HB 5775

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Full Text of HB5775
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	HB5775 - 104th General Assembly
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104TH GENERAL ASSEMBLY
State of Illinois
2025 and 2026
HB5775
Introduced 5/15/2026, by Rep. Jennifer Sanalitro
SYNOPSIS AS INTRODUCED:
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that diapers for use by infants, children, or adults are exempt from the taxes under the Acts. Effective immediately.
LRB104 21778 HLH 37462 b
A BILL FOR
		HB5775		LRB104 21778 HLH 37462 b
1    AN ACT concerning revenue.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Use Tax Act is amended by changing Section
53-5 as follows:
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use, which, on and after January 1,
82025, includes use by a lessee, of the following tangible
9personal property is exempt from the tax imposed by this Act:
10    (1) Personal property purchased from a corporation,
11society, association, foundation, institution, or
12organization, other than a limited liability company, that is
13organized and operated as a not-for-profit service enterprise
14for the benefit of persons 65 years of age or older if the
15personal property was not purchased by the enterprise for the
16purpose of resale by the enterprise.
17    (2) Personal property purchased by a not-for-profit
18Illinois county fair association for use in conducting,
19operating, or promoting the county fair.
20    (3) Personal property purchased by a not-for-profit arts
21or cultural organization that establishes, by proof required
22by the Department by rule, that it has received an exemption
23under Section 501(c)(3) of the Internal Revenue Code and that
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1is organized and operated primarily for the presentation or
2support of arts or cultural programming, activities, or
3services. These organizations include, but are not limited to,
4music and dramatic arts organizations such as symphony
5orchestras and theatrical groups, arts and cultural service
6organizations, local arts councils, visual arts organizations,
7and media arts organizations. On and after July 1, 2001 (the
8effective date of Public Act 92-35), however, an entity
9otherwise eligible for this exemption shall not make tax-free
10purchases unless it has an active identification number issued
11by the Department.
12    (4) Except as otherwise provided in this Act, personal
13property purchased by a governmental body, by a corporation,
14society, association, foundation, or institution organized and
15operated exclusively for charitable, religious, or educational
16purposes, or by a not-for-profit corporation, society,
17association, foundation, institution, or organization that has
18no compensated officers or employees and that is organized and
19operated primarily for the recreation of persons 55 years of
20age or older. A limited liability company may qualify for the
21exemption under this paragraph only if the limited liability
22company is organized and operated exclusively for educational
23purposes. On and after July 1, 1987, however, no entity
24otherwise eligible for this exemption shall make tax-free
25purchases unless it has an active exemption identification
26number issued by the Department.
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1    (5) Until July 1, 2003, a passenger car that is a
2replacement vehicle to the extent that the purchase price of
3the car is subject to the Replacement Vehicle Tax.
4    (6) Until July 1, 2003 and beginning again on September 1,
52004 through August 30, 2014, graphic arts machinery and
6equipment, including repair and replacement parts, both new
7and used, and including that manufactured on special order,
8certified by the purchaser to be used primarily for graphic
9arts production, and including machinery and equipment
10purchased for lease. Equipment includes chemicals or chemicals
11acting as catalysts but only if the chemicals or chemicals
12acting as catalysts effect a direct and immediate change upon
13a graphic arts product. Beginning on July 1, 2017, graphic
14arts machinery and equipment is included in the manufacturing
15and assembling machinery and equipment exemption under
16paragraph (18).
17    (7) Farm chemicals.
18    (8) Legal tender, currency, medallions, or gold or silver
19coinage issued by the State of Illinois, the government of the
20United States of America, or the government of any foreign
21country, and bullion.
22    (9) Personal property purchased from a teacher-sponsored
23student organization affiliated with an elementary or
24secondary school located in Illinois.
25    (10) A motor vehicle that is used for automobile renting,
26as defined in the Automobile Renting Occupation and Use Tax
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1Act.
2    (11) Farm machinery and equipment, both new and used,
3including that manufactured on special order, certified by the
4purchaser to be used primarily for production agriculture or
5State or federal agricultural programs, including individual
6replacement parts for the machinery and equipment, including
7machinery and equipment purchased for lease, and including
8implements of husbandry defined in Section 1-130 of the
9Illinois Vehicle Code, farm machinery and agricultural
10chemical and fertilizer spreaders, and nurse wagons required
11to be registered under Section 3-809 of the Illinois Vehicle
12Code, but excluding other motor vehicles required to be
13registered under the Illinois Vehicle Code. Horticultural
14polyhouses or hoop houses used for propagating, growing, or
15overwintering plants shall be considered farm machinery and
16equipment under this item (11). Agricultural chemical tender
17tanks and dry boxes shall include units sold separately from a
18motor vehicle required to be licensed and units sold mounted
19on a motor vehicle required to be licensed if the selling price
20of the tender is separately stated.
21    Farm machinery and equipment shall include precision
22farming equipment that is installed or purchased to be
23installed on farm machinery and equipment, including, but not
24limited to, tractors, harvesters, sprayers, planters, seeders,
25or spreaders. Precision farming equipment includes, but is not
26limited to, soil testing sensors, computers, monitors,
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1software, global positioning and mapping systems, and other
2such equipment.
3    Farm machinery and equipment also includes computers,
4sensors, software, and related equipment used primarily in the
5computer-assisted operation of production agriculture
6facilities, equipment, and activities such as, but not limited
7to, the collection, monitoring, and correlation of animal and
8crop data for the purpose of formulating animal diets and
9agricultural chemicals.
10    Beginning on January 1, 2024, farm machinery and equipment
11also includes electrical power generation equipment used
12primarily for production agriculture.
13    This item (11) is exempt from the provisions of Section
143-90.
15    (12) Until June 30, 2013, fuel and petroleum products sold
16to or used by an air common carrier, certified by the carrier
17to be used for consumption, shipment, or storage in the
18conduct of its business as an air common carrier, for a flight
19destined for or returning from a location or locations outside
20the United States without regard to previous or subsequent
21domestic stopovers.
22    Beginning July 1, 2013, fuel and petroleum products sold
23to or used by an air carrier, certified by the carrier to be
24used for consumption, shipment, or storage in the conduct of
25its business as an air common carrier, for a flight that (i) is
26engaged in foreign trade or is engaged in trade between the
		HB5775	- 6 -	LRB104 21778 HLH 37462 b
1United States and any of its possessions and (ii) transports
2at least one individual or package for hire from the city of
3origination to the city of final destination on the same
4aircraft, without regard to a change in the flight number of
5that aircraft.
6    (13) Proceeds of mandatory service charges separately
7stated on customers' bills for the purchase and consumption of
8food and beverages purchased at retail from a retailer, to the
9extent that the proceeds of the service charge are in fact
10turned over as tips or as a substitute for tips to the
11employees who participate directly in preparing, serving,
12hosting or cleaning up the food or beverage function with
13respect to which the service charge is imposed.
14    (14) Until July 1, 2003, oil field exploration, drilling,
15and production equipment, including (i) rigs and parts of
16rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
17pipe and tubular goods, including casing and drill strings,
18(iii) pumps and pump-jack units, (iv) storage tanks and flow
19lines, (v) any individual replacement part for oil field
20exploration, drilling, and production equipment, and (vi)
21machinery and equipment purchased for lease; but excluding
22motor vehicles required to be registered under the Illinois
23Vehicle Code.
24    (15) Photoprocessing machinery and equipment, including
25repair and replacement parts, both new and used, including
26that manufactured on special order, certified by the purchaser
		HB5775	- 7 -	LRB104 21778 HLH 37462 b
1to be used primarily for photoprocessing, and including
2photoprocessing machinery and equipment purchased for lease.
3    (16) Until July 1, 2028, coal and aggregate exploration,
4mining, off-highway hauling, processing, maintenance, and
5reclamation equipment, including replacement parts and
6equipment, and including equipment purchased for lease, but
7excluding motor vehicles required to be registered under the
8Illinois Vehicle Code. The changes made to this Section by
9Public Act 97-767 apply on and after July 1, 2003, but no claim
10for credit or refund is allowed on or after August 16, 2013
11(the effective date of Public Act 98-456) for such taxes paid
12during the period beginning July 1, 2003 and ending on August
1316, 2013 (the effective date of Public Act 98-456).
14    (17) Until July 1, 2003, distillation machinery and
15equipment, sold as a unit or kit, assembled or installed by the
16retailer, certified by the user to be used only for the
17production of ethyl alcohol that will be used for consumption
18as motor fuel or as a component of motor fuel for the personal
19use of the user, and not subject to sale or resale.
20    (18) Manufacturing and assembling machinery and equipment
21used primarily in the process of manufacturing or assembling
22tangible personal property for wholesale or retail sale or
23lease, whether that sale or lease is made directly by the
24manufacturer or by some other person, whether the materials
25used in the process are owned by the manufacturer or some other
26person, or whether that sale or lease is made apart from or as
		HB5775	- 8 -	LRB104 21778 HLH 37462 b
1an incident to the seller's engaging in the service occupation
2of producing machines, tools, dies, jigs, patterns, gauges, or
3other similar items of no commercial value on special order
4for a particular purchaser. The exemption provided by this
5paragraph (18) includes production related tangible personal
6property, as defined in Section 3-50, purchased on or after
7July 1, 2019. The exemption provided by this paragraph (18)
8does not include machinery and equipment used in (i) the
9generation of electricity for wholesale or retail sale; (ii)
10the generation or treatment of natural or artificial gas for
11wholesale or retail sale that is delivered to customers
12through pipes, pipelines, or mains; or (iii) the treatment of
13water for wholesale or retail sale that is delivered to
14customers through pipes, pipelines, or mains. The provisions
15of Public Act 98-583 are declaratory of existing law as to the
16meaning and scope of this exemption. Beginning on July 1,
172017, the exemption provided by this paragraph (18) includes,
18but is not limited to, graphic arts machinery and equipment,
19as defined in paragraph (6) of this Section.
20    (19) Personal property delivered to a purchaser or
21purchaser's donee inside Illinois when the purchase order for
22that personal property was received by a florist located
23outside Illinois who has a florist located inside Illinois
24deliver the personal property.
25    (20) Semen used for artificial insemination of livestock
26for direct agricultural production.
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1    (21) Horses, or interests in horses, registered with and
2meeting the requirements of any of the Arabian Horse Club
3Registry of America, Appaloosa Horse Club, American Quarter
4Horse Association, United States Trotting Association, or
5Jockey Club, as appropriate, used for purposes of breeding or
6racing for prizes. This item (21) is exempt from the
7provisions of Section 3-90, and the exemption provided for
8under this item (21) applies for all periods beginning May 30,
91995, but no claim for credit or refund is allowed on or after
10January 1, 2008 for such taxes paid during the period
11beginning May 30, 2000 and ending on January 1, 2008.
12    (22) Computers and communications equipment utilized for
13any hospital purpose and equipment used in the diagnosis,
14analysis, or treatment of hospital patients purchased by a
15lessor who leases the equipment, under a lease of one year or
16longer executed or in effect at the time the lessor would
17otherwise be subject to the tax imposed by this Act, to a
18hospital that has been issued an active tax exemption
19identification number by the Department under Section 1g of
20the Retailers' Occupation Tax Act. If the equipment is leased
21in a manner that does not qualify for this exemption or is used
22in any other non-exempt manner, the lessor shall be liable for
23the tax imposed under this Act or the Service Use Tax Act, as
24the case may be, based on the fair market value of the property
25at the time the non-qualifying use occurs. No lessor shall
26collect or attempt to collect an amount (however designated)
		HB5775	- 10 -	LRB104 21778 HLH 37462 b
1that purports to reimburse that lessor for the tax imposed by
2this Act or the Service Use Tax Act, as the case may be, if the
3tax has not been paid by the lessor. If a lessor improperly
4collects any such amount from the lessee, the lessee shall
5have a legal right to claim a refund of that amount from the
6lessor. If, however, that amount is not refunded to the lessee
7for any reason, the lessor is liable to pay that amount to the
8Department.
9    (23) Personal property purchased by a lessor who leases
10the property, under a lease of one year or longer executed or
11in effect at the time the lessor would otherwise be subject to
12the tax imposed by this Act, to a governmental body that has
13been issued an active sales tax exemption identification
14number by the Department under Section 1g of the Retailers'
15Occupation Tax Act. If the property is leased in a manner that
16does not qualify for this exemption or used in any other
17non-exempt manner, the lessor shall be liable for the tax
18imposed under this Act or the Service Use Tax Act, as the case
19may be, based on the fair market value of the property at the
20time the non-qualifying use occurs. No lessor shall collect or
21attempt to collect an amount (however designated) that
22purports to reimburse that lessor for the tax imposed by this
23Act or the Service Use Tax Act, as the case may be, if the tax
24has not been paid by the lessor. If a lessor improperly
25collects any such amount from the lessee, the lessee shall
26have a legal right to claim a refund of that amount from the
		HB5775	- 11 -	LRB104 21778 HLH 37462 b
1lessor. If, however, that amount is not refunded to the lessee
2for any reason, the lessor is liable to pay that amount to the
3Department.
4    (24) Beginning with taxable years ending on or after
5December 31, 1995 and ending with taxable years ending on or
6before December 31, 2004, personal property that is donated
7for disaster relief to be used in a State or federally declared
8disaster area in Illinois or bordering Illinois by a
9manufacturer or retailer that is registered in this State to a
10corporation, society, association, foundation, or institution
11that has been issued a sales tax exemption identification
12number by the Department that assists victims of the disaster
13who reside within the declared disaster area.
14    (25) Beginning with taxable years ending on or after
15December 31, 1995 and ending with taxable years ending on or
16before December 31, 2004, personal property that is used in
17the performance of infrastructure repairs in this State,
18including, but not limited to, municipal roads and streets,
19access roads, bridges, sidewalks, waste disposal systems,
20water and sewer line extensions, water distribution and
21purification facilities, storm water drainage and retention
22facilities, and sewage treatment facilities, resulting from a
23State or federally declared disaster in Illinois or bordering
24Illinois when such repairs are initiated on facilities located
25in the declared disaster area within 6 months after the
26disaster.
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1    (26) Beginning July 1, 1999, game or game birds purchased
2at a "game breeding and hunting preserve area" as that term is
3used in the Wildlife Code. This paragraph is exempt from the
4provisions of Section 3-90.
5    (27) A motor vehicle, as that term is defined in Section
61-146 of the Illinois Vehicle Code, that is donated to a
7corporation, limited liability company, society, association,
8foundation, or institution that is determined by the
9Department to be organized and operated exclusively for
10educational purposes. For purposes of this exemption, "a
11corporation, limited liability company, society, association,
12foundation, or institution organized and operated exclusively
13for educational purposes" means all tax-supported public
14schools, private schools that offer systematic instruction in
15useful branches of learning by methods common to public
16schools and that compare favorably in their scope and
17intensity with the course of study presented in tax-supported
18schools, and vocational or technical schools or institutes
19organized and operated exclusively to provide a course of
20study of not less than 6 weeks duration and designed to prepare
21individuals to follow a trade or to pursue a manual,
22technical, mechanical, industrial, business, or commercial
23occupation.
24    (28) Beginning January 1, 2000, personal property,
25including food, purchased through fundraising events for the
26benefit of a public or private elementary or secondary school,
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1a group of those schools, or one or more school districts if
2the events are sponsored by an entity recognized by the school
3district that consists primarily of volunteers and includes
4parents and teachers of the school children. This paragraph
5does not apply to fundraising events (i) for the benefit of
6private home instruction or (ii) for which the fundraising
7entity purchases the personal property sold at the events from
8another individual or entity that sold the property for the
9purpose of resale by the fundraising entity and that profits
10from the sale to the fundraising entity. This paragraph is
11exempt from the provisions of Section 3-90.
12    (29) Beginning January 1, 2000 and through December 31,
132001, new or used automatic vending machines that prepare and
14serve hot food and beverages, including coffee, soup, and
15other items, and replacement parts for these machines.
16Beginning January 1, 2002 and through June 30, 2003, machines
17and parts for machines used in commercial, coin-operated
18amusement and vending business if a use or occupation tax is
19paid on the gross receipts derived from the use of the
20commercial, coin-operated amusement and vending machines. This
21paragraph is exempt from the provisions of Section 3-90.
22    (30) Beginning January 1, 2001 and through June 30, 2016,
23food for human consumption that is to be consumed off the
24premises where it is sold (other than alcoholic beverages,
25soft drinks, and food that has been prepared for immediate
26consumption) and prescription and nonprescription medicines,
		HB5775	- 14 -	LRB104 21778 HLH 37462 b
1drugs, medical appliances, and insulin, urine testing
2materials, syringes, and needles used by diabetics, for human
3use, when purchased for use by a person receiving medical
4assistance under Article V of the Illinois Public Aid Code who
5resides in a licensed long-term care facility, as defined in
6the Nursing Home Care Act, or in a licensed facility as defined
7in the ID/DD Community Care Act, the MC/DD Act, or the
8Specialized Mental Health Rehabilitation Act of 2013.
9    (31) Beginning on August 2, 2001 (the effective date of
10Public Act 92-227), computers and communications equipment
11utilized for any hospital purpose and equipment used in the
12diagnosis, analysis, or treatment of hospital patients
13purchased by a lessor who leases the equipment, under a lease
14of one year or longer executed or in effect at the time the
15lessor would otherwise be subject to the tax imposed by this
16Act, to a hospital that has been issued an active tax exemption
17identification number by the Department under Section 1g of
18the Retailers' Occupation Tax Act. If the equipment is leased
19in a manner that does not qualify for this exemption or is used
20in any other nonexempt manner, the lessor shall be liable for
21the tax imposed under this Act or the Service Use Tax Act, as
22the case may be, based on the fair market value of the property
23at the time the nonqualifying use occurs. No lessor shall
24collect or attempt to collect an amount (however designated)
25that purports to reimburse that lessor for the tax imposed by
26this Act or the Service Use Tax Act, as the case may be, if the
		HB5775	- 15 -	LRB104 21778 HLH 37462 b
1tax has not been paid by the lessor. If a lessor improperly
2collects any such amount from the lessee, the lessee shall
3have a legal right to claim a refund of that amount from the
4lessor. If, however, that amount is not refunded to the lessee
5for any reason, the lessor is liable to pay that amount to the
6Department. This paragraph is exempt from the provisions of
7Section 3-90.
8    (32) Beginning on August 2, 2001 (the effective date of
9Public Act 92-227), personal property purchased by a lessor
10who leases the property, under a lease of one year or longer
11executed or in effect at the time the lessor would otherwise be
12subject to the tax imposed by this Act, to a governmental body
13that has been issued an active sales tax exemption
14identification number by the Department under Section 1g of
15the Retailers' Occupation Tax Act. If the property is leased
16in a manner that does not qualify for this exemption or used in
17any other nonexempt manner, the lessor shall be liable for the
18tax imposed under this Act or the Service Use Tax Act, as the
19case may be, based on the fair market value of the property at
20the time the nonqualifying use occurs. No lessor shall collect
21or attempt to collect an amount (however designated) that
22purports to reimburse that lessor for the tax imposed by this
23Act or the Service Use Tax Act, as the case may be, if the tax
24has not been paid by the lessor. If a lessor improperly
25collects any such amount from the lessee, the lessee shall
26have a legal right to claim a refund of that amount from the
		HB5775	- 16 -	LRB104 21778 HLH 37462 b
1lessor. If, however, that amount is not refunded to the lessee
2for any reason, the lessor is liable to pay that amount to the
3Department. This paragraph is exempt from the provisions of
4Section 3-90.
5    (33) On and after July 1, 2003 and through June 30, 2004,
6the use in this State of motor vehicles of the second division
7with a gross vehicle weight in excess of 8,000 pounds and that
8are subject to the commercial distribution fee imposed under
9Section 3-815.1 of the Illinois Vehicle Code. Beginning on
10July 1, 2004 and through June 30, 2005, the use in this State
11of motor vehicles of the second division: (i) with a gross
12vehicle weight rating in excess of 8,000 pounds; (ii) that are
13subject to the commercial distribution fee imposed under
14Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
15are primarily used for commercial purposes. Through June 30,
162005, this exemption applies to repair and replacement parts
17added after the initial purchase of such a motor vehicle if
18that motor vehicle is used in a manner that would qualify for
19the rolling stock exemption otherwise provided for in this
20Act. For purposes of this paragraph, the term "used for
21commercial purposes" means the transportation of persons or
22property in furtherance of any commercial or industrial
23enterprise, whether for-hire or not.
24    (34) Beginning January 1, 2008, tangible personal property
25used in the construction or maintenance of a community water
26supply, as defined under Section 3.145 of the Environmental
		HB5775	- 17 -	LRB104 21778 HLH 37462 b
1Protection Act, that is operated by a not-for-profit
2corporation that holds a valid water supply permit issued
3under Title IV of the Environmental Protection Act. This
4paragraph is exempt from the provisions of Section 3-90.
5    (35) Beginning January 1, 2010 and continuing through
6December 31, 2029, materials, parts, equipment, components,
7and furnishings incorporated into or upon an aircraft as part
8of the modification, refurbishment, completion, replacement,
9repair, or maintenance of the aircraft. This exemption
10includes consumable supplies used in the modification,
11refurbishment, completion, replacement, repair, and
12maintenance of aircraft. However, until January 1, 2024, this
13exemption excludes any materials, parts, equipment,
14components, and consumable supplies used in the modification,
15replacement, repair, and maintenance of aircraft engines or
16power plants, whether such engines or power plants are
17installed or uninstalled upon any such aircraft. "Consumable
18supplies" include, but are not limited to, adhesive, tape,
19sandpaper, general purpose lubricants, cleaning solution,
20latex gloves, and protective films.
21    Beginning January 1, 2010 and continuing through December
2231, 2023, this exemption applies only to the use of qualifying
23tangible personal property by persons who modify, refurbish,
24complete, repair, replace, or maintain aircraft and who (i)
25hold an Air Agency Certificate and are empowered to operate an
26approved repair station by the Federal Aviation
		HB5775	- 18 -	LRB104 21778 HLH 37462 b
1Administration, (ii) have a Class IV Rating, and (iii) conduct
2operations in accordance with Part 145 of the Federal Aviation
3Regulations. From January 1, 2024 through December 31, 2029,
4this exemption applies only to the use of qualifying tangible
5personal property by: (A) persons who modify, refurbish,
6complete, repair, replace, or maintain aircraft and who (i)
7hold an Air Agency Certificate and are empowered to operate an
8approved repair station by the Federal Aviation
9Administration, (ii) have a Class IV Rating, and (iii) conduct
10operations in accordance with Part 145 of the Federal Aviation
11Regulations; and (B) persons who engage in the modification,
12replacement, repair, and maintenance of aircraft engines or
13power plants without regard to whether or not those persons
14meet the qualifications of item (A).
15    The exemption does not include aircraft operated by a
16commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part
18129 of the Federal Aviation Regulations. The changes made to
19this paragraph (35) by Public Act 98-534 are declarative of
20existing law. It is the intent of the General Assembly that the
21exemption under this paragraph (35) applies continuously from
22January 1, 2010 through December 31, 2024; however, no claim
23for credit or refund is allowed for taxes paid as a result of
24the disallowance of this exemption on or after January 1, 2015
25and prior to February 5, 2020 (the effective date of Public Act
26101-629).
		HB5775	- 19 -	LRB104 21778 HLH 37462 b
1    (36) Tangible personal property purchased by a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt
10instruments issued by the public-facilities corporation in
11connection with the development of the municipal convention
12hall. This exemption includes existing public-facilities
13corporations as provided in Section 11-65-25 of the Illinois
14Municipal Code. This paragraph is exempt from the provisions
15of Section 3-90.
16    (37) Beginning January 1, 2017 and through December 31,
172026, menstrual pads, tampons, and menstrual cups.
18    (38) Merchandise that is subject to the Rental Purchase
19Agreement Occupation and Use Tax. The purchaser must certify
20that the item is purchased to be rented subject to a
21rental-purchase agreement, as defined in the Rental-Purchase
22Agreement Act, and provide proof of registration under the
23Rental Purchase Agreement Occupation and Use Tax Act. This
24paragraph is exempt from the provisions of Section 3-90.
25    (39) Tangible personal property purchased by a purchaser
26who is exempt from the tax imposed by this Act by operation of
		HB5775	- 20 -	LRB104 21778 HLH 37462 b
1federal law. This paragraph is exempt from the provisions of
2Section 3-90.
3    (40) Qualified tangible personal property used in the
4construction or operation of a data center that has been
5granted a certificate of exemption by the Department of
6Commerce and Economic Opportunity, whether that tangible
7personal property is purchased by the owner, operator, or
8tenant of the data center or by a contractor or subcontractor
9of the owner, operator, or tenant. Data centers that would
10have qualified for a certificate of exemption prior to January
111, 2020 had Public Act 101-31 been in effect may apply for and
12obtain an exemption for subsequent purchases of computer
13equipment or enabling software purchased or leased to upgrade,
14supplement, or replace computer equipment or enabling software
15purchased or leased in the original investment that would have
16qualified.
17    The Department of Commerce and Economic Opportunity shall
18grant a certificate of exemption under this item (40) to
19qualified data centers as defined by Section 605-1025 of the
20Department of Commerce and Economic Opportunity Law of the
21Civil Administrative Code of Illinois.
22    For the purposes of this item (40):
23        "Data center" means a building or a series of
24    buildings rehabilitated or constructed to house working
25    servers in one physical location or multiple sites within
26    the State of Illinois.
		HB5775	- 21 -	LRB104 21778 HLH 37462 b
1        "Qualified tangible personal property" means:
2    electrical systems and equipment; climate control and
3    chilling equipment and systems; mechanical systems and
4    equipment; monitoring and secure systems; emergency
5    generators; hardware; computers; servers; data storage
6    devices; network connectivity equipment; racks; cabinets;
7    telecommunications cabling infrastructure; raised floor
8    systems; peripheral components or systems; software;
9    mechanical, electrical, or plumbing systems; battery
10    systems; cooling systems and towers; temperature control
11    systems; other cabling; and other data center
12    infrastructure equipment and systems necessary to operate
13    qualified tangible personal property, including fixtures;
14    and component parts of any of the foregoing, including
15    installation, maintenance, repair, refurbishment, and
16    replacement of qualified tangible personal property to
17    generate, transform, transmit, distribute, or manage
18    electricity necessary to operate qualified tangible
19    personal property; and all other tangible personal
20    property that is essential to the operations of a computer
21    data center. The term "qualified tangible personal
22    property" also includes building materials physically
23    incorporated into the qualifying data center. To document
24    the exemption allowed under this Section, the retailer
25    must obtain from the purchaser a copy of the certificate
26    of eligibility issued by the Department of Commerce and
		HB5775	- 22 -	LRB104 21778 HLH 37462 b
1    Economic Opportunity.
2    This item (40) is exempt from the provisions of Section
33-90.
4    (41) Beginning July 1, 2022, breast pumps, breast pump
5collection and storage supplies, and breast pump kits. This
6item (41) is exempt from the provisions of Section 3-90. As
7used in this item (41):
8        "Breast pump" means an electrically controlled or
9    manually controlled pump device designed or marketed to be
10    used to express milk from a human breast during lactation,
11    including the pump device and any battery, AC adapter, or
12    other power supply unit that is used to power the pump
13    device and is packaged and sold with the pump device at the
14    time of sale.
15        "Breast pump collection and storage supplies" means
16    items of tangible personal property designed or marketed
17    to be used in conjunction with a breast pump to collect
18    milk expressed from a human breast and to store collected
19    milk until it is ready for consumption.
20        "Breast pump collection and storage supplies"
21    includes, but is not limited to: breast shields and breast
22    shield connectors; breast pump tubes and tubing adapters;
23    breast pump valves and membranes; backflow protectors and
24    backflow protector adaptors; bottles and bottle caps
25    specific to the operation of the breast pump; and breast
26    milk storage bags.
		HB5775	- 23 -	LRB104 21778 HLH 37462 b
1        "Breast pump collection and storage supplies" does not
2    include: (1) bottles and bottle caps not specific to the
3    operation of the breast pump; (2) breast pump travel bags
4    and other similar carrying accessories, including ice
5    packs, labels, and other similar products; (3) breast pump
6    cleaning supplies; (4) nursing bras, bra pads, breast
7    shells, and other similar products; and (5) creams,
8    ointments, and other similar products that relieve
9    breastfeeding-related symptoms or conditions of the
10    breasts or nipples, unless sold as part of a breast pump
11    kit that is pre-packaged by the breast pump manufacturer
12    or distributor.
13        "Breast pump kit" means a kit that: (1) contains no
14    more than a breast pump, breast pump collection and
15    storage supplies, a rechargeable battery for operating the
16    breast pump, a breastmilk cooler, bottle stands, ice
17    packs, and a breast pump carrying case; and (2) is
18    pre-packaged as a breast pump kit by the breast pump
19    manufacturer or distributor.
20    (42) Tangible personal property sold by or on behalf of
21the State Treasurer pursuant to the Revised Uniform Unclaimed
22Property Act. This item (42) is exempt from the provisions of
23Section 3-90.
24    (43) Beginning on January 1, 2024, tangible personal
25property purchased by an active duty member of the armed
26forces of the United States who presents valid military
		HB5775	- 24 -	LRB104 21778 HLH 37462 b
1identification and purchases the property using a form of
2payment where the federal government is the payor. The member
3of the armed forces must complete, at the point of sale, a form
4prescribed by the Department of Revenue documenting that the
5transaction is eligible for the exemption under this
6paragraph. Retailers must keep the form as documentation of
7the exemption in their records for a period of not less than 6
8years. "Armed forces of the United States" means the United
9States Army, Navy, Air Force, Space Force, Marine Corps, or
10Coast Guard. This paragraph is exempt from the provisions of
11Section 3-90.
12    (44) Beginning July 1, 2024, home-delivered meals provided
13to Medicare or Medicaid recipients when payment is made by an
14intermediary, such as a Medicare Administrative Contractor, a
15Managed Care Organization, or a Medicare Advantage
16Organization, pursuant to a government contract. This item
17(44) is exempt from the provisions of Section 3-90.
18    (45) Beginning on January 1, 2026, as further defined in
19Section 3-10, food for human consumption that is to be
20consumed off the premises where it is sold (other than
21alcoholic beverages, food consisting of or infused with adult
22use cannabis, soft drinks, candy, and food that has been
23prepared for immediate consumption). This item (45) is exempt
24from the provisions of Section 3-90.
25    (46) Use by the lessee of the following leased tangible
26personal property:
		HB5775	- 25 -	LRB104 21778 HLH 37462 b
1        (1) software transferred subject to a license that
2    meets the following requirements:
3            (A) it is evidenced by a written agreement signed
4        by the licensor and the customer;
5                (i) an electronic agreement in which the
6            customer accepts the license by means of an
7            electronic signature that is verifiable and can be
8            authenticated and is attached to or made part of
9            the license will comply with this requirement;
10                (ii) a license agreement in which the customer
11            electronically accepts the terms by clicking "I
12            agree" does not comply with this requirement;
13            (B) it restricts the customer's duplication and
14        use of the software;
15            (C) it prohibits the customer from licensing,
16        sublicensing, or transferring the software to a third
17        party (except to a related party) without the
18        permission and continued control of the licensor;
19            (D) the licensor has a policy of providing another
20        copy at minimal or no charge if the customer loses or
21        damages the software, or of permitting the licensee to
22        make and keep an archival copy, and such policy is
23        either stated in the license agreement, supported by
24        the licensor's books and records, or supported by a
25        notarized statement made under penalties of perjury by
26        the licensor; and
		HB5775	- 26 -	LRB104 21778 HLH 37462 b
1            (E) the customer must destroy or return all copies
2        of the software to the licensor at the end of the
3        license period; this provision is deemed to be met, in
4        the case of a perpetual license, without being set
5        forth in the license agreement; and
6        (2) property that is subject to a tax on lease
7    receipts imposed by a home rule unit of local government
8    if the ordinance imposing that tax was adopted prior to
9    January 1, 2023.
10    (47) On and after January 1, 2027, diapers for use by 
11infants, children, or adults. This paragraph is exempt from 
12the provisions of Section 3-90.
13(Source: P.A. 103-9, Article 5, Section 5-5, eff. 6-7-23;
14103-9, Article 15, Section 15-5, eff. 6-7-23; 103-154, eff.
156-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
16eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
17103-781, eff. 8-5-24; 104-417, eff. 8-15-25.)
18    Section 10. The Service Use Tax Act is amended by changing
19Section 3-5 as follows:
20    (35 ILCS 110/3-5)
21    Sec. 3-5. Exemptions. Use of the following tangible
22personal property is exempt from the tax imposed by this Act:
23    (1) Personal property purchased from a corporation,
24society, association, foundation, institution, or
		HB5775	- 27 -	LRB104 21778 HLH 37462 b
1organization, other than a limited liability company, that is
2organized and operated as a not-for-profit service enterprise
3for the benefit of persons 65 years of age or older if the
4personal property was not purchased by the enterprise for the
5purpose of resale by the enterprise.
6    (2) Personal property purchased by a non-profit Illinois
7county fair association for use in conducting, operating, or
8promoting the county fair.
9    (3) Personal property purchased by a not-for-profit arts
10or cultural organization that establishes, by proof required
11by the Department by rule, that it has received an exemption
12under Section 501(c)(3) of the Internal Revenue Code and that
13is organized and operated primarily for the presentation or
14support of arts or cultural programming, activities, or
15services. These organizations include, but are not limited to,
16music and dramatic arts organizations such as symphony
17orchestras and theatrical groups, arts and cultural service
18organizations, local arts councils, visual arts organizations,
19and media arts organizations. On and after July 1, 2001 (the
20effective date of Public Act 92-35), however, an entity
21otherwise eligible for this exemption shall not make tax-free
22purchases unless it has an active identification number issued
23by the Department.
24    (4) Legal tender, currency, medallions, or gold or silver
25coinage issued by the State of Illinois, the government of the
26United States of America, or the government of any foreign
		HB5775	- 28 -	LRB104 21778 HLH 37462 b
1country, and bullion.
2    (5) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new
5and used, and including that manufactured on special order or
6purchased for lease, certified by the purchaser to be used
7primarily for graphic arts production. Equipment includes
8chemicals or chemicals acting as catalysts but only if the
9chemicals or chemicals acting as catalysts effect a direct and
10immediate change upon a graphic arts product. Beginning on
11July 1, 2017, graphic arts machinery and equipment is included
12in the manufacturing and assembling machinery and equipment
13exemption under Section 2 of this Act.
14    (6) Personal property purchased from a teacher-sponsored
15student organization affiliated with an elementary or
16secondary school located in Illinois.
17    (7) Farm machinery and equipment, both new and used,
18including that manufactured on special order, certified by the
19purchaser to be used primarily for production agriculture or
20State or federal agricultural programs, including individual
21replacement parts for the machinery and equipment, including
22machinery and equipment purchased for lease, and including
23implements of husbandry defined in Section 1-130 of the
24Illinois Vehicle Code, farm machinery and agricultural
25chemical and fertilizer spreaders, and nurse wagons required
26to be registered under Section 3-809 of the Illinois Vehicle
		HB5775	- 29 -	LRB104 21778 HLH 37462 b
1Code, but excluding other motor vehicles required to be
2registered under the Illinois Vehicle Code. Horticultural
3polyhouses or hoop houses used for propagating, growing, or
4overwintering plants shall be considered farm machinery and
5equipment under this item (7). Agricultural chemical tender
6tanks and dry boxes shall include units sold separately from a
7motor vehicle required to be licensed and units sold mounted
8on a motor vehicle required to be licensed if the selling price
9of the tender is separately stated.
10    Farm machinery and equipment shall include precision
11farming equipment that is installed or purchased to be
12installed on farm machinery and equipment, including, but not
13limited to, tractors, harvesters, sprayers, planters, seeders,
14or spreaders. Precision farming equipment includes, but is not
15limited to, soil testing sensors, computers, monitors,
16software, global positioning and mapping systems, and other
17such equipment.
18    Farm machinery and equipment also includes computers,
19sensors, software, and related equipment used primarily in the
20computer-assisted operation of production agriculture
21facilities, equipment, and activities such as, but not limited
22to, the collection, monitoring, and correlation of animal and
23crop data for the purpose of formulating animal diets and
24agricultural chemicals.
25    Beginning on January 1, 2024, farm machinery and equipment
26also includes electrical power generation equipment used
		HB5775	- 30 -	LRB104 21778 HLH 37462 b
1primarily for production agriculture.
2    This item (7) is exempt from the provisions of Section
33-75.
4    (8) Until June 30, 2013, fuel and petroleum products sold
5to or used by an air common carrier, certified by the carrier
6to be used for consumption, shipment, or storage in the
7conduct of its business as an air common carrier, for a flight
8destined for or returning from a location or locations outside
9the United States without regard to previous or subsequent
10domestic stopovers.
11    Beginning July 1, 2013, fuel and petroleum products sold
12to or used by an air carrier, certified by the carrier to be
13used for consumption, shipment, or storage in the conduct of
14its business as an air common carrier, for a flight that (i) is
15engaged in foreign trade or is engaged in trade between the
16United States and any of its possessions and (ii) transports
17at least one individual or package for hire from the city of
18origination to the city of final destination on the same
19aircraft, without regard to a change in the flight number of
20that aircraft.
21    (9) Proceeds of mandatory service charges separately
22stated on customers' bills for the purchase and consumption of
23food and beverages acquired as an incident to the purchase of a
24service from a serviceman, to the extent that the proceeds of
25the service charge are in fact turned over as tips or as a
26substitute for tips to the employees who participate directly
		HB5775	- 31 -	LRB104 21778 HLH 37462 b
1in preparing, serving, hosting or cleaning up the food or
2beverage function with respect to which the service charge is
3imposed.
4    (10) Until July 1, 2003, oil field exploration, drilling,
5and production equipment, including (i) rigs and parts of
6rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
7pipe and tubular goods, including casing and drill strings,
8(iii) pumps and pump-jack units, (iv) storage tanks and flow
9lines, (v) any individual replacement part for oil field
10exploration, drilling, and production equipment, and (vi)
11machinery and equipment purchased for lease; but excluding
12motor vehicles required to be registered under the Illinois
13Vehicle Code.
14    (11) Proceeds from the sale of photoprocessing machinery
15and equipment, including repair and replacement parts, both
16new and used, including that manufactured on special order,
17certified by the purchaser to be used primarily for
18photoprocessing, and including photoprocessing machinery and
19equipment purchased for lease.
20    (12) Until July 1, 2028, coal and aggregate exploration,
21mining, off-highway hauling, processing, maintenance, and
22reclamation equipment, including replacement parts and
23equipment, and including equipment purchased for lease, but
24excluding motor vehicles required to be registered under the
25Illinois Vehicle Code. The changes made to this Section by
26Public Act 97-767 apply on and after July 1, 2003, but no claim
		HB5775	- 32 -	LRB104 21778 HLH 37462 b
1for credit or refund is allowed on or after August 16, 2013
2(the effective date of Public Act 98-456) for such taxes paid
3during the period beginning July 1, 2003 and ending on August
416, 2013 (the effective date of Public Act 98-456).
5    (13) Semen used for artificial insemination of livestock
6for direct agricultural production.
7    (14) Horses, or interests in horses, registered with and
8meeting the requirements of any of the Arabian Horse Club
9Registry of America, Appaloosa Horse Club, American Quarter
10Horse Association, United States Trotting Association, or
11Jockey Club, as appropriate, used for purposes of breeding or
12racing for prizes. This item (14) is exempt from the
13provisions of Section 3-75, and the exemption provided for
14under this item (14) applies for all periods beginning May 30,
151995, but no claim for credit or refund is allowed on or after
16January 1, 2008 (the effective date of Public Act 95-88) for
17such taxes paid during the period beginning May 30, 2000 and
18ending on January 1, 2008 (the effective date of Public Act
1995-88).
20    (15) Computers and communications equipment utilized for
21any hospital purpose and equipment used in the diagnosis,
22analysis, or treatment of hospital patients purchased by a
23lessor who leases the equipment, under a lease of one year or
24longer executed or in effect at the time the lessor would
25otherwise be subject to the tax imposed by this Act, to a
26hospital that has been issued an active tax exemption
		HB5775	- 33 -	LRB104 21778 HLH 37462 b
1identification number by the Department under Section 1g of
2the Retailers' Occupation Tax Act. If the equipment is leased
3in a manner that does not qualify for this exemption or is used
4in any other non-exempt manner, the lessor shall be liable for
5the tax imposed under this Act or the Use Tax Act, as the case
6may be, based on the fair market value of the property at the
7time the non-qualifying use occurs. No lessor shall collect or
8attempt to collect an amount (however designated) that
9purports to reimburse that lessor for the tax imposed by this
10Act or the Use Tax Act, as the case may be, if the tax has not
11been paid by the lessor. If a lessor improperly collects any
12such amount from the lessee, the lessee shall have a legal
13right to claim a refund of that amount from the lessor. If,
14however, that amount is not refunded to the lessee for any
15reason, the lessor is liable to pay that amount to the
16Department.
17    (16) Personal property purchased by a lessor who leases
18the property, under a lease of one year or longer executed or
19in effect at the time the lessor would otherwise be subject to
20the tax imposed by this Act, to a governmental body that has
21been issued an active tax exemption identification number by
22the Department under Section 1g of the Retailers' Occupation
23Tax Act. If the property is leased in a manner that does not
24qualify for this exemption or is used in any other non-exempt
25manner, the lessor shall be liable for the tax imposed under
26this Act or the Use Tax Act, as the case may be, based on the
		HB5775	- 34 -	LRB104 21778 HLH 37462 b
1fair market value of the property at the time the
2non-qualifying use occurs. No lessor shall collect or attempt
3to collect an amount (however designated) that purports to
4reimburse that lessor for the tax imposed by this Act or the
5Use Tax Act, as the case may be, if the tax has not been paid
6by the lessor. If a lessor improperly collects any such amount
7from the lessee, the lessee shall have a legal right to claim a
8refund of that amount from the lessor. If, however, that
9amount is not refunded to the lessee for any reason, the lessor
10is liable to pay that amount to the Department.
11    (17) Beginning with taxable years ending on or after
12December 31, 1995 and ending with taxable years ending on or
13before December 31, 2004, personal property that is donated
14for disaster relief to be used in a State or federally declared
15disaster area in Illinois or bordering Illinois by a
16manufacturer or retailer that is registered in this State to a
17corporation, society, association, foundation, or institution
18that has been issued a sales tax exemption identification
19number by the Department that assists victims of the disaster
20who reside within the declared disaster area.
21    (18) Beginning with taxable years ending on or after
22December 31, 1995 and ending with taxable years ending on or
23before December 31, 2004, personal property that is used in
24the performance of infrastructure repairs in this State,
25including, but not limited to, municipal roads and streets,
26access roads, bridges, sidewalks, waste disposal systems,
		HB5775	- 35 -	LRB104 21778 HLH 37462 b
1water and sewer line extensions, water distribution and
2purification facilities, storm water drainage and retention
3facilities, and sewage treatment facilities, resulting from a
4State or federally declared disaster in Illinois or bordering
5Illinois when such repairs are initiated on facilities located
6in the declared disaster area within 6 months after the
7disaster.
8    (19) Beginning July 1, 1999, game or game birds purchased
9at a "game breeding and hunting preserve area" as that term is
10used in the Wildlife Code. This paragraph is exempt from the
11provisions of Section 3-75.
12    (20) A motor vehicle, as that term is defined in Section
131-146 of the Illinois Vehicle Code, that is donated to a
14corporation, limited liability company, society, association,
15foundation, or institution that is determined by the
16Department to be organized and operated exclusively for
17educational purposes. For purposes of this exemption, "a
18corporation, limited liability company, society, association,
19foundation, or institution organized and operated exclusively
20for educational purposes" means all tax-supported public
21schools, private schools that offer systematic instruction in
22useful branches of learning by methods common to public
23schools and that compare favorably in their scope and
24intensity with the course of study presented in tax-supported
25schools, and vocational or technical schools or institutes
26organized and operated exclusively to provide a course of
		HB5775	- 36 -	LRB104 21778 HLH 37462 b
1study of not less than 6 weeks duration and designed to prepare
2individuals to follow a trade or to pursue a manual,
3technical, mechanical, industrial, business, or commercial
4occupation.
5    (21) Beginning January 1, 2000, personal property,
6including food, purchased through fundraising events for the
7benefit of a public or private elementary or secondary school,
8a group of those schools, or one or more school districts if
9the events are sponsored by an entity recognized by the school
10district that consists primarily of volunteers and includes
11parents and teachers of the school children. This paragraph
12does not apply to fundraising events (i) for the benefit of
13private home instruction or (ii) for which the fundraising
14entity purchases the personal property sold at the events from
15another individual or entity that sold the property for the
16purpose of resale by the fundraising entity and that profits
17from the sale to the fundraising entity. This paragraph is
18exempt from the provisions of Section 3-75.
19    (22) Beginning January 1, 2000 and through December 31,
202001, new or used automatic vending machines that prepare and
21serve hot food and beverages, including coffee, soup, and
22other items, and replacement parts for these machines.
23Beginning January 1, 2002 and through June 30, 2003, machines
24and parts for machines used in commercial, coin-operated
25amusement and vending business if a use or occupation tax is
26paid on the gross receipts derived from the use of the
		HB5775	- 37 -	LRB104 21778 HLH 37462 b
1commercial, coin-operated amusement and vending machines. This
2paragraph is exempt from the provisions of Section 3-75.
3    (23) Beginning August 23, 2001 and through June 30, 2016,
4food for human consumption that is to be consumed off the
5premises where it is sold (other than alcoholic beverages,
6soft drinks, and food that has been prepared for immediate
7consumption) and prescription and nonprescription medicines,
8drugs, medical appliances, and insulin, urine testing
9materials, syringes, and needles used by diabetics, for human
10use, when purchased for use by a person receiving medical
11assistance under Article V of the Illinois Public Aid Code who
12resides in a licensed long-term care facility, as defined in
13the Nursing Home Care Act, or in a licensed facility as defined
14in the ID/DD Community Care Act, the MC/DD Act, or the
15Specialized Mental Health Rehabilitation Act of 2013.
16    (24) Beginning on August 2, 2001 (the effective date of
17Public Act 92-227), computers and communications equipment
18utilized for any hospital purpose and equipment used in the
19diagnosis, analysis, or treatment of hospital patients
20purchased by a lessor who leases the equipment, under a lease
21of one year or longer executed or in effect at the time the
22lessor would otherwise be subject to the tax imposed by this
23Act, to a hospital that has been issued an active tax exemption
24identification number by the Department under Section 1g of
25the Retailers' Occupation Tax Act. If the equipment is leased
26in a manner that does not qualify for this exemption or is used
		HB5775	- 38 -	LRB104 21778 HLH 37462 b
1in any other nonexempt manner, the lessor shall be liable for
2the tax imposed under this Act or the Use Tax Act, as the case
3may be, based on the fair market value of the property at the
4time the nonqualifying use occurs. No lessor shall collect or
5attempt to collect an amount (however designated) that
6purports to reimburse that lessor for the tax imposed by this
7Act or the Use Tax Act, as the case may be, if the tax has not
8been paid by the lessor. If a lessor improperly collects any
9such amount from the lessee, the lessee shall have a legal
10right to claim a refund of that amount from the lessor. If,
11however, that amount is not refunded to the lessee for any
12reason, the lessor is liable to pay that amount to the
13Department. This paragraph is exempt from the provisions of
14Section 3-75.
15    (25) Beginning on August 2, 2001 (the effective date of
16Public Act 92-227), personal property purchased by a lessor
17who leases the property, under a lease of one year or longer
18executed or in effect at the time the lessor would otherwise be
19subject to the tax imposed by this Act, to a governmental body
20that has been issued an active tax exemption identification
21number by the Department under Section 1g of the Retailers'
22Occupation Tax Act. If the property is leased in a manner that
23does not qualify for this exemption or is used in any other
24nonexempt manner, the lessor shall be liable for the tax
25imposed under this Act or the Use Tax Act, as the case may be,
26based on the fair market value of the property at the time the
		HB5775	- 39 -	LRB104 21778 HLH 37462 b
1nonqualifying use occurs. No lessor shall collect or attempt
2to collect an amount (however designated) that purports to
3reimburse that lessor for the tax imposed by this Act or the
4Use Tax Act, as the case may be, if the tax has not been paid
5by the lessor. If a lessor improperly collects any such amount
6from the lessee, the lessee shall have a legal right to claim a
7refund of that amount from the lessor. If, however, that
8amount is not refunded to the lessee for any reason, the lessor
9is liable to pay that amount to the Department. This paragraph
10is exempt from the provisions of Section 3-75.
11    (26) Beginning January 1, 2008, tangible personal property
12used in the construction or maintenance of a community water
13supply, as defined under Section 3.145 of the Environmental
14Protection Act, that is operated by a not-for-profit
15corporation that holds a valid water supply permit issued
16under Title IV of the Environmental Protection Act. This
17paragraph is exempt from the provisions of Section 3-75.
18    (27) Beginning January 1, 2010 and continuing through
19December 31, 2029, materials, parts, equipment, components,
20and furnishings incorporated into or upon an aircraft as part
21of the modification, refurbishment, completion, replacement,
22repair, or maintenance of the aircraft. This exemption
23includes consumable supplies used in the modification,
24refurbishment, completion, replacement, repair, and
25maintenance of aircraft. However, until January 1, 2024, this
26exemption excludes any materials, parts, equipment,
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1components, and consumable supplies used in the modification,
2replacement, repair, and maintenance of aircraft engines or
3power plants, whether such engines or power plants are
4installed or uninstalled upon any such aircraft. "Consumable
5supplies" include, but are not limited to, adhesive, tape,
6sandpaper, general purpose lubricants, cleaning solution,
7latex gloves, and protective films.
8    Beginning January 1, 2010 and continuing through December
931, 2023, this exemption applies only to the use of qualifying
10tangible personal property transferred incident to the
11modification, refurbishment, completion, replacement, repair,
12or maintenance of aircraft by persons who (i) hold an Air
13Agency Certificate and are empowered to operate an approved
14repair station by the Federal Aviation Administration, (ii)
15have a Class IV Rating, and (iii) conduct operations in
16accordance with Part 145 of the Federal Aviation Regulations.
17From January 1, 2024 through December 31, 2029, this exemption
18applies only to the use of qualifying tangible personal
19property transferred incident to: (A) the modification,
20refurbishment, completion, repair, replacement, or maintenance
21of an aircraft by persons who (i) hold an Air Agency
22Certificate and are empowered to operate an approved repair
23station by the Federal Aviation Administration, (ii) have a
24Class IV Rating, and (iii) conduct operations in accordance
25with Part 145 of the Federal Aviation Regulations; and (B) the
26modification, replacement, repair, and maintenance of aircraft
		HB5775	- 41 -	LRB104 21778 HLH 37462 b
1engines or power plants without regard to whether or not those
2persons meet the qualifications of item (A).
3    The exemption does not include aircraft operated by a
4commercial air carrier providing scheduled passenger air
5service pursuant to authority issued under Part 121 or Part
6129 of the Federal Aviation Regulations. The changes made to
7this paragraph (27) by Public Act 98-534 are declarative of
8existing law. It is the intent of the General Assembly that the
9exemption under this paragraph (27) applies continuously from
10January 1, 2010 through December 31, 2024; however, no claim
11for credit or refund is allowed for taxes paid as a result of
12the disallowance of this exemption on or after January 1, 2015
13and prior to February 5, 2020 (the effective date of Public Act
14101-629).
15    (28) Tangible personal property purchased by a
16public-facilities corporation, as described in Section
1711-65-10 of the Illinois Municipal Code, for purposes of
18constructing or furnishing a municipal convention hall, but
19only if the legal title to the municipal convention hall is
20transferred to the municipality without any further
21consideration by or on behalf of the municipality at the time
22of the completion of the municipal convention hall or upon the
23retirement or redemption of any bonds or other debt
24instruments issued by the public-facilities corporation in
25connection with the development of the municipal convention
26hall. This exemption includes existing public-facilities
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1corporations as provided in Section 11-65-25 of the Illinois
2Municipal Code. This paragraph is exempt from the provisions
3of Section 3-75.
4    (29) Beginning January 1, 2017 and through December 31,
52026, menstrual pads, tampons, and menstrual cups.
6    (30) Tangible personal property transferred to a purchaser
7who is exempt from the tax imposed by this Act by operation of
8federal law. This paragraph is exempt from the provisions of
9Section 3-75.
10    (31) Qualified tangible personal property used in the
11construction or operation of a data center that has been
12granted a certificate of exemption by the Department of
13Commerce and Economic Opportunity, whether that tangible
14personal property is purchased by the owner, operator, or
15tenant of the data center or by a contractor or subcontractor
16of the owner, operator, or tenant. Data centers that would
17have qualified for a certificate of exemption prior to January
181, 2020 had Public Act 101-31 been in effect, may apply for and
19obtain an exemption for subsequent purchases of computer
20equipment or enabling software purchased or leased to upgrade,
21supplement, or replace computer equipment or enabling software
22purchased or leased in the original investment that would have
23qualified.
24    The Department of Commerce and Economic Opportunity shall
25grant a certificate of exemption under this item (31) to
26qualified data centers as defined by Section 605-1025 of the
		HB5775	- 43 -	LRB104 21778 HLH 37462 b
1Department of Commerce and Economic Opportunity Law of the
2Civil Administrative Code of Illinois.
3    For the purposes of this item (31):
4        "Data center" means a building or a series of
5    buildings rehabilitated or constructed to house working
6    servers in one physical location or multiple sites within
7    the State of Illinois.
8        "Qualified tangible personal property" means:
9    electrical systems and equipment; climate control and
10    chilling equipment and systems; mechanical systems and
11    equipment; monitoring and secure systems; emergency
12    generators; hardware; computers; servers; data storage
13    devices; network connectivity equipment; racks; cabinets;
14    telecommunications cabling infrastructure; raised floor
15    systems; peripheral components or systems; software;
16    mechanical, electrical, or plumbing systems; battery
17    systems; cooling systems and towers; temperature control
18    systems; other cabling; and other data center
19    infrastructure equipment and systems necessary to operate
20    qualified tangible personal property, including fixtures;
21    and component parts of any of the foregoing, including
22    installation, maintenance, repair, refurbishment, and
23    replacement of qualified tangible personal property to
24    generate, transform, transmit, distribute, or manage
25    electricity necessary to operate qualified tangible
26    personal property; and all other tangible personal
		HB5775	- 44 -	LRB104 21778 HLH 37462 b
1    property that is essential to the operations of a computer
2    data center. The term "qualified tangible personal
3    property" also includes building materials physically
4    incorporated into the qualifying data center. To document
5    the exemption allowed under this Section, the retailer
6    must obtain from the purchaser a copy of the certificate
7    of eligibility issued by the Department of Commerce and
8    Economic Opportunity.
9    This item (31) is exempt from the provisions of Section
103-75.
11    (32) Beginning July 1, 2022, breast pumps, breast pump
12collection and storage supplies, and breast pump kits. This
13item (32) is exempt from the provisions of Section 3-75. As
14used in this item (32):
15        "Breast pump" means an electrically controlled or
16    manually controlled pump device designed or marketed to be
17    used to express milk from a human breast during lactation,
18    including the pump device and any battery, AC adapter, or
19    other power supply unit that is used to power the pump
20    device and is packaged and sold with the pump device at the
21    time of sale.
22        "Breast pump collection and storage supplies" means
23    items of tangible personal property designed or marketed
24    to be used in conjunction with a breast pump to collect
25    milk expressed from a human breast and to store collected
26    milk until it is ready for consumption.
		HB5775	- 45 -	LRB104 21778 HLH 37462 b
1        "Breast pump collection and storage supplies"
2    includes, but is not limited to: breast shields and breast
3    shield connectors; breast pump tubes and tubing adapters;
4    breast pump valves and membranes; backflow protectors and
5    backflow protector adaptors; bottles and bottle caps
6    specific to the operation of the breast pump; and breast
7    milk storage bags.
8        "Breast pump collection and storage supplies" does not
9    include: (1) bottles and bottle caps not specific to the
10    operation of the breast pump; (2) breast pump travel bags
11    and other similar carrying accessories, including ice
12    packs, labels, and other similar products; (3) breast pump
13    cleaning supplies; (4) nursing bras, bra pads, breast
14    shells, and other similar products; and (5) creams,
15    ointments, and other similar products that relieve
16    breastfeeding-related symptoms or conditions of the
17    breasts or nipples, unless sold as part of a breast pump
18    kit that is pre-packaged by the breast pump manufacturer
19    or distributor.
20        "Breast pump kit" means a kit that: (1) contains no
21    more than a breast pump, breast pump collection and
22    storage supplies, a rechargeable battery for operating the
23    breast pump, a breastmilk cooler, bottle stands, ice
24    packs, and a breast pump carrying case; and (2) is
25    pre-packaged as a breast pump kit by the breast pump
26    manufacturer or distributor.
		HB5775	- 46 -	LRB104 21778 HLH 37462 b
1    (33) Tangible personal property sold by or on behalf of
2the State Treasurer pursuant to the Revised Uniform Unclaimed
3Property Act. This item (33) is exempt from the provisions of
4Section 3-75.
5    (34) Beginning on January 1, 2024, tangible personal
6property purchased by an active duty member of the armed
7forces of the United States who presents valid military
8identification and purchases the property using a form of
9payment where the federal government is the payor. The member
10of the armed forces must complete, at the point of sale, a form
11prescribed by the Department of Revenue documenting that the
12transaction is eligible for the exemption under this
13paragraph. Retailers must keep the form as documentation of
14the exemption in their records for a period of not less than 6
15years. "Armed forces of the United States" means the United
16States Army, Navy, Air Force, Space Force, Marine Corps, or
17Coast Guard. This paragraph is exempt from the provisions of
18Section 3-75.
19    (35) Beginning July 1, 2024, home-delivered meals provided
20to Medicare or Medicaid recipients when payment is made by an
21intermediary, such as a Medicare Administrative Contractor, a
22Managed Care Organization, or a Medicare Advantage
23Organization, pursuant to a government contract. This
24paragraph (35) is exempt from the provisions of Section 3-75.
25    (36) Beginning on January 1, 2026, as further defined in
26Section 3-10, food prepared for immediate consumption and
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1transferred incident to a sale of service subject to this Act
2or the Service Occupation Tax Act by an entity licensed under
3the Hospital Licensing Act, the Nursing Home Care Act, the
4Assisted Living and Shared Housing Act, the ID/DD Community
5Care Act, the MC/DD Act, the Specialized Mental Health
6Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
7an entity that holds a permit issued pursuant to the Life Care
8Facilities Act. This item (36) is exempt from the provisions
9of Section 3-75.
10    (37) Beginning on January 1, 2026, as further defined in
11Section 3-10, food for human consumption that is to be
12consumed off the premises where it is sold (other than
13alcoholic beverages, food consisting of or infused with adult
14use cannabis, soft drinks, candy, and food that has been
15prepared for immediate consumption). This item (37) is exempt
16from the provisions of Section 3-75.
17    (38) Use by a lessee of the following leased tangible
18personal property:
19        (1) software transferred subject to a license that
20    meets the following requirements:
21            (A) it is evidenced by a written agreement signed
22        by the licensor and the customer;
23                (i) an electronic agreement in which the
24            customer accepts the license by means of an
25            electronic signature that is verifiable and can be
26            authenticated and is attached to or made part of
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1            the license will comply with this requirement;
2                (ii) a license agreement in which the customer
3            electronically accepts the terms by clicking "I
4            agree" does not comply with this requirement;
5            (B) it restricts the customer's duplication and
6        use of the software;
7            (C) it prohibits the customer from licensing,
8        sublicensing, or transferring the software to a third
9        party (except to a related party) without the
10        permission and continued control of the licensor;
11            (D) the licensor has a policy of providing another
12        copy at minimal or no charge if the customer loses or
13        damages the software, or of permitting the licensee to
14        make and keep an archival copy, and such policy is
15        either stated in the license agreement, supported by
16        the licensor's books and records, or supported by a
17        notarized statement made under penalties of perjury by
18        the licensor; and
19            (E) the customer must destroy or return all copies
20        of the software to the licensor at the end of the
21        license period; this provision is deemed to be met, in
22        the case of a perpetual license, without being set
23        forth in the license agreement; and
24        (2) property that is subject to a tax on lease
25    receipts imposed by a home rule unit of local government
26    if the ordinance imposing that tax was adopted prior to
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1    January 1, 2023.
2    (39) On and after January 1, 2027, diapers for use by 
3infants, children, or adults. This paragraph is exempt from 
4the provisions of Section 3-75.
5(Source: P.A. 103-9, Article 5, Section 5-10, eff. 6-7-23;
6103-9, Article 15, Section 15-10, eff. 6-7-23; 103-154, eff.
76-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
8eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
9103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-417, eff.
108-15-25.)
11    Section 15. The Service Occupation Tax Act is amended by
12changing Section 3-5 as follows:
13    (35 ILCS 115/3-5)
14    Sec. 3-5. Exemptions. The following tangible personal
15property is exempt from the tax imposed by this Act:
16    (1) Personal property sold by a corporation, society,
17association, foundation, institution, or organization, other
18than a limited liability company, that is organized and
19operated as a not-for-profit service enterprise for the
20benefit of persons 65 years of age or older if the personal
21property was not purchased by the enterprise for the purpose
22of resale by the enterprise.
23    (2) Personal property purchased by a not-for-profit
24Illinois county fair association for use in conducting,
		HB5775	- 50 -	LRB104 21778 HLH 37462 b
1operating, or promoting the county fair.
2    (3) Personal property purchased by any not-for-profit arts
3or cultural organization that establishes, by proof required
4by the Department by rule, that it has received an exemption
5under Section 501(c)(3) of the Internal Revenue Code and that
6is organized and operated primarily for the presentation or
7support of arts or cultural programming, activities, or
8services. These organizations include, but are not limited to,
9music and dramatic arts organizations such as symphony
10orchestras and theatrical groups, arts and cultural service
11organizations, local arts councils, visual arts organizations,
12and media arts organizations. On and after July 1, 2001 (the
13effective date of Public Act 92-35), however, an entity
14otherwise eligible for this exemption shall not make tax-free
15purchases unless it has an active identification number issued
16by the Department.
17    (4) Legal tender, currency, medallions, or gold or silver
18coinage issued by the State of Illinois, the government of the
19United States of America, or the government of any foreign
20country, and bullion.
21    (5) Until July 1, 2003 and beginning again on September 1,
222004 through August 30, 2014, graphic arts machinery and
23equipment, including repair and replacement parts, both new
24and used, and including that manufactured on special order or
25purchased for lease, certified by the purchaser to be used
26primarily for graphic arts production. Equipment includes
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1chemicals or chemicals acting as catalysts but only if the
2chemicals or chemicals acting as catalysts effect a direct and
3immediate change upon a graphic arts product. Beginning on
4July 1, 2017, graphic arts machinery and equipment is included
5in the manufacturing and assembling machinery and equipment
6exemption under Section 2 of this Act.
7    (6) Personal property sold by a teacher-sponsored student
8organization affiliated with an elementary or secondary school
9located in Illinois.
10    (7) Farm machinery and equipment, both new and used,
11including that manufactured on special order, certified by the
12purchaser to be used primarily for production agriculture or
13State or federal agricultural programs, including individual
14replacement parts for the machinery and equipment, including
15machinery and equipment purchased for lease, and including
16implements of husbandry defined in Section 1-130 of the
17Illinois Vehicle Code, farm machinery and agricultural
18chemical and fertilizer spreaders, and nurse wagons required
19to be registered under Section 3-809 of the Illinois Vehicle
20Code, but excluding other motor vehicles required to be
21registered under the Illinois Vehicle Code. Horticultural
22polyhouses or hoop houses used for propagating, growing, or
23overwintering plants shall be considered farm machinery and
24equipment under this item (7). Agricultural chemical tender
25tanks and dry boxes shall include units sold separately from a
26motor vehicle required to be licensed and units sold mounted
		HB5775	- 52 -	LRB104 21778 HLH 37462 b
1on a motor vehicle required to be licensed if the selling price
2of the tender is separately stated.
3    Farm machinery and equipment shall include precision
4farming equipment that is installed or purchased to be
5installed on farm machinery and equipment, including, but not
6limited to, tractors, harvesters, sprayers, planters, seeders,
7or spreaders. Precision farming equipment includes, but is not
8limited to, soil testing sensors, computers, monitors,
9software, global positioning and mapping systems, and other
10such equipment.
11    Farm machinery and equipment also includes computers,
12sensors, software, and related equipment used primarily in the
13computer-assisted operation of production agriculture
14facilities, equipment, and activities such as, but not limited
15to, the collection, monitoring, and correlation of animal and
16crop data for the purpose of formulating animal diets and
17agricultural chemicals.
18    Beginning on January 1, 2024, farm machinery and equipment
19also includes electrical power generation equipment used
20primarily for production agriculture.
21    This item (7) is exempt from the provisions of Section
223-55.
23    (8) Until June 30, 2013, fuel and petroleum products sold
24to or used by an air common carrier, certified by the carrier
25to be used for consumption, shipment, or storage in the
26conduct of its business as an air common carrier, for a flight
		HB5775	- 53 -	LRB104 21778 HLH 37462 b
1destined for or returning from a location or locations outside
2the United States without regard to previous or subsequent
3domestic stopovers.
4    Beginning July 1, 2013, fuel and petroleum products sold
5to or used by an air carrier, certified by the carrier to be
6used for consumption, shipment, or storage in the conduct of
7its business as an air common carrier, for a flight that (i) is
8engaged in foreign trade or is engaged in trade between the
9United States and any of its possessions and (ii) transports
10at least one individual or package for hire from the city of
11origination to the city of final destination on the same
12aircraft, without regard to a change in the flight number of
13that aircraft.
14    (9) Proceeds of mandatory service charges separately
15stated on customers' bills for the purchase and consumption of
16food and beverages, to the extent that the proceeds of the
17service charge are in fact turned over as tips or as a
18substitute for tips to the employees who participate directly
19in preparing, serving, hosting or cleaning up the food or
20beverage function with respect to which the service charge is
21imposed.
22    (10) Until July 1, 2003, oil field exploration, drilling,
23and production equipment, including (i) rigs and parts of
24rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
25pipe and tubular goods, including casing and drill strings,
26(iii) pumps and pump-jack units, (iv) storage tanks and flow
		HB5775	- 54 -	LRB104 21778 HLH 37462 b
1lines, (v) any individual replacement part for oil field
2exploration, drilling, and production equipment, and (vi)
3machinery and equipment purchased for lease; but excluding
4motor vehicles required to be registered under the Illinois
5Vehicle Code.
6    (11) Photoprocessing machinery and equipment, including
7repair and replacement parts, both new and used, including
8that manufactured on special order, certified by the purchaser
9to be used primarily for photoprocessing, and including
10photoprocessing machinery and equipment purchased for lease.
11    (12) Until July 1, 2028, coal and aggregate exploration,
12mining, off-highway hauling, processing, maintenance, and
13reclamation equipment, including replacement parts and
14equipment, and including equipment purchased for lease, but
15excluding motor vehicles required to be registered under the
16Illinois Vehicle Code. The changes made to this Section by
17Public Act 97-767 apply on and after July 1, 2003, but no claim
18for credit or refund is allowed on or after August 16, 2013
19(the effective date of Public Act 98-456) for such taxes paid
20during the period beginning July 1, 2003 and ending on August
2116, 2013 (the effective date of Public Act 98-456).
22    (13) Beginning January 1, 1992 and through June 30, 2016,
23food for human consumption that is to be consumed off the
24premises where it is sold (other than alcoholic beverages,
25soft drinks and food that has been prepared for immediate
26consumption) and prescription and non-prescription medicines,
		HB5775	- 55 -	LRB104 21778 HLH 37462 b
1drugs, medical appliances, and insulin, urine testing
2materials, syringes, and needles used by diabetics, for human
3use, when purchased for use by a person receiving medical
4assistance under Article V of the Illinois Public Aid Code who
5resides in a licensed long-term care facility, as defined in
6the Nursing Home Care Act, or in a licensed facility as defined
7in the ID/DD Community Care Act, the MC/DD Act, or the
8Specialized Mental Health Rehabilitation Act of 2013.
9    (14) Semen used for artificial insemination of livestock
10for direct agricultural production.
11    (15) Horses, or interests in horses, registered with and
12meeting the requirements of any of the Arabian Horse Club
13Registry of America, Appaloosa Horse Club, American Quarter
14Horse Association, United States Trotting Association, or
15Jockey Club, as appropriate, used for purposes of breeding or
16racing for prizes. This item (15) is exempt from the
17provisions of Section 3-55, and the exemption provided for
18under this item (15) applies for all periods beginning May 30,
191995, but no claim for credit or refund is allowed on or after
20January 1, 2008 (the effective date of Public Act 95-88) for
21such taxes paid during the period beginning May 30, 2000 and
22ending on January 1, 2008 (the effective date of Public Act
2395-88).
24    (16) Computers and communications equipment utilized for
25any hospital purpose and equipment used in the diagnosis,
26analysis, or treatment of hospital patients sold to a lessor
		HB5775	- 56 -	LRB104 21778 HLH 37462 b
1who leases the equipment, under a lease of one year or longer
2executed or in effect at the time of the purchase, to a
3hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of
5the Retailers' Occupation Tax Act.
6    (17) Personal property sold to a lessor who leases the
7property, under a lease of one year or longer executed or in
8effect at the time of the purchase, to a governmental body that
9has been issued an active tax exemption identification number
10by the Department under Section 1g of the Retailers'
11Occupation Tax Act.
12    (18) Beginning with taxable years ending on or after
13December 31, 1995 and ending with taxable years ending on or
14before December 31, 2004, personal property that is donated
15for disaster relief to be used in a State or federally declared
16disaster area in Illinois or bordering Illinois by a
17manufacturer or retailer that is registered in this State to a
18corporation, society, association, foundation, or institution
19that has been issued a sales tax exemption identification
20number by the Department that assists victims of the disaster
21who reside within the declared disaster area.
22    (19) Beginning with taxable years ending on or after
23December 31, 1995 and ending with taxable years ending on or
24before December 31, 2004, personal property that is used in
25the performance of infrastructure repairs in this State,
26including, but not limited to, municipal roads and streets,
		HB5775	- 57 -	LRB104 21778 HLH 37462 b
1access roads, bridges, sidewalks, waste disposal systems,
2water and sewer line extensions, water distribution and
3purification facilities, storm water drainage and retention
4facilities, and sewage treatment facilities, resulting from a
5State or federally declared disaster in Illinois or bordering
6Illinois when such repairs are initiated on facilities located
7in the declared disaster area within 6 months after the
8disaster.
9    (20) Beginning July 1, 1999, game or game birds sold at a
10"game breeding and hunting preserve area" as that term is used
11in the Wildlife Code. This paragraph is exempt from the
12provisions of Section 3-55.
13    (21) A motor vehicle, as that term is defined in Section
141-146 of the Illinois Vehicle Code, that is donated to a
15corporation, limited liability company, society, association,
16foundation, or institution that is determined by the
17Department to be organized and operated exclusively for
18educational purposes. For purposes of this exemption, "a
19corporation, limited liability company, society, association,
20foundation, or institution organized and operated exclusively
21for educational purposes" means all tax-supported public
22schools, private schools that offer systematic instruction in
23useful branches of learning by methods common to public
24schools and that compare favorably in their scope and
25intensity with the course of study presented in tax-supported
26schools, and vocational or technical schools or institutes
		HB5775	- 58 -	LRB104 21778 HLH 37462 b
1organized and operated exclusively to provide a course of
2study of not less than 6 weeks duration and designed to prepare
3individuals to follow a trade or to pursue a manual,
4technical, mechanical, industrial, business, or commercial
5occupation.
6    (22) Beginning January 1, 2000, personal property,
7including food, purchased through fundraising events for the
8benefit of a public or private elementary or secondary school,
9a group of those schools, or one or more school districts if
10the events are sponsored by an entity recognized by the school
11district that consists primarily of volunteers and includes
12parents and teachers of the school children. This paragraph
13does not apply to fundraising events (i) for the benefit of
14private home instruction or (ii) for which the fundraising
15entity purchases the personal property sold at the events from
16another individual or entity that sold the property for the
17purpose of resale by the fundraising entity and that profits
18from the sale to the fundraising entity. This paragraph is
19exempt from the provisions of Section 3-55.
20    (23) Beginning January 1, 2000 and through December 31,
212001, new or used automatic vending machines that prepare and
22serve hot food and beverages, including coffee, soup, and
23other items, and replacement parts for these machines.
24Beginning January 1, 2002 and through June 30, 2003, machines
25and parts for machines used in commercial, coin-operated
26amusement and vending business if a use or occupation tax is
		HB5775	- 59 -	LRB104 21778 HLH 37462 b
1paid on the gross receipts derived from the use of the
2commercial, coin-operated amusement and vending machines. This
3paragraph is exempt from the provisions of Section 3-55.
4    (24) Beginning on August 2, 2001 (the effective date of
5Public Act 92-227), computers and communications equipment
6utilized for any hospital purpose and equipment used in the
7diagnosis, analysis, or treatment of hospital patients sold to
8a lessor who leases the equipment, under a lease of one year or
9longer executed or in effect at the time of the purchase, to a
10hospital that has been issued an active tax exemption
11identification number by the Department under Section 1g of
12the Retailers' Occupation Tax Act. This paragraph is exempt
13from the provisions of Section 3-55.
14    (25) Beginning on August 2, 2001 (the effective date of
15Public Act 92-227), personal property sold to a lessor who
16leases the property, under a lease of one year or longer
17executed or in effect at the time of the purchase, to a
18governmental body that has been issued an active tax exemption
19identification number by the Department under Section 1g of
20the Retailers' Occupation Tax Act. This paragraph is exempt
21from the provisions of Section 3-55.
22    (26) Beginning on January 1, 2002 and through June 30,
232016, tangible personal property purchased from an Illinois
24retailer by a taxpayer engaged in centralized purchasing
25activities in Illinois who will, upon receipt of the property
26in Illinois, temporarily store the property in Illinois (i)
		HB5775	- 60 -	LRB104 21778 HLH 37462 b
1for the purpose of subsequently transporting it outside this
2State for use or consumption thereafter solely outside this
3State or (ii) for the purpose of being processed, fabricated,
4or manufactured into, attached to, or incorporated into other
5tangible personal property to be transported outside this
6State and thereafter used or consumed solely outside this
7State. The Director of Revenue shall, pursuant to rules
8adopted in accordance with the Illinois Administrative
9Procedure Act, issue a permit to any taxpayer in good standing
10with the Department who is eligible for the exemption under
11this paragraph (26). The permit issued under this paragraph
12(26) shall authorize the holder, to the extent and in the
13manner specified in the rules adopted under this Act, to
14purchase tangible personal property from a retailer exempt
15from the taxes imposed by this Act. Taxpayers shall maintain
16all necessary books and records to substantiate the use and
17consumption of all such tangible personal property outside of
18the State of Illinois.
19    (27) Beginning January 1, 2008, tangible personal property
20used in the construction or maintenance of a community water
21supply, as defined under Section 3.145 of the Environmental
22Protection Act, that is operated by a not-for-profit
23corporation that holds a valid water supply permit issued
24under Title IV of the Environmental Protection Act. This
25paragraph is exempt from the provisions of Section 3-55.
26    (28) Tangible personal property sold to a
		HB5775	- 61 -	LRB104 21778 HLH 37462 b
1public-facilities corporation, as described in Section
211-65-10 of the Illinois Municipal Code, for purposes of
3constructing or furnishing a municipal convention hall, but
4only if the legal title to the municipal convention hall is
5transferred to the municipality without any further
6consideration by or on behalf of the municipality at the time
7of the completion of the municipal convention hall or upon the
8retirement or redemption of any bonds or other debt
9instruments issued by the public-facilities corporation in
10connection with the development of the municipal convention
11hall. This exemption includes existing public-facilities
12corporations as provided in Section 11-65-25 of the Illinois
13Municipal Code. This paragraph is exempt from the provisions
14of Section 3-55.
15    (29) Beginning January 1, 2010 and continuing through
16December 31, 2029, materials, parts, equipment, components,
17and furnishings incorporated into or upon an aircraft as part
18of the modification, refurbishment, completion, replacement,
19repair, or maintenance of the aircraft. This exemption
20includes consumable supplies used in the modification,
21refurbishment, completion, replacement, repair, and
22maintenance of aircraft. However, until January 1, 2024, this
23exemption excludes any materials, parts, equipment,
24components, and consumable supplies used in the modification,
25replacement, repair, and maintenance of aircraft engines or
26power plants, whether such engines or power plants are
		HB5775	- 62 -	LRB104 21778 HLH 37462 b
1installed or uninstalled upon any such aircraft. "Consumable
2supplies" include, but are not limited to, adhesive, tape,
3sandpaper, general purpose lubricants, cleaning solution,
4latex gloves, and protective films.
5    Beginning January 1, 2010 and continuing through December
631, 2023, this exemption applies only to the transfer of
7qualifying tangible personal property incident to the
8modification, refurbishment, completion, replacement, repair,
9or maintenance of an aircraft by persons who (i) hold an Air
10Agency Certificate and are empowered to operate an approved
11repair station by the Federal Aviation Administration, (ii)
12have a Class IV Rating, and (iii) conduct operations in
13accordance with Part 145 of the Federal Aviation Regulations.
14The exemption does not include aircraft operated by a
15commercial air carrier providing scheduled passenger air
16service pursuant to authority issued under Part 121 or Part
17129 of the Federal Aviation Regulations. From January 1, 2024
18through December 31, 2029, this exemption applies only to the
19transfer of qualifying tangible personal property incident to:
20(A) the modification, refurbishment, completion, repair,
21replacement, or maintenance of an aircraft by persons who (i)
22hold an Air Agency Certificate and are empowered to operate an
23approved repair station by the Federal Aviation
24Administration, (ii) have a Class IV Rating, and (iii) conduct
25operations in accordance with Part 145 of the Federal Aviation
26Regulations; and (B) the modification, replacement, repair,
		HB5775	- 63 -	LRB104 21778 HLH 37462 b
1and maintenance of aircraft engines or power plants without
2regard to whether or not those persons meet the qualifications
3of item (A).
4    The changes made to this paragraph (29) by Public Act
598-534 are declarative of existing law. It is the intent of the
6General Assembly that the exemption under this paragraph (29)
7applies continuously from January 1, 2010 through December 31,
82024; however, no claim for credit or refund is allowed for
9taxes paid as a result of the disallowance of this exemption on
10or after January 1, 2015 and prior to February 5, 2020 (the
11effective date of Public Act 101-629).
12    (30) Beginning January 1, 2017 and through December 31,
132026, menstrual pads, tampons, and menstrual cups.
14    (31) Tangible personal property transferred to a purchaser
15who is exempt from tax by operation of federal law. This
16paragraph is exempt from the provisions of Section 3-55.
17    (32) Qualified tangible personal property used in the
18construction or operation of a data center that has been
19granted a certificate of exemption by the Department of
20Commerce and Economic Opportunity, whether that tangible
21personal property is purchased by the owner, operator, or
22tenant of the data center or by a contractor or subcontractor
23of the owner, operator, or tenant. Data centers that would
24have qualified for a certificate of exemption prior to January
251, 2020 had Public Act 101-31 been in effect, may apply for and
26obtain an exemption for subsequent purchases of computer
		HB5775	- 64 -	LRB104 21778 HLH 37462 b
1equipment or enabling software purchased or leased to upgrade,
2supplement, or replace computer equipment or enabling software
3purchased or leased in the original investment that would have
4qualified.
5    The Department of Commerce and Economic Opportunity shall
6grant a certificate of exemption under this item (32) to
7qualified data centers as defined by Section 605-1025 of the
8Department of Commerce and Economic Opportunity Law of the
9Civil Administrative Code of Illinois.
10    For the purposes of this item (32):
11        "Data center" means a building or a series of
12    buildings rehabilitated or constructed to house working
13    servers in one physical location or multiple sites within
14    the State of Illinois.
15        "Qualified tangible personal property" means:
16    electrical systems and equipment; climate control and
17    chilling equipment and systems; mechanical systems and
18    equipment; monitoring and secure systems; emergency
19    generators; hardware; computers; servers; data storage
20    devices; network connectivity equipment; racks; cabinets;
21    telecommunications cabling infrastructure; raised floor
22    systems; peripheral components or systems; software;
23    mechanical, electrical, or plumbing systems; battery
24    systems; cooling systems and towers; temperature control
25    systems; other cabling; and other data center
26    infrastructure equipment and systems necessary to operate
		HB5775	- 65 -	LRB104 21778 HLH 37462 b
1    qualified tangible personal property, including fixtures;
2    and component parts of any of the foregoing, including
3    installation, maintenance, repair, refurbishment, and
4    replacement of qualified tangible personal property to
5    generate, transform, transmit, distribute, or manage
6    electricity necessary to operate qualified tangible
7    personal property; and all other tangible personal
8    property that is essential to the operations of a computer
9    data center. The term "qualified tangible personal
10    property" also includes building materials physically
11    incorporated into the qualifying data center. To document
12    the exemption allowed under this Section, the retailer
13    must obtain from the purchaser a copy of the certificate
14    of eligibility issued by the Department of Commerce and
15    Economic Opportunity.
16    This item (32) is exempt from the provisions of Section
173-55.
18    (33) Beginning July 1, 2022, breast pumps, breast pump
19collection and storage supplies, and breast pump kits. This
20item (33) is exempt from the provisions of Section 3-55. As
21used in this item (33):
22        "Breast pump" means an electrically controlled or
23    manually controlled pump device designed or marketed to be
24    used to express milk from a human breast during lactation,
25    including the pump device and any battery, AC adapter, or
26    other power supply unit that is used to power the pump
		HB5775	- 66 -	LRB104 21778 HLH 37462 b
1    device and is packaged and sold with the pump device at the
2    time of sale.
3        "Breast pump collection and storage supplies" means
4    items of tangible personal property designed or marketed
5    to be used in conjunction with a breast pump to collect
6    milk expressed from a human breast and to store collected
7    milk until it is ready for consumption.
8        "Breast pump collection and storage supplies"
9    includes, but is not limited to: breast shields and breast
10    shield connectors; breast pump tubes and tubing adapters;
11    breast pump valves and membranes; backflow protectors and
12    backflow protector adaptors; bottles and bottle caps
13    specific to the operation of the breast pump; and breast
14    milk storage bags.
15        "Breast pump collection and storage supplies" does not
16    include: (1) bottles and bottle caps not specific to the
17    operation of the breast pump; (2) breast pump travel bags
18    and other similar carrying accessories, including ice
19    packs, labels, and other similar products; (3) breast pump
20    cleaning supplies; (4) nursing bras, bra pads, breast
21    shells, and other similar products; and (5) creams,
22    ointments, and other similar products that relieve
23    breastfeeding-related symptoms or conditions of the
24    breasts or nipples, unless sold as part of a breast pump
25    kit that is pre-packaged by the breast pump manufacturer
26    or distributor.
		HB5775	- 67 -	LRB104 21778 HLH 37462 b
1        "Breast pump kit" means a kit that: (1) contains no
2    more than a breast pump, breast pump collection and
3    storage supplies, a rechargeable battery for operating the
4    breast pump, a breastmilk cooler, bottle stands, ice
5    packs, and a breast pump carrying case; and (2) is
6    pre-packaged as a breast pump kit by the breast pump
7    manufacturer or distributor.
8    (34) Tangible personal property sold by or on behalf of
9the State Treasurer pursuant to the Revised Uniform Unclaimed
10Property Act. This item (34) is exempt from the provisions of
11Section 3-55.
12    (35) Beginning on January 1, 2024, tangible personal
13property purchased by an active duty member of the armed
14forces of the United States who presents valid military
15identification and purchases the property using a form of
16payment where the federal government is the payor. The member
17of the armed forces must complete, at the point of sale, a form
18prescribed by the Department of Revenue documenting that the
19transaction is eligible for the exemption under this
20paragraph. Retailers must keep the form as documentation of
21the exemption in their records for a period of not less than 6
22years. "Armed forces of the United States" means the United
23States Army, Navy, Air Force, Space Force, Marine Corps, or
24Coast Guard. This paragraph is exempt from the provisions of
25Section 3-55.
26    (36) Beginning July 1, 2024, home-delivered meals provided
		HB5775	- 68 -	LRB104 21778 HLH 37462 b
1to Medicare or Medicaid recipients when payment is made by an
2intermediary, such as a Medicare Administrative Contractor, a
3Managed Care Organization, or a Medicare Advantage
4Organization, pursuant to a government contract. This
5paragraph (36) is exempt from the provisions of Section 3-55.
6    (37) Beginning on January 1, 2026, as further defined in
7Section 3-10, food prepared for immediate consumption and
8transferred incident to a sale of service subject to this Act
9or the Service Use Tax Act by an entity licensed under the
10Hospital Licensing Act, the Nursing Home Care Act, the
11Assisted Living and Shared Housing Act, the ID/DD Community
12Care Act, the MC/DD Act, the Specialized Mental Health
13Rehabilitation Act of 2013, or the Child Care Act of 1969 or by
14an entity that holds a permit issued pursuant to the Life Care
15Facilities Act. This item (37) is exempt from the provisions
16of Section 3-55.
17    (38) Beginning on January 1, 2026, as further defined in
18Section 3-10, food for human consumption that is to be
19consumed off the premises where it is sold (other than
20alcoholic beverages, food consisting of or infused with adult
21use cannabis, soft drinks, candy, and food that has been
22prepared for immediate consumption). This item (38) is exempt
23from the provisions of Section 3-55.
24    (39) The lease of the following tangible personal
25property:
26        (1) computer software transferred subject to a license
		HB5775	- 69 -	LRB104 21778 HLH 37462 b
1    that meets the following requirements:
2            (A) it is evidenced by a written agreement signed
3        by the licensor and the customer;
4                (i) an electronic agreement in which the
5            customer accepts the license by means of an
6            electronic signature that is verifiable and can be
7            authenticated and is attached to or made part of
8            the license will comply with this requirement;
9                (ii) a license agreement in which the customer
10            electronically accepts the terms by clicking "I
11            agree" does not comply with this requirement;
12            (B) it restricts the customer's duplication and
13        use of the software;
14            (C) it prohibits the customer from licensing,
15        sublicensing, or transferring the software to a third
16        party (except to a related party) without the
17        permission and continued control of the licensor;
18            (D) the licensor has a policy of providing another
19        copy at minimal or no charge if the customer loses or
20        damages the software, or of permitting the licensee to
21        make and keep an archival copy, and such policy is
22        either stated in the license agreement, supported by
23        the licensor's books and records, or supported by a
24        notarized statement made under penalties of perjury by
25        the licensor; and
26            (E) the customer must destroy or return all copies
		HB5775	- 70 -	LRB104 21778 HLH 37462 b
1        of the software to the licensor at the end of the
2        license period; this provision is deemed to be met, in
3        the case of a perpetual license, without being set
4        forth in the license agreement; and
5        (2) property that is subject to a tax on lease
6    receipts imposed by a home rule unit of local government
7    if the ordinance imposing that tax was adopted prior to
8    January 1, 2023.
9    (40) On and after January 1, 2027, diapers for use by 
10infants, children, or adults. This paragraph is exempt from 
11the provisions of Section 3-55.
12(Source: P.A. 103-9, Article 5, Section 5-15, eff. 6-7-23;
13103-9, Article 15, Section 15-15, eff. 6-7-23; 103-154, eff.
146-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
15eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
16103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-417, eff.
178-15-25.)
18    Section 20. The Retailers' Occupation Tax Act is amended
19by changing Section 2-5 as follows:
20    (35 ILCS 120/2-5)
21    Sec. 2-5. Exemptions. Gross receipts from proceeds from
22the sale, which, on and after January 1, 2025, includes the
23lease, of the following tangible personal property are exempt
24from the tax imposed by this Act:
		HB5775	- 71 -	LRB104 21778 HLH 37462 b
1        (1) Farm chemicals.
2        (2) Farm machinery and equipment, both new and used,
3    including that manufactured on special order, certified by
4    the purchaser to be used primarily for production
5    agriculture or State or federal agricultural programs,
6    including individual replacement parts for the machinery
7    and equipment, including machinery and equipment purchased
8    for lease, and including implements of husbandry defined
9    in Section 1-130 of the Illinois Vehicle Code, farm
10    machinery and agricultural chemical and fertilizer
11    spreaders, and nurse wagons required to be registered
12    under Section 3-809 of the Illinois Vehicle Code, but
13    excluding other motor vehicles required to be registered
14    under the Illinois Vehicle Code. Horticultural polyhouses
15    or hoop houses used for propagating, growing, or
16    overwintering plants shall be considered farm machinery
17    and equipment under this item (2). Agricultural chemical
18    tender tanks and dry boxes shall include units sold
19    separately from a motor vehicle required to be licensed
20    and units sold mounted on a motor vehicle required to be
21    licensed, if the selling price of the tender is separately
22    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
26    not limited to, tractors, harvesters, sprayers, planters,
		HB5775	- 72 -	LRB104 21778 HLH 37462 b
1    seeders, or spreaders. Precision farming equipment
2    includes, but is not limited to, soil testing sensors,
3    computers, monitors, software, global positioning and
4    mapping systems, and other such equipment.
5        Farm machinery and equipment also includes computers,
6    sensors, software, and related equipment used primarily in
7    the computer-assisted operation of production agriculture
8    facilities, equipment, and activities such as, but not
9    limited to, the collection, monitoring, and correlation of
10    animal and crop data for the purpose of formulating animal
11    diets and agricultural chemicals.
12        Beginning on January 1, 2024, farm machinery and
13    equipment also includes electrical power generation
14    equipment used primarily for production agriculture.
15        This item (2) is exempt from the provisions of Section
16    2-70.
17        (3) Until July 1, 2003, distillation machinery and
18    equipment, sold as a unit or kit, assembled or installed
19    by the retailer, certified by the user to be used only for
20    the production of ethyl alcohol that will be used for
21    consumption as motor fuel or as a component of motor fuel
22    for the personal use of the user, and not subject to sale
23    or resale.
24        (4) Until July 1, 2003 and beginning again September
25    1, 2004 through August 30, 2014, graphic arts machinery
26    and equipment, including repair and replacement parts,
		HB5775	- 73 -	LRB104 21778 HLH 37462 b
1    both new and used, and including that manufactured on
2    special order or purchased for lease, certified by the
3    purchaser to be used primarily for graphic arts
4    production. Equipment includes chemicals or chemicals
5    acting as catalysts but only if the chemicals or chemicals
6    acting as catalysts effect a direct and immediate change
7    upon a graphic arts product. Beginning on July 1, 2017,
8    graphic arts machinery and equipment is included in the
9    manufacturing and assembling machinery and equipment
10    exemption under paragraph (14).
11        (5) A motor vehicle that is used for automobile
12    renting, as defined in the Automobile Renting Occupation
13    and Use Tax Act. This paragraph is exempt from the
14    provisions of Section 2-70.
15        (6) Personal property sold by a teacher-sponsored
16    student organization affiliated with an elementary or
17    secondary school located in Illinois.
18        (7) Until July 1, 2003, proceeds of that portion of
19    the selling price of a passenger car the sale of which is
20    subject to the Replacement Vehicle Tax.
21        (8) Personal property sold to an Illinois county fair
22    association for use in conducting, operating, or promoting
23    the county fair.
24        (9) Personal property sold to a not-for-profit arts or
25    cultural organization that establishes, by proof required
26    by the Department by rule, that it has received an
		HB5775	- 74 -	LRB104 21778 HLH 37462 b
1    exemption under Section 501(c)(3) of the Internal Revenue
2    Code and that is organized and operated primarily for the
3    presentation or support of arts or cultural programming,
4    activities, or services. These organizations include, but
5    are not limited to, music and dramatic arts organizations
6    such as symphony orchestras and theatrical groups, arts
7    and cultural service organizations, local arts councils,
8    visual arts organizations, and media arts organizations.
9    On and after July 1, 2001 (the effective date of Public Act
10    92-35), however, an entity otherwise eligible for this
11    exemption shall not make tax-free purchases unless it has
12    an active identification number issued by the Department.
13        (10) Personal property sold by a corporation, society,
14    association, foundation, institution, or organization,
15    other than a limited liability company, that is organized
16    and operated as a not-for-profit service enterprise for
17    the benefit of persons 65 years of age or older if the
18    personal property was not purchased by the enterprise for
19    the purpose of resale by the enterprise.
20        (11) Except as otherwise provided in this Section,
21    personal property sold to a governmental body, to a
22    corporation, society, association, foundation, or
23    institution organized and operated exclusively for
24    charitable, religious, or educational purposes, or to a
25    not-for-profit corporation, society, association,
26    foundation, institution, or organization that has no
		HB5775	- 75 -	LRB104 21778 HLH 37462 b
1    compensated officers or employees and that is organized
2    and operated primarily for the recreation of persons 55
3    years of age or older. A limited liability company may
4    qualify for the exemption under this paragraph only if the
5    limited liability company is organized and operated
6    exclusively for educational purposes. On and after July 1,
7    1987, however, no entity otherwise eligible for this
8    exemption shall make tax-free purchases unless it has an
9    active identification number issued by the Department.
10        (12) (Blank).
11        (12-5) On and after July 1, 2003 and through June 30,
12    2004, motor vehicles of the second division with a gross
13    vehicle weight in excess of 8,000 pounds that are subject
14    to the commercial distribution fee imposed under Section
15    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
16    2004 and through June 30, 2005, the use in this State of
17    motor vehicles of the second division: (i) with a gross
18    vehicle weight rating in excess of 8,000 pounds; (ii) that
19    are subject to the commercial distribution fee imposed
20    under Section 3-815.1 of the Illinois Vehicle Code; and
21    (iii) that are primarily used for commercial purposes.
22    Through June 30, 2005, this exemption applies to repair
23    and replacement parts added after the initial purchase of
24    such a motor vehicle if that motor vehicle is used in a
25    manner that would qualify for the rolling stock exemption
26    otherwise provided for in this Act. For purposes of this
		HB5775	- 76 -	LRB104 21778 HLH 37462 b
1    paragraph, "used for commercial purposes" means the
2    transportation of persons or property in furtherance of
3    any commercial or industrial enterprise whether for-hire
4    or not.
5        (13) Proceeds from sales to owners or lessors,
6    lessees, or shippers of tangible personal property that is
7    utilized by interstate carriers for hire for use as
8    rolling stock moving in interstate commerce and equipment
9    operated by a telecommunications provider, licensed as a
10    common carrier by the Federal Communications Commission,
11    which is permanently installed in or affixed to aircraft
12    moving in interstate commerce.
13        (14) Machinery and equipment that will be used by the
14    purchaser, or a lessee of the purchaser, primarily in the
15    process of manufacturing or assembling tangible personal
16    property for wholesale or retail sale or lease, whether
17    the sale or lease is made directly by the manufacturer or
18    by some other person, whether the materials used in the
19    process are owned by the manufacturer or some other
20    person, or whether the sale or lease is made apart from or
21    as an incident to the seller's engaging in the service
22    occupation of producing machines, tools, dies, jigs,
23    patterns, gauges, or other similar items of no commercial
24    value on special order for a particular purchaser. The
25    exemption provided by this paragraph (14) does not include
26    machinery and equipment used in (i) the generation of
		HB5775	- 77 -	LRB104 21778 HLH 37462 b
1    electricity for wholesale or retail sale; (ii) the
2    generation or treatment of natural or artificial gas for
3    wholesale or retail sale that is delivered to customers
4    through pipes, pipelines, or mains; or (iii) the treatment
5    of water for wholesale or retail sale that is delivered to
6    customers through pipes, pipelines, or mains. The
7    provisions of Public Act 98-583 are declaratory of
8    existing law as to the meaning and scope of this
9    exemption. Beginning on July 1, 2017, the exemption
10    provided by this paragraph (14) includes, but is not
11    limited to, graphic arts machinery and equipment, as
12    defined in paragraph (4) of this Section.
13        (15) Proceeds of mandatory service charges separately
14    stated on customers' bills for purchase and consumption of
15    food and beverages, to the extent that the proceeds of the
16    service charge are in fact turned over as tips or as a
17    substitute for tips to the employees who participate
18    directly in preparing, serving, hosting or cleaning up the
19    food or beverage function with respect to which the
20    service charge is imposed.
21        (16) Tangible personal property sold to a purchaser if
22    the purchaser is exempt from use tax by operation of
23    federal law. This paragraph is exempt from the provisions
24    of Section 2-70.
25        (17) Tangible personal property sold to a common
26    carrier by rail or motor that receives the physical
		HB5775	- 78 -	LRB104 21778 HLH 37462 b
1    possession of the property in Illinois and that transports
2    the property, or shares with another common carrier in the
3    transportation of the property, out of Illinois on a
4    standard uniform bill of lading showing the seller of the
5    property as the shipper or consignor of the property to a
6    destination outside Illinois, for use outside Illinois.
7        (18) Legal tender, currency, medallions, or gold or
8    silver coinage issued by the State of Illinois, the
9    government of the United States of America, or the
10    government of any foreign country, and bullion.
11        (19) Until July 1, 2003, oil field exploration,
12    drilling, and production equipment, including (i) rigs and
13    parts of rigs, rotary rigs, cable tool rigs, and workover
14    rigs, (ii) pipe and tubular goods, including casing and
15    drill strings, (iii) pumps and pump-jack units, (iv)
16    storage tanks and flow lines, (v) any individual
17    replacement part for oil field exploration, drilling, and
18    production equipment, and (vi) machinery and equipment
19    purchased for lease; but excluding motor vehicles required
20    to be registered under the Illinois Vehicle Code.
21        (20) Photoprocessing machinery and equipment,
22    including repair and replacement parts, both new and used,
23    including that manufactured on special order, certified by
24    the purchaser to be used primarily for photoprocessing,
25    and including photoprocessing machinery and equipment
26    purchased for lease.
		HB5775	- 79 -	LRB104 21778 HLH 37462 b
1        (21) Until July 1, 2028, coal and aggregate
2    exploration, mining, off-highway hauling, processing,
3    maintenance, and reclamation equipment, including
4    replacement parts and equipment, and including equipment
5    purchased for lease, but excluding motor vehicles required
6    to be registered under the Illinois Vehicle Code. The
7    changes made to this Section by Public Act 97-767 apply on
8    and after July 1, 2003, but no claim for credit or refund
9    is allowed on or after August 16, 2013 (the effective date
10    of Public Act 98-456) for such taxes paid during the
11    period beginning July 1, 2003 and ending on August 16,
12    2013 (the effective date of Public Act 98-456).
13        (22) Until June 30, 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 destined for or returning from a location or
18    locations outside the United States without regard to
19    previous or subsequent domestic stopovers.
20        Beginning July 1, 2013, fuel and petroleum products
21    sold to or used by an air carrier, certified by the carrier
22    to be used for consumption, shipment, or storage in the
23    conduct of its business as an air common carrier, for a
24    flight that (i) is engaged in foreign trade or is engaged
25    in trade between the United States and any of its
26    possessions and (ii) transports at least one individual or
		HB5775	- 80 -	LRB104 21778 HLH 37462 b
1    package for hire from the city of origination to the city
2    of final destination on the same aircraft, without regard
3    to a change in the flight number of that aircraft.
4        (23) A transaction in which the purchase order is
5    received by a florist who is located outside Illinois, but
6    who has a florist located in Illinois deliver the property
7    to the purchaser or the purchaser's donee in Illinois.
8        (24) Fuel consumed or used in the operation of ships,
9    barges, or vessels that are used primarily in or for the
10    transportation of property or the conveyance of persons
11    for hire on rivers bordering on this State if the fuel is
12    delivered by the seller to the purchaser's barge, ship, or
13    vessel while it is afloat upon that bordering river.
14        (25) Except as provided in items (25-5) and (25-6) of
15    this Section, a motor vehicle sold in this State to a
16    nonresident even though the motor vehicle is delivered to
17    the nonresident in this State, if the motor vehicle is not
18    to be titled in this State, and if a drive-away permit is
19    issued to the motor vehicle as provided in Section 3-603
20    of the Illinois Vehicle Code or if the nonresident
21    purchaser has vehicle registration plates to transfer to
22    the motor vehicle upon returning to his or her home state.
23    The issuance of the drive-away permit or having the
24    out-of-state registration plates to be transferred is
25    prima facie evidence that the motor vehicle will not be
26    titled in this State.
		HB5775	- 81 -	LRB104 21778 HLH 37462 b
1        (25-5) The exemption under item (25) does not apply if
2    the state in which the motor vehicle will be titled does
3    not allow a reciprocal exemption for a motor vehicle sold
4    and delivered in that state to an Illinois resident but
5    titled in Illinois. The tax collected under this Act on
6    the sale of a motor vehicle in this State to a resident of
7    another state that does not allow a reciprocal exemption
8    shall be imposed at a rate equal to the state's rate of tax
9    on taxable property in the state in which the purchaser is
10    a resident, except that the tax shall not exceed the tax
11    that would otherwise be imposed under this Act. At the
12    time of the sale, the purchaser shall execute a statement,
13    signed under penalty of perjury, of his or her intent to
14    title the vehicle in the state in which the purchaser is a
15    resident within 30 days after the sale and of the fact of
16    the payment to the State of Illinois of tax in an amount
17    equivalent to the state's rate of tax on taxable property
18    in his or her state of residence and shall submit the
19    statement to the appropriate tax collection agency in his
20    or her state of residence. In addition, the retailer must
21    retain a signed copy of the statement in his or her
22    records. Nothing in this item shall be construed to
23    require the removal of the vehicle from this state
24    following the filing of an intent to title the vehicle in
25    the purchaser's state of residence if the purchaser titles
26    the vehicle in his or her state of residence within 30 days
		HB5775	- 82 -	LRB104 21778 HLH 37462 b
1    after the date of sale. The tax collected under this Act in
2    accordance with this item (25-5) shall be proportionately
3    distributed as if the tax were collected at the 6.25%
4    general rate imposed under this Act.
5        (25-6) There is a rebuttable presumption that the
6    exemption under item (25) does not apply if the purchaser
7    is a limited liability company and a member of the limited
8    liability company is a resident of Illinois. This
9    presumption may be rebutted by other evidence, such as
10    evidence the motor vehicle is insured at a garaging or
11    storage address outside Illinois or other evidence of the
12    physical address at which the motor vehicle will be
13    permanently stored or garaged outside Illinois.
14        (25-7) Beginning on July 1, 2007, no tax is imposed
15    under this Act on the sale of an aircraft, as defined in
16    Section 3 of the Illinois Aeronautics Act, if all of the
17    following conditions are met:
18            (1) the aircraft leaves this State within 15 days
19        after the later of either the issuance of the final
20        billing for the sale of the aircraft, or the
21        authorized approval for return to service, completion
22        of the maintenance record entry, and completion of the
23        test flight and ground test for inspection, as
24        required by 14 CFR 91.407;
25            (2) the aircraft is not based or registered in
26        this State after the sale of the aircraft; and
		HB5775	- 83 -	LRB104 21778 HLH 37462 b
1            (3) the seller retains in his or her books and
2        records and provides to the Department a signed and
3        dated certification from the purchaser, on a form
4        prescribed by the Department, certifying that the
5        requirements of this item (25-7) are met. The
6        certificate must also include the name and address of
7        the purchaser, the address of the location where the
8        aircraft is to be titled or registered, the address of
9        the primary physical location of the aircraft, and
10        other information that the Department may reasonably
11        require.
12        For purposes of this item (25-7):
13        "Based in this State" means hangared, stored, or
14    otherwise used, excluding post-sale customizations as
15    defined in this Section, for 10 or more days in each
16    12-month period immediately following the date of the sale
17    of the aircraft.
18        "Registered in this State" means an aircraft
19    registered with the Department of Transportation,
20    Aeronautics Division, or titled or registered with the
21    Federal Aviation Administration to an address located in
22    this State.
23        This paragraph (25-7) is exempt from the provisions of
24    Section 2-70.
25        (26) Semen used for artificial insemination of
26    livestock for direct agricultural production.
		HB5775	- 84 -	LRB104 21778 HLH 37462 b
1        (27) Horses, or interests in horses, registered with
2    and meeting the requirements of any of the Arabian Horse
3    Club Registry of America, Appaloosa Horse Club, American
4    Quarter Horse Association, United States Trotting
5    Association, or Jockey Club, as appropriate, used for
6    purposes of breeding or racing for prizes. This item (27)
7    is exempt from the provisions of Section 2-70, and the
8    exemption provided for under this item (27) applies for
9    all periods beginning May 30, 1995, but no claim for
10    credit or refund is allowed on or after January 1, 2008
11    (the effective date of Public Act 95-88) for such taxes
12    paid during the period beginning May 30, 2000 and ending
13    on January 1, 2008 (the effective date of Public Act
14    95-88).
15        (28) Computers and communications equipment utilized
16    for any hospital purpose and equipment used in the
17    diagnosis, analysis, or treatment of hospital patients
18    sold to a lessor who leases the equipment, under a lease of
19    one year or longer executed or in effect at the time of the
20    purchase, to a hospital that has been issued an active tax
21    exemption identification number by the Department under
22    Section 1g of this Act.
23        (29) Personal property sold to a lessor who leases the
24    property, under a lease of one year or longer executed or
25    in effect at the time of the purchase, to a governmental
26    body that has been issued an active tax exemption
		HB5775	- 85 -	LRB104 21778 HLH 37462 b
1    identification number by the Department under Section 1g
2    of this Act.
3        (30) Beginning with taxable years ending on or after
4    December 31, 1995 and ending with taxable years ending on
5    or before December 31, 2004, personal property that is
6    donated for disaster relief to be used in a State or
7    federally declared disaster area in Illinois or bordering
8    Illinois by a manufacturer or retailer that is registered
9    in this State to a corporation, society, association,
10    foundation, or institution that has been issued a sales
11    tax exemption identification number by the Department that
12    assists victims of the disaster who reside within the
13    declared disaster area.
14        (31) Beginning with taxable years ending on or after
15    December 31, 1995 and ending with taxable years ending on
16    or before December 31, 2004, personal property that is
17    used in the performance of infrastructure repairs in this
18    State, including, but not limited to, municipal roads and
19    streets, access roads, bridges, sidewalks, waste disposal
20    systems, water and sewer line extensions, water
21    distribution and purification facilities, storm water
22    drainage and retention facilities, and sewage treatment
23    facilities, resulting from a State or federally declared
24    disaster in Illinois or bordering Illinois when such
25    repairs are initiated on facilities located in the
26    declared disaster area within 6 months after the disaster.
		HB5775	- 86 -	LRB104 21778 HLH 37462 b
1        (32) Beginning July 1, 1999, game or game birds sold
2    at a "game breeding and hunting preserve area" as that
3    term is used in the Wildlife Code. This paragraph is
4    exempt from the provisions of Section 2-70.
5        (33) A motor vehicle, as that term is defined in
6    Section 1-146 of the Illinois Vehicle Code, that is
7    donated to a corporation, limited liability company,
8    society, association, foundation, or institution that is
9    determined by the Department to be organized and operated
10    exclusively for educational purposes. For purposes of this
11    exemption, "a corporation, limited liability company,
12    society, association, foundation, or institution organized
13    and operated exclusively for educational purposes" means
14    all tax-supported public schools, private schools that
15    offer systematic instruction in useful branches of
16    learning by methods common to public schools and that
17    compare favorably in their scope and intensity with the
18    course of study presented in tax-supported schools, and
19    vocational or technical schools or institutes organized
20    and operated exclusively to provide a course of study of
21    not less than 6 weeks duration and designed to prepare
22    individuals to follow a trade or to pursue a manual,
23    technical, mechanical, industrial, business, or commercial
24    occupation.
25        (34) Beginning January 1, 2000, personal property,
26    including food, purchased through fundraising events for
		HB5775	- 87 -	LRB104 21778 HLH 37462 b
1    the benefit of a public or private elementary or secondary
2    school, a group of those schools, or one or more school
3    districts if the events are sponsored by an entity
4    recognized by the school district that consists primarily
5    of volunteers and includes parents and teachers of the
6    school children. This paragraph does not apply to
7    fundraising events (i) for the benefit of private home
8    instruction or (ii) for which the fundraising entity
9    purchases the personal property sold at the events from
10    another individual or entity that sold the property for
11    the purpose of resale by the fundraising entity and that
12    profits from the sale to the fundraising entity. This
13    paragraph is exempt from the provisions of Section 2-70.
14        (35) Beginning January 1, 2000 and through December
15    31, 2001, new or used automatic vending machines that
16    prepare and serve hot food and beverages, including
17    coffee, soup, and other items, and replacement parts for
18    these machines. Beginning January 1, 2002 and through June
19    30, 2003, machines and parts for machines used in
20    commercial, coin-operated amusement and vending business
21    if a use or occupation tax is paid on the gross receipts
22    derived from the use of the commercial, coin-operated
23    amusement and vending machines. This paragraph is exempt
24    from the provisions of Section 2-70.
25        (35-5) Beginning August 23, 2001 and through June 30,
26    2016, food for human consumption that is to be consumed
		HB5775	- 88 -	LRB104 21778 HLH 37462 b
1    off the premises where it is sold (other than alcoholic
2    beverages, soft drinks, and food that has been prepared
3    for immediate consumption) and prescription and
4    nonprescription medicines, drugs, medical appliances, and
5    insulin, urine testing materials, syringes, and needles
6    used by diabetics, for human use, when purchased for use
7    by a person receiving medical assistance under Article V
8    of the Illinois Public Aid Code who resides in a licensed
9    long-term care facility, as defined in the Nursing Home
10    Care Act, or a licensed facility as defined in the ID/DD
11    Community Care Act, the MC/DD Act, or the Specialized
12    Mental Health Rehabilitation Act of 2013.
13        (36) Beginning August 2, 2001, computers and
14    communications equipment utilized for any hospital purpose
15    and equipment used in the diagnosis, analysis, or
16    treatment of hospital patients sold to a lessor who leases
17    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
21    of this Act. This paragraph is exempt from the provisions
22    of Section 2-70.
23        (37) Beginning August 2, 2001, personal property sold
24    to a lessor who leases the property, under a lease of one
25    year or longer executed or in effect at the time of the
26    purchase, to a governmental body that has been issued an
		HB5775	- 89 -	LRB104 21778 HLH 37462 b
1    active tax exemption identification number by the
2    Department under Section 1g of this Act. This paragraph is
3    exempt from the provisions of Section 2-70.
4        (38) Beginning on January 1, 2002 and through June 30,
5    2016, tangible personal property purchased from an
6    Illinois retailer by a taxpayer engaged in centralized
7    purchasing activities in Illinois who will, upon receipt
8    of the property in Illinois, temporarily store the
9    property in Illinois (i) for the purpose of subsequently
10    transporting it outside this State for use or consumption
11    thereafter solely outside this State or (ii) for the
12    purpose of being processed, fabricated, or manufactured
13    into, attached to, or incorporated into other tangible
14    personal property to be transported outside this State and
15    thereafter used or consumed solely outside this State. The
16    Director of Revenue shall, pursuant to rules adopted in
17    accordance with the Illinois Administrative Procedure Act,
18    issue a permit to any taxpayer in good standing with the
19    Department who is eligible for the exemption under this
20    paragraph (38). The permit issued under this paragraph
21    (38) shall authorize the holder, to the extent and in the
22    manner specified in the rules adopted under this Act, to
23    purchase tangible personal property from a retailer exempt
24    from the taxes imposed by this Act. Taxpayers shall
25    maintain all necessary books and records to substantiate
26    the use and consumption of all such tangible personal
		HB5775	- 90 -	LRB104 21778 HLH 37462 b
1    property outside of the State of Illinois.
2        (39) Beginning January 1, 2008, tangible personal
3    property used in the construction or maintenance of a
4    community water supply, as defined under Section 3.145 of
5    the Environmental Protection Act, that is operated by a
6    not-for-profit corporation that holds a valid water supply
7    permit issued under Title IV of the Environmental
8    Protection Act. This paragraph is exempt from the
9    provisions of Section 2-70.
10        (40) Beginning January 1, 2010 and continuing through
11    December 31, 2029, materials, parts, equipment,
12    components, and furnishings incorporated into or upon an
13    aircraft as part of the modification, refurbishment,
14    completion, replacement, repair, or maintenance of the
15    aircraft. This exemption includes consumable supplies used
16    in the modification, refurbishment, completion,
17    replacement, repair, and maintenance of aircraft. However,
18    until January 1, 2024, this exemption excludes any
19    materials, parts, equipment, components, and consumable
20    supplies used in the modification, replacement, repair,
21    and maintenance of aircraft engines or power plants,
22    whether such engines or power plants are installed or
23    uninstalled upon any such aircraft. "Consumable supplies"
24    include, but are not limited to, adhesive, tape,
25    sandpaper, general purpose lubricants, cleaning solution,
26    latex gloves, and protective films.
		HB5775	- 91 -	LRB104 21778 HLH 37462 b
1        Beginning January 1, 2010 and continuing through
2    December 31, 2023, this exemption applies only to the sale
3    of qualifying tangible personal property to persons who
4    modify, refurbish, complete, replace, or maintain an
5    aircraft and who (i) hold an Air Agency Certificate and
6    are empowered to operate an approved repair station by the
7    Federal Aviation Administration, (ii) have a Class IV
8    Rating, and (iii) conduct operations in accordance with
9    Part 145 of the Federal Aviation Regulations. The
10    exemption does not include aircraft operated by a
11    commercial air carrier providing scheduled passenger air
12    service pursuant to authority issued under Part 121 or
13    Part 129 of the Federal Aviation Regulations. From January
14    1, 2024 through December 31, 2029, this exemption applies
15    only to the sale of qualifying tangible personal property
16    to: (A) persons who modify, refurbish, complete, repair,
17    replace, or maintain aircraft and who (i) hold an Air
18    Agency Certificate and are empowered to operate an
19    approved repair station by the Federal Aviation
20    Administration, (ii) have a Class IV Rating, and (iii)
21    conduct operations in accordance with Part 145 of the
22    Federal Aviation Regulations; and (B) persons who engage
23    in the modification, replacement, repair, and maintenance
24    of aircraft engines or power plants without regard to
25    whether or not those persons meet the qualifications of
26    item (A).
		HB5775	- 92 -	LRB104 21778 HLH 37462 b
1        The changes made to this paragraph (40) by Public Act
2    98-534 are declarative of existing law. It is the intent
3    of the General Assembly that the exemption under this
4    paragraph (40) applies continuously from January 1, 2010
5    through December 31, 2024; however, no claim for credit or
6    refund is allowed for taxes paid as a result of the
7    disallowance of this exemption on or after January 1, 2015
8    and prior to February 5, 2020 (the effective date of
9    Public Act 101-629).
10        (41) Tangible personal property sold to a
11    public-facilities corporation, as described in Section
12    11-65-10 of the Illinois Municipal Code, for purposes of
13    constructing or furnishing a municipal convention hall,
14    but only if the legal title to the municipal convention
15    hall is transferred to the municipality without any
16    further consideration by or on behalf of the municipality
17    at the time of the completion of the municipal convention
18    hall or upon the retirement or redemption of any bonds or
19    other debt instruments issued by the public-facilities
20    corporation in connection with the development of the
21    municipal convention hall. This exemption includes
22    existing public-facilities corporations as provided in
23    Section 11-65-25 of the Illinois Municipal Code. This
24    paragraph is exempt from the provisions of Section 2-70.
25        (42) Beginning January 1, 2017 and through December
26    31, 2026, menstrual pads, tampons, and menstrual cups.
		HB5775	- 93 -	LRB104 21778 HLH 37462 b
1        (43) Merchandise that is subject to the Rental
2    Purchase Agreement Occupation and Use Tax. The purchaser
3    must certify that the item is purchased to be rented
4    subject to a rental-purchase agreement, as defined in the
5    Rental-Purchase Agreement Act, and provide proof of
6    registration under the Rental Purchase Agreement
7    Occupation and Use Tax Act. This paragraph is exempt from
8    the provisions of Section 2-70.
9        (44) Qualified tangible personal property used in the
10    construction or operation of a data center that has been
11    granted a certificate of exemption by the Department of
12    Commerce and Economic Opportunity, whether that tangible
13    personal property is purchased by the owner, operator, or
14    tenant of the data center or by a contractor or
15    subcontractor of the owner, operator, or tenant. Data
16    centers that would have qualified for a certificate of
17    exemption prior to January 1, 2020 had Public Act 101-31
18    been in effect, may apply for and obtain an exemption for
19    subsequent purchases of computer equipment or enabling
20    software purchased or leased to upgrade, supplement, or
21    replace computer equipment or enabling software purchased
22    or leased in the original investment that would have
23    qualified.
24        The Department of Commerce and Economic Opportunity
25    shall grant a certificate of exemption under this item
26    (44) to qualified data centers as defined by Section
		HB5775	- 94 -	LRB104 21778 HLH 37462 b
1    605-1025 of the Department of Commerce and Economic
2    Opportunity Law of the Civil Administrative Code of
3    Illinois.
4        For the purposes of this item (44):
5            "Data center" means a building or a series of
6        buildings rehabilitated or constructed to house
7        working servers in one physical location or multiple
8        sites within the State of Illinois.
9            "Qualified tangible personal property" means:
10        electrical systems and equipment; climate control and
11        chilling equipment and systems; mechanical systems and
12        equipment; monitoring and secure systems; emergency
13        generators; hardware; computers; servers; data storage
14        devices; network connectivity equipment; racks;
15        cabinets; telecommunications cabling infrastructure;
16        raised floor systems; peripheral components or
17        systems; software; mechanical, electrical, or plumbing
18        systems; battery systems; cooling systems and towers;
19        temperature control systems; other cabling; and other
20        data center infrastructure equipment and systems
21        necessary to operate qualified tangible personal
22        property, including fixtures; and component parts of
23        any of the foregoing, including installation,
24        maintenance, repair, refurbishment, and replacement of
25        qualified tangible personal property to generate,
26        transform, transmit, distribute, or manage electricity
		HB5775	- 95 -	LRB104 21778 HLH 37462 b
1        necessary to operate qualified tangible personal
2        property; and all other tangible personal property
3        that is essential to the operations of a computer data
4        center. The term "qualified tangible personal
5        property" also includes building materials physically
6        incorporated into the qualifying data center. To
7        document the exemption allowed under this Section, the
8        retailer must obtain from the purchaser a copy of the
9        certificate of eligibility issued by the Department of
10        Commerce and Economic Opportunity.
11        This item (44) is exempt from the provisions of
12    Section 2-70.
13        (45) Beginning January 1, 2020 and through December
14    31, 2020, sales of tangible personal property made by a
15    marketplace seller over a marketplace for which tax is due
16    under this Act but for which use tax has been collected and
17    remitted to the Department by a marketplace facilitator
18    under Section 2d of the Use Tax Act are exempt from tax
19    under this Act. A marketplace seller claiming this
20    exemption shall maintain books and records demonstrating
21    that the use tax on such sales has been collected and
22    remitted by a marketplace facilitator. Marketplace sellers
23    that have properly remitted tax under this Act on such
24    sales may file a claim for credit as provided in Section 6
25    of this Act. No claim is allowed, however, for such taxes
26    for which a credit or refund has been issued to the
		HB5775	- 96 -	LRB104 21778 HLH 37462 b
1    marketplace facilitator under the Use Tax Act, or for
2    which the marketplace facilitator has filed a claim for
3    credit or refund under the Use Tax Act.
4        (46) Beginning July 1, 2022, breast pumps, breast pump
5    collection and storage supplies, and breast pump kits.
6    This item (46) is exempt from the provisions of Section
7    2-70. As used in this item (46):
8        "Breast pump" means an electrically controlled or
9    manually controlled pump device designed or marketed to be
10    used to express milk from a human breast during lactation,
11    including the pump device and any battery, AC adapter, or
12    other power supply unit that is used to power the pump
13    device and is packaged and sold with the pump device at the
14    time of sale.
15        "Breast pump collection and storage supplies" means
16    items of tangible personal property designed or marketed
17    to be used in conjunction with a breast pump to collect
18    milk expressed from a human breast and to store collected
19    milk until it is ready for consumption.
20        "Breast pump collection and storage supplies"
21    includes, but is not limited to: breast shields and breast
22    shield connectors; breast pump tubes and tubing adapters;
23    breast pump valves and membranes; backflow protectors and
24    backflow protector adaptors; bottles and bottle caps
25    specific to the operation of the breast pump; and breast
26    milk storage bags.
		HB5775	- 97 -	LRB104 21778 HLH 37462 b
1        "Breast pump collection and storage supplies" does not
2    include: (1) bottles and bottle caps not specific to the
3    operation of the breast pump; (2) breast pump travel bags
4    and other similar carrying accessories, including ice
5    packs, labels, and other similar products; (3) breast pump
6    cleaning supplies; (4) nursing bras, bra pads, breast
7    shells, and other similar products; and (5) creams,
8    ointments, and other similar products that relieve
9    breastfeeding-related symptoms or conditions of the
10    breasts or nipples, unless sold as part of a breast pump
11    kit that is pre-packaged by the breast pump manufacturer
12    or distributor.
13        "Breast pump kit" means a kit that: (1) contains no
14    more than a breast pump, breast pump collection and
15    storage supplies, a rechargeable battery for operating the
16    breast pump, a breastmilk cooler, bottle stands, ice
17    packs, and a breast pump carrying case; and (2) is
18    pre-packaged as a breast pump kit by the breast pump
19    manufacturer or distributor.
20        (47) Tangible personal property sold by or on behalf
21    of the State Treasurer pursuant to the Revised Uniform
22    Unclaimed Property Act. This item (47) is exempt from the
23    provisions of Section 2-70.
24        (48) Beginning on January 1, 2024, tangible personal
25    property purchased by an active duty member of the armed
26    forces of the United States who presents valid military
		HB5775	- 98 -	LRB104 21778 HLH 37462 b
1    identification and purchases the property using a form of
2    payment where the federal government is the payor. The
3    member of the armed forces must complete, at the point of
4    sale, a form prescribed by the Department of Revenue
5    documenting that the transaction is eligible for the
6    exemption under this paragraph. Retailers must keep the
7    form as documentation of the exemption in their records
8    for a period of not less than 6 years. "Armed forces of the
9    United States" means the United States Army, Navy, Air
10    Force, Space Force, Marine Corps, or Coast Guard. This
11    paragraph is exempt from the provisions of Section 2-70.
12        (49) Beginning July 1, 2024, home-delivered meals
13    provided to Medicare or Medicaid recipients when payment
14    is made by an intermediary, such as a Medicare
15    Administrative Contractor, a Managed Care Organization, or
16    a Medicare Advantage Organization, pursuant to a
17    government contract. This paragraph (49) is exempt from
18    the provisions of Section 2-70.
19        (50) Beginning on January 1, 2026, as further defined
20    in Section 2-10, food for human consumption that is to be
21    consumed off the premises where it is sold (other than
22    alcoholic beverages, food consisting of or infused with
23    adult use cannabis, soft drinks, candy, and food that has
24    been prepared for immediate consumption). This item (50)
25    is exempt from the provisions of Section 2-70.
26        (51) Gross receipts from the lease of the following
		HB5775	- 99 -	LRB104 21778 HLH 37462 b
1    tangible personal property:
2            (1) computer software transferred subject to a
3        license that meets the following requirements:
4                (A) it is evidenced by a written agreement
5            signed by the licensor and the customer;
6                    (i) an electronic agreement in which the
7                customer accepts the license by means of an
8                electronic signature that is verifiable and
9                can be authenticated and is attached to or
10                made part of the license will comply with this
11                requirement;
12                    (ii) a license agreement in which the
13                customer electronically accepts the terms by
14                clicking "I agree" does not comply with this
15                requirement;
16                (B) it restricts the customer's duplication
17            and use of the software;
18                (C) it prohibits the customer from licensing,
19            sublicensing, or transferring the software to a
20            third party (except to a related party) without
21            the permission and continued control of the
22            licensor;
23                (D) the licensor has a policy of providing
24            another copy at minimal or no charge if the
25            customer loses or damages the software, or of
26            permitting the licensee to make and keep an
		HB5775	- 100 -	LRB104 21778 HLH 37462 b
1            archival copy, and such policy is either stated in
2            the license agreement, supported by the licensor's
3            books and records, or supported by a notarized
4            statement made under penalties of perjury by the
5            licensor; and
6                (E) the customer must destroy or return all
7            copies of the software to the licensor at the end
8            of the license period; this provision is deemed to
9            be met, in the case of a perpetual license,
10            without being set forth in the license agreement;
11            and
12            (2) property that is subject to a tax on lease
13        receipts imposed by a home rule unit of local
14        government if the ordinance imposing that tax was
15        adopted prior to January 1, 2023.
16        (52) On and after January 1, 2027, diapers for use by 
17    infants, children, or adults. This paragraph is exempt 
18    from the provisions of Section 2-70.
19(Source: P.A. 103-9, Article 5, Section 5-20, eff. 6-7-23;
20103-9, Article 15, Section 15-20, eff. 6-7-23; 103-154, eff.
216-30-23; 103-384, eff. 1-1-24; 103-592, eff. 1-1-25; 103-605,
22eff. 7-1-24; 103-643, eff. 7-1-24; 103-746, eff. 1-1-25;
23103-781, eff. 8-5-24; 103-995, eff. 8-9-24; 104-6, eff.
246-16-25; 104-417, eff. 8-15-25.)
25    Section 99. Effective date. This Act takes effect upon
26becoming law.