Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart C - CERTAIN STATUTORY EXEMPTIONS › Section 130.331 - Manufacturer's Purchase Credit

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				Earning Manufacturer's Purchase Credit
1)
				Effective January 1, 1995 through June 30, 2003, and beginning again on
				September 1, 2004 through August 30, 2014, a manufacturer may earn a credit
				when purchasing exempt manufacturing machinery and equipment. Effective July 1,
				1996 through June 30, 2003, and beginning again on September 1, 2004 through
				August 30, 2014, a graphic arts producer may earn a credit when purchasing
				exempt graphic arts machinery and equipment. The credit is known as the
				Manufacturer's Purchase Credit or MPC. The amount of credit is limited to a
				percentage of the 6.25 % State rate of tax that would have been incurred on the
				purchase of exempt manufacturing machinery and equipment. (See Section
				130.325
				and Section
				130.330
				of this Part.) By statute, MPC was repealed June 30, 2003 (Public Act 93-0024;
				effective June 20, 2003). Pursuant to Public Act 93-0840, effective July 30,
				2004, MPC was reenacted without any specific sunset date. Subsequently, Public
				Act 96-116 was enacted to add a sunset date for MPC of August 30,
				2014.
2) The percentage of credit
				earned based upon exempt purchases increases over time as follows:
A) 15% for purchases made on or before June
				30, 1995.
B) 25% for purchases made
				after June 30, 1995, and on or before June 30, 1996.
C) 40% for purchases made after June 30,
				1996, and on or before June 30, 1997.
D) 50% for purchases made on or after July 1,
				1997. (Section 3-85 of the Use Tax Act)
3) The credit is earned at the time
				qualifying manufacturing machinery and equipment or qualifying graphic arts
				machinery and equipment is purchased. A qualifying purchase is considered to
				take place as of the date of invoice of that qualifying manufacturing machinery
				and equipment. The credit is considered to be earned on qualifying
				manufacturing machinery and equipment or qualifying graphic arts machinery and
				equipment that is purchased under an installment contract or progress payment
				contract at the time that each installment or progress payment is invoiced. The
				amount of credit that is earned is based on the amount of tax that would have
				been due on that portion of the purchase price that is invoiced.
4) No credit is earned for exempt purchases
				under the expanded Enterprise Zone exemption, as described in Section
				130.1951(b)
				of this Part, unless that purchase would also qualify as exempt under the
				Manufacturing Machinery and Equipment Exemption described in Section
				130.330
				of this Part or under the Graphic Arts Machinery and Equipment Exemption
				described in Section
				130.325
				of this Part.
5) No credit is
				earned for a purchase of tangible personal property that qualifies as an
				occasional sale, as described in Section
				130.110(a)
				of this Part.
6) No credit is
				earned for a purchase of tangible personal property that is purchased for
				resale. (See Section
				130.210(a)
				of this Part.)