold the property for the
3
purpose of resale by the fundraising entity and that profits
4
from the sale to the fundraising entity. This paragraph is
5
exempt from the provisions of Section 3-75.
6

(22) Beginning January 1, 2000 and through December 31,
7
2001, new or used automatic vending machines that prepare and
8
serve hot food and beverages, including coffee, soup, and
9
other items, and replacement parts for these machines.
10
Beginning January 1, 2002 and through June 30, 2003, machines
11
and parts for machines used in commercial, coin-operated
12
amusement and vending business if a use or occupation tax is
13
paid on the gross receipts derived from the use of the
14
commercial, coin-operated amusement and vending machines. This
15
paragraph is exempt from the provisions of Section 3-75.
16

(23) Beginning August 23, 2001 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 nonprescription 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

(24) Beginning on August 2, 2001 (the effective date of
4
Public Act 92-227), computers and communications equipment
5
utilized for any hospital purpose and equipment used in the
6
diagnosis, analysis, or treatment of hospital patients
7
purchased by a lessor who leases the equipment, under a lease
8
of one year or longer executed or in effect at the time the
9
lessor would otherwise be subject to the tax imposed by this
10
Act, to a hospital that has been issued an active tax exemption
11
identification number by the Department under Section 1g of
12
the Retailers' Occupation Tax Act. If the equipment is leased
13
in a manner that does not qualify for this exemption or is used
14
in any other nonexempt manner, the lessor shall be liable for
15
the tax imposed under this Act or the Use Tax Act, as the case
16
may be, based on the fair market value of the property at the
17
time the nonqualifying use occurs. No lessor shall collect or
18
attempt to collect an amount (however designated) that
19
purports to reimburse that lessor for the tax imposed by this
20
Act or the Use Tax Act, as the case may be, if the tax has not
21
been paid by the lessor. If a lessor improperly collects any
22
such amount from the lessee, the lessee shall have a legal
23
right to claim a refund of that amount from the lessor. If,
24
however, that amount is not refunded to the lessee for any
25
reason, the lessor is liable to pay that amount to the
26
Department. This paragraph is exempt from the provisions of

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Section 3-75.
2

(25) Beginning on August 2, 2001 (the effective date of
3
Public Act 92-227), personal property purchased by a lessor
4
who leases the property, under a lease of one year or longer
5
executed or in effect at the time the lessor would otherwise be
6
subject to the tax imposed by this Act, to a governmental body
7
that has been issued an active tax exemption identification
8
number by the Department under Section 1g of the Retailers'
9
Occupation Tax Act. If the property is leased in a manner that
10
does not qualify for this exemption or is used in any other
11
nonexempt manner, the lessor shall be liable for the tax
12
imposed under this Act or the Use Tax Act, as the case may be,
13
based on the fair market value of the property at the time the
14
nonqualifying use occurs. No lessor shall collect or attempt
15
to collect an amount (however designated) that purports to
16
reimburse that lessor for the tax imposed by this Act or the
17
Use Tax Act, as the case may be, if the tax has not been paid
18
by the lessor. If a lessor improperly collects any such amount
19
from the lessee, the lessee shall have a legal right to claim a
20
refund of that amount from the lessor. If, however, that
21
amount is not refunded to the lessee for any reason, the lessor
22
is liable to pay that amount to the Department. This paragraph
23
is exempt from the provisions of Section 3-75.
24

(26) 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 3-75.
5

(27) 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 transferred incident to the
24
modification, refurbishment, completion, replacement, repair,
25
or maintenance of aircraft by persons who (i) hold an Air
26
Agency Certificate and are empowered to operate an approved

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repair station by the Federal Aviation Administration, (ii)
2
have a Class IV Rating, and (iii) conduct operations in
3
accordance with Part 145 of the Federal Aviation Regulations.
4
From January 1, 2024 through December 31, 2029, this exemption
5
applies only to the use of qualifying tangible personal
6
property transferred incident to: (A) the modification,
7
refurbishment, completion, repair, replacement, or maintenance
8
of an aircraft by persons who (i) hold an Air Agency
9
Certificate and are empowered to operate an approved repair
10
station by the Federal Aviation Administration, (ii) have a
11
Class IV Rating, and (iii) conduct operations in accordance
12
with Part 145 of the Federal Aviation Regulations; and (B) the
13
modification, replacement, repair, and maintenance of aircraft
14
engines or power plants without regard to whether or not those
15
persons meet the qualifications of item (A).
16

The exemption does not include aircraft operated by a
17
commercial air carrier providing scheduled passenger air
18
service pursuant to authority issued under Part 121 or Part
19
129 of the Federal Aviation Regulations. The changes made to
20
this paragraph (27) by Public Act 98-534 are declarative of
21
existing law. It is the intent of the General Assembly that the
22
exemption under this paragraph (27) applies continuously from
23
January 1, 2010 through December 31, 2024; however, no claim
24
for credit or refund is allowed for taxes paid as a result of
25
the disallowance of this exemption on or after January 1, 2015
26
and prior to February 5, 2020 (the effective date of Public Act

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101-629).
2

(28) Tangible personal property purchased by a
3
public-facilities corporation, as described in Section
4
11-65-10 of the Illinois Municipal Code, for purposes of
5
constructing or furnishing a municipal convention hall, but
6
only if the legal title to the municipal convention hall is
7
transferred to the municipality without any further
8
consideration by or on behalf of the municipality at the time
9
of the completion of the municipal convention hall or upon the
10
retirement or redemption of any bonds or other debt
11
instruments issued by the public-facilities corporation in
12
connection with the development of the municipal convention
13
hall. This exemption includes existing public-facilities
14
corporations as provided in Section 11-65-25 of the Illinois
15
Municipal Code. This paragraph is exempt from the provisions
16
of Section 3-75.
17

(29) Beginning January 1, 2017 and through December 31,
18
2026, menstrual pads, tampons, and menstrual cups.
19

(30) Tangible personal property transferred to a purchaser
20
who is exempt from the tax imposed by this Act by operation of
21
federal law. This paragraph is exempt from the provisions of
22
Section 3-75.
23

(31) Qualified tangible personal property used in the
24
construction or operation of a data center that has been
25
granted a certificate of exemption by the Department of
26
Commerce and Economic Opportunity, whether that tangible

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

The Department of Commerce and Economic Opportunity shall
12
grant a certificate of exemption under this item (31) to
13
qualified data centers as defined by Section 605-1025 of the
14
Department of Commerce and Economic Opportunity Law of the
15
Civil Administrative Code of Illinois.
16

For the purposes of this item (31):
17

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

buildings rehabilitated or constructed to house working
19

servers in one physical location or multiple sites within
20

the State of Illinois.
21

"Qualified tangible personal property" means:
22

electrical systems and equipment; climate control and
23

chilling equipment and systems; mechanical systems and
24

equipment; monitoring and secure systems; emergency
25

generators; hardware; computers; servers; data storage
26

devices; network connectivity equipment; racks; cabinets;

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telecommunications cabling infrastructure; raised floor
2

systems; peripheral components or systems; software;
3

mechanical, electrical, or plumbing systems; battery
4

systems; cooling systems and towers; temperature control
5

systems; other cabling; and other data center
6

infrastructure equipment and systems necessary to operate
7

qualified tangible personal property, including fixtures;
8

and component parts of any of the foregoing, including
9

installation, maintenance, repair, refurbishment, and
10

replacement of qualified tangible personal property to
11

generate, transform, transmit, distribute, or manage
12

electricity necessary to operate qualified tangible
13

personal property; and all other tangible personal
14

property that is essential to the operations of a computer
15

data center. The term "qualified tangible personal
16

property" also includes building materials physically
17

incorporated into the qualifying data center. To document
18

the exemption allowed under this Section, the retailer
19

must obtain from the purchaser a copy of the certificate
20

of eligibility issued by the Department of Commerce and
21

Economic Opportunity.
22

This item (31) is exempt from the provisions of Section
23
3-75.
24

(32) Beginning July 1, 2022, breast pumps, breast pump
25
collection and storage supplies, and breast pump kits. This
26
item (32) is exempt from the provisions of Section 3-75. As

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1
used in this item (32):
2

"Breast pump" means an electrically controlled or
3

manually controlled pump device designed or marketed to be
4

used to express milk from a human breast during lactation,
5

including the pump device and any battery, AC adapter, or
6

other power supply unit that is used to power the pump
7

device and is packaged and sold with the pump device at the
8

time of sale.
9

"Breast pump collection and storage supplies" means
10

items of tangible personal property designed or marketed
11

to be used in conjunction with a breast pump to collect
12

milk expressed from a human breast and to store collected
13

milk until it is ready for consumption.
14

"Breast pump collection and storage supplies"
15

includes, but is not limited to: breast shields and breast
16

shield connectors; breast pump tubes and tubing adapters;
17

breast pump valves and membranes; backflow protectors and
18

backflow protector adaptors; bottles and bottle caps
19

specific to the operation of the breast pump; and breast
20

milk storage bags.
21

"Breast pump collection and storage supplies" does not
22

include: (1) bottles and bottle caps not specific to the
23

operation of the breast pump; (2) breast pump travel bags
24

and other similar carrying accessories, including ice
25

packs, labels, and other similar products; (3) breast pump
26

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

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1

shells, and other similar products; and (5) creams,
2

ointments, and other similar products that relieve
3

breastfeeding-related symptoms or conditions of the
4

breasts or nipples, unless sold as part of a breast pump
5

kit that is pre-packaged by the breast pump manufacturer
6

or distributor.
7

"Breast pump kit" means a kit that: (1) contains no
8

more than a breast pump, breast pump collection and
9

storage supplies, a rechargeable battery for operating the
10

breast pump, a breastmilk cooler, bottle stands, ice
11

packs, and a breast pump carrying case; and (2) is
12

pre-packaged as a breast pump kit by the breast pump
13

manufacturer or distributor.
14

(33) Tangible personal property sold by or on behalf of
15
the State Treasurer pursuant to the Revised Uniform Unclaimed
16
Property Act. This item (33) is exempt from the provisions of
17
Section 3-75.
18

(34) Beginning on January 1, 2024, tangible personal
19
property purchased by an active duty member of the armed
20
forces of the United States who presents valid military
21
identification and purchases the property using a form of
22
payment where the federal government is the payor. The member
23
of the armed forces must complete, at the point of sale, a form
24
prescribed by the Department of Revenue documenting that the
25
transaction is eligible for the exemption under this
26
paragraph. Retailers must keep the form as documentation of

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the exemption in their records for a period of not less than 6
2
years. "Armed forces of the United States" means the United
3
States Army, Navy, Air Force, Space Force, Marine Corps, or
4
Coast Guard. This paragraph is exempt from the provisions of
5
Section 3-75.
6

(35) Beginning July 1, 2024, home-delivered meals provided
7
to Medicare or Medicaid recipients when payment is made by an
8
intermediary, such as a Medicare Administrative Contractor, a
9
Managed Care Organization, or a Medicare Advantage
10
Organization, pursuant to a government contract. This
11
paragraph (35) is exempt from the provisions of Section 3-75.
12

(36) Beginning on January 1, 2026, as further defined in
13
Section 3-10, food prepared for immediate consumption and
14
transferred incident to a sale of service subject to this Act
15
or the Service Occupation Tax Act by an entity licensed under
16
the Hospital Licensing Act, the Nursing Home Care Act, the
17
Assisted Living and Shared Housing Act, the ID/DD Community
18
Care Act, the MC/DD Act, the Specialized Mental Health
19
Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
20
an entity that holds a permit issued pursuant to the Life Care
21
Facilities Act. This item (36) is exempt from the provisions
22
of Section 3-75.
23

(37) Beginning on January 1, 2026, as further defined in
24
Section 3-10, food for human consumption that is to be
25
consumed off the premises where it is sold (other than
26
alcoholic beverages, food consisting of or infused with adult

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use cannabis, soft drinks, candy, and food that has been
2
prepared for immediate consumption). This item (37) is exempt
3
from the provisions of Section 3-75.
4

(38) Use by a lessee of the following leased tangible
5
personal property:
6

(1) software transferred subject to a license that
7

meets the following requirements:
8

(A) it is evidenced by a written agreement signed
9

by the licensor and the customer;
10

(i) an electronic agreement in which the
11

customer accepts the license by means of an
12

electronic signature that is verifiable and can be
13

authenticated and is attached to or made part of
14

the license will comply with this requirement;
15

(ii) a license agreement in which the customer
16

electronically accepts the terms by clicking "I
17

agree" does not comply with this requirement;
18

(B) it restricts the customer's duplication and
19

use of the software;
20

(C) it prohibits the customer from licensing,
21

sublicensing, or transferring the software to a third
22

party (except to a related party) without the
23

permission and continued control of the licensor;
24

(D) the licensor has a policy of providing another
25

copy at minimal or no charge if the customer loses or
26

damages the software, or of permitting the licensee to

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make and keep an archival copy, and such policy is
2

either stated in the license agreement, supported by
3

the licensor's books and records, or supported by a
4

notarized statement made under penalties of perjury by
5

the licensor; and
6

(E) the customer must destroy or return all copies
7

of the software to the licensor at the end of the
8

license period; this provision is deemed to be met, in
9

the case of a perpetual license, without being set
10

forth in the license agreement; and
11

(2) property that is subject to a tax on lease
12

receipts imposed by a home rule unit of local government
13

if the ordinance imposing that tax was adopted prior to
14

January 1, 2023.
15

(39) Tangible personal property to be incorporated into
16
the construction of a single-family home in the State by a home
17
builder who has been issued a certificate of exemption by the
18
Illinois Housing Development Authority under Section 33.1 of
19
the Illinois Housing Development Act. This item (39) is exempt
20
from the provisions of Section 3-75.

21
(Source: P.A. 103-9, Article 5, Section 5-10, eff. 6-7-23;
22
103-9, Article 15, Section 15-10, eff. 6-7-23; 103-154, eff.
23
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
24
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
25
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-417, eff.
26
8-15-25.)

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Section 25.
The Service Occupation Tax Act is amended by
2
changing Section 3-5 as follows:

3

(35 ILCS 115/3-5)
4

Sec. 3-5.
Exemptions.
The following tangible personal
5
property is exempt from the tax imposed by this Act:
6

(1) Personal property sold by a corporation, society,
7
association, foundation, institution, or organization, other
8
than a limited liability company, that is organized and
9
operated as a not-for-profit service enterprise for the
10
benefit of persons 65 years of age or older if the personal
11
property was not purchased by the enterprise for the purpose
12
of resale by the enterprise.
13

(2) Personal property purchased by a not-for-profit
14
Illinois county fair association for use in conducting,
15
operating, or promoting the county fair.
16

(3) Personal property purchased by any not-for-profit arts
17
or cultural organization that establishes, by proof required
18
by the Department by rule, that it has received an exemption
19
under Section 501(c)(3) of the Internal Revenue Code and that
20
is organized and operated primarily for the presentation or
21
support of arts or cultural programming, activities, or
22
services. These organizations include, but are not limited to,
23
music and dramatic arts organizations such as symphony
24
orchestras and theatrical groups, arts and cultural service

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organizations, local arts councils, visual arts organizations,
2
and media arts organizations. On and after July 1, 2001 (the
3
effective date of Public Act 92-35), however, an entity
4
otherwise eligible for this exemption shall not make tax-free
5
purchases unless it has an active identification number issued
6
by the Department.
7

(4) Legal tender, currency, medallions, or gold or silver
8
coinage issued by the State of Illinois, the government of the
9
United States of America, or the government of any foreign
10
country, and bullion.
11

(5) Until July 1, 2003 and beginning again on September 1,
12
2004 through August 30, 2014, graphic arts machinery and
13
equipment, including repair and replacement parts, both new
14
and used, and including that manufactured on special order or
15
purchased for lease, certified by the purchaser to be used
16
primarily for graphic arts production. Equipment includes
17
chemicals or chemicals acting as catalysts but only if the
18
chemicals or chemicals acting as catalysts effect a direct and
19
immediate change upon a graphic arts product. Beginning on
20
July 1, 2017, graphic arts machinery and equipment is included
21
in the manufacturing and assembling machinery and equipment
22
exemption under Section 2 of this Act.
23

(6) Personal property sold by a teacher-sponsored student
24
organization affiliated with an elementary or secondary school
25
located in Illinois.
26

(7) Farm machinery and equipment, both new and used,

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including that manufactured on special order, certified by the
2
purchaser to be used primarily for production agriculture or
3
State or federal agricultural programs, including individual
4
replacement parts for the machinery and equipment, including
5
machinery and equipment purchased for lease, and including
6
implements of husbandry defined in Section 1-130 of the
7
Illinois Vehicle Code, farm machinery and agricultural
8
chemical and fertilizer spreaders, and nurse wagons required
9
to be registered under Section 3-809 of the Illinois Vehicle
10
Code, but excluding other motor vehicles required to be
11
registered under the Illinois Vehicle Code. Horticultural
12
polyhouses or hoop houses used for propagating, growing, or
13
overwintering plants shall be considered farm machinery and
14
equipment under this item (7). Agricultural chemical tender
15
tanks and dry boxes shall include units sold separately from a
16
motor vehicle required to be licensed and units sold mounted
17
on a motor vehicle required to be licensed if the selling price
18
of the tender is separately stated.
19

Farm machinery and equipment shall include precision
20
farming equipment that is installed or purchased to be
21
installed on farm machinery and equipment, including, but not
22
limited to, tractors, harvesters, sprayers, planters, seeders,
23
or spreaders. Precision farming equipment includes, but is not
24
limited to, soil testing sensors, computers, monitors,
25
software, global positioning and mapping systems, and other
26
such equipment.

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Farm machinery and equipment also includes computers,
2
sensors, software, and related equipment used primarily in the
3
computer-assisted operation of production agriculture
4
facilities, equipment, and activities such as, but not limited
5
to, the collection, monitoring, and correlation of animal and
6
crop data for the purpose of formulating animal diets and
7
agricultural chemicals.
8

Beginning on January 1, 2024, farm machinery and equipment
9
also includes electrical power generation equipment used
10
primarily for production agriculture.
11

This item (7) is exempt from the provisions of Section
12
3-55.
13

(8) Until June 30, 2013, fuel and petroleum products sold
14
to or used by an air common carrier, certified by the carrier
15
to be used for consumption, shipment, or storage in the
16
conduct of its business as an air common carrier, for a flight
17
destined for or returning from a location or locations outside
18
the United States without regard to previous or subsequent
19
domestic stopovers.
20

Beginning July 1, 2013, fuel and petroleum products sold
21
to or used by an air carrier, certified by the carrier to be
22
used for consumption, shipment, or storage in the conduct of
23
its business as an air common carrier, for a flight that (i) is
24
engaged in foreign trade or is engaged in trade between the
25
United States and any of its possessions and (ii) transports
26
at least one individual or package for hire from the city of

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origination to the city of final destination on the same
2
aircraft, without regard to a change in the flight number of
3
that aircraft.
4

(9) Proceeds of mandatory service charges separately
5
stated on customers' bills for the 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 directly
9
in preparing, serving, hosting or cleaning up the food or
10
beverage function with respect to which the service charge is
11
imposed.
12

(10) Until July 1, 2003, oil field exploration, drilling,
13
and production equipment, including (i) rigs and parts of
14
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
15
pipe and tubular goods, including casing and drill strings,
16
(iii) pumps and pump-jack units, (iv) storage tanks and flow
17
lines, (v) any individual replacement part for oil field
18
exploration, drilling, and production equipment, and (vi)
19
machinery and equipment purchased for lease; but excluding
20
motor vehicles required to be registered under the Illinois
21
Vehicle Code.
22

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

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(12) Until July 1, 2028, coal and aggregate exploration,
2
mining, off-highway hauling, processing, maintenance, and
3
reclamation equipment, including replacement parts and
4
equipment, and including equipment purchased for lease, but
5
excluding motor vehicles required to be registered under the
6
Illinois Vehicle Code. The changes made to this Section by
7
Public Act 97-767 apply on and after July 1, 2003, but no claim
8
for credit or refund is allowed on or after August 16, 2013
9
(the effective date of Public Act 98-456) for such taxes paid
10
during the period beginning July 1, 2003 and ending on August
11
16, 2013 (the effective date of Public Act 98-456).
12

(13) Beginning January 1, 1992 and through June 30, 2016,
13
food for human consumption that is to be consumed off the
14
premises where it is sold (other than alcoholic beverages,
15
soft drinks and food that has been prepared for immediate
16
consumption) and prescription and non-prescription medicines,
17
drugs, medical appliances, and insulin, urine testing
18
materials, syringes, and needles used by diabetics, for human
19
use, when purchased for use by a person receiving medical
20
assistance under Article V of the Illinois Public Aid Code who
21
resides in a licensed long-term care facility, as defined in
22
the Nursing Home Care Act, or in a licensed facility as defined
23
in the ID/DD Community Care Act, the MC/DD Act, or the
24
Specialized Mental Health Rehabilitation Act of 2013.
25

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

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(15) 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 (15) is exempt from the
7
provisions of Section 3-55, and the exemption provided for
8
under this item (15) 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 (the effective date of Public Act 95-88) for
11
such taxes paid during the period beginning May 30, 2000 and
12
ending on January 1, 2008 (the effective date of Public Act
13
95-88).
14

(16) Computers and communications equipment utilized for
15
any hospital purpose and equipment used in the diagnosis,
16
analysis, or treatment of hospital patients sold to a lessor
17
who leases the equipment, under a lease of one year or longer
18
executed or in effect at the time of the purchase, to a
19
hospital that has been issued an active tax exemption
20
identification number by the Department under Section 1g of
21
the Retailers' Occupation Tax Act.
22

(17) Personal property sold to a lessor who leases the
23
property, under a lease of one year or longer executed or in
24
effect at the time of the purchase, to a governmental body that
25
has been issued an active tax exemption identification number
26
by the Department under Section 1g of the Retailers'

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Occupation Tax Act.
2

(18) Beginning with taxable years ending on or after
3
December 31, 1995 and ending with taxable years ending on or
4
before December 31, 2004, personal property that is donated
5
for disaster relief to be used in a State or federally declared
6
disaster area in Illinois or bordering Illinois by a
7
manufacturer or retailer that is registered in this State to a
8
corporation, society, association, foundation, or institution
9
that has been issued a sales tax exemption identification
10
number by the Department that assists victims of the disaster
11
who reside within the declared disaster area.
12

(19) Beginning with taxable years ending on or after
13
December 31, 1995 and ending with taxable years ending on or
14
before December 31, 2004, personal property that is used in
15
the performance of infrastructure repairs in this State,
16
including, but not limited to, municipal roads and streets,
17
access roads, bridges, sidewalks, waste disposal systems,
18
water and sewer line extensions, water distribution and
19
purification facilities, storm water drainage and retention
20
facilities, and sewage treatment facilities, resulting from a
21
State or federally declared disaster in Illinois or bordering
22
Illinois when such repairs are initiated on facilities located
23
in the declared disaster area within 6 months after the
24
disaster.
25

(20) Beginning July 1, 1999, game or game birds sold at a
26
"game breeding and hunting preserve area" as that term is used

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in the Wildlife Code. This paragraph is exempt from the
2
provisions of Section 3-55.
3

(21) A motor vehicle, as that term is defined in Section
4
1-146 of the Illinois Vehicle Code, that is donated to a
5
corporation, limited liability company, society, association,
6
foundation, or institution that is determined by the
7
Department to be organized and operated exclusively for
8
educational purposes. For purposes of this exemption, "a
9
corporation, limited liability company, society, association,
10
foundation, or institution organized and operated exclusively
11
for educational purposes" means all tax-supported public
12
schools, private schools that offer systematic instruction in
13
useful branches of learning by methods common to public
14
schools and that compare favorably in their scope and
15
intensity with the course of study presented in tax-supported
16
schools, and vocational or technical schools or institutes
17
organized and operated exclusively to provide a course of
18
study of not less than 6 weeks duration and designed to prepare
19
individuals to follow a trade or to pursue a manual,
20
technical, mechanical, industrial, business, or commercial
21
occupation.
22

(22) Beginning January 1, 2000, personal property,
23
including food, purchased through fundraising events for the
24
benefit of a public or private elementary or secondary school,
25
a group of those schools, or one or more school districts if
26
the events are sponsored by an entity recognized by the school

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district that consists primarily of volunteers and includes
2
parents and teachers of the school children. This paragraph
3
does not apply to fundraising events (i) for the benefit of
4
private home instruction or (ii) for which the fundraising
5
entity purchases the personal property sold at the events from
6
another individual or entity that sold the property for the
7
purpose of resale by the fundraising entity and that profits
8
from the sale to the fundraising entity. This paragraph is
9
exempt from the provisions of Section 3-55.
10

(23) Beginning January 1, 2000 and through December 31,
11
2001, new or used automatic vending machines that prepare and
12
serve hot food and beverages, including coffee, soup, and
13
other items, and replacement parts for these machines.
14
Beginning January 1, 2002 and through June 30, 2003, machines
15
and parts for machines used in commercial, coin-operated
16
amusement and vending business if a use or occupation tax is
17
paid on the gross receipts derived from the use of the
18
commercial, coin-operated amusement and vending machines. This
19
paragraph is exempt from the provisions of Section 3-55.
20

(24) Beginning on August 2, 2001 (the effective date of
21
Public Act 92-227), computers and communications equipment
22
utilized for any hospital purpose and equipment used in the
23
diagnosis, analysis, or treatment of hospital patients sold to
24
a lessor who leases the equipment, under a lease of one year or
25
longer executed or in effect at the time of the purchase, to a
26
hospital that has been issued an active tax exemption

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

(25) Beginning on August 2, 2001 (the effective date of
5
Public Act 92-227), personal property sold to a lessor who
6
leases the property, under a lease of one year or longer
7
executed or in effect at the time of the purchase, to a
8
governmental body that has been issued an active tax exemption
9
identification number by the Department under Section 1g of
10
the Retailers' Occupation Tax Act. This paragraph is exempt
11
from the provisions of Section 3-55.
12

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

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this paragraph (26). The permit issued under this paragraph
2
(26) shall authorize the holder, to the extent and in the
3
manner specified in the rules adopted under this Act, to
4
purchase tangible personal property from a retailer exempt
5
from the taxes imposed by this Act. Taxpayers shall maintain
6
all necessary books and records to substantiate the use and
7
consumption of all such tangible personal property outside of
8
the State of Illinois.
9

(27) Beginning January 1, 2008, tangible personal property
10
used in the construction or maintenance of a community water
11
supply, as defined under Section 3.145 of the Environmental
12
Protection Act, that is operated by a not-for-profit
13
corporation that holds a valid water supply permit issued
14
under Title IV of the Environmental Protection Act. This
15
paragraph is exempt from the provisions of Section 3-55.
16

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

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hall. This exemption includes existing public-facilities
2
corporations as provided in Section 11-65-25 of the Illinois
3
Municipal Code. This paragraph is exempt from the provisions
4
of Section 3-55.
5

(29) 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 transfer of
23
qualifying tangible personal property incident to the
24
modification, refurbishment, completion, replacement, repair,
25
or maintenance of an aircraft by persons who (i) hold an Air
26
Agency Certificate and are empowered to operate an approved

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

The changes made to this paragraph (29) by Public Act
21
98-534 are declarative of existing law. It is the intent of the
22
General Assembly that the exemption under this paragraph (29)
23
applies continuously from January 1, 2010 through December 31,
24
2024; however, no claim for credit or refund is allowed for
25
taxes paid as a result of the disallowance of this exemption on
26
or after January 1, 2015 and prior to February 5, 2020 (the

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effective date of Public Act 101-629).
2

(30) Beginning January 1, 2017 and through December 31,
3
2026, menstrual pads, tampons, and menstrual cups.
4

(31) Tangible personal property transferred to a purchaser
5
who is exempt from tax by operation of federal law. This
6
paragraph is exempt from the provisions of Section 3-55.
7

(32) 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 (32) 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 (32):

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

(33) Beginning July 1, 2022, breast pumps, breast pump
9
collection and storage supplies, and breast pump kits. This
10
item (33) is exempt from the provisions of Section 3-55. As
11
used in this item (33):
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

(34) Tangible personal property sold by or on behalf of
25
the State Treasurer pursuant to the Revised Uniform Unclaimed
26
Property Act. This item (34) is exempt from the provisions of

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Section 3-55.
2

(35) 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 3-55.
16

(36) 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 (36) is exempt from the provisions of Section 3-55.
22

(37) 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 Use Tax Act by an entity licensed under the
26
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 (37) is exempt from the provisions
6
of Section 3-55.
7

(38) 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 (38) is exempt
13
from the provisions of Section 3-55.
14

(39) The lease of the following tangible personal
15
property:
16

(1) computer software transferred subject to a license
17

that 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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1

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

(40) Tangible personal property to be incorporated into
26
the construction of a single-family home in the State by a home

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builder who has been issued a certificate of exemption by the
2
Illinois Housing Development Authority under Section 33.1 of
3
the Illinois Housing Development Act. This item (40) is exempt
4
from the provisions of Section 3-55.

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

11

Section 30.
The Retailers' Occupation Tax Act is amended
12
by changing Section 2-5 as follows:

13

(35 ILCS 120/2-5)
14

Sec. 2-5.
Exemptions.
Gross receipts from proceeds from
15
the sale, which, on and after January 1, 2025, includes the
16
lease, of the following tangible personal property are exempt
17
from the tax imposed by this Act:
18

(1) Farm chemicals.
19

(2) Farm machinery and equipment, both new and used,
20

including that manufactured on special order, certified by
21

the purchaser to be used primarily for production
22

agriculture or State or federal agricultural programs,
23

including individual replacement parts for the machinery
24

and equipment, including machinery and equipment purchased

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for lease, and including implements of husbandry defined
2

in Section 1-130 of the Illinois Vehicle Code, farm
3

machinery and agricultural chemical and fertilizer
4

spreaders, and nurse wagons required to be registered
5

under Section 3-809 of the Illinois Vehicle Code, but
6

excluding other motor vehicles required to be registered
7

under the Illinois Vehicle Code. Horticultural polyhouses
8

or hoop houses used for propagating, growing, or
9

overwintering plants shall be considered farm machinery
10

and equipment under this item (2). Agricultural chemical
11

tender tanks and dry boxes shall include units sold
12

separately from a motor vehicle required to be licensed
13

and units sold mounted on a motor vehicle required to be
14

licensed, if the selling price of the tender is separately
15

stated.
16

Farm machinery and equipment shall include precision
17

farming equipment that is installed or purchased to be
18

installed on farm machinery and equipment including, but
19

not limited to, tractors, harvesters, sprayers, planters,
20

seeders, or spreaders. Precision farming equipment
21

includes, but is not limited to, soil testing sensors,
22

computers, monitors, software, global positioning and
23

mapping systems, and other such equipment.
24

Farm machinery and equipment also includes computers,
25

sensors, software, and related equipment used primarily in
26

the computer-assisted operation of production agriculture

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facilities, equipment, and activities such as, but not
2

limited to, the collection, monitoring, and correlation of
3

animal and crop data for the purpose of formulating animal
4

diets and agricultural chemicals.
5

Beginning on January 1, 2024, farm machinery and
6

equipment also includes electrical power generation
7

equipment used primarily for production agriculture.
8

This item (2) is exempt from the provisions of Section
9

2-70.
10

(3) Until July 1, 2003, distillation machinery and
11

equipment, sold as a unit or kit, assembled or installed
12

by the retailer, certified by the user to be used only for
13

the production of ethyl alcohol that will be used for
14

consumption as motor fuel or as a component of motor fuel
15

for the personal use of the user, and not subject to sale
16

or resale.
17

(4) Until July 1, 2003 and beginning again September
18

1, 2004 through August 30, 2014, graphic arts machinery
19

and equipment, including repair and replacement parts,
20

both new and used, and including that manufactured on
21

special order or purchased for lease, certified by the
22

purchaser to be used primarily for graphic arts
23

production. Equipment includes chemicals or chemicals
24

acting as catalysts but only if the chemicals or chemicals
25

acting as catalysts effect a direct and immediate change
26

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

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graphic arts machinery and equipment is included in the
2

manufacturing and assembling machinery and equipment
3

exemption under paragraph (14).
4

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

renting, as defined in the Automobile Renting Occupation
6

and Use Tax Act. This paragraph is exempt from the
7

provisions of Section 2-70.
8

(6) Personal property sold by a teacher-sponsored
9

student organization affiliated with an elementary or
10

secondary school located in Illinois.
11

(7) Until July 1, 2003, proceeds of that portion of
12

the selling price of a passenger car the sale of which is
13

subject to the Replacement Vehicle Tax.
14

(8) Personal property sold to an Illinois county fair
15

association for use in conducting, operating, or promoting
16

the county fair.
17

(9) Personal property sold to a not-for-profit arts or
18

cultural organization that establishes, by proof required
19

by the Department by rule, that it has received an
20

exemption under Section 501(c)(3) of the Internal Revenue
21

Code and that is organized and operated primarily for the
22

presentation or support of arts or cultural programming,
23

activities, or services. These organizations include, but
24

are not limited to, music and dramatic arts organizations
25

such as symphony orchestras and theatrical groups, arts
26

and cultural service organizations, local arts councils,

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visual arts organizations, and media arts organizations.
2

On and after July 1, 2001 (the effective date of Public Act
3

92-35), however, an entity otherwise eligible for this
4

exemption shall not make tax-free purchases unless it has
5

an active identification number issued by the Department.
6

(10) Personal property sold by a corporation, society,
7

association, foundation, institution, or organization,
8

other than a limited liability company, that is organized
9

and operated as a not-for-profit service enterprise for
10

the benefit of persons 65 years of age or older if the
11

personal property was not purchased by the enterprise for
12

the purpose of resale by the enterprise.
13

(11) Except as otherwise provided in this Section,
14

personal property sold to a governmental body, to a
15

corporation, society, association, foundation, or
16

institution organized and operated exclusively for
17

charitable, religious, or educational purposes, or to a
18

not-for-profit corporation, society, association,
19

foundation, institution, or organization that has no
20

compensated officers or employees and that is organized
21

and operated primarily for the recreation of persons 55
22

years of age or older. A limited liability company may
23

qualify for the exemption under this paragraph only if the
24

limited liability company is organized and operated
25

exclusively for educational purposes. On and after July 1,
26

1987, however, no entity otherwise eligible for this

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exemption shall make tax-free purchases unless it has an
2

active identification number issued by the Department.
3

(12) (Blank).
4

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

2004, motor vehicles of the second division with a gross
6

vehicle weight in excess of 8,000 pounds that are subject
7

to the commercial distribution fee imposed under Section
8

3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
9

2004 and through June 30, 2005, the use in this State of
10

motor vehicles of the second division: (i) with a gross
11

vehicle weight rating in excess of 8,000 pounds; (ii) that
12

are subject to the commercial distribution fee imposed
13

under Section 3-815.1 of the Illinois Vehicle Code; and
14

(iii) that are primarily used for commercial purposes.
15

Through June 30, 2005, this exemption applies to repair
16

and replacement parts added after the initial purchase of
17

such a motor vehicle if that motor vehicle is used in a
18

manner that would qualify for the rolling stock exemption
19

otherwise provided for in this Act. For purposes of this
20

paragraph, "used for commercial purposes" means the
21

transportation of persons or property in furtherance of
22

any commercial or industrial enterprise whether for-hire
23

or not.
24

(13) Proceeds from sales to owners or lessors,
25

lessees, or shippers of tangible personal property that is
26

utilized by interstate carriers for hire for use as

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rolling stock moving in interstate commerce and equipment
2

operated by a telecommunications provider, licensed as a
3

common carrier by the Federal Communications Commission,
4

which is permanently installed in or affixed to aircraft
5

moving in interstate commerce.
6

(14) Machinery and equipment that will be used by the
7

purchaser, or a lessee of the purchaser, primarily in the
8

process of manufacturing or assembling tangible personal
9

property for wholesale or retail sale or lease, whether
10

the sale or lease is made directly by the manufacturer or
11

by some other person, whether the materials used in the
12

process are owned by the manufacturer or some other
13

person, or whether the sale or lease is made apart from or
14

as an incident to the seller's engaging in the service
15

occupation of producing machines, tools, dies, jigs,
16

patterns, gauges, or other similar items of no commercial
17

value on special order for a particular purchaser. The
18

exemption provided by this paragraph (14) does not include
19

machinery and equipment used in (i) the generation of
20

electricity for wholesale or retail sale; (ii) the
21

generation or treatment of natural or artificial gas for
22

wholesale or retail sale that is delivered to customers
23

through pipes, pipelines, or mains; or (iii) the treatment
24

of water for wholesale or retail sale that is delivered to
25

customers through pipes, pipelines, or mains. The
26

provisions of Public Act 98-583 are declaratory of

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existing law as to the meaning and scope of this
2

exemption. Beginning on July 1, 2017, the exemption
3

provided by this paragraph (14) includes, but is not
4

limited to, graphic arts machinery and equipment, as
5

defined in paragraph (4) of this Section.
6

(15) Proceeds of mandatory service charges separately
7

stated on customers' bills for purchase and consumption of
8

food and beverages, to the extent that the proceeds of the
9

service charge are in fact turned over as tips or as a
10

substitute for tips to the employees who participate
11

directly in preparing, serving, hosting or cleaning up the
12

food or beverage function with respect to which the
13

service charge is imposed.
14

(16) Tangible personal property sold to a purchaser if
15

the purchaser is exempt from use tax by operation of
16

federal law. This paragraph is exempt from the provisions
17

of Section 2-70.
18

(17) Tangible personal property sold to a common
19

carrier by rail or motor that receives the physical
20

possession of the property in Illinois and that transports
21

the property, or shares with another common carrier in the
22

transportation of the property, out of Illinois on a
23

standard uniform bill of lading showing the seller of the
24

property as the shipper or consignor of the property to a
25

destination outside Illinois, for use outside Illinois.
26

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

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silver coinage issued by the State of Illinois, the
2

government of the United States of America, or the
3

government of any foreign country, and bullion.
4

(19) Until July 1, 2003, oil field exploration,
5

drilling, and production equipment, including (i) rigs and
6

parts of rigs, rotary rigs, cable tool rigs, and workover
7

rigs, (ii) pipe and tubular goods, including casing and
8

drill strings, (iii) pumps and pump-jack units, (iv)
9

storage tanks and flow lines, (v) any individual
10

replacement part for oil field exploration, drilling, and
11

production equipment, and (vi) machinery and equipment
12

purchased for lease; but excluding motor vehicles required
13

to be registered under the Illinois Vehicle Code.
14

(20) Photoprocessing machinery and equipment,
15

including repair and replacement parts, both new and used,
16

including that manufactured on special order, certified by
17

the purchaser to be used primarily for photoprocessing,
18

and including photoprocessing machinery and equipment
19

purchased for lease.
20

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

exploration, mining, off-highway hauling, processing,
22

maintenance, and reclamation equipment, including
23

replacement parts and equipment, and including equipment
24

purchased for lease, but excluding motor vehicles required
25

to be registered under the Illinois Vehicle Code. The
26

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

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and after July 1, 2003, but no claim for credit or refund
2

is allowed on or after August 16, 2013 (the effective date
3

of Public Act 98-456) for such taxes paid during the
4

period beginning July 1, 2003 and ending on August 16,
5

2013 (the effective date of Public Act 98-456).
6

(22) Until June 30, 2013, fuel and petroleum products
7

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

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

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

flight destined for or returning from a location or
11

locations outside the United States without regard to
12

previous or subsequent domestic stopovers.
13

Beginning July 1, 2013, fuel and petroleum products
14

sold to or used by an air carrier, certified by the carrier
15

to be used for consumption, shipment, or storage in the
16

conduct of its business as an air common carrier, for a
17

flight that (i) is engaged in foreign trade or is engaged
18

in trade between the United States and any of its
19

possessions and (ii) transports at least one individual or
20

package for hire from the city of origination to the city
21

of final destination on the same aircraft, without regard
22

to a change in the flight number of that aircraft.
23

(23) A transaction in which the purchase order is
24

received by a florist who is located outside Illinois, but
25

who has a florist located in Illinois deliver the property
26

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

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(24) Fuel consumed or used in the operation of ships,
2

barges, or vessels that are used primarily in or for the
3

transportation of property or the conveyance of persons
4

for hire on rivers bordering on this State if the fuel is
5

delivered by the seller to the purchaser's barge, ship, or
6

vessel while it is afloat upon that bordering river.
7

(25) Except as provided in items (25-5) and (25-6) of
8

this Section, a motor vehicle sold in this State to a
9

nonresident even though the motor vehicle is delivered to
10

the nonresident in this State, if the motor vehicle is not
11

to be titled in this State, and if a drive-away permit is
12

issued to the motor vehicle as provided in Section 3-603
13

of the Illinois Vehicle Code or if the nonresident
14

purchaser has vehicle registration plates to transfer to
15

the motor vehicle upon returning to his or her home state.
16

The issuance of the drive-away permit or having the
17

out-of-state registration plates to be transferred is
18

prima facie evidence that the motor vehicle will not be
19

titled in this State.
20

(25-5) The exemption under item (25) does not apply if
21

the state in which the motor vehicle will be titled does
22

not allow a reciprocal exemption for a motor vehicle sold
23

and delivered in that state to an Illinois resident but
24

titled in Illinois. The tax collected under this Act on
25

the sale of a motor vehicle in this State to a resident of
26

another state that does not allow a reciprocal exemption

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shall be imposed at a rate equal to the state's rate of tax
2

on taxable property in the state in which the purchaser is
3

a resident, except that the tax shall not exceed the tax
4

that would otherwise be imposed under this Act. At the
5

time of the sale, the purchaser shall execute a statement,
6

signed under penalty of perjury, of his or her intent to
7

title the vehicle in the state in which the purchaser is a
8

resident within 30 days after the sale and of the fact of
9

the payment to the State of Illinois of tax in an amount
10

equivalent to the state's rate of tax on taxable property
11

in his or her state of residence and shall submit the
12

statement to the appropriate tax collection agency in his
13

or her state of residence. In addition, the retailer must
14

retain a signed copy of the statement in his or her
15

records. Nothing in this item shall be construed to
16

require the removal of the vehicle from this state
17

following the filing of an intent to title the vehicle in
18

the purchaser's state of residence if the purchaser titles
19

the vehicle in his or her state of residence within 30 days
20

after the date of sale. The tax collected under this Act in
21

accordance with this item (25-5) shall be proportionately
22

distributed as if the tax were collected at the 6.25%
23

general rate imposed under this Act.
24

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

exemption under item (25) does not apply if the purchaser
26

is a limited liability company and a member of the limited

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liability company is a resident of Illinois. This
2

presumption may be rebutted by other evidence, such as
3

evidence the motor vehicle is insured at a garaging or
4

storage address outside Illinois or other evidence of the
5

physical address at which the motor vehicle will be
6

permanently stored or garaged outside Illinois.
7

(25-7) Beginning on July 1, 2007, no tax is imposed
8

under this Act on the sale of an aircraft, as defined in
9

Section 3 of the Illinois Aeronautics Act, if all of the
10

following conditions are met:
11

(1) the aircraft leaves this State within 15 days
12

after the later of either the issuance of the final
13

billing for the sale of the aircraft, or the
14

authorized approval for return to service, completion
15

of the maintenance record entry, and completion of the
16

test flight and ground test for inspection, as
17

required by 14 CFR 91.407;
18

(2) the aircraft is not based or registered in
19

this State after the sale of the aircraft; and
20

(3) the seller retains in his or her books and
21

records and provides to the Department a signed and
22

dated certification from the purchaser, on a form
23

prescribed by the Department, certifying that the
24

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

certificate must also include the name and address of
26

the purchaser, the address of the location where the

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aircraft is to be titled or registered, the address of
2

the primary physical location of the aircraft, and
3

other information that the Department may reasonably
4

require.
5

For purposes of this item (25-7):
6

"Based in this State" means hangared, stored, or
7

otherwise used, excluding post-sale customizations as
8

defined in this Section, for 10 or more days in each
9

12-month period immediately following the date of the sale
10

of the aircraft.
11

"Registered in this State" means an aircraft
12

registered with the Department of Transportation,
13

Aeronautics Division, or titled or registered with the
14

Federal Aviation Administration to an address located in
15

this State.
16

This paragraph (25-7) is exempt from the provisions of
17

Section 2-70.
18

(26) Semen used for artificial insemination of
19

livestock for direct agricultural production.
20

(27) Horses, or interests in horses, registered with
21

and meeting the requirements of any of the Arabian Horse
22

Club Registry of America, Appaloosa Horse Club, American
23

Quarter Horse Association, United States Trotting
24

Association, or Jockey Club, as appropriate, used for
25

purposes of breeding or racing for prizes. This item (27)
26

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

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exemption provided for under this item (27) applies for
2

all periods beginning May 30, 1995, but no claim for
3

credit or refund is allowed on or after January 1, 2008
4

(the effective date of Public Act 95-88) for such taxes
5

paid during the period beginning May 30, 2000 and ending
6

on January 1, 2008 (the effective date of Public Act
7

95-88).
8

(28) Computers and communications equipment utilized
9

for any hospital purpose and equipment used in the
10

diagnosis, analysis, or treatment of hospital patients
11

sold to a lessor who leases the equipment, under a lease of
12

one year or longer executed or in effect at the time of the
13

purchase, to a hospital that has been issued an active tax
14

exemption identification number by the Department under
15

Section 1g of this Act.
16

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

property, under a lease of one year or longer executed or
18

in effect at the time of the purchase, to a governmental
19

body that has been issued an active tax exemption
20

identification number by the Department under Section 1g
21

of this Act.
22

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

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

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

donated for disaster relief to be used in a State or
26

federally declared disaster area in Illinois or bordering

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Illinois by a manufacturer or retailer that is registered
2

in this State to a corporation, society, association,
3

foundation, or institution that has been issued a sales
4

tax exemption identification number by the Department that
5

assists victims of the disaster who reside within the
6

declared disaster area.
7

(31) Beginning with taxable years ending on or after
8

December 31, 1995 and ending with taxable years ending on
9

or before December 31, 2004, personal property that is
10

used in the performance of infrastructure repairs in this
11

State, including, but not limited to, municipal roads and
12

streets, access roads, bridges, sidewalks, waste disposal
13

systems, water and sewer line extensions, water
14

distribution and purification facilities, storm water
15

drainage and retention facilities, and sewage treatment
16

facilities, resulting from a State or federally declared
17

disaster in Illinois or bordering Illinois when such
18

repairs are initiated on facilities located in the
19

declared disaster area within 6 months after the disaster.
20

(32) Beginning July 1, 1999, game or game birds sold
21

at a "game breeding and hunting preserve area" as that
22

term is used in the Wildlife Code. This paragraph is
23

exempt from the provisions of Section 2-70.
24

(33) A motor vehicle, as that term is defined in
25

Section 1-146 of the Illinois Vehicle Code, that is
26

donated to a corporation, limited liability company,

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society, association, foundation, or institution that is
2

determined by the Department to be organized and operated
3

exclusively for educational purposes. For purposes of this
4

exemption, "a corporation, limited liability company,
5

society, association, foundation, or institution organized
6

and operated exclusively for educational purposes" means
7

all tax-supported public schools, private schools that
8

offer systematic instruction in useful branches of
9

learning by methods common to public schools and that
10

compare favorably in their scope and intensity with the
11

course of study presented in tax-supported schools, and
12

vocational or technical schools or institutes organized
13

and operated exclusively to provide a course of study of
14

not less than 6 weeks duration and designed to prepare
15

individuals to follow a trade or to pursue a manual,
16

technical, mechanical, industrial, business, or commercial
17

occupation.
18

(34) Beginning January 1, 2000, personal property,
19

including food, purchased through fundraising events for
20

the benefit of a public or private elementary or secondary
21

school, a group of those schools, or one or more school
22

districts if the events are sponsored by an entity
23

recognized by the school district that consists primarily
24

of volunteers and includes parents and teachers of the
25

school children. This paragraph does not apply to
26

fundraising events (i) for the benefit of private home

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instruction or (ii) for which the fundraising entity
2

purchases the personal property sold at the events from
3

another individual or entity that sold the property for
4

the purpose of resale by the fundraising entity and that
5

profits from the sale to the fundraising entity. This
6

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

(35) Beginning January 1, 2000 and through December
8

31, 2001, new or used automatic vending machines that
9

prepare and serve hot food and beverages, including
10

coffee, soup, and other items, and replacement parts for
11

these machines. Beginning January 1, 2002 and through June
12

30, 2003, machines and parts for machines used in
13

commercial, coin-operated amusement and vending business
14

if a use or occupation tax is paid on the gross receipts
15

derived from the use of the commercial, coin-operated
16

amusement and vending machines. This paragraph is exempt
17

from the provisions of Section 2-70.
18

(35-5) Beginning August 23, 2001 and through June 30,
19

2016, food for human consumption that is to be consumed
20

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

beverages, soft drinks, and food that has been prepared
22

for immediate consumption) and prescription and
23

nonprescription medicines, drugs, medical appliances, and
24

insulin, urine testing materials, syringes, and needles
25

used by diabetics, for human use, when purchased for use
26

by a person receiving medical assistance under Article V

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of the Illinois Public Aid Code who resides in a licensed
2

long-term care facility, as defined in the Nursing Home
3

Care Act, or a licensed facility as defined in the ID/DD
4

Community Care Act, the MC/DD Act, or the Specialized
5

Mental Health Rehabilitation Act of 2013.
6

(36) Beginning August 2, 2001, computers and
7

communications equipment utilized for any hospital purpose
8

and equipment used in the diagnosis, analysis, or
9

treatment of hospital patients sold to a lessor who leases
10

the equipment, under a lease of one year or longer
11

executed or in effect at the time of the purchase, to a
12

hospital that has been issued an active tax exemption
13

identification number by the Department under Section 1g
14

of this Act. This paragraph is exempt from the provisions
15

of Section 2-70.
16

(37) Beginning August 2, 2001, personal property sold
17

to a lessor who leases the property, under a lease of one
18

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

purchase, to a governmental body that has been issued an
20

active tax exemption identification number by the
21

Department under Section 1g of this Act. This paragraph is
22

exempt from the provisions of Section 2-70.
23

(38) Beginning on January 1, 2002 and through June 30,
24

2016, tangible personal property purchased from an
25

Illinois retailer by a taxpayer engaged in centralized
26

purchasing activities in Illinois who will, upon receipt

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of the property in Illinois, temporarily store the
2

property in Illinois (i) for the purpose of subsequently
3

transporting it outside this State for use or consumption
4

thereafter solely outside this State or (ii) for the
5

purpose of being processed, fabricated, or manufactured
6

into, attached to, or incorporated into other tangible
7

personal property to be transported outside this State and
8

thereafter used or consumed solely outside this State. The
9

Director of Revenue shall, pursuant to rules adopted in
10

accordance with the Illinois Administrative Procedure Act,
11

issue a permit to any taxpayer in good standing with the
12

Department who is eligible for the exemption under this
13

paragraph (38). The permit issued under this paragraph
14

(38) shall authorize the holder, to the extent and in the
15

manner specified in the rules adopted under this Act, to
16

purchase tangible personal property from a retailer exempt
17

from the taxes imposed by this Act. Taxpayers shall
18

maintain all necessary books and records to substantiate
19

the use and consumption of all such tangible personal
20

property outside of the State of Illinois.
21

(39) Beginning January 1, 2008, tangible personal
22

property used in the construction or maintenance of a
23

community water supply, as defined under Section 3.145 of
24

the Environmental Protection Act, that is operated by a
25

not-for-profit corporation that holds a valid water supply
26

permit issued under Title IV of the Environmental

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1

Protection Act. This paragraph is exempt from the
2

provisions of Section 2-70.
3

(40) Beginning January 1, 2010 and continuing through
4

December 31, 2029, materials, parts, equipment,
5

components, and furnishings incorporated into or upon an
6

aircraft as part of the modification, refurbishment,
7

completion, replacement, repair, or maintenance of the
8

aircraft. This exemption includes consumable supplies used
9

in the modification, refurbishment, completion,
10

replacement, repair, and maintenance of aircraft. However,
11

until January 1, 2024, this exemption excludes any
12

materials, parts, equipment, components, and consumable
13

supplies used in the modification, replacement, repair,
14

and maintenance of aircraft engines or power plants,
15

whether such engines or power plants are installed or
16

uninstalled upon any such aircraft. "Consumable supplies"
17

include, but are not limited to, adhesive, tape,
18

sandpaper, general purpose lubricants, cleaning solution,
19

latex gloves, and protective films.
20

Beginning January 1, 2010 and continuing through
21

December 31, 2023, this exemption applies only to the sale
22

of qualifying tangible personal property to persons who
23

modify, refurbish, complete, replace, or maintain an
24

aircraft and who (i) hold an Air Agency Certificate and
25

are empowered to operate an approved repair station by the
26

Federal Aviation Administration, (ii) have a Class IV

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1

Rating, and (iii) conduct operations in accordance with
2

Part 145 of the Federal Aviation Regulations. The
3

exemption does not include aircraft operated by a
4

commercial air carrier providing scheduled passenger air
5

service pursuant to authority issued under Part 121 or
6

Part 129 of the Federal Aviation Regulations. From January
7

1, 2024 through December 31, 2029, this exemption applies
8

only to the sale of qualifying tangible personal property
9

to: (A) persons who modify, refurbish, complete, repair,
10

replace, or maintain aircraft and who (i) hold an Air
11

Agency Certificate and are empowered to operate an
12

approved repair station by the Federal Aviation
13

Administration, (ii) have a Class IV Rating, and (iii)
14

conduct operations in accordance with Part 145 of the
15

Federal Aviation Regulations; and (B) persons who engage
16

in the modification, replacement, repair, and maintenance
17

of aircraft engines or power plants without regard to
18

whether or not those persons meet the qualifications of
19

item (A).
20

The changes made to this paragraph (40) by Public Act
21

98-534 are declarative of existing law. It is the intent
22

of the General Assembly that the exemption under this
23

paragraph (40) applies continuously from January 1, 2010
24

through December 31, 2024; however, no claim for credit or
25

refund is allowed for taxes paid as a result of the
26

disallowance of this exemption on or after January 1, 2015

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1

and prior to February 5, 2020 (the effective date of
2

Public Act 101-629).
3

(41) Tangible personal property sold to a
4

public-facilities corporation, as described in Section
5

11-65-10 of the Illinois Municipal Code, for purposes of
6

constructing or furnishing a municipal convention hall,
7

but only if the legal title to the municipal convention
8

hall is transferred to the municipality without any
9

further consideration by or on behalf of the municipality
10

at the time of the completion of the municipal convention
11

hall or upon the retirement or redemption of any bonds or
12

other debt instruments issued by the public-facilities
13

corporation in connection with the development of the
14

municipal convention hall. This exemption includes
15

existing public-facilities corporations as provided in
16

Section 11-65-25 of the Illinois Municipal Code. This
17

paragraph is exempt from the provisions of Section 2-70.
18

(42) Beginning January 1, 2017 and through December
19

31, 2026, menstrual pads, tampons, and menstrual cups.
20

(43) Merchandise that is subject to the Rental
21

Purchase Agreement Occupation and Use Tax. The purchaser
22

must certify that the item is purchased to be rented
23

subject to a rental-purchase agreement, as defined in the
24

Rental-Purchase Agreement Act, and provide proof of
25

registration under the Rental Purchase Agreement
26

Occupation and Use Tax Act. This paragraph is exempt from

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1

the provisions of Section 2-70.
2

(44) Qualified tangible personal property used in the
3

construction or operation of a data center that has been
4

granted a certificate of exemption by the Department of
5

Commerce and Economic Opportunity, whether that tangible
6

personal property is purchased by the owner, operator, or
7

tenant of the data center or by a contractor or
8

subcontractor of the owner, operator, or tenant. Data
9

centers that would have qualified for a certificate of
10

exemption prior to January 1, 2020 had Public Act 101-31
11

been in effect, may apply for and obtain an exemption for
12

subsequent purchases of computer equipment or enabling
13

software purchased or leased to upgrade, supplement, or
14

replace computer equipment or enabling software purchased
15

or leased in the original investment that would have
16

qualified.
17

The Department of Commerce and Economic Opportunity
18

shall grant a certificate of exemption under this item
19

(44) to qualified data centers as defined by Section
20

605-1025 of the Department of Commerce and Economic
21

Opportunity Law of the Civil Administrative Code of
22

Illinois.
23

For the purposes of this item (44):
24

"Data center" means a building or a series of
25

buildings rehabilitated or constructed to house
26

working servers in one physical location or multiple

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sites within the State of Illinois.
2

"Qualified tangible personal property" means:
3

electrical systems and equipment; climate control and
4

chilling equipment and systems; mechanical systems and
5

equipment; monitoring and secure systems; emergency
6

generators; hardware; computers; servers; data storage
7

devices; network connectivity equipment; racks;
8

cabinets; telecommunications cabling infrastructure;
9

raised floor systems; peripheral components or
10

systems; software; mechanical, electrical, or plumbing
11

systems; battery systems; cooling systems and towers;
12

temperature control systems; other cabling; and other
13

data center infrastructure equipment and systems
14

necessary to operate qualified tangible personal
15

property, including fixtures; and component parts of
16

any of the foregoing, including installation,
17

maintenance, repair, refurbishment, and replacement of
18

qualified tangible personal property to generate,
19

transform, transmit, distribute, or manage electricity
20

necessary to operate qualified tangible personal
21

property; and all other tangible personal property
22

that is essential to the operations of a computer data
23

center. The term "qualified tangible personal
24

property" also includes building materials physically
25

incorporated into the qualifying data center. To
26

document the exemption allowed under this Section, the

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1

retailer must obtain from the purchaser a copy of the
2

certificate of eligibility issued by the Department of
3

Commerce and Economic Opportunity.
4

This item (44) is exempt from the provisions of
5

Section 2-70.
6

(45) Beginning January 1, 2020 and through December
7

31, 2020, sales of tangible personal property made by a
8

marketplace seller over a marketplace for which tax is due
9

under this Act but for which use tax has been collected and
10

remitted to the Department by a marketplace facilitator
11

under Section 2d of the Use Tax Act are exempt from tax
12

under this Act. A marketplace seller claiming this
13

exemption shall maintain books and records demonstrating
14

that the use tax on such sales has been collected and
15

remitted by a marketplace facilitator. Marketplace sellers
16

that have properly remitted tax under this Act on such
17

sales may file a claim for credit as provided in Section 6
18

of this Act. No claim is allowed, however, for such taxes
19

for which a credit or refund has been issued to the
20

marketplace facilitator under the Use Tax Act, or for
21

which the marketplace facilitator has filed a claim for
22

credit or refund under the Use Tax Act.
23

(46) Beginning July 1, 2022, breast pumps, breast pump
24

collection and storage supplies, and breast pump kits.
25

This item (46) is exempt from the provisions of Section
26

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

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1

"Breast pump" means an electrically controlled or
2

manually controlled pump device designed or marketed to be
3

used to express milk from a human breast during lactation,
4

including the pump device and any battery, AC adapter, or
5

other power supply unit that is used to power the pump
6

device and is packaged and sold with the pump device at the
7

time of sale.
8

"Breast pump collection and storage supplies" means
9

items of tangible personal property designed or marketed
10

to be used in conjunction with a breast pump to collect
11

milk expressed from a human breast and to store collected
12

milk until it is ready for consumption.
13

"Breast pump collection and storage supplies"
14

includes, but is not limited to: breast shields and breast
15

shield connectors; breast pump tubes and tubing adapters;
16

breast pump valves and membranes; backflow protectors and
17

backflow protector adaptors; bottles and bottle caps
18

specific to the operation of the breast pump; and breast
19

milk storage bags.
20

"Breast pump collection and storage supplies" does not
21

include: (1) bottles and bottle caps not specific to the
22

operation of the breast pump; (2) breast pump travel bags
23

and other similar carrying accessories, including ice
24

packs, labels, and other similar products; (3) breast pump
25

cleaning supplies; (4) nursing bras, bra pads, breast
26

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

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1

ointments, and other similar products that relieve
2

breastfeeding-related symptoms or conditions of the
3

breasts or nipples, unless sold as part of a breast pump
4

kit that is pre-packaged by the breast pump manufacturer
5

or distributor.
6

"Breast pump kit" means a kit that: (1) contains no
7

more than a breast pump, breast pump collection and
8

storage supplies, a rechargeable battery for operating the
9

breast pump, a breastmilk cooler, bottle stands, ice
10

packs, and a breast pump carrying case; and (2) is
11

pre-packaged as a breast pump kit by the breast pump
12

manufacturer or distributor.
13

(47) Tangible personal property sold by or on behalf
14

of the State Treasurer pursuant to the Revised Uniform
15

Unclaimed Property Act. This item (47) is exempt from the
16

provisions of Section 2-70.
17

(48) Beginning on January 1, 2024, tangible personal
18

property purchased by an active duty member of the armed
19

forces of the United States who presents valid military
20

identification and purchases the property using a form of
21

payment where the federal government is the payor. The
22

member of the armed forces must complete, at the point of
23

sale, a form prescribed by the Department of Revenue
24

documenting that the transaction is eligible for the
25

exemption under this paragraph. Retailers must keep the
26

form as documentation of the exemption in their records

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1

for a period of not less than 6 years. "Armed forces of the
2

United States" means the United States Army, Navy, Air
3

Force, Space Force, Marine Corps, or Coast Guard. This
4

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

(49) Beginning July 1, 2024, home-delivered meals
6

provided to Medicare or Medicaid recipients when payment
7

is made by an intermediary, such as a Medicare
8

Administrative Contractor, a Managed Care Organization, or
9

a Medicare Advantage Organization, pursuant to a
10

government contract. This paragraph (49) is exempt from
11

the provisions of Section 2-70.
12

(50) Beginning on January 1, 2026, as further defined
13

in Section 2-10, food for human consumption that is to be
14

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

alcoholic beverages, food consisting of or infused with
16

adult use cannabis, soft drinks, candy, and food that has
17

been prepared for immediate consumption). This item (50)
18

is exempt from the provisions of Section 2-70.
19

(51) Gross receipts from the lease of the following
20

tangible personal property:
21

(1) computer software transferred subject to a
22

license that meets the following requirements:
23

(A) it is evidenced by a written agreement
24

signed by the licensor and the customer;
25

(i) an electronic agreement in which the
26

customer accepts the license by means of an

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1

electronic signature that is verifiable and
2

can be authenticated and is attached to or
3

made part of the license will comply with this
4

requirement;
5

(ii) a license agreement in which the
6

customer electronically accepts the terms by
7

clicking "I agree" does not comply with this
8

requirement;
9

(B) it restricts the customer's duplication
10

and use of the software;
11

(C) it prohibits the customer from licensing,
12

sublicensing, or transferring the software to a
13

third party (except to a related party) without
14

the permission and continued control of the
15

licensor;
16

(D) the licensor has a policy of providing
17

another copy at minimal or no charge if the
18

customer loses or damages the software, or of
19

permitting the licensee to make and keep an
20

archival copy, and such policy is either stated in
21

the license agreement, supported by the licensor's
22

books and records, or supported by a notarized
23

statement made under penalties of perjury by the
24

licensor; and
25

(E) the customer must destroy or return all
26

copies of the software to the licensor at the end

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1

of the license period; this provision is deemed to
2

be met, in the case of a perpetual license,
3

without being set forth in the license agreement;
4

and
5

(2) property that is subject to a tax on lease
6

receipts imposed by a home rule unit of local
7

government if the ordinance imposing that tax was
8

adopted prior to January 1, 2023.
9

(51) Tangible personal property to be incorporated
10

into the construction of a single-family home in the State
11

by a home builder who has been issued a certificate of
12

exemption by the Illinois Housing Development Authority
13

under Section 33.1 of the Illinois Housing Development
14

Act. This item (51) is exempt from the provisions of
15

Section 2-70.

16
(Source: P.A. 103-9, Article 5, Section 5-20, eff. 6-7-23;
17
103-9, Article 15, Section 15-20, eff. 6-7-23; 103-154, eff.
18
6-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
19
eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
20
103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-6, eff.
21
6-16-25; 104-417, eff. 8-15-25.)

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