Bill Text: IL HB5545 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Property Tax Code. Provides that certain property may be certified by the Department of Commerce and Economic Opportunity as containing a megaproject. Provides that a "megaproject" is a project that meets certain investment and job creation specifications. Provides that the megaproject property is eligible for an assessment freeze. Provides that megaproject property may be granted an abatement. Provides that a company that operates a megaproject shall enter into an agreement with the municipality in which the project is located and other local taxing districts to make certain special payments. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that qualified tangible personal property used in the construction or development of a megaproject is exempt from the taxes imposed under those Acts. Effective June 1, 2024.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2024-04-05 - Committee/3rd Reading Deadline Extended-Rule May 24, 2024 [HB5545 Detail]

Download: Illinois-2023-HB5545-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 HB5545 Introduced , by Rep. Jay Hoffman SYNOPSIS AS INTRODUCED:
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Amends the Property Tax Code. Provides that certain property may be certified by the Department of Commerce and Economic Opportunity as containing a megaproject. Provides that a "megaproject" is a project that meets certain investment and job creation specifications. Provides that the megaproject property is eligible for an assessment freeze. Provides that megaproject property may be granted an abatement. Provides that a company that operates a megaproject shall enter into an agreement with the municipality in which the project is located and other local taxing districts to make certain special payments. Amends the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, and the Retailers' Occupation Tax Act. Provides that qualified tangible personal property used in the construction or development of a megaproject is exempt from the taxes imposed under those Acts. Effective June 1, 2024.
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A BILL FOR
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AN ACT concerning revenue.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Use Tax Act is amended by changing Section
3-5 as follows:
(35 ILCS 105/3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by a not-for-profit arts
or cultural organization that establishes, by proof required
by the Department by rule, that it has received an exemption
under Section 501(c)(3) of the Internal Revenue Code and that
is organized and operated primarily for the presentation or

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support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after July 1, 2001 (the
effective date of Public Act 92-35), however, an entity
otherwise eligible for this exemption shall not make tax-free
purchases unless it has an active identification number issued
by the Department.
(4) Except as otherwise provided in this Act, personal
property purchased by a governmental body, by a corporation,
society, association, foundation, or institution organized and
operated exclusively for charitable, religious, or educational
purposes, or by a not-for-profit corporation, society,
association, foundation, institution, or organization that has
no compensated officers or employees and that is organized and
operated primarily for the recreation of persons 55 years of
age or older. A limited liability company may qualify for the
exemption under this paragraph only if the limited liability
company is organized and operated exclusively for educational
purposes. On and after July 1, 1987, however, no entity
otherwise eligible for this exemption shall make tax-free
purchases unless it has an active exemption identification
number issued by the Department.
(5) Until July 1, 2003, a passenger car that is a

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replacement vehicle to the extent that the purchase price of
the car is subject to the Replacement Vehicle Tax.
(6) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new
and used, and including that manufactured on special order,
certified by the purchaser to be used primarily for graphic
arts production, and including machinery and equipment
purchased for lease. Equipment includes chemicals or chemicals
acting as catalysts but only if the chemicals or chemicals
acting as catalysts effect a direct and immediate change upon
a graphic arts product. Beginning on July 1, 2017, graphic
arts machinery and equipment is included in the manufacturing
and assembling machinery and equipment exemption under
paragraph (18).
(7) Farm chemicals.
(8) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(9) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(10) A motor vehicle that is used for automobile renting,
as defined in the Automobile Renting Occupation and Use Tax
Act.

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(11) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery and
equipment under this item (11). Agricultural chemical tender
tanks and dry boxes shall include units sold separately from a
motor vehicle required to be licensed and units sold mounted
on a motor vehicle required to be licensed if the selling price
of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment, including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,
software, global positioning and mapping systems, and other

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such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals.
Beginning on January 1, 2024, farm machinery and equipment
also includes electrical power generation equipment used
primarily for production agriculture.
This item (11) is exempt from the provisions of Section
3-90.
(12) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common carrier, certified by the carrier
to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a flight
destined for or returning from a location or locations outside
the United States without regard to previous or subsequent
domestic stopovers.
Beginning July 1, 2013, fuel and petroleum products sold
to or used by an air carrier, certified by the carrier to be
used for consumption, shipment, or storage in the conduct of
its business as an air common carrier, for a flight that (i) is
engaged in foreign trade or is engaged in trade between the
United States and any of its possessions and (ii) transports

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at least one individual or package for hire from the city of
origination to the city of final destination on the same
aircraft, without regard to a change in the flight number of
that aircraft.
(13) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption of
food and beverages purchased at retail from a retailer, to the
extent that the proceeds of the service charge are in fact
turned over as tips or as a substitute for tips to the
employees who participate directly in preparing, serving,
hosting or cleaning up the food or beverage function with
respect to which the service charge is imposed.
(14) Until July 1, 2003, oil field exploration, drilling,
and production equipment, including (i) rigs and parts of
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
pipe and tubular goods, including casing and drill strings,
(iii) pumps and pump-jack units, (iv) storage tanks and flow
lines, (v) any individual replacement part for oil field
exploration, drilling, and production equipment, and (vi)
machinery and equipment purchased for lease; but excluding
motor vehicles required to be registered under the Illinois
Vehicle Code.
(15) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the purchaser
to be used primarily for photoprocessing, and including

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photoprocessing machinery and equipment purchased for lease.
(16) Until July 1, 2028, coal and aggregate exploration,
mining, off-highway hauling, processing, maintenance, and
reclamation equipment, including replacement parts and
equipment, and including equipment purchased for lease, but
excluding motor vehicles required to be registered under the
Illinois Vehicle Code. The changes made to this Section by
Public Act 97-767 apply on and after July 1, 2003, but no claim
for credit or refund is allowed on or after August 16, 2013
(the effective date of Public Act 98-456) for such taxes paid
during the period beginning July 1, 2003 and ending on August
16, 2013 (the effective date of Public Act 98-456).
(17) Until July 1, 2003, distillation machinery and
equipment, sold as a unit or kit, assembled or installed by the
retailer, certified by the user to be used only for the
production of ethyl alcohol that will be used for consumption
as motor fuel or as a component of motor fuel for the personal
use of the user, and not subject to sale or resale.
(18) Manufacturing and assembling machinery and equipment
used primarily in the process of manufacturing or assembling
tangible personal property for wholesale or retail sale or
lease, whether that sale or lease is made directly by the
manufacturer or by some other person, whether the materials
used in the process are owned by the manufacturer or some other
person, or whether that sale or lease is made apart from or as
an incident to the seller's engaging in the service occupation

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of producing machines, tools, dies, jigs, patterns, gauges, or
other similar items of no commercial value on special order
for a particular purchaser. The exemption provided by this
paragraph (18) includes production related tangible personal
property, as defined in Section 3-50, purchased on or after
July 1, 2019. The exemption provided by this paragraph (18)
does not include machinery and equipment used in (i) the
generation of electricity for wholesale or retail sale; (ii)
the generation or treatment of natural or artificial gas for
wholesale or retail sale that is delivered to customers
through pipes, pipelines, or mains; or (iii) the treatment of
water for wholesale or retail sale that is delivered to
customers through pipes, pipelines, or mains. The provisions
of Public Act 98-583 are declaratory of existing law as to the
meaning and scope of this exemption. Beginning on July 1,
2017, the exemption provided by this paragraph (18) includes,
but is not limited to, graphic arts machinery and equipment,
as defined in paragraph (6) of this Section.
(19) Personal property delivered to a purchaser or
purchaser's donee inside Illinois when the purchase order for
that personal property was received by a florist located
outside Illinois who has a florist located inside Illinois
deliver the personal property.
(20) Semen used for artificial insemination of livestock
for direct agricultural production.
(21) Horses, or interests in horses, registered with and

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meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (21) is exempt from the
provisions of Section 3-90, and the exemption provided for
under this item (21) applies for all periods beginning May 30,
1995, but no claim for credit or refund is allowed on or after
January 1, 2008 for such taxes paid during the period
beginning May 30, 2000 and ending on January 1, 2008.
(22) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is leased
in a manner that does not qualify for this exemption or is used
in any other non-exempt manner, the lessor shall be liable for
the tax imposed under this Act or the Service Use Tax Act, as
the case may be, based on the fair market value of the property
at the time the non-qualifying use occurs. No lessor shall
collect or attempt to collect an amount (however designated)
that purports to reimburse that lessor for the tax imposed by

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

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for any reason, the lessor is liable to pay that amount to the
Department.
(24) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally declared
disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to a
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(25) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including, but not limited to, municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities located
in the declared disaster area within 6 months after the
disaster.
(26) Beginning July 1, 1999, game or game birds purchased

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at a "game breeding and hunting preserve area" as that term is
used in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-90.
(27) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the
Department to be organized and operated exclusively for
educational purposes. For purposes of this exemption, "a
corporation, limited liability company, society, association,
foundation, or institution organized and operated exclusively
for educational purposes" means all tax-supported public
schools, private schools that offer systematic instruction in
useful branches of learning by methods common to public
schools and that compare favorably in their scope and
intensity with the course of study presented in tax-supported
schools, and vocational or technical schools or institutes
organized and operated exclusively to provide a course of
study of not less than 6 weeks duration and designed to prepare
individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.
(28) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary school,
a group of those schools, or one or more school districts if

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the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that profits
from the sale to the fundraising entity. This paragraph is
exempt from the provisions of Section 3-90.
(29) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and
other items, and replacement parts for these machines.
Beginning January 1, 2002 and through June 30, 2003, machines
and parts for machines used in commercial, coin-operated
amusement and vending business if a use or occupation tax is
paid on the gross receipts derived from the use of the
commercial, coin-operated amusement and vending machines. This
paragraph is exempt from the provisions of Section 3-90.
(30) Beginning January 1, 2001 and through June 30, 2016,
food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages,
soft drinks, and food that has been prepared for immediate
consumption) and prescription and nonprescription medicines,
drugs, medical appliances, and insulin, urine testing

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materials, syringes, and needles used by diabetics, for human
use, when purchased for use by a person receiving medical
assistance under Article V of the Illinois Public Aid Code who
resides in a licensed long-term care facility, as defined in
the Nursing Home Care Act, or in a licensed facility as defined
in the ID/DD Community Care Act, the MC/DD Act, or the
Specialized Mental Health Rehabilitation Act of 2013.
(31) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), computers and communications equipment
utilized for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients
purchased by a lessor who leases the equipment, under a lease
of one year or longer executed or in effect at the time the
lessor would otherwise be subject to the tax imposed by this
Act, to a hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is leased
in a manner that does not qualify for this exemption or is used
in any other nonexempt manner, the lessor shall be liable for
the tax imposed under this Act or the Service Use Tax Act, as
the case may be, based on the fair market value of the property
at the time the nonqualifying use occurs. No lessor shall
collect or attempt to collect an amount (however designated)
that purports to reimburse that lessor for the tax imposed by
this Act or the Service Use Tax Act, as the case may be, if the
tax has not been paid by the lessor. If a lessor improperly

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collects any such amount from the lessee, the lessee shall
have a legal right to claim a refund of that amount from the
lessor. If, however, that amount is not refunded to the lessee
for any reason, the lessor is liable to pay that amount to the
Department. This paragraph is exempt from the provisions of
Section 3-90.
(32) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), personal property purchased by a lessor
who leases the property, under a lease of one year or longer
executed or in effect at the time the lessor would otherwise be
subject to the tax imposed by this Act, to a governmental body
that has been issued an active sales tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the property is leased
in a manner that does not qualify for this exemption or used in
any other nonexempt manner, the lessor shall be liable for the
tax imposed under this Act or the Service Use Tax Act, as the
case may be, based on the fair market value of the property at
the time the nonqualifying use occurs. No lessor shall collect
or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Service Use Tax Act, as the case may be, if the tax
has not been paid by the lessor. If a lessor improperly
collects any such amount from the lessee, the lessee shall
have a legal right to claim a refund of that amount from the
lessor. If, however, that amount is not refunded to the lessee

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for any reason, the lessor is liable to pay that amount to the
Department. This paragraph is exempt from the provisions of
Section 3-90.
(33) On and after July 1, 2003 and through June 30, 2004,
the use in this State of motor vehicles of the second division
with a gross vehicle weight in excess of 8,000 pounds and that
are subject to the commercial distribution fee imposed under
Section 3-815.1 of the Illinois Vehicle Code. Beginning on
July 1, 2004 and through June 30, 2005, the use in this State
of motor vehicles of the second division: (i) with a gross
vehicle weight rating in excess of 8,000 pounds; (ii) that are
subject to the commercial distribution fee imposed under
Section 3-815.1 of the Illinois Vehicle Code; and (iii) that
are primarily used for commercial purposes. Through June 30,
2005, this exemption applies to repair and replacement parts
added after the initial purchase of such a motor vehicle if
that motor vehicle is used in a manner that would qualify for
the rolling stock exemption otherwise provided for in this
Act. For purposes of this paragraph, the term "used for
commercial purposes" means the transportation of persons or
property in furtherance of any commercial or industrial
enterprise, whether for-hire or not.
(34) Beginning January 1, 2008, tangible personal property
used in the construction or maintenance of a community water
supply, as defined under Section 3.145 of the Environmental
Protection Act, that is operated by a not-for-profit

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corporation that holds a valid water supply permit issued
under Title IV of the Environmental Protection Act. This
paragraph is exempt from the provisions of Section 3-90.
(35) Beginning January 1, 2010 and continuing through
December 31, 2029, materials, parts, equipment, components,
and furnishings incorporated into or upon an aircraft as part
of the modification, refurbishment, completion, replacement,
repair, or maintenance of the aircraft. This exemption
includes consumable supplies used in the modification,
refurbishment, completion, replacement, repair, and
maintenance of aircraft. However, until January 1, 2024, this
exemption excludes any materials, parts, equipment,
components, and consumable supplies used in the modification,
replacement, repair, and maintenance of aircraft engines or
power plants, whether such engines or power plants are
installed or uninstalled upon any such aircraft. "Consumable
supplies" include, but are not limited to, adhesive, tape,
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films.
Beginning January 1, 2010 and continuing through December
31, 2023, this exemption applies only to the use of qualifying
tangible personal property by persons who modify, refurbish,
complete, repair, replace, or maintain aircraft and who (i)
hold an Air Agency Certificate and are empowered to operate an
approved repair station by the Federal Aviation
Administration, (ii) have a Class IV Rating, and (iii) conduct

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operations in accordance with Part 145 of the Federal Aviation
Regulations. From January 1, 2024 through December 31, 2029,
this exemption applies only to the use of qualifying tangible
personal property by: (A) persons who modify, refurbish,
complete, repair, replace, or maintain aircraft and who (i)
hold an Air Agency Certificate and are empowered to operate an
approved repair station by the Federal Aviation
Administration, (ii) have a Class IV Rating, and (iii) conduct
operations in accordance with Part 145 of the Federal Aviation
Regulations; and (B) persons who engage in the modification,
replacement, repair, and maintenance of aircraft engines or
power plants without regard to whether or not those persons
meet the qualifications of item (A).
The exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part
129 of the Federal Aviation Regulations. The changes made to
this paragraph (35) by Public Act 98-534 are declarative of
existing law. It is the intent of the General Assembly that the
exemption under this paragraph (35) applies continuously from
January 1, 2010 through December 31, 2024; however, no claim
for credit or refund is allowed for taxes paid as a result of
the disallowance of this exemption on or after January 1, 2015
and prior to February 5, 2020 (the effective date of Public Act
101-629).
(36) Tangible personal property purchased by a

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public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall, but
only if the legal title to the municipal convention hall is
transferred to the municipality without any further
consideration by or on behalf of the municipality at the time
of the completion of the municipal convention hall or upon the
retirement or redemption of any bonds or other debt
instruments issued by the public-facilities corporation in
connection with the development of the municipal convention
hall. This exemption includes existing public-facilities
corporations as provided in Section 11-65-25 of the Illinois
Municipal Code. This paragraph is exempt from the provisions
of Section 3-90.
(37) Beginning January 1, 2017 and through December 31,
2026, menstrual pads, tampons, and menstrual cups.
(38) Merchandise that is subject to the Rental Purchase
Agreement Occupation and Use Tax. The purchaser must certify
that the item is purchased to be rented subject to a
rental-purchase rental purchase agreement, as defined in the
Rental-Purchase Rental Purchase Agreement Act, and provide
proof of registration under the Rental Purchase Agreement
Occupation and Use Tax Act. This paragraph is exempt from the
provisions of Section 3-90.
(39) Tangible personal property purchased by a purchaser
who is exempt from the tax imposed by this Act by operation of

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federal law. This paragraph is exempt from the provisions of
Section 3-90.
(40) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or subcontractor
of the owner, operator, or tenant. Data centers that would
have qualified for a certificate of exemption prior to January
1, 2020 had Public Act 101-31 been in effect may apply for and
obtain an exemption for subsequent purchases of computer
equipment or enabling software purchased or leased to upgrade,
supplement, or replace computer equipment or enabling software
purchased or leased in the original investment that would have
qualified.
The Department of Commerce and Economic Opportunity shall
grant a certificate of exemption under this item (40) to
qualified data centers as defined by Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois.
For the purposes of this item (40):
"Data center" means a building or a series of
buildings rehabilitated or constructed to house working
servers in one physical location or multiple sites within
the State of Illinois.

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"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. The term "qualified tangible personal
property" also includes building materials physically
incorporated into in to the qualifying data center. To
document the exemption allowed under this Section, the
retailer must obtain from the purchaser a copy of the
certificate of eligibility issued by the Department of

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Commerce and Economic Opportunity.
This item (40) is exempt from the provisions of Section
3-90.
(41) Beginning July 1, 2022, breast pumps, breast pump
collection and storage supplies, and breast pump kits. This
item (41) is exempt from the provisions of Section 3-90. As
used in this item (41):
"Breast pump" means an electrically controlled or
manually controlled pump device designed or marketed to be
used to express milk from a human breast during lactation,
including the pump device and any battery, AC adapter, or
other power supply unit that is used to power the pump
device and is packaged and sold with the pump device at the
time of sale.
"Breast pump collection and storage supplies" means
items of tangible personal property designed or marketed
to be used in conjunction with a breast pump to collect
milk expressed from a human breast and to store collected
milk until it is ready for consumption.
"Breast pump collection and storage supplies"
includes, but is not limited to: breast shields and breast
shield connectors; breast pump tubes and tubing adapters;
breast pump valves and membranes; backflow protectors and
backflow protector adaptors; bottles and bottle caps
specific to the operation of the breast pump; and breast
milk storage bags.

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"Breast pump collection and storage supplies" does not
include: (1) bottles and bottle caps not specific to the
operation of the breast pump; (2) breast pump travel bags
and other similar carrying accessories, including ice
packs, labels, and other similar products; (3) breast pump
cleaning supplies; (4) nursing bras, bra pads, breast
shells, and other similar products; and (5) creams,
ointments, and other similar products that relieve
breastfeeding-related symptoms or conditions of the
breasts or nipples, unless sold as part of a breast pump
kit that is pre-packaged by the breast pump manufacturer
or distributor.
"Breast pump kit" means a kit that: (1) contains no
more than a breast pump, breast pump collection and
storage supplies, a rechargeable battery for operating the
breast pump, a breastmilk cooler, bottle stands, ice
packs, and a breast pump carrying case; and (2) is
pre-packaged as a breast pump kit by the breast pump
manufacturer or distributor.
(42) Tangible personal property sold by or on behalf of
the State Treasurer pursuant to the Revised Uniform Unclaimed
Property Act. This item (42) is exempt from the provisions of
Section 3-90.
(43) Beginning on January 1, 2024, tangible personal
property purchased by an active duty member of the armed
forces of the United States who presents valid military

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identification and purchases the property using a form of
payment where the federal government is the payor. The member
of the armed forces must complete, at the point of sale, a form
prescribed by the Department of Revenue documenting that the
transaction is eligible for the exemption under this
paragraph. Retailers must keep the form as documentation of
the exemption in their records for a period of not less than 6
years. "Armed forces of the United States" means the United
States Army, Navy, Air Force, Marine Corps, or Coast Guard.
This paragraph is exempt from the provisions of Section 3-90.
(44) Qualified tangible personal property that is (i) used
in the construction or development of a megaproject for which
a certificate has been issued prior to December 31, 2030 by the
Department of Commerce and Economic Opportunity under Division
22 of Article 10 of the Property Tax Code and (ii) purchased
prior to the Department's issuance of the megaproject
certificate or during the investment period, whether that
tangible personal property is purchased by the owner,
operator, or tenant of the megaproject or by a contractor or
subcontractor of the owner, operator, or tenant.
As used in this item (44):
"Facility" means a building or series of buildings.
"Investment period" means the period ending 7 years after
the date on which the Department of Commerce and Economic
Opportunity issues the megaproject certificate, or such other
longer period of time as the local municipality, local taxing

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districts, and the company may agree to, not to exceed an
initial period of 10 years.
"Megaproject" means a facility that is rehabilitated or
constructed as described in Division 22 of Article 10 of the
Property Tax Code.
"Qualified tangible personal property" means all tangible
personal property that is essential to the construction or
development of a megaproject, including, but not limited to:
electrical systems and equipment; climate control and chilling
equipment and systems; mechanical systems and equipment;
monitoring and secure systems; emergency generators; hardware;
computers; servers; data storage devices; network connectivity
equipment; racks; cabinets; telecommunications cabling
infrastructure; raised floor systems; peripheral components or
systems; software; mechanical, electrical, or plumbing
systems; battery systems; cooling systems and towers;
temperature control systems; other cabling; and other
infrastructure, equipment, and systems necessary to operate
qualified tangible personal property, including fixtures; and
component parts of those items, including installation,
maintenance, repair, refurbishment, and replacement of
qualified tangible personal property to generate, transform,
transmit, distribute, or manage electricity necessary to
operate qualified tangible personal property. The term
"qualified tangible personal property" also includes building
materials to be incorporated into the megaproject. To document

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the exemption allowed under this Section, the retailer,
contractor, subcontractor, or supplier must obtain from the
purchaser a copy of the certificate issued by the Department
of Commerce and Economic Opportunity for the megaproject as
described and defined in Division 22 of Article 10 of the
Property Tax Code.
(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
Section 70-5, eff. 4-19-22; 102-700, Article 75, Section 75-5,
eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
Section 5-5, eff. 6-7-23; 103-9, Article 15, Section 15-5,
eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
revised 12-12-23.)
Section 10. The Service Use Tax Act is amended by changing
Section 3-5 as follows:
(35 ILCS 110/3-5)
Sec. 3-5. Exemptions. Use of the following tangible
personal property is exempt from the tax imposed by this Act:
(1) Personal property purchased from a corporation,
society, association, foundation, institution, or
organization, other than a limited liability company, that is
organized and operated as a not-for-profit service enterprise
for the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for the
purpose of resale by the enterprise.

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(2) Personal property purchased by a non-profit Illinois
county fair association for use in conducting, operating, or
promoting the county fair.
(3) Personal property purchased by a not-for-profit arts
or cultural organization that establishes, by proof required
by the Department by rule, that it has received an exemption
under Section 501(c)(3) of the Internal Revenue Code and that
is organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after July 1, 2001 (the
effective date of Public Act 92-35), however, an entity
otherwise eligible for this exemption shall not make tax-free
purchases unless it has an active identification number issued
by the Department.
(4) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(5) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and
equipment, including repair and replacement parts, both new
and used, and including that manufactured on special order or

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purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a graphic arts product. Beginning on
July 1, 2017, graphic arts machinery and equipment is included
in the manufacturing and assembling machinery and equipment
exemption under Section 2 of this Act.
(6) Personal property purchased from a teacher-sponsored
student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or
overwintering plants shall be considered farm machinery and
equipment under this item (7). Agricultural chemical tender

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tanks and dry boxes shall include units sold separately from a
motor vehicle required to be licensed and units sold mounted
on a motor vehicle required to be licensed if the selling price
of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment, including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,
software, global positioning and mapping systems, and other
such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals.
Beginning on January 1, 2024, farm machinery and equipment
also includes electrical power generation equipment used
primarily for production agriculture.
This item (7) is exempt from the provisions of Section
3-75.
(8) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common carrier, certified by the carrier

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to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a flight
destined for or returning from a location or locations outside
the United States without regard to previous or subsequent
domestic stopovers.
Beginning July 1, 2013, fuel and petroleum products sold
to or used by an air carrier, certified by the carrier to be
used for consumption, shipment, or storage in the conduct of
its business as an air common carrier, for a flight that (i) is
engaged in foreign trade or is engaged in trade between the
United States and any of its possessions and (ii) transports
at least one individual or package for hire from the city of
origination to the city of final destination on the same
aircraft, without regard to a change in the flight number of
that aircraft.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption of
food and beverages acquired as an incident to the purchase of a
service from a serviceman, to the extent that the proceeds of
the service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(10) Until July 1, 2003, oil field exploration, drilling,
and production equipment, including (i) rigs and parts of

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rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
pipe and tubular goods, including casing and drill strings,
(iii) pumps and pump-jack units, (iv) storage tanks and flow
lines, (v) any individual replacement part for oil field
exploration, drilling, and production equipment, and (vi)
machinery and equipment purchased for lease; but excluding
motor vehicles required to be registered under the Illinois
Vehicle Code.
(11) Proceeds from the sale of photoprocessing machinery
and equipment, including repair and replacement parts, both
new and used, including that manufactured on special order,
certified by the purchaser to be used primarily for
photoprocessing, and including photoprocessing machinery and
equipment purchased for lease.
(12) Until July 1, 2028, coal and aggregate exploration,
mining, off-highway hauling, processing, maintenance, and
reclamation equipment, including replacement parts and
equipment, and including equipment purchased for lease, but
excluding motor vehicles required to be registered under the
Illinois Vehicle Code. The changes made to this Section by
Public Act 97-767 apply on and after July 1, 2003, but no claim
for credit or refund is allowed on or after August 16, 2013
(the effective date of Public Act 98-456) for such taxes paid
during the period beginning July 1, 2003 and ending on August
16, 2013 (the effective date of Public Act 98-456).
(13) Semen used for artificial insemination of livestock

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for direct agricultural production.
(14) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (14) is exempt from the
provisions of Section 3-75, and the exemption provided for
under this item (14) applies for all periods beginning May 30,
1995, but no claim for credit or refund is allowed on or after
January 1, 2008 (the effective date of Public Act 95-88) for
such taxes paid during the period beginning May 30, 2000 and
ending on January 1, 2008 (the effective date of Public Act
95-88).
(15) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a
lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time the lessor would
otherwise be subject to the tax imposed by this Act, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is leased
in a manner that does not qualify for this exemption or is used
in any other non-exempt manner, the lessor shall be liable for
the tax imposed under this Act or the Use Tax Act, as the case

HB5545 - 33 - LRB103 38926 HLH 69063 b
may be, based on the fair market value of the property at the
time the non-qualifying use occurs. No lessor shall collect or
attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by this
Act or the Use Tax Act, as the case may be, if the tax has not
been paid by the lessor. If a lessor improperly collects any
such amount from the lessee, the lessee shall have a legal
right to claim a refund of that amount from the lessor. If,
however, that amount is not refunded to the lessee for any
reason, the lessor is liable to pay that amount to the
Department.
(16) Personal property purchased by a lessor who leases
the property, under a lease of one year or longer executed or
in effect at the time the lessor would otherwise be subject to
the tax imposed by this Act, to a governmental body that has
been issued an active tax exemption identification number by
the Department under Section 1g of the Retailers' Occupation
Tax Act. If the property is leased in a manner that does not
qualify for this exemption or is used in any other non-exempt
manner, the lessor shall be liable for the tax imposed under
this Act or the Use Tax Act, as the case may be, based on the
fair market value of the property at the time the
non-qualifying use occurs. No lessor shall collect or attempt
to collect an amount (however designated) that purports to
reimburse that lessor for the tax imposed by this Act or the
Use Tax Act, as the case may be, if the tax has not been paid

HB5545 - 34 - LRB103 38926 HLH 69063 b
by the lessor. If a lessor improperly collects any such amount
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that
amount is not refunded to the lessee for any reason, the lessor
is liable to pay that amount to the Department.
(17) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally declared
disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to a
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including, but not limited to, municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities located

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in the declared disaster area within 6 months after the
disaster.
(19) Beginning July 1, 1999, game or game birds purchased
at a "game breeding and hunting preserve area" as that term is
used in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-75.
(20) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the
Department to be organized and operated exclusively for
educational purposes. For purposes of this exemption, "a
corporation, limited liability company, society, association,
foundation, or institution organized and operated exclusively
for educational purposes" means all tax-supported public
schools, private schools that offer systematic instruction in
useful branches of learning by methods common to public
schools and that compare favorably in their scope and
intensity with the course of study presented in tax-supported
schools, and vocational or technical schools or institutes
organized and operated exclusively to provide a course of
study of not less than 6 weeks duration and designed to prepare
individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.
(21) Beginning January 1, 2000, personal property,

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including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary school,
a group of those schools, or one or more school districts if
the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that profits
from the sale to the fundraising entity. This paragraph is
exempt from the provisions of Section 3-75.
(22) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and
other items, and replacement parts for these machines.
Beginning January 1, 2002 and through June 30, 2003, machines
and parts for machines used in commercial, coin-operated
amusement and vending business if a use or occupation tax is
paid on the gross receipts derived from the use of the
commercial, coin-operated amusement and vending machines. This
paragraph is exempt from the provisions of Section 3-75.
(23) Beginning August 23, 2001 and through June 30, 2016,
food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages,

HB5545 - 37 - LRB103 38926 HLH 69063 b
soft drinks, and food that has been prepared for immediate
consumption) and prescription and nonprescription medicines,
drugs, medical appliances, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, when purchased for use by a person receiving medical
assistance under Article V of the Illinois Public Aid Code who
resides in a licensed long-term care facility, as defined in
the Nursing Home Care Act, or in a licensed facility as defined
in the ID/DD Community Care Act, the MC/DD Act, or the
Specialized Mental Health Rehabilitation Act of 2013.
(24) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), computers and communications equipment
utilized for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients
purchased by a lessor who leases the equipment, under a lease
of one year or longer executed or in effect at the time the
lessor would otherwise be subject to the tax imposed by this
Act, to a hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. If the equipment is leased
in a manner that does not qualify for this exemption or is used
in any other nonexempt manner, the lessor shall be liable for
the tax imposed under this Act or the Use Tax Act, as the case
may be, based on the fair market value of the property at the
time the nonqualifying use occurs. No lessor shall collect or
attempt to collect an amount (however designated) that

HB5545 - 38 - LRB103 38926 HLH 69063 b
purports to reimburse that lessor for the tax imposed by this
Act or the Use Tax Act, as the case may be, if the tax has not
been paid by the lessor. If a lessor improperly collects any
such amount from the lessee, the lessee shall have a legal
right to claim a refund of that amount from the lessor. If,
however, that amount is not refunded to the lessee for any
reason, the lessor is liable to pay that amount to the
Department. This paragraph is exempt from the provisions of
Section 3-75.
(25) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), personal property purchased by a lessor
who leases the property, under a lease of one year or longer
executed or in effect at the time the lessor would otherwise be
subject to the tax imposed by this Act, to a governmental body
that has been issued an active tax exemption identification
number by the Department under Section 1g of the Retailers'
Occupation Tax Act. If the property is leased in a manner that
does not qualify for this exemption or is used in any other
nonexempt manner, the lessor shall be liable for the tax
imposed under this Act or the Use Tax Act, as the case may be,
based on the fair market value of the property at the time the
nonqualifying use occurs. No lessor shall collect or attempt
to collect an amount (however designated) that purports to
reimburse that lessor for the tax imposed by this Act or the
Use Tax Act, as the case may be, if the tax has not been paid
by the lessor. If a lessor improperly collects any such amount

HB5545 - 39 - LRB103 38926 HLH 69063 b
from the lessee, the lessee shall have a legal right to claim a
refund of that amount from the lessor. If, however, that
amount is not refunded to the lessee for any reason, the lessor
is liable to pay that amount to the Department. This paragraph
is exempt from the provisions of Section 3-75.
(26) Beginning January 1, 2008, tangible personal property
used in the construction or maintenance of a community water
supply, as defined under Section 3.145 of the Environmental
Protection Act, that is operated by a not-for-profit
corporation that holds a valid water supply permit issued
under Title IV of the Environmental Protection Act. This
paragraph is exempt from the provisions of Section 3-75.
(27) Beginning January 1, 2010 and continuing through
December 31, 2029, materials, parts, equipment, components,
and furnishings incorporated into or upon an aircraft as part
of the modification, refurbishment, completion, replacement,
repair, or maintenance of the aircraft. This exemption
includes consumable supplies used in the modification,
refurbishment, completion, replacement, repair, and
maintenance of aircraft. However, until January 1, 2024, this
exemption excludes any materials, parts, equipment,
components, and consumable supplies used in the modification,
replacement, repair, and maintenance of aircraft engines or
power plants, whether such engines or power plants are
installed or uninstalled upon any such aircraft. "Consumable
supplies" include, but are not limited to, adhesive, tape,

HB5545 - 40 - LRB103 38926 HLH 69063 b
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films.
Beginning January 1, 2010 and continuing through December
31, 2023, this exemption applies only to the use of qualifying
tangible personal property transferred incident to the
modification, refurbishment, completion, replacement, repair,
or maintenance of aircraft by persons who (i) hold an Air
Agency Certificate and are empowered to operate an approved
repair station by the Federal Aviation Administration, (ii)
have a Class IV Rating, and (iii) conduct operations in
accordance with Part 145 of the Federal Aviation Regulations.
From January 1, 2024 through December 31, 2029, this exemption
applies only to the use of qualifying tangible personal
property by: (A) persons who modify, refurbish, complete,
repair, replace, or maintain aircraft and who (i) hold an Air
Agency Certificate and are empowered to operate an approved
repair station by the Federal Aviation Administration, (ii)
have a Class IV Rating, and (iii) conduct operations in
accordance with Part 145 of the Federal Aviation Regulations;
and (B) persons who engage in the modification, replacement,
repair, and maintenance of aircraft engines or power plants
without regard to whether or not those persons meet the
qualifications of item (A).
The exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part

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129 of the Federal Aviation Regulations. The changes made to
this paragraph (27) by Public Act 98-534 are declarative of
existing law. It is the intent of the General Assembly that the
exemption under this paragraph (27) applies continuously from
January 1, 2010 through December 31, 2024; however, no claim
for credit or refund is allowed for taxes paid as a result of
the disallowance of this exemption on or after January 1, 2015
and prior to February 5, 2020 (the effective date of Public Act
101-629).
(28) Tangible personal property purchased by a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall, but
only if the legal title to the municipal convention hall is
transferred to the municipality without any further
consideration by or on behalf of the municipality at the time
of the completion of the municipal convention hall or upon the
retirement or redemption of any bonds or other debt
instruments issued by the public-facilities corporation in
connection with the development of the municipal convention
hall. This exemption includes existing public-facilities
corporations as provided in Section 11-65-25 of the Illinois
Municipal Code. This paragraph is exempt from the provisions
of Section 3-75.
(29) Beginning January 1, 2017 and through December 31,
2026, menstrual pads, tampons, and menstrual cups.

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(30) Tangible personal property transferred to a purchaser
who is exempt from the tax imposed by this Act by operation of
federal law. This paragraph is exempt from the provisions of
Section 3-75.
(31) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or subcontractor
of the owner, operator, or tenant. Data centers that would
have qualified for a certificate of exemption prior to January
1, 2020 had Public Act 101-31 been in effect, may apply for and
obtain an exemption for subsequent purchases of computer
equipment or enabling software purchased or leased to upgrade,
supplement, or replace computer equipment or enabling software
purchased or leased in the original investment that would have
qualified.
The Department of Commerce and Economic Opportunity shall
grant a certificate of exemption under this item (31) to
qualified data centers as defined by Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois.
For the purposes of this item (31):
"Data center" means a building or a series of
buildings rehabilitated or constructed to house working

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servers in one physical location or multiple sites within
the State of Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. The term "qualified tangible personal
property" also includes building materials physically
incorporated into in to the qualifying data center. To
document the exemption allowed under this Section, the

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retailer must obtain from the purchaser a copy of the
certificate of eligibility issued by the Department of
Commerce and Economic Opportunity.
This item (31) is exempt from the provisions of Section
3-75.
(32) Beginning July 1, 2022, breast pumps, breast pump
collection and storage supplies, and breast pump kits. This
item (32) is exempt from the provisions of Section 3-75. As
used in this item (32):
"Breast pump" means an electrically controlled or
manually controlled pump device designed or marketed to be
used to express milk from a human breast during lactation,
including the pump device and any battery, AC adapter, or
other power supply unit that is used to power the pump
device and is packaged and sold with the pump device at the
time of sale.
"Breast pump collection and storage supplies" means
items of tangible personal property designed or marketed
to be used in conjunction with a breast pump to collect
milk expressed from a human breast and to store collected
milk until it is ready for consumption.
"Breast pump collection and storage supplies"
includes, but is not limited to: breast shields and breast
shield connectors; breast pump tubes and tubing adapters;
breast pump valves and membranes; backflow protectors and
backflow protector adaptors; bottles and bottle caps

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specific to the operation of the breast pump; and breast
milk storage bags.
"Breast pump collection and storage supplies" does not
include: (1) bottles and bottle caps not specific to the
operation of the breast pump; (2) breast pump travel bags
and other similar carrying accessories, including ice
packs, labels, and other similar products; (3) breast pump
cleaning supplies; (4) nursing bras, bra pads, breast
shells, and other similar products; and (5) creams,
ointments, and other similar products that relieve
breastfeeding-related symptoms or conditions of the
breasts or nipples, unless sold as part of a breast pump
kit that is pre-packaged by the breast pump manufacturer
or distributor.
"Breast pump kit" means a kit that: (1) contains no
more than a breast pump, breast pump collection and
storage supplies, a rechargeable battery for operating the
breast pump, a breastmilk cooler, bottle stands, ice
packs, and a breast pump carrying case; and (2) is
pre-packaged as a breast pump kit by the breast pump
manufacturer or distributor.
(33) Tangible personal property sold by or on behalf of
the State Treasurer pursuant to the Revised Uniform Unclaimed
Property Act. This item (33) is exempt from the provisions of
Section 3-75.
(34) Beginning on January 1, 2024, tangible personal

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property purchased by an active duty member of the armed
forces of the United States who presents valid military
identification and purchases the property using a form of
payment where the federal government is the payor. The member
of the armed forces must complete, at the point of sale, a form
prescribed by the Department of Revenue documenting that the
transaction is eligible for the exemption under this
paragraph. Retailers must keep the form as documentation of
the exemption in their records for a period of not less than 6
years. "Armed forces of the United States" means the United
States Army, Navy, Air Force, Marine Corps, or Coast Guard.
This paragraph is exempt from the provisions of Section 3-75.
(35) Qualified tangible personal property that is (i) used
in the construction or development of a megaproject for which
a certificate has been issued prior to December 31, 2030 by the
Department of Commerce and Economic Opportunity under Division
22 of Article 10 of the Property Tax Code and (ii) purchased
prior to the Department's issuance of the megaproject
certificate or during the investment period, whether that
tangible personal property is purchased by the owner,
operator, or tenant of the megaproject or by a contractor or
subcontractor of the owner, operator, or tenant.
As used in this item (35):
"Facility" means a building or series of buildings.
"Investment period" means the period ending 7 years after
the date on which the Department of Commerce and Economic

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Opportunity issues the megaproject certificate, or such other
longer period of time as the local municipality, local taxing
districts, and the company may agree to, not to exceed an
initial period of 10 years.
"Megaproject" means a facility that is rehabilitated or
constructed as described in Division 22 of Article 10 of the
Property Tax Code.
"Qualified tangible personal property" means all tangible
personal property that is essential to the construction or
development of a megaproject, including, but not limited to:
electrical systems and equipment; climate control and chilling
equipment and systems; mechanical systems and equipment;
monitoring and secure systems; emergency generators; hardware;
computers; servers; data storage devices; network connectivity
equipment; racks; cabinets; telecommunications cabling
infrastructure; raised floor systems; peripheral components or
systems; software; mechanical, electrical, or plumbing
systems; battery systems; cooling systems and towers;
temperature control systems; other cabling; and other
infrastructure, equipment, and systems necessary to operate
qualified tangible personal property, including fixtures; and
component parts of those items, including installation,
maintenance, repair, refurbishment, and replacement of
qualified tangible personal property to generate, transform,
transmit, distribute, or manage electricity necessary to
operate qualified tangible personal property. The term

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"qualified tangible personal property" also includes building
materials to be incorporated into the megaproject. To document
the exemption allowed under this Section, the retailer,
contractor, subcontractor, or supplier must obtain from the
purchaser a copy of the certificate issued by the Department
of Commerce and Economic Opportunity for the megaproject as
described and defined in Division 22 of Article 10 of the
Property Tax Code.
(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
Section 70-10, eff. 4-19-22; 102-700, Article 75, Section
75-10, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,
Section 5-10, eff. 6-7-23; 103-9, Article 15, Section 15-10,
eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
revised 12-12-23.)
Section 15. The Service Occupation Tax Act is amended by
changing Section 3-5 as follows:
(35 ILCS 115/3-5)
Sec. 3-5. Exemptions. The following tangible personal
property is exempt from the tax imposed by this Act:
(1) Personal property sold by a corporation, society,
association, foundation, institution, or organization, other
than a limited liability company, that is organized and
operated as a not-for-profit service enterprise for the
benefit of persons 65 years of age or older if the personal

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property was not purchased by the enterprise for the purpose
of resale by the enterprise.
(2) Personal property purchased by a not-for-profit
Illinois county fair association for use in conducting,
operating, or promoting the county fair.
(3) Personal property purchased by any not-for-profit arts
or cultural organization that establishes, by proof required
by the Department by rule, that it has received an exemption
under Section 501(c)(3) of the Internal Revenue Code and that
is organized and operated primarily for the presentation or
support of arts or cultural programming, activities, or
services. These organizations include, but are not limited to,
music and dramatic arts organizations such as symphony
orchestras and theatrical groups, arts and cultural service
organizations, local arts councils, visual arts organizations,
and media arts organizations. On and after July 1, 2001 (the
effective date of Public Act 92-35), however, an entity
otherwise eligible for this exemption shall not make tax-free
purchases unless it has an active identification number issued
by the Department.
(4) Legal tender, currency, medallions, or gold or silver
coinage issued by the State of Illinois, the government of the
United States of America, or the government of any foreign
country, and bullion.
(5) Until July 1, 2003 and beginning again on September 1,
2004 through August 30, 2014, graphic arts machinery and

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equipment, including repair and replacement parts, both new
and used, and including that manufactured on special order or
purchased for lease, certified by the purchaser to be used
primarily for graphic arts production. Equipment includes
chemicals or chemicals acting as catalysts but only if the
chemicals or chemicals acting as catalysts effect a direct and
immediate change upon a graphic arts product. Beginning on
July 1, 2017, graphic arts machinery and equipment is included
in the manufacturing and assembling machinery and equipment
exemption under Section 2 of this Act.
(6) Personal property sold by a teacher-sponsored student
organization affiliated with an elementary or secondary school
located in Illinois.
(7) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by the
purchaser to be used primarily for production agriculture or
State or federal agricultural programs, including individual
replacement parts for the machinery and equipment, including
machinery and equipment purchased for lease, and including
implements of husbandry defined in Section 1-130 of the
Illinois Vehicle Code, farm machinery and agricultural
chemical and fertilizer spreaders, and nurse wagons required
to be registered under Section 3-809 of the Illinois Vehicle
Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Horticultural
polyhouses or hoop houses used for propagating, growing, or

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overwintering plants shall be considered farm machinery and
equipment under this item (7). Agricultural chemical tender
tanks and dry boxes shall include units sold separately from a
motor vehicle required to be licensed and units sold mounted
on a motor vehicle required to be licensed if the selling price
of the tender is separately stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment, including, but not
limited to, tractors, harvesters, sprayers, planters, seeders,
or spreaders. Precision farming equipment includes, but is not
limited to, soil testing sensors, computers, monitors,
software, global positioning and mapping systems, and other
such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not limited
to, the collection, monitoring, and correlation of animal and
crop data for the purpose of formulating animal diets and
agricultural chemicals.
Beginning on January 1, 2024, farm machinery and equipment
also includes electrical power generation equipment used
primarily for production agriculture.
This item (7) is exempt from the provisions of Section
3-55.

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(8) Until June 30, 2013, fuel and petroleum products sold
to or used by an air common carrier, certified by the carrier
to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a flight
destined for or returning from a location or locations outside
the United States without regard to previous or subsequent
domestic stopovers.
Beginning July 1, 2013, fuel and petroleum products sold
to or used by an air carrier, certified by the carrier to be
used for consumption, shipment, or storage in the conduct of
its business as an air common carrier, for a flight that (i) is
engaged in foreign trade or is engaged in trade between the
United States and any of its possessions and (ii) transports
at least one individual or package for hire from the city of
origination to the city of final destination on the same
aircraft, without regard to a change in the flight number of
that aircraft.
(9) Proceeds of mandatory service charges separately
stated on customers' bills for the purchase and consumption of
food and beverages, to the extent that the proceeds of the
service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate directly
in preparing, serving, hosting or cleaning up the food or
beverage function with respect to which the service charge is
imposed.
(10) Until July 1, 2003, oil field exploration, drilling,

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and production equipment, including (i) rigs and parts of
rigs, rotary rigs, cable tool rigs, and workover rigs, (ii)
pipe and tubular goods, including casing and drill strings,
(iii) pumps and pump-jack units, (iv) storage tanks and flow
lines, (v) any individual replacement part for oil field
exploration, drilling, and production equipment, and (vi)
machinery and equipment purchased for lease; but excluding
motor vehicles required to be registered under the Illinois
Vehicle Code.
(11) Photoprocessing machinery and equipment, including
repair and replacement parts, both new and used, including
that manufactured on special order, certified by the purchaser
to be used primarily for photoprocessing, and including
photoprocessing machinery and equipment purchased for lease.
(12) Until July 1, 2028, coal and aggregate exploration,
mining, off-highway hauling, processing, maintenance, and
reclamation equipment, including replacement parts and
equipment, and including equipment purchased for lease, but
excluding motor vehicles required to be registered under the
Illinois Vehicle Code. The changes made to this Section by
Public Act 97-767 apply on and after July 1, 2003, but no claim
for credit or refund is allowed on or after August 16, 2013
(the effective date of Public Act 98-456) for such taxes paid
during the period beginning July 1, 2003 and ending on August
16, 2013 (the effective date of Public Act 98-456).
(13) Beginning January 1, 1992 and through June 30, 2016,

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food for human consumption that is to be consumed off the
premises where it is sold (other than alcoholic beverages,
soft drinks and food that has been prepared for immediate
consumption) and prescription and non-prescription medicines,
drugs, medical appliances, and insulin, urine testing
materials, syringes, and needles used by diabetics, for human
use, when purchased for use by a person receiving medical
assistance under Article V of the Illinois Public Aid Code who
resides in a licensed long-term care facility, as defined in
the Nursing Home Care Act, or in a licensed facility as defined
in the ID/DD Community Care Act, the MC/DD Act, or the
Specialized Mental Health Rehabilitation Act of 2013.
(14) Semen used for artificial insemination of livestock
for direct agricultural production.
(15) Horses, or interests in horses, registered with and
meeting the requirements of any of the Arabian Horse Club
Registry of America, Appaloosa Horse Club, American Quarter
Horse Association, United States Trotting Association, or
Jockey Club, as appropriate, used for purposes of breeding or
racing for prizes. This item (15) is exempt from the
provisions of Section 3-55, and the exemption provided for
under this item (15) applies for all periods beginning May 30,
1995, but no claim for credit or refund is allowed on or after
January 1, 2008 (the effective date of Public Act 95-88) for
such taxes paid during the period beginning May 30, 2000 and
ending on January 1, 2008 (the effective date of Public Act

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95-88).
(16) Computers and communications equipment utilized for
any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients sold to a lessor
who leases the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act.
(17) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or in
effect at the time of the purchase, to a governmental body that
has been issued an active tax exemption identification number
by the Department under Section 1g of the Retailers'
Occupation Tax Act.
(18) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is donated
for disaster relief to be used in a State or federally declared
disaster area in Illinois or bordering Illinois by a
manufacturer or retailer that is registered in this State to a
corporation, society, association, foundation, or institution
that has been issued a sales tax exemption identification
number by the Department that assists victims of the disaster
who reside within the declared disaster area.
(19) Beginning with taxable years ending on or after

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December 31, 1995 and ending with taxable years ending on or
before December 31, 2004, personal property that is used in
the performance of infrastructure repairs in this State,
including, but not limited to, municipal roads and streets,
access roads, bridges, sidewalks, waste disposal systems,
water and sewer line extensions, water distribution and
purification facilities, storm water drainage and retention
facilities, and sewage treatment facilities, resulting from a
State or federally declared disaster in Illinois or bordering
Illinois when such repairs are initiated on facilities located
in the declared disaster area within 6 months after the
disaster.
(20) Beginning July 1, 1999, game or game birds sold at a
"game breeding and hunting preserve area" as that term is used
in the Wildlife Code. This paragraph is exempt from the
provisions of Section 3-55.
(21) A motor vehicle, as that term is defined in Section
1-146 of the Illinois Vehicle Code, that is donated to a
corporation, limited liability company, society, association,
foundation, or institution that is determined by the
Department to be organized and operated exclusively for
educational purposes. For purposes of this exemption, "a
corporation, limited liability company, society, association,
foundation, or institution organized and operated exclusively
for educational purposes" means all tax-supported public
schools, private schools that offer systematic instruction in

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useful branches of learning by methods common to public
schools and that compare favorably in their scope and
intensity with the course of study presented in tax-supported
schools, and vocational or technical schools or institutes
organized and operated exclusively to provide a course of
study of not less than 6 weeks duration and designed to prepare
individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.
(22) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for the
benefit of a public or private elementary or secondary school,
a group of those schools, or one or more school districts if
the events are sponsored by an entity recognized by the school
district that consists primarily of volunteers and includes
parents and teachers of the school children. This paragraph
does not apply to fundraising events (i) for the benefit of
private home instruction or (ii) for which the fundraising
entity purchases the personal property sold at the events from
another individual or entity that sold the property for the
purpose of resale by the fundraising entity and that profits
from the sale to the fundraising entity. This paragraph is
exempt from the provisions of Section 3-55.
(23) Beginning January 1, 2000 and through December 31,
2001, new or used automatic vending machines that prepare and
serve hot food and beverages, including coffee, soup, and

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other items, and replacement parts for these machines.
Beginning January 1, 2002 and through June 30, 2003, machines
and parts for machines used in commercial, coin-operated
amusement and vending business if a use or occupation tax is
paid on the gross receipts derived from the use of the
commercial, coin-operated amusement and vending machines. This
paragraph is exempt from the provisions of Section 3-55.
(24) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), computers and communications equipment
utilized for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients sold to
a lessor who leases the equipment, under a lease of one year or
longer executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. This paragraph is exempt
from the provisions of Section 3-55.
(25) Beginning on August 2, 2001 (the effective date of
Public Act 92-227), personal property sold to a lessor who
leases the property, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
governmental body that has been issued an active tax exemption
identification number by the Department under Section 1g of
the Retailers' Occupation Tax Act. This paragraph is exempt
from the provisions of Section 3-55.
(26) Beginning on January 1, 2002 and through June 30,

HB5545 - 59 - LRB103 38926 HLH 69063 b
2016, tangible personal property purchased from an Illinois
retailer by a taxpayer engaged in centralized purchasing
activities in Illinois who will, upon receipt of the property
in Illinois, temporarily store the property in Illinois (i)
for the purpose of subsequently transporting it outside this
State for use or consumption thereafter solely outside this
State or (ii) for the purpose of being processed, fabricated,
or manufactured into, attached to, or incorporated into other
tangible personal property to be transported outside this
State and thereafter used or consumed solely outside this
State. The Director of Revenue shall, pursuant to rules
adopted in accordance with the Illinois Administrative
Procedure Act, issue a permit to any taxpayer in good standing
with the Department who is eligible for the exemption under
this paragraph (26). The permit issued under this paragraph
(26) shall authorize the holder, to the extent and in the
manner specified in the rules adopted under this Act, to
purchase tangible personal property from a retailer exempt
from the taxes imposed by this Act. Taxpayers shall maintain
all necessary books and records to substantiate the use and
consumption of all such tangible personal property outside of
the State of Illinois.
(27) Beginning January 1, 2008, tangible personal property
used in the construction or maintenance of a community water
supply, as defined under Section 3.145 of the Environmental
Protection Act, that is operated by a not-for-profit

HB5545 - 60 - LRB103 38926 HLH 69063 b
corporation that holds a valid water supply permit issued
under Title IV of the Environmental Protection Act. This
paragraph is exempt from the provisions of Section 3-55.
(28) Tangible personal property sold to a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall, but
only if the legal title to the municipal convention hall is
transferred to the municipality without any further
consideration by or on behalf of the municipality at the time
of the completion of the municipal convention hall or upon the
retirement or redemption of any bonds or other debt
instruments issued by the public-facilities corporation in
connection with the development of the municipal convention
hall. This exemption includes existing public-facilities
corporations as provided in Section 11-65-25 of the Illinois
Municipal Code. This paragraph is exempt from the provisions
of Section 3-55.
(29) Beginning January 1, 2010 and continuing through
December 31, 2029, materials, parts, equipment, components,
and furnishings incorporated into or upon an aircraft as part
of the modification, refurbishment, completion, replacement,
repair, or maintenance of the aircraft. This exemption
includes consumable supplies used in the modification,
refurbishment, completion, replacement, repair, and
maintenance of aircraft. However, until January 1, 2024, this

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exemption excludes any materials, parts, equipment,
components, and consumable supplies used in the modification,
replacement, repair, and maintenance of aircraft engines or
power plants, whether such engines or power plants are
installed or uninstalled upon any such aircraft. "Consumable
supplies" include, but are not limited to, adhesive, tape,
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films.
Beginning January 1, 2010 and continuing through December
31, 2023, this exemption applies only to the transfer of
qualifying tangible personal property incident to the
modification, refurbishment, completion, replacement, repair,
or maintenance of an aircraft by persons who (i) hold an Air
Agency Certificate and are empowered to operate an approved
repair station by the Federal Aviation Administration, (ii)
have a Class IV Rating, and (iii) conduct operations in
accordance with Part 145 of the Federal Aviation Regulations.
The exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or Part
129 of the Federal Aviation Regulations. From January 1, 2024
through December 31, 2029, this exemption applies only to the
use of qualifying tangible personal property by: (A) persons
who modify, refurbish, complete, repair, replace, or maintain
aircraft and who (i) hold an Air Agency Certificate and are
empowered to operate an approved repair station by the Federal

HB5545 - 62 - LRB103 38926 HLH 69063 b
Aviation Administration, (ii) have a Class IV Rating, and
(iii) conduct operations in accordance with Part 145 of the
Federal Aviation Regulations; and (B) persons who engage in
the modification, replacement, repair, and maintenance of
aircraft engines or power plants without regard to whether or
not those persons meet the qualifications of item (A).
The changes made to this paragraph (29) by Public Act
98-534 are declarative of existing law. It is the intent of the
General Assembly that the exemption under this paragraph (29)
applies continuously from January 1, 2010 through December 31,
2024; however, no claim for credit or refund is allowed for
taxes paid as a result of the disallowance of this exemption on
or after January 1, 2015 and prior to February 5, 2020 (the
effective date of Public Act 101-629).
(30) Beginning January 1, 2017 and through December 31,
2026, menstrual pads, tampons, and menstrual cups.
(31) Tangible personal property transferred to a purchaser
who is exempt from tax by operation of federal law. This
paragraph is exempt from the provisions of Section 3-55.
(32) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or subcontractor
of the owner, operator, or tenant. Data centers that would

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have qualified for a certificate of exemption prior to January
1, 2020 had Public Act 101-31 been in effect, may apply for and
obtain an exemption for subsequent purchases of computer
equipment or enabling software purchased or leased to upgrade,
supplement, or replace computer equipment or enabling software
purchased or leased in the original investment that would have
qualified.
The Department of Commerce and Economic Opportunity shall
grant a certificate of exemption under this item (32) to
qualified data centers as defined by Section 605-1025 of the
Department of Commerce and Economic Opportunity Law of the
Civil Administrative Code of Illinois.
For the purposes of this item (32):
"Data center" means a building or a series of
buildings rehabilitated or constructed to house working
servers in one physical location or multiple sites within
the State of Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks; cabinets;
telecommunications cabling infrastructure; raised floor
systems; peripheral components or systems; software;
mechanical, electrical, or plumbing systems; battery

HB5545 - 64 - LRB103 38926 HLH 69063 b
systems; cooling systems and towers; temperature control
systems; other cabling; and other data center
infrastructure equipment and systems necessary to operate
qualified tangible personal property, including fixtures;
and component parts of any of the foregoing, including
installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property; and all other tangible personal
property that is essential to the operations of a computer
data center. The term "qualified tangible personal
property" also includes building materials physically
incorporated into in to the qualifying data center. To
document the exemption allowed under this Section, the
retailer must obtain from the purchaser a copy of the
certificate of eligibility issued by the Department of
Commerce and Economic Opportunity.
This item (32) is exempt from the provisions of Section
3-55.
(33) Beginning July 1, 2022, breast pumps, breast pump
collection and storage supplies, and breast pump kits. This
item (33) is exempt from the provisions of Section 3-55. As
used in this item (33):
"Breast pump" means an electrically controlled or
manually controlled pump device designed or marketed to be

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used to express milk from a human breast during lactation,
including the pump device and any battery, AC adapter, or
other power supply unit that is used to power the pump
device and is packaged and sold with the pump device at the
time of sale.
"Breast pump collection and storage supplies" means
items of tangible personal property designed or marketed
to be used in conjunction with a breast pump to collect
milk expressed from a human breast and to store collected
milk until it is ready for consumption.
"Breast pump collection and storage supplies"
includes, but is not limited to: breast shields and breast
shield connectors; breast pump tubes and tubing adapters;
breast pump valves and membranes; backflow protectors and
backflow protector adaptors; bottles and bottle caps
specific to the operation of the breast pump; and breast
milk storage bags.
"Breast pump collection and storage supplies" does not
include: (1) bottles and bottle caps not specific to the
operation of the breast pump; (2) breast pump travel bags
and other similar carrying accessories, including ice
packs, labels, and other similar products; (3) breast pump
cleaning supplies; (4) nursing bras, bra pads, breast
shells, and other similar products; and (5) creams,
ointments, and other similar products that relieve
breastfeeding-related symptoms or conditions of the

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breasts or nipples, unless sold as part of a breast pump
kit that is pre-packaged by the breast pump manufacturer
or distributor.
"Breast pump kit" means a kit that: (1) contains no
more than a breast pump, breast pump collection and
storage supplies, a rechargeable battery for operating the
breast pump, a breastmilk cooler, bottle stands, ice
packs, and a breast pump carrying case; and (2) is
pre-packaged as a breast pump kit by the breast pump
manufacturer or distributor.
(34) Tangible personal property sold by or on behalf of
the State Treasurer pursuant to the Revised Uniform Unclaimed
Property Act. This item (34) is exempt from the provisions of
Section 3-55.
(35) Beginning on January 1, 2024, tangible personal
property purchased by an active duty member of the armed
forces of the United States who presents valid military
identification and purchases the property using a form of
payment where the federal government is the payor. The member
of the armed forces must complete, at the point of sale, a form
prescribed by the Department of Revenue documenting that the
transaction is eligible for the exemption under this
paragraph. Retailers must keep the form as documentation of
the exemption in their records for a period of not less than 6
years. "Armed forces of the United States" means the United
States Army, Navy, Air Force, Marine Corps, or Coast Guard.

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This paragraph is exempt from the provisions of Section 3-55.
(36) Qualified tangible personal property that is (i) used
in the construction or development of a megaproject for which
a certificate has been issued prior to December 31, 2030 by the
Department of Commerce and Economic Opportunity under Division
22 of Article 10 of the Property Tax Code and (ii) purchased
prior to the Department's issuance of the megaproject
certificate or during the investment period, whether that
tangible personal property is purchased by the owner,
operator, or tenant of the megaproject or by a contractor or
subcontractor of the owner, operator, or tenant.
As used in this item (36):
"Facility" means a building or series of buildings.
"Investment period" means the period ending 7 years after
the date on which the Department of Commerce and Economic
Opportunity issues the megaproject certificate, or such other
longer period of time as the local municipality, local taxing
districts, and the company may agree to, not to exceed an
initial period of 10 years.
"Megaproject" means a facility that is rehabilitated or
constructed as described in Division 22 of Article 10 of the
Property Tax Code.
"Qualified tangible personal property" means all tangible
personal property that is essential to the construction or
development of a megaproject, including, but not limited to:
electrical systems and equipment; climate control and chilling

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equipment and systems; mechanical systems and equipment;
monitoring and secure systems; emergency generators; hardware;
computers; servers; data storage devices; network connectivity
equipment; racks; cabinets; telecommunications cabling
infrastructure; raised floor systems; peripheral components or
systems; software; mechanical, electrical, or plumbing
systems; battery systems; cooling systems and towers;
temperature control systems; other cabling; and other
infrastructure, equipment, and systems necessary to operate
qualified tangible personal property, including fixtures; and
component parts of those items, including installation,
maintenance, repair, refurbishment, and replacement of
qualified tangible personal property to generate, transform,
transmit, distribute, or manage electricity necessary to
operate qualified tangible personal property. The term
"qualified tangible personal property" also includes building
materials to be incorporated into the megaproject. To document
the exemption allowed under this Section, the retailer,
contractor, subcontractor, or supplier must obtain from the
purchaser a copy of the certificate issued by the Department
of Commerce and Economic Opportunity for the megaproject as
described and defined in Division 22 of Article 10 of the
Property Tax Code.
(Source: P.A. 102-16, eff. 6-17-21; 102-700, Article 70,
Section 70-15, eff. 4-19-22; 102-700, Article 75, Section
75-15, eff. 4-19-22; 102-1026, eff. 5-27-22; 103-9, Article 5,

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Section 5-15, eff. 6-7-23; 103-9, Article 15, Section 15-15,
eff. 6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24;
revised 12-12-23.)
Section 20. The Retailers' Occupation Tax Act is amended
by changing Section 2-5 as follows:
(35 ILCS 120/2-5)
Sec. 2-5. Exemptions. Gross receipts from proceeds from
the sale of the following tangible personal property are
exempt from the tax imposed by this Act:
(1) Farm chemicals.
(2) Farm machinery and equipment, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for production
agriculture or State or federal agricultural programs,
including individual replacement parts for the machinery
and equipment, including machinery and equipment purchased
for lease, and including implements of husbandry defined
in Section 1-130 of the Illinois Vehicle Code, farm
machinery and agricultural chemical and fertilizer
spreaders, and nurse wagons required to be registered
under Section 3-809 of the Illinois Vehicle Code, but
excluding other motor vehicles required to be registered
under the Illinois Vehicle Code. Horticultural polyhouses
or hoop houses used for propagating, growing, or

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overwintering plants shall be considered farm machinery
and equipment under this item (2). Agricultural chemical
tender tanks and dry boxes shall include units sold
separately from a motor vehicle required to be licensed
and units sold mounted on a motor vehicle required to be
licensed, if the selling price of the tender is separately
stated.
Farm machinery and equipment shall include precision
farming equipment that is installed or purchased to be
installed on farm machinery and equipment including, but
not limited to, tractors, harvesters, sprayers, planters,
seeders, or spreaders. Precision farming equipment
includes, but is not limited to, soil testing sensors,
computers, monitors, software, global positioning and
mapping systems, and other such equipment.
Farm machinery and equipment also includes computers,
sensors, software, and related equipment used primarily in
the computer-assisted operation of production agriculture
facilities, equipment, and activities such as, but not
limited to, the collection, monitoring, and correlation of
animal and crop data for the purpose of formulating animal
diets and agricultural chemicals.
Beginning on January 1, 2024, farm machinery and
equipment also includes electrical power generation
equipment used primarily for production agriculture.
This item (2) is exempt from the provisions of Section

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2-70.
(3) Until July 1, 2003, distillation machinery and
equipment, sold as a unit or kit, assembled or installed
by the retailer, certified by the user to be used only for
the production of ethyl alcohol that will be used for
consumption as motor fuel or as a component of motor fuel
for the personal use of the user, and not subject to sale
or resale.
(4) Until July 1, 2003 and beginning again September
1, 2004 through August 30, 2014, graphic arts machinery
and equipment, including repair and replacement parts,
both new and used, and including that manufactured on
special order or purchased for lease, certified by the
purchaser to be used primarily for graphic arts
production. Equipment includes chemicals or chemicals
acting as catalysts but only if the chemicals or chemicals
acting as catalysts effect a direct and immediate change
upon a graphic arts product. Beginning on July 1, 2017,
graphic arts machinery and equipment is included in the
manufacturing and assembling machinery and equipment
exemption under paragraph (14).
(5) A motor vehicle that is used for automobile
renting, as defined in the Automobile Renting Occupation
and Use Tax Act. This paragraph is exempt from the
provisions of Section 2-70.
(6) Personal property sold by a teacher-sponsored

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student organization affiliated with an elementary or
secondary school located in Illinois.
(7) Until July 1, 2003, proceeds of that portion of
the selling price of a passenger car the sale of which is
subject to the Replacement Vehicle Tax.
(8) Personal property sold to an Illinois county fair
association for use in conducting, operating, or promoting
the county fair.
(9) Personal property sold to a not-for-profit arts or
cultural organization that establishes, by proof required
by the Department by rule, that it has received an
exemption under Section 501(c)(3) of the Internal Revenue
Code and that is organized and operated primarily for the
presentation or support of arts or cultural programming,
activities, or services. These organizations include, but
are not limited to, music and dramatic arts organizations
such as symphony orchestras and theatrical groups, arts
and cultural service organizations, local arts councils,
visual arts organizations, and media arts organizations.
On and after July 1, 2001 (the effective date of Public Act
92-35), however, an entity otherwise eligible for this
exemption shall not make tax-free purchases unless it has
an active identification number issued by the Department.
(10) Personal property sold by a corporation, society,
association, foundation, institution, or organization,
other than a limited liability company, that is organized

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and operated as a not-for-profit service enterprise for
the benefit of persons 65 years of age or older if the
personal property was not purchased by the enterprise for
the purpose of resale by the enterprise.
(11) Except as otherwise provided in this Section,
personal property sold to a governmental body, to a
corporation, society, association, foundation, or
institution organized and operated exclusively for
charitable, religious, or educational purposes, or to a
not-for-profit corporation, society, association,
foundation, institution, or organization that has no
compensated officers or employees and that is organized
and operated primarily for the recreation of persons 55
years of age or older. A limited liability company may
qualify for the exemption under this paragraph only if the
limited liability company is organized and operated
exclusively for educational purposes. On and after July 1,
1987, however, no entity otherwise eligible for this
exemption shall make tax-free purchases unless it has an
active identification number issued by the Department.
(12) (Blank).
(12-5) On and after July 1, 2003 and through June 30,
2004, motor vehicles of the second division with a gross
vehicle weight in excess of 8,000 pounds that are subject
to the commercial distribution fee imposed under Section
3-815.1 of the Illinois Vehicle Code. Beginning on July 1,

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2004 and through June 30, 2005, the use in this State of
motor vehicles of the second division: (i) with a gross
vehicle weight rating in excess of 8,000 pounds; (ii) that
are subject to the commercial distribution fee imposed
under Section 3-815.1 of the Illinois Vehicle Code; and
(iii) that are primarily used for commercial purposes.
Through June 30, 2005, this exemption applies to repair
and replacement parts added after the initial purchase of
such a motor vehicle if that motor vehicle is used in a
manner that would qualify for the rolling stock exemption
otherwise provided for in this Act. For purposes of this
paragraph, "used for commercial purposes" means the
transportation of persons or property in furtherance of
any commercial or industrial enterprise whether for-hire
or not.
(13) Proceeds from sales to owners, lessors, or
shippers of tangible personal property that is utilized by
interstate carriers for hire for use as rolling stock
moving in interstate commerce and equipment operated by a
telecommunications provider, licensed as a common carrier
by the Federal Communications Commission, which is
permanently installed in or affixed to aircraft moving in
interstate commerce.
(14) Machinery and equipment that will be used by the
purchaser, or a lessee of the purchaser, primarily in the
process of manufacturing or assembling tangible personal

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property for wholesale or retail sale or lease, whether
the sale or lease is made directly by the manufacturer or
by some other person, whether the materials used in the
process are owned by the manufacturer or some other
person, or whether the sale or lease is made apart from or
as an incident to the seller's engaging in the service
occupation of producing machines, tools, dies, jigs,
patterns, gauges, or other similar items of no commercial
value on special order for a particular purchaser. The
exemption provided by this paragraph (14) does not include
machinery and equipment used in (i) the generation of
electricity for wholesale or retail sale; (ii) the
generation or treatment of natural or artificial gas for
wholesale or retail sale that is delivered to customers
through pipes, pipelines, or mains; or (iii) the treatment
of water for wholesale or retail sale that is delivered to
customers through pipes, pipelines, or mains. The
provisions of Public Act 98-583 are declaratory of
existing law as to the meaning and scope of this
exemption. Beginning on July 1, 2017, the exemption
provided by this paragraph (14) includes, but is not
limited to, graphic arts machinery and equipment, as
defined in paragraph (4) of this Section.
(15) Proceeds of mandatory service charges separately
stated on customers' bills for purchase and consumption of
food and beverages, to the extent that the proceeds of the

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service charge are in fact turned over as tips or as a
substitute for tips to the employees who participate
directly in preparing, serving, hosting or cleaning up the
food or beverage function with respect to which the
service charge is imposed.
(16) Tangible personal property sold to a purchaser if
the purchaser is exempt from use tax by operation of
federal law. This paragraph is exempt from the provisions
of Section 2-70.
(17) Tangible personal property sold to a common
carrier by rail or motor that receives the physical
possession of the property in Illinois and that transports
the property, or shares with another common carrier in the
transportation of the property, out of Illinois on a
standard uniform bill of lading showing the seller of the
property as the shipper or consignor of the property to a
destination outside Illinois, for use outside Illinois.
(18) Legal tender, currency, medallions, or gold or
silver coinage issued by the State of Illinois, the
government of the United States of America, or the
government of any foreign country, and bullion.
(19) Until July 1, 2003, oil field exploration,
drilling, and production equipment, including (i) rigs and
parts of rigs, rotary rigs, cable tool rigs, and workover
rigs, (ii) pipe and tubular goods, including casing and
drill strings, (iii) pumps and pump-jack units, (iv)

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storage tanks and flow lines, (v) any individual
replacement part for oil field exploration, drilling, and
production equipment, and (vi) machinery and equipment
purchased for lease; but excluding motor vehicles required
to be registered under the Illinois Vehicle Code.
(20) Photoprocessing machinery and equipment,
including repair and replacement parts, both new and used,
including that manufactured on special order, certified by
the purchaser to be used primarily for photoprocessing,
and including photoprocessing machinery and equipment
purchased for lease.
(21) Until July 1, 2028, coal and aggregate
exploration, mining, off-highway hauling, processing,
maintenance, and reclamation equipment, including
replacement parts and equipment, and including equipment
purchased for lease, but excluding motor vehicles required
to be registered under the Illinois Vehicle Code. The
changes made to this Section by Public Act 97-767 apply on
and after July 1, 2003, but no claim for credit or refund
is allowed on or after August 16, 2013 (the effective date
of Public Act 98-456) for such taxes paid during the
period beginning July 1, 2003 and ending on August 16,
2013 (the effective date of Public Act 98-456).
(22) Until June 30, 2013, fuel and petroleum products
sold to or used by an air carrier, certified by the carrier
to be used for consumption, shipment, or storage in the

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conduct of its business as an air common carrier, for a
flight destined for or returning from a location or
locations outside the United States without regard to
previous or subsequent domestic stopovers.
Beginning July 1, 2013, fuel and petroleum products
sold to or used by an air carrier, certified by the carrier
to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a
flight that (i) is engaged in foreign trade or is engaged
in trade between the United States and any of its
possessions and (ii) transports at least one individual or
package for hire from the city of origination to the city
of final destination on the same aircraft, without regard
to a change in the flight number of that aircraft.
(23) A transaction in which the purchase order is
received by a florist who is located outside Illinois, but
who has a florist located in Illinois deliver the property
to the purchaser or the purchaser's donee in Illinois.
(24) Fuel consumed or used in the operation of ships,
barges, or vessels that are used primarily in or for the
transportation of property or the conveyance of persons
for hire on rivers bordering on this State if the fuel is
delivered by the seller to the purchaser's barge, ship, or
vessel while it is afloat upon that bordering river.
(25) Except as provided in item (25-5) of this
Section, a motor vehicle sold in this State to a

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nonresident even though the motor vehicle is delivered to
the nonresident in this State, if the motor vehicle is not
to be titled in this State, and if a drive-away permit is
issued to the motor vehicle as provided in Section 3-603
of the Illinois Vehicle Code or if the nonresident
purchaser has vehicle registration plates to transfer to
the motor vehicle upon returning to his or her home state.
The issuance of the drive-away permit or having the
out-of-state registration plates to be transferred is
prima facie evidence that the motor vehicle will not be
titled in this State.
(25-5) The exemption under item (25) does not apply if
the state in which the motor vehicle will be titled does
not allow a reciprocal exemption for a motor vehicle sold
and delivered in that state to an Illinois resident but
titled in Illinois. The tax collected under this Act on
the sale of a motor vehicle in this State to a resident of
another state that does not allow a reciprocal exemption
shall be imposed at a rate equal to the state's rate of tax
on taxable property in the state in which the purchaser is
a resident, except that the tax shall not exceed the tax
that would otherwise be imposed under this Act. At the
time of the sale, the purchaser shall execute a statement,
signed under penalty of perjury, of his or her intent to
title the vehicle in the state in which the purchaser is a
resident within 30 days after the sale and of the fact of

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the payment to the State of Illinois of tax in an amount
equivalent to the state's rate of tax on taxable property
in his or her state of residence and shall submit the
statement to the appropriate tax collection agency in his
or her state of residence. In addition, the retailer must
retain a signed copy of the statement in his or her
records. Nothing in this item shall be construed to
require the removal of the vehicle from this state
following the filing of an intent to title the vehicle in
the purchaser's state of residence if the purchaser titles
the vehicle in his or her state of residence within 30 days
after the date of sale. The tax collected under this Act in
accordance with this item (25-5) shall be proportionately
distributed as if the tax were collected at the 6.25%
general rate imposed under this Act.
(25-7) Beginning on July 1, 2007, no tax is imposed
under this Act on the sale of an aircraft, as defined in
Section 3 of the Illinois Aeronautics Act, if all of the
following conditions are met:
(1) the aircraft leaves this State within 15 days
after the later of either the issuance of the final
billing for the sale of the aircraft, or the
authorized approval for return to service, completion
of the maintenance record entry, and completion of the
test flight and ground test for inspection, as
required by 14 CFR 91.407;

HB5545 - 81 - LRB103 38926 HLH 69063 b
(2) the aircraft is not based or registered in
this State after the sale of the aircraft; and
(3) the seller retains in his or her books and
records and provides to the Department a signed and
dated certification from the purchaser, on a form
prescribed by the Department, certifying that the
requirements of this item (25-7) are met. The
certificate must also include the name and address of
the purchaser, the address of the location where the
aircraft is to be titled or registered, the address of
the primary physical location of the aircraft, and
other information that the Department may reasonably
require.
For purposes of this item (25-7):
"Based in this State" means hangared, stored, or
otherwise used, excluding post-sale customizations as
defined in this Section, for 10 or more days in each
12-month period immediately following the date of the sale
of the aircraft.
"Registered in this State" means an aircraft
registered with the Department of Transportation,
Aeronautics Division, or titled or registered with the
Federal Aviation Administration to an address located in
this State.
This paragraph (25-7) is exempt from the provisions of
Section 2-70.

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(26) Semen used for artificial insemination of
livestock for direct agricultural production.
(27) Horses, or interests in horses, registered with
and meeting the requirements of any of the Arabian Horse
Club Registry of America, Appaloosa Horse Club, American
Quarter Horse Association, United States Trotting
Association, or Jockey Club, as appropriate, used for
purposes of breeding or racing for prizes. This item (27)
is exempt from the provisions of Section 2-70, and the
exemption provided for under this item (27) applies for
all periods beginning May 30, 1995, but no claim for
credit or refund is allowed on or after January 1, 2008
(the effective date of Public Act 95-88) for such taxes
paid during the period beginning May 30, 2000 and ending
on January 1, 2008 (the effective date of Public Act
95-88).
(28) Computers and communications equipment utilized
for any hospital purpose and equipment used in the
diagnosis, analysis, or treatment of hospital patients
sold to a lessor who leases the equipment, under a lease of
one year or longer executed or in effect at the time of the
purchase, to a hospital that has been issued an active tax
exemption identification number by the Department under
Section 1g of this Act.
(29) Personal property sold to a lessor who leases the
property, under a lease of one year or longer executed or

HB5545 - 83 - LRB103 38926 HLH 69063 b
in effect at the time of the purchase, to a governmental
body that has been issued an active tax exemption
identification number by the Department under Section 1g
of this Act.
(30) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on
or before December 31, 2004, personal property that is
donated for disaster relief to be used in a State or
federally declared disaster area in Illinois or bordering
Illinois by a manufacturer or retailer that is registered
in this State to a corporation, society, association,
foundation, or institution that has been issued a sales
tax exemption identification number by the Department that
assists victims of the disaster who reside within the
declared disaster area.
(31) Beginning with taxable years ending on or after
December 31, 1995 and ending with taxable years ending on
or before December 31, 2004, personal property that is
used in the performance of infrastructure repairs in this
State, including, but not limited to, municipal roads and
streets, access roads, bridges, sidewalks, waste disposal
systems, water and sewer line extensions, water
distribution and purification facilities, storm water
drainage and retention facilities, and sewage treatment
facilities, resulting from a State or federally declared
disaster in Illinois or bordering Illinois when such

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repairs are initiated on facilities located in the
declared disaster area within 6 months after the disaster.
(32) Beginning July 1, 1999, game or game birds sold
at a "game breeding and hunting preserve area" as that
term is used in the Wildlife Code. This paragraph is
exempt from the provisions of Section 2-70.
(33) A motor vehicle, as that term is defined in
Section 1-146 of the Illinois Vehicle Code, that is
donated to a corporation, limited liability company,
society, association, foundation, or institution that is
determined by the Department to be organized and operated
exclusively for educational purposes. For purposes of this
exemption, "a corporation, limited liability company,
society, association, foundation, or institution organized
and operated exclusively for educational purposes" means
all tax-supported public schools, private schools that
offer systematic instruction in useful branches of
learning by methods common to public schools and that
compare favorably in their scope and intensity with the
course of study presented in tax-supported schools, and
vocational or technical schools or institutes organized
and operated exclusively to provide a course of study of
not less than 6 weeks duration and designed to prepare
individuals to follow a trade or to pursue a manual,
technical, mechanical, industrial, business, or commercial
occupation.

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(34) Beginning January 1, 2000, personal property,
including food, purchased through fundraising events for
the benefit of a public or private elementary or secondary
school, a group of those schools, or one or more school
districts if the events are sponsored by an entity
recognized by the school district that consists primarily
of volunteers and includes parents and teachers of the
school children. This paragraph does not apply to
fundraising events (i) for the benefit of private home
instruction or (ii) for which the fundraising entity
purchases the personal property sold at the events from
another individual or entity that sold the property for
the purpose of resale by the fundraising entity and that
profits from the sale to the fundraising entity. This
paragraph is exempt from the provisions of Section 2-70.
(35) Beginning January 1, 2000 and through December
31, 2001, new or used automatic vending machines that
prepare and serve hot food and beverages, including
coffee, soup, and other items, and replacement parts for
these machines. Beginning January 1, 2002 and through June
30, 2003, machines and parts for machines used in
commercial, coin-operated amusement and vending business
if a use or occupation tax is paid on the gross receipts
derived from the use of the commercial, coin-operated
amusement and vending machines. This paragraph is exempt
from the provisions of Section 2-70.

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(35-5) Beginning August 23, 2001 and through June 30,
2016, food for human consumption that is to be consumed
off the premises where it is sold (other than alcoholic
beverages, soft drinks, and food that has been prepared
for immediate consumption) and prescription and
nonprescription medicines, drugs, medical appliances, and
insulin, urine testing materials, syringes, and needles
used by diabetics, for human use, when purchased for use
by a person receiving medical assistance under Article V
of the Illinois Public Aid Code who resides in a licensed
long-term care facility, as defined in the Nursing Home
Care Act, or a licensed facility as defined in the ID/DD
Community Care Act, the MC/DD Act, or the Specialized
Mental Health Rehabilitation Act of 2013.
(36) Beginning August 2, 2001, computers and
communications equipment utilized for any hospital purpose
and equipment used in the diagnosis, analysis, or
treatment of hospital patients sold to a lessor who leases
the equipment, under a lease of one year or longer
executed or in effect at the time of the purchase, to a
hospital that has been issued an active tax exemption
identification number by the Department under Section 1g
of this Act. This paragraph is exempt from the provisions
of Section 2-70.
(37) Beginning August 2, 2001, personal property sold
to a lessor who leases the property, under a lease of one

HB5545 - 87 - LRB103 38926 HLH 69063 b
year or longer executed or in effect at the time of the
purchase, to a governmental body that has been issued an
active tax exemption identification number by the
Department under Section 1g of this Act. This paragraph is
exempt from the provisions of Section 2-70.
(38) Beginning on January 1, 2002 and through June 30,
2016, tangible personal property purchased from an
Illinois retailer by a taxpayer engaged in centralized
purchasing activities in Illinois who will, upon receipt
of the property in Illinois, temporarily store the
property in Illinois (i) for the purpose of subsequently
transporting it outside this State for use or consumption
thereafter solely outside this State or (ii) for the
purpose of being processed, fabricated, or manufactured
into, attached to, or incorporated into other tangible
personal property to be transported outside this State and
thereafter used or consumed solely outside this State. The
Director of Revenue shall, pursuant to rules adopted in
accordance with the Illinois Administrative Procedure Act,
issue a permit to any taxpayer in good standing with the
Department who is eligible for the exemption under this
paragraph (38). The permit issued under this paragraph
(38) shall authorize the holder, to the extent and in the
manner specified in the rules adopted under this Act, to
purchase tangible personal property from a retailer exempt
from the taxes imposed by this Act. Taxpayers shall

HB5545 - 88 - LRB103 38926 HLH 69063 b
maintain all necessary books and records to substantiate
the use and consumption of all such tangible personal
property outside of the State of Illinois.
(39) Beginning January 1, 2008, tangible personal
property used in the construction or maintenance of a
community water supply, as defined under Section 3.145 of
the Environmental Protection Act, that is operated by a
not-for-profit corporation that holds a valid water supply
permit issued under Title IV of the Environmental
Protection Act. This paragraph is exempt from the
provisions of Section 2-70.
(40) Beginning January 1, 2010 and continuing through
December 31, 2029, materials, parts, equipment,
components, and furnishings incorporated into or upon an
aircraft as part of the modification, refurbishment,
completion, replacement, repair, or maintenance of the
aircraft. This exemption includes consumable supplies used
in the modification, refurbishment, completion,
replacement, repair, and maintenance of aircraft. However,
until January 1, 2024, this exemption excludes any
materials, parts, equipment, components, and consumable
supplies used in the modification, replacement, repair,
and maintenance of aircraft engines or power plants,
whether such engines or power plants are installed or
uninstalled upon any such aircraft. "Consumable supplies"
include, but are not limited to, adhesive, tape,

HB5545 - 89 - LRB103 38926 HLH 69063 b
sandpaper, general purpose lubricants, cleaning solution,
latex gloves, and protective films.
Beginning January 1, 2010 and continuing through
December 31, 2023, this exemption applies only to the sale
of qualifying tangible personal property to persons who
modify, refurbish, complete, replace, or maintain an
aircraft and who (i) hold an Air Agency Certificate and
are empowered to operate an approved repair station by the
Federal Aviation Administration, (ii) have a Class IV
Rating, and (iii) conduct operations in accordance with
Part 145 of the Federal Aviation Regulations. The
exemption does not include aircraft operated by a
commercial air carrier providing scheduled passenger air
service pursuant to authority issued under Part 121 or
Part 129 of the Federal Aviation Regulations. From January
1, 2024 through December 31, 2029, this exemption applies
only to the use of qualifying tangible personal property
by: (A) persons who modify, refurbish, complete, repair,
replace, or maintain aircraft and who (i) hold an Air
Agency Certificate and are empowered to operate an
approved repair station by the Federal Aviation
Administration, (ii) have a Class IV Rating, and (iii)
conduct operations in accordance with Part 145 of the
Federal Aviation Regulations; and (B) persons who engage
in the modification, replacement, repair, and maintenance
of aircraft engines or power plants without regard to

HB5545 - 90 - LRB103 38926 HLH 69063 b
whether or not those persons meet the qualifications of
item (A).
The changes made to this paragraph (40) by Public Act
98-534 are declarative of existing law. It is the intent
of the General Assembly that the exemption under this
paragraph (40) applies continuously from January 1, 2010
through December 31, 2024; however, no claim for credit or
refund is allowed for taxes paid as a result of the
disallowance of this exemption on or after January 1, 2015
and prior to February 5, 2020 (the effective date of
Public Act 101-629).
(41) Tangible personal property sold to a
public-facilities corporation, as described in Section
11-65-10 of the Illinois Municipal Code, for purposes of
constructing or furnishing a municipal convention hall,
but only if the legal title to the municipal convention
hall is transferred to the municipality without any
further consideration by or on behalf of the municipality
at the time of the completion of the municipal convention
hall or upon the retirement or redemption of any bonds or
other debt instruments issued by the public-facilities
corporation in connection with the development of the
municipal convention hall. This exemption includes
existing public-facilities corporations as provided in
Section 11-65-25 of the Illinois Municipal Code. This
paragraph is exempt from the provisions of Section 2-70.

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(42) Beginning January 1, 2017 and through December
31, 2026, menstrual pads, tampons, and menstrual cups.
(43) Merchandise that is subject to the Rental
Purchase Agreement Occupation and Use Tax. The purchaser
must certify that the item is purchased to be rented
subject to a rental-purchase rental purchase agreement, as
defined in the Rental-Purchase Rental Purchase Agreement
Act, and provide proof of registration under the Rental
Purchase Agreement Occupation and Use Tax Act. This
paragraph is exempt from the provisions of Section 2-70.
(44) Qualified tangible personal property used in the
construction or operation of a data center that has been
granted a certificate of exemption by the Department of
Commerce and Economic Opportunity, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the data center or by a contractor or
subcontractor of the owner, operator, or tenant. Data
centers that would have qualified for a certificate of
exemption prior to January 1, 2020 had Public Act 101-31
been in effect, may apply for and obtain an exemption for
subsequent purchases of computer equipment or enabling
software purchased or leased to upgrade, supplement, or
replace computer equipment or enabling software purchased
or leased in the original investment that would have
qualified.
The Department of Commerce and Economic Opportunity

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shall grant a certificate of exemption under this item
(44) to qualified data centers as defined by Section
605-1025 of the Department of Commerce and Economic
Opportunity Law of the Civil Administrative Code of
Illinois.
For the purposes of this item (44):
"Data center" means a building or a series of
buildings rehabilitated or constructed to house
working servers in one physical location or multiple
sites within the State of Illinois.
"Qualified tangible personal property" means:
electrical systems and equipment; climate control and
chilling equipment and systems; mechanical systems and
equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage
devices; network connectivity equipment; racks;
cabinets; telecommunications cabling infrastructure;
raised floor systems; peripheral components or
systems; software; mechanical, electrical, or plumbing
systems; battery systems; cooling systems and towers;
temperature control systems; other cabling; and other
data center infrastructure equipment and systems
necessary to operate qualified tangible personal
property, including fixtures; and component parts of
any of the foregoing, including installation,
maintenance, repair, refurbishment, and replacement of

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qualified tangible personal property to generate,
transform, transmit, distribute, or manage electricity
necessary to operate qualified tangible personal
property; and all other tangible personal property
that is essential to the operations of a computer data
center. The term "qualified tangible personal
property" also includes building materials physically
incorporated into the qualifying data center. To
document the exemption allowed under this Section, the
retailer must obtain from the purchaser a copy of the
certificate of eligibility issued by the Department of
Commerce and Economic Opportunity.
This item (44) is exempt from the provisions of
Section 2-70.
(45) Beginning January 1, 2020 and through December
31, 2020, sales of tangible personal property made by a
marketplace seller over a marketplace for which tax is due
under this Act but for which use tax has been collected and
remitted to the Department by a marketplace facilitator
under Section 2d of the Use Tax Act are exempt from tax
under this Act. A marketplace seller claiming this
exemption shall maintain books and records demonstrating
that the use tax on such sales has been collected and
remitted by a marketplace facilitator. Marketplace sellers
that have properly remitted tax under this Act on such
sales may file a claim for credit as provided in Section 6

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of this Act. No claim is allowed, however, for such taxes
for which a credit or refund has been issued to the
marketplace facilitator under the Use Tax Act, or for
which the marketplace facilitator has filed a claim for
credit or refund under the Use Tax Act.
(46) Beginning July 1, 2022, breast pumps, breast pump
collection and storage supplies, and breast pump kits.
This item (46) is exempt from the provisions of Section
2-70. As used in this item (46):
"Breast pump" means an electrically controlled or
manually controlled pump device designed or marketed to be
used to express milk from a human breast during lactation,
including the pump device and any battery, AC adapter, or
other power supply unit that is used to power the pump
device and is packaged and sold with the pump device at the
time of sale.
"Breast pump collection and storage supplies" means
items of tangible personal property designed or marketed
to be used in conjunction with a breast pump to collect
milk expressed from a human breast and to store collected
milk until it is ready for consumption.
"Breast pump collection and storage supplies"
includes, but is not limited to: breast shields and breast
shield connectors; breast pump tubes and tubing adapters;
breast pump valves and membranes; backflow protectors and
backflow protector adaptors; bottles and bottle caps

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specific to the operation of the breast pump; and breast
milk storage bags.
"Breast pump collection and storage supplies" does not
include: (1) bottles and bottle caps not specific to the
operation of the breast pump; (2) breast pump travel bags
and other similar carrying accessories, including ice
packs, labels, and other similar products; (3) breast pump
cleaning supplies; (4) nursing bras, bra pads, breast
shells, and other similar products; and (5) creams,
ointments, and other similar products that relieve
breastfeeding-related symptoms or conditions of the
breasts or nipples, unless sold as part of a breast pump
kit that is pre-packaged by the breast pump manufacturer
or distributor.
"Breast pump kit" means a kit that: (1) contains no
more than a breast pump, breast pump collection and
storage supplies, a rechargeable battery for operating the
breast pump, a breastmilk cooler, bottle stands, ice
packs, and a breast pump carrying case; and (2) is
pre-packaged as a breast pump kit by the breast pump
manufacturer or distributor.
(47) Tangible personal property sold by or on behalf
of the State Treasurer pursuant to the Revised Uniform
Unclaimed Property Act. This item (47) is exempt from the
provisions of Section 2-70.
(48) Beginning on January 1, 2024, tangible personal

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property purchased by an active duty member of the armed
forces of the United States who presents valid military
identification and purchases the property using a form of
payment where the federal government is the payor. The
member of the armed forces must complete, at the point of
sale, a form prescribed by the Department of Revenue
documenting that the transaction is eligible for the
exemption under this paragraph. Retailers must keep the
form as documentation of the exemption in their records
for a period of not less than 6 years. "Armed forces of the
United States" means the United States Army, Navy, Air
Force, Marine Corps, or Coast Guard. This paragraph is
exempt from the provisions of Section 2-70.
(49) Qualified tangible personal property that is (i)
used in the construction or development of a megaproject
for which a certificate has been issued prior to December
31, 2030 by the Department of Commerce and Economic
Opportunity under Division 22 of Article 10 of the
Property Tax Code and (ii) purchased prior to the
Department's issuance of the megaproject certificate or
during the investment period, whether that tangible
personal property is purchased by the owner, operator, or
tenant of the megaproject or by a contractor or
subcontractor of the owner, operator, or tenant.
As used in this item (49):
"Facility" means a building or series of buildings.

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"Investment period" means the period ending 7 years
after the date on which the Department of Commerce and
Economic Opportunity issues the megaproject certificate,
or such other longer period of time as the local
municipality, local taxing districts, and the company may
agree to, not to exceed an initial period of 10 years.
"Megaproject" means a facility that is rehabilitated
or constructed as described in Division 22 of Article 10
of the Property Tax Code.
"Qualified tangible personal property" means all
tangible personal property that is essential to the
construction or development of a megaproject, including,
but not limited to: electrical systems and equipment;
climate control and chilling equipment and systems;
mechanical systems and equipment; monitoring and secure
systems; emergency generators; hardware; computers;
servers; data storage devices; network connectivity
equipment; racks; cabinets; telecommunications cabling
infrastructure; raised floor systems; peripheral
components or systems; software; mechanical, electrical,
or plumbing systems; battery systems; cooling systems and
towers; temperature control systems; other cabling; and
other infrastructure, equipment, and systems necessary to
operate qualified tangible personal property, including
fixtures; and component parts of those items, including
installation, maintenance, repair, refurbishment, and

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replacement of qualified tangible personal property to
generate, transform, transmit, distribute, or manage
electricity necessary to operate qualified tangible
personal property. The term "qualified tangible personal
property" also includes building materials to be
incorporated into the megaproject. To document the
exemption allowed under this Section, the retailer,
contractor, subcontractor, or supplier must obtain from
the purchaser a copy of the certificate issued by the
Department of Commerce and Economic Opportunity for the
megaproject as described and defined in Division 22 of
Article 10 of the Property Tax Code.
(Source: P.A. 102-16, eff. 6-17-21; 102-634, eff. 8-27-21;
102-700, Article 70, Section 70-20, eff. 4-19-22; 102-700,
Article 75, Section 75-20, eff. 4-19-22; 102-813, eff.
5-13-22; 102-1026, eff. 5-27-22; 103-9, Article 5, Section
5-20, eff. 6-7-23; 103-9, Article 15, Section 15-20, eff.
6-7-23; 103-154, eff. 6-30-23; 103-384, eff. 1-1-24; revised
12-12-23.)
Section 25. The Property Tax Code is amended by adding
Division 22 to Article 10 and changing as follows:
(35 ILCS 200/Art. 10 Div. 22 heading new)
Division 22. Megaprojects

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(35 ILCS 200/10-910 new)
Sec. 10-910. Megaproject Assessment Freeze and Payment
Law; definitions. This Division 22 may be cited as the
Megaproject Assessment Freeze and Payment Law.
As used in this Division:
"Assessment officer" means the chief county assessment
officer of the county in which the megaproject is located.
"Assessment period" means the period beginning on the
first day of the calendar year after the calendar year in which
a megaproject is placed in service and ending on the date when
the megaproject no longer qualifies as a megaproject under
this Division.
"Base tax year" means the tax year prior to the first
calendar year during which the Department issues a megaproject
certificate under this Division.
"Base year" means:
(1) the calendar year prior to the calendar year in
which the Department issues the megaproject certificate,
if the Department issues a megaproject certificate for a
project located on the property without granting
preliminary approval for the project pursuant to Section
10-940; or
(2) the calendar year prior to the calendar year in
which the Department grants that preliminary approval, if
the Department grants preliminary approval pursuant to
Section 10-940 for a megaproject located on the property.

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"Base year valuation" means the assessed value, in the
base year, of the property comprising the megaproject.
"Company" means one or more entities whose aggregate
investment in the megaproject meets the minimum investment
required under this Division. The term "company" includes a
company affiliate unless the context clearly indicates
otherwise.
"Company affiliate" means an entity that joins with or is
an affiliate of a company and that participates in the
investment in, or financing of, a megaproject.
"Consumer Price Index" means the index published by the
Bureau of Labor Statistics of the United States Department of
Labor that measures the average change in prices of goods and
services purchased by all urban consumers, United States city
average, all items, 1982-84 = 100.
"Department" means the Department of Commerce and Economic
Opportunity.
"Eligible costs" means all costs incurred by or on behalf
of, or allocated to, a company, prior to the Department's
issuance of the megaproject certificate or during the
investment period, to create or construct a megaproject.
"Eligible costs" includes, without limitation:
(1) the purchase, site preparation, renovation,
rehabilitation, and construction of land, buildings,
structures, equipment, and furnishings used for or in the
megaproject;

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(2) any goods or services for the megaproject that are
purchased and capitalized under generally accepted
accounting principles, including any organizational costs
and research and development costs incurred in Illinois;
(3) capitalized lease costs for land, buildings,
structures, and equipment valued at their present value
using the interest rate at which the company borrows funds
prevailing at the time the company entered into the lease;
(4) infrastructure development costs;
(5) debt service and project financing costs;
(6) noncapitalized research and development costs;
(7) job training and education costs;
(8) lease and relocation costs; and
(9) amounts expended by a company or company affiliate
as a nonresponsible party pursuant to a voluntary program
of site remediation, including amounts expended to obtain
a certification of completion, if completion of
remediation is certified by the Illinois Environmental
Protection Agency.
"Entity" means a sole proprietor, partnership, firm,
corporation, limited liability company, association, or other
business enterprise.
"Full-time employee" means an individual who is employed
for consideration for at least 35 hours each week or who
renders any other standard of service generally accepted by
industry custom or practice as a full-time employee. An

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individual for whom a W-2 is issued by a professional employer
organization is a full-time employee if he or she is employed
in the service of the applicant for at least 35 hours each week
or renders any other standard of service generally accepted by
industry custom or practice as a full-time employment. An
owner, operator, or tenant who employs labor or services at a
specific site or facility under contract with another may
declare one full-time job for every 1,820 man-hours worked per
year under the contract. Vacations, paid holidays, and sick
time are included in this computation, but overtime is not
considered a part of regular hours.
"Incentive agreement" means an agreement between a
company, a local municipality, and the local taxing districts
obligating the company to make the special payment under this
Division, in addition to paying property taxes, during the
incentive period for a megaproject.
"Incentive period" means the period beginning on the first
day of the calendar year after the calendar year in which the
megaproject is placed in service and each calendar year
thereafter until the earlier of (i) the expiration or
termination of the incentive agreement or (ii) the revocation
of the megaproject certificate.
"Inducement resolution" means a resolution adopted by the
local municipality setting forth the commitment of the local
municipality to enter into an incentive agreement.
"Investment period" means the period ending 7 years after

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the date on which the Department issues the megaproject
certificate, or such other longer period of time as the local
municipality, the local taxing districts, and the company may
agree to, not to exceed an initial period of 10 years.
"Local municipality" means the city, village, or
incorporated town in which the megaproject is located or, if
the megaproject is located in an unincorporated area, the
county in which the megaproject is located.
"Local taxing district means a taxing district that levies
taxes totaling 10% or more of the total property tax bill for
the property on which the megaproject is located.
"Megaproject" means a project that satisfies the minimum
investment and other requirements of this Division.
"Megaproject certificate" means a certificate issued by
the Department that authorizes an assessment freeze as
provided in this Division.
"Minimum investment" means an investment in the
megaproject of at least $100,000,000 in eligible costs within
the investment period.
"Minority person" means a person who is a citizen or
lawful permanent resident of the United States and who is any
of the following:
(1) American Indian or Alaska Native (a person having
origins in any of the original peoples of North and South
America, including Central America, and who maintains
tribal affiliation or community attachment).

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(2) Asian (a person having origins in any of the
original peoples of the Far East, Southeast Asia, or the
Indian subcontinent, including, but not limited to,
Cambodia, China, India, Japan, Korea, Malaysia, Pakistan,
the Philippine Islands, Thailand, and Vietnam).
(3) Black or African American (a person having origins
in any of the black racial groups of Africa).
(4) Hispanic or Latino (a person of Cuban, Mexican,
Puerto Rican, South or Central American, or other Spanish
culture or origin, regardless of race).
(5) Native Hawaiian or Other Pacific Islander (a
person having origins in any of the original peoples of
Hawaii, Guam, Samoa, or other Pacific Islands).
"Minority-owned business" means a business that is at
least 51% owned by one or more minority persons, or that, in
the case of a corporation, has at least 51% of its stock owned
by one or more minority persons, and that, in either case, is
managed and operated on a daily basis by one or more of the
minority individuals who own the business.
"New full-time employee" means a full-time employee who
first became employed by the owner, operator, contractor, or
tenant of the megaproject during the incentive period or
investment period and whose hiring results in a net increase
in the owner, operator, contractor, or tenant's total number
of full-time Illinois employees.
"New full-time employee" does not include:

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(1) a person who was previously employed in Illinois
by the applicant or a related family member prior to the
onset of the investment or incentive period; or
(2) an individual who has a direct or indirect
ownership interest of at least 5% in the profits, capital,
or value of the applicant.
"Placed in service" means that the company has commenced
its business operations at the megaproject site and has met
its job creation requirements under this Section by hiring or
causing to be hired at least 100 new full-time employees who
provide support to the megaproject's business operations and
work in the State of Illinois. If a company pauses or shuts
down its business operations for a period of more than 30 days,
then the megaproject shall no longer be considered placed in
service.
"Project" means land, buildings, and other improvements on
the land, including water facilities, sewage treatment and
disposal facilities, air pollution control facilities, and all
other machinery, apparatuses, equipment, office facilities,
related infrastructure, and furnishings that are considered
necessary, suitable, or useful by a company and comprise the
megaproject, including all such property subject to assessment
under the Property Tax Code.
"Special payment" means the annual amount paid in addition
to property taxes paid during the incentive period as provided
in the incentive agreement.

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"Sports stadium" means a facility, stadium, arena, or
other structure where athletic contests are held and sports
teams practice and perform.
"Taxing district" has the meaning set forth in Section
1-150.
"Termination date" means the last day of a calendar year
that is no later than the 23rd year following the first
calendar year in which a megaproject is placed in service. A
company may apply to the local municipality and local taxing
districts prior to the termination date for an extension of
the termination date beyond the 23rd year for up to 17
additional years, for a total of 40 years. The corporate
authorities of the local municipality and the local taxing
districts shall approve an extension by resolution upon a
finding of substantial public benefit. A copy of the
resolution must be delivered to the Department within 30 days
of the date the resolution was adopted. If the incentive
agreement is terminated under Section 10-937, then the
termination date is the date the agreement is terminated.
(35 ILCS 200/10-915 new)
Sec. 10-915. Valuation during incentive period;
eligibility.
(a) Property certified by the Department as megaproject
property pursuant to this Division is eligible for an
assessment freeze, as provided in this Division, eliminating

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from consideration, for assessment purposes during the
incentive period, the value added to the property by the
project and limiting the total valuation of the property
during the incentive period to the base year valuation. If the
company does not anticipate completing the project within the
investment period, then the local municipality and local
taxing districts may approve one or more extensions of time to
complete the project. However, the local municipality and
local taxing districts may not extend the project for a period
that exceeds 5 years after the last day of the investment
period. Unless approved as part of the original incentive
agreement, the corporate authorities of the local municipality
and local taxing districts may approve an extension under this
subsection by resolution, a copy of which must be delivered to
the Department within 30 days after the date the resolution is
adopted.
(b) To qualify for a megaproject certificate, the company
must:
(1) make the minimum investment in the megaproject
during the investment period;
(2) enter into an incentive agreement with the local
municipality and local taxing districts as described in
this Division;
(3) enter into a project labor agreement with the
applicable local building trades council prior to the
commencement of any demolition, building construction, or

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building renovation related to the project;
(4) establish the goal of awarding 20% of the total
dollar amount of contracts that are related to the project
and are awarded by the company during each calendar year
to minority-owned businesses; and
(5) enter into a memorandum of understanding with the
Department committing to the creation of at least 100 new
full-time jobs as a result of the megaproject.
(c) For purposes of this Division, if a single company
enters into a financing arrangement of the type described in
subsection (b) of Section 10-950, the investment in or
financing of the property by a developer, lessor, financing
entity, or other third party in accordance with this
arrangement is considered investment by the company.
Investment by a related person to the company is considered
investment by the company.
(35 ILCS 200/10-920 new)
Sec. 10-920. Incentive agreement; assessment freeze for
megaprojects; incentive period; inducement resolution;
location of the project; criteria to qualify.
(a) To obtain the benefits provided in this Division, the
company shall apply in writing to the local municipality and
local taxing districts to enter into an incentive agreement
with the municipality and local taxing districts, in the form
and manner required by the local municipality and local taxing

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districts, respectively, and shall certify to the facts
asserted in the application.
(b) The corporate authorities of the local municipality,
prior to entering into an incentive agreement under this
Section, shall hold a public hearing to consider the
application. The amount and terms of the proposed special
payment and the duration of the incentive agreement shall be
considered at the public hearing.
(c) Copies of the completed application shall be provided
to each taxing district for which property taxes were assessed
on the property for the immediately preceding tax year. Those
copies shall be provided at least 30 days prior to the
scheduled public hearing at which the corporate authorities of
the local municipality will consider the application.
(d) The company, the local municipality, and the local
taxing districts shall enter into an incentive agreement
requiring the special payment described in Section 10-925. The
corporate authorities of the local municipality shall adopt an
ordinance approving the incentive agreement.
(e) If an incentive agreement is not executed within 5
years after the local municipality's adoption of an inducement
resolution, expenditures incurred by the company more than 5
years prior to the execution of the incentive agreement shall
not qualify as part of the minimum investment.
(f) To be eligible to enter into an incentive agreement
under this Division, the company must commit to a project that

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meets the minimum investment and new job creation requirements
set forth in this Division.
(35 ILCS 200/10-925 new)
Sec. 10-925. Contents of incentive agreement.
(a) The incentive agreement under Section 10-920 must
require the company to pay, or be responsible for the payment
of, an annual special payment to the local municipality and
the local taxing districts, beginning with the first tax year
for which the assessment freeze under this Division is applied
to the megaproject. The amount of the special payment shall be
established by the local municipality and local taxing
districts in the incentive agreement and may be a fixed amount
for the duration of the incentive period or may be subject to
adjustment (downward or upward) based on factors memorialized
in the incentive agreement.
Unless the special payment is negotiated as a fixed
payment for the duration of the incentive period, the parties
shall conduct an impact analysis study on the megaproject
every 5 years, and the special payment shall be adjusted based
on the results of that study; provided, however, the
adjustment shall not be less than the initial special payment
adjusted for inflation as measured by the Consumer Price
Index.
The portion of the special payment due to the local school
districts shall be increased annually by the lesser of (i) 5%

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or (ii) the percentage increase, if any, in the Consumer Price
Index for the 12 months ending in September of the immediately
preceding calendar year, and may be further increased or
decreased every 5 years based on the results of the impact
analysis study.
(b) The incentive agreement shall obligate the company to
operate the megaproject at the designated project location for
a minimum of 20 years.
(c) The incentive agreement may contain such other terms
and conditions as are mutually agreeable to the local
municipality, the local taxing districts, and the company and
are consistent with the requirements of this Division,
including, without limitation, operational and additional job
creation requirements.
(d) In addition, all incentive agreements entered into
pursuant to Section 10-920 must include, as the first portion
of the document, a recapitulation of the remaining contents of
the document, which shall include the following:
(1) the legal name of each party to the agreement;
(2) the street address of the project and the property
subject to the agreement;
(3) the agreed minimum investment;
(3.5) the agreed number of new jobs to be created;
(4) the term of the agreement;
(5) a schedule showing the amount of the special
payment and its calculation for each year of the

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agreement;
(6) a schedule showing the amount to be distributed
annually to each local taxing district, as set forth in
the incentive agreement;
(7) any other feature or aspect of the agreement which
may affect the calculation of items (5) and (6) of this
subsection; and
(8) the party or parties to the agreement who are
responsible for updating the information contained in the
summary document.
(35 ILCS 200/10-927 new)
Sec. 10-927. Minimum job creation requirements.
(a) The company must hire at least 100 new full-time
employees as a result of the megaproject beginning no later
than when the project is placed in service and lasting for the
duration of the incentive period. These new full-time
employees must be hired to support the business operations of
the megaproject and be located within the State of Illinois.
(b) A company may not satisfy the requirements of this
Section by relocating jobs from one site in Illinois to
another site in Illinois.
(35 ILCS 200/10-930 new)
Sec. 10-930. Installment bills; distribution of special
payments.

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(a) The local municipality shall prepare a bill for the
company for each installment of the special payment according
to the schedule set forth in paragraph (5) of subsection (d) of
Section 10-925, or as modified pursuant to paragraph (7) of
subsection (d) of Section 10-925, and the company shall make
direct payments to the affected taxing entities according to
the schedule in paragraph (6) of subsection (d) of Section
10-925 or as modified in paragraph (7) of subsection (d) of
Section 10-925.
(b) The company shall make direct payments of the special
payment to the local taxing districts associated with the
megaproject within 30 days after receipt by the company of the
bill prepared by the local municipality.
(c) Misallocations of the special payments may be
corrected by adjusting later distributions, but these
adjustments must be made in the next succeeding year following
identification and resolution of the misallocation. To the
extent that distributions have been made improperly in
previous years, claims for adjustment must be made within one
year of the distribution.
(35 ILCS 200/10-937 new)
Sec. 10-937. Termination of incentive agreement; automatic
termination; minimum level of investment and new job creation
required to remain qualified for assessment freeze.
(a) The local municipality, the local taxing districts,

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and the company may mutually agree to terminate the incentive
agreement at any time. From the date of termination, the
megaproject is subject to assessment on the basis of the
then-current fair cash value.
(b) An incentive agreement shall be terminated if the
company fails to satisfy the minimum investment level or the
job creation requirements provided in this Division. If the
incentive agreement is terminated under this subsection, the
megaproject is subject to assessment on the basis of the
then-current fair cash value beginning in the tax year during
which the termination occurs.
(c) An incentive agreement shall terminate if, at any
time, the company no longer has the minimum level of new job
creation and investment as provided in this Division, without
regard to depreciation.
(35 ILCS 200/10-940 new)
Sec. 10-940. Megaproject applications; certification as a
megaproject and revocation of certification.
(a) The Department shall receive applications for
megaproject certificates under this Division in a form and
manner provided by the Department by rule. The Department
shall promptly notify the assessment officer when the
Department receives an application under this Section. The
Department's rules shall provide that an applicant may request
preliminary approval of the megaproject before the project

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begins, before the applicant has entered into a fully executed
incentive agreement with the local municipality and local
taxing districts, or before the project has been placed in
service.
(b) An applicant for a megaproject certificate under this
Division must provide evidence to the Department of a fully
executed incentive agreement between the company, the local
municipality, and the local taxing districts as described in
this Division.
(c) An applicant for a megaproject certificate under this
Division must provide evidence to the Department of a fully
executed project labor agreement entered into with the
applicable local building trades council prior to the
commencement of any demolition, building construction, or
building renovation at the project. If the demolition,
building construction, or building renovation begins after the
application is approved, then the applicant must transmit a
copy of the fully executed project labor agreement to the
Department as soon as possible after the agreement is
executed.
(d) An applicant for a megaproject certificate under this
Division must provide evidence to the Department that the
company has established the goal of awarding 20% of the total
dollar amount of contracts awarded during each calendar year
by the company, that are related to the project, to
minority-owned businesses.

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(d-1) An applicant for a megaproject certificate under
this Division must provide evidence to the Department that the
company has entered into a memorandum of understanding with
the Department committing to the creation of at least 100 new
full-time jobs that provide support to the business operations
of the megaproject and are located within the State of
Illinois.
(e) The Department shall approve an application for a
megaproject certificate if the Department finds that the
project meets the requirements of this Division.
(f) Upon approval of the application, the Department shall
issue a megaproject certificate to the applicant and transmit
a copy to the assessment officer. The certificate shall
identify the property on which the megaproject is located.
(g) For each calendar year following issuance of the
megaproject certificate, until the minimum investment and new
job creation requirements have been met and the megaproject
has been placed in service, the company shall deliver a report
to the Department on the status of construction or creation of
the megaproject and the amount of minimum investment made in
the megaproject during the preceding calendar year. If the
Department determines, in accordance with the Administrative
Review Law and the Illinois Administrative Procedure Act, that
a project for which a certificate has been issued has not met
the minimum investment and job creation requirements of this
Division within the investment period, the Department shall

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revoke the certificate by written notice to the taxpayer of
record and transmit a copy of the revocation to the assessment
officer.
(h) If the local municipality notifies the Department that
the incentive agreement between the company, the local
municipality, and the local taxing districts has been
terminated, the Department shall revoke the certificate by
written notice to the taxpayer of record and transmit a copy of
the revocation to the assessment officer.
(35 ILCS 200/10-945 new)
Sec. 10-945. Computation of valuation.
(a) Upon receipt of the megaproject certificate from the
Department, the assessment officer shall determine the base
year valuation and shall make a notation on each statement of
assessment during the assessment period that the valuation of
the project is based upon the issuance of a megaproject
certificate.
(b) Upon revocation of a megaproject certificate, the
assessment officer shall compute the assessed valuation of the
project on the basis of the then-current fair cash value of the
property.
(35 ILCS 200/10-950 new)
Sec. 10-950. Transfers of interest in a megaproject;
sale-leaseback arrangement; requirements.

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(a) Subject to the terms of the incentive agreement
between the company, the local municipality, and the local
municipality, ownership of or any interest in the megaproject
and any and all related project property, including, without
limitation, transfers of indirect beneficial interests and
equity interests in a company owning a megaproject, shall not
affect the assessment freeze or the validity of the
megaproject certificate issued under this Division.
Notwithstanding the provisions of this subsection, the
incentive agreement shall be a covenant running with the land.
(b) A company may enter into lending, financing, security,
leasing, or similar arrangements, or a succession of such
arrangements, with a financing entity concerning all or part
of a project including, without limitation, a sale-leaseback
arrangement, equipment lease, build-to-suit lease, synthetic
lease, nordic lease, defeased tax benefit, or transfer lease,
an assignment, sublease, or similar arrangement, or succession
of those arrangements, with one or more financing entities
concerning all or part of a project, regardless of the
identity of the income tax or fee owner of the megaproject.
Neither the original transfer to the financing entity nor the
later transfer from the financing entity back to the company,
pursuant to terms in the sale-leaseback agreement, shall
affect the assessment freeze or the validity of the
megaproject certificate issued under this Division, regardless
of whether the income tax basis is changed for income tax

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purposes.
(c) The Department must receive notice of all transfers
undertaken with respect to other projects to effect a
financing. Notice shall be made in writing within 60 days
after the transfer, shall identify each transferee, and shall
contain other information required by the Department with the
appropriate returns. Failure to meet this notice requirement
does not adversely affect the assessment freeze.
(35 ILCS 200/10-955 new)
Sec. 10-955. Minimum investment by company affiliates. To
be eligible for the benefits of this Division, a company must
invest the minimum investment. Investments by company
affiliates during the investment period may be applied toward
the minimum investment under this Division regardless of
whether the company affiliate was part of the project. To
qualify for the assessment freeze, the minimum investment must
be made in connection with the megaproject.
(35 ILCS 200/10-960 new)
Sec. 10-960. Projects to be valued at fair cash value for
purposes of bonded indebtedness and limitations on property
tax extensions. Projects to which an assessment freeze applies
pursuant to this Division shall be valued at their fair cash
value for purposes of calculating a municipality's general
obligation bond limits and a taxing district's limitation on

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tax extensions.
(35 ILCS 200/10-965 new)
Sec. 10-965. Abatements. Any taxing district, upon a
majority vote of its governing authority, may, after the
determination of the assessed valuation as set forth in this
Division, order the clerk of the appropriate municipality or
county to abate any portion of real property taxes otherwise
levied or extended by the taxing district on a megaproject.
(35 ILCS 200/10-970 new)
Sec. 10-970. Filing of returns, contracts, and other
information; due date of payments and returns.
(a) The company and the local municipality shall file
notices, reports, and other information as required by the
Department.
(b) Special payments are due at the same time as property
tax payments and property tax returns are due for the
megaproject property.
(c) Failure to make a timely special payment results in
the assessment of penalties as if the payment were a
delinquent property tax payment or return.
(d) Within 30 days after the date of execution of an
incentive agreement, a copy of the incentive agreement must be
filed with the Department, the county assessor, and the county
auditor for the county in which the megaproject is located.

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(35 ILCS 200/10-980 new)
Sec. 10-980. Rules. The Department may issue rulings and
adopt rules as necessary to carry out the purpose of this
Division.
(35 ILCS 200/10-985 new)
Sec. 10-985. Prohibition on multiple credits, exemptions,
and freezes. An applicant for a megaproject certificate who
qualifies for an assessment freeze under this Section is not
entitled to any other property tax credits, exemptions, or
assessment freezes relating to the megaproject.
(35 ILCS 200/10-990 new)
Sec. 10-990. Sports stadiums. An applicant is not
eligible for a megaproject assessment freeze under this
Section for the construction or development of a sports
stadium unless, prior to the approval of the megaproject by
the Department, the General Assembly approves the megaproject
by joint resolution.
(35 ILCS 200/10-995 new)
Sec. 10-995. Tax Increment Financing districts. A project
that is located and operated in a Tax Increment Financing
(TIF) district or TIF designated area is not eligible for a
megaproject assessment freeze under this Section. The

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agreement shall provide that the megaproject certificate is
void if an area on which the megaproject is located is
designated as a TIF district or TIF designated area.
(35 ILCS 200/10-1000 new)
Sec. 10-1000. Invalidity. If all or any part of this
Division is determined to be unconstitutional or otherwise
unenforceable by a court of competent jurisdiction, a company
has 180 days from the date of the determination to transfer the
megaproject's title to an authorized economic development
authority that qualifies for property tax assessment under
this Division or is exempt from property taxes.
Section 97. Severability. The provisions of this Act are
severable under Section 1.31 of the Statute on Statutes.
Section 99. Effective date. This Act takes effect June 1,
2024.
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INDEX
Statutes amended in order of appearance
35 ILCS 105/3-5
35 ILCS 110/3-5
35 ILCS 115/3-5
35 ILCS 120/2-5
35 ILCS 200/Art. 10 Div.
22 heading new
35 ILCS 200/10-910 new
35 ILCS 200/10-915 new
35 ILCS 200/10-920 new
35 ILCS 200/10-925 new
35 ILCS 200/10-927 new
35 ILCS 200/10-930 new
35 ILCS 200/10-937 new
35 ILCS 200/10-940 new
35 ILCS 200/10-945 new
35 ILCS 200/10-950 new
35 ILCS 200/10-955 new
35 ILCS 200/10-960 new
35 ILCS 200/10-965 new
35 ILCS 200/10-970 new
35 ILCS 200/10-980 new
35 ILCS 200/10-985 new
35 ILCS 200/10-990 new
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