Illinois Administrative Code › Title 86 - REVENUE › Part 150 - USE TAX › Subpart C - KINDS OF USES AND USERS NOT TAXED › Section 150.310 - Exemptions to Avoid Multi-State Taxation

Current through Register Vol. 48, No. 28, July 12, 2024
a)
To prevent actual or likely
				multistate taxation, the tax imposed by
the Act
does not apply
				to the use of tangible personal property in this State under the following
				circumstances:
1)
the use,
				in this State, of tangible personal property acquired outside this State by a
				nonresident individual and brought into this State by the individual
				for
that individual's
own use while temporarily within this
				State or while passing through this State
; this includes stopping for
				fuel, energy, food, or overnight lodging in this State [35 ILCS
				105/3-55(a) ];
2)
the use, in this State, by 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 as long as so used by the interstate carriers for hire, 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
[35 ILCS
				105/3-55(c) ] (See also 86 Ill. Adm.
				Code 130.340 for more information
				concerning this exemption as the same principles apply for use tax
				purposes);
3)
the use, in
				this State, of tangible personal property that is acquired outside this State
				and caused to be brought into this State by a person who has already paid a tax
				in another
state
in respect to the sale, purchase, or use of
				that property, to the extent of the amount of the tax properly due and paid in
				the other
state; for this purpose, state includes the District of
				Columbia [35 ILCS
				105/3-55(d) ];
4)
the temporary storage, in this
				State, of tangible personal property that is acquired outside this State and
				that, after being brought into this State and stored here temporarily, is used
				solely outside this State or is physically attached to or incorporated into
				other tangible personal property that is used solely outside this State, or is
				altered by converting, fabricating, manufacturing, printing, processing, or
				shaping, and, as altered, is used solely outside this State
[35 ILCS
				105/3-55(e) ];
5)
the temporary storage in this
				State of building materials and fixtures that are acquired either in this State
				or outside this State by an Illinois registered combination retailer and
				construction contractor, and that the purchaser thereafter uses outside this
				State by incorporating that property into real estate located outside this
				State
[35 ILCS
				105/3-55(f) ];
6) the use, in this State, of a vehicle for
				which a drive-away decal has been issued under the provisions of 86 Ill. Adm.
				Code 130.605(b)(1).
				However, beginning July 1, 2008, if the purchaser of a motor vehicle claims the
				exemption provided in Section
				130.605(b)(1)
				and the motor vehicle is then used in this State for more than 30 days in a
				calendar year, the purchaser is liable for use tax on the purchase price of
				that motor vehicle, subject to credit for tax properly due and paid to any
				other state as provided in subsection (a)(3). [35 ILCS
				105/3-55(h) and (h-1)] The assessment
				of tax under this subsection (a)(6) by the Department is limited to the period
				for which it may issue a notice of tax liability under the Use Tax
				Act.
7)
Beginning July 1,
				2007, the following exemptions
described in subsections (a)(7)(A),
				(B), or (C)
apply with respect to certain aircraft, as defined in
				Section 3 of the Illinois Aeronautics Act
[620 ILCS 5]. [35 ILCS
				105/3-55(h-2)(1-3)]
A) If the aircraft is
				purchased in this State,
no tax is imposed if all of the following
				conditions are met:
i)
the
				aircraft leaves this State within 15 days after the later of either the
				issuance of the final billing for the purchase 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;
ii)
the aircraft is not based or
				registered in this State after the purchase of the aircraft;
				and
iii)
the
				purchaser provides the Department with a signed and dated certification, on a
				form prescribed by the Department, certifying that the requirements of
				this
subsection (a)(7)(A)
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.
[35 ILCS 105/3-55
				(h-2)(1)(A-C)]
B) If the
				aircraft
is temporarily located in this State for the purpose of a
				prepurchase evaluation, no tax is imposed if all of the following conditions
				are met:
i)
the aircraft is
				not based or registered in this State after the prepurchase evaluation;
				and
ii)
the
				purchaser provides the Department with a signed and dated certification, on a
				form prescribed by the Department, certifying that the requirements of
				this
subsection (a)(7)(B)
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.
[35 ILCS 105/3-55
				(h-2)(2)(A-B)]
C) If the
				aircraft
is temporarily located in this State for the purpose of a
				post-sale customization, no tax is imposed if all of the following conditions
				are met:
i)
the aircraft
				leaves this State within 15 days after 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;
ii)
the
				aircraft is not based or registered in this State either before or after the
				post-sale customization; and
iii)
the purchaser provides the
				Department with a signed and dated certification, on a form prescribed by the
				Department, certifying that the requirements of this
subsection
				(a)(7)(C)
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.
[35 ILCS 105/3-55(h-2)(3)(A-C)]
D) The exemption provided under subsections
				(a)(7)(B) and (C) does not apply to tax incurred on any service transactions
				performed on the aircraft.
E) For
				purposes of this subsection (a)(7):
"Based in this State" means hangared, stored, or
				  otherwise used, excluding post-sale customizations as defined in this
subsection (a)(7)(E)
, for 10 or more days in each 12-month period
				  immediately following the date of the sale of the aircraft.
"Post-sale customization" means any improvement,
				  maintenance, or repair that is performed on an aircraft following a transfer of
				  ownership of the aircraft.
"Prepurchase evaluation" means an examination of an
				  aircraft to provide a potential purchaser with information relevant to the
				  potential purchase.
"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.
F)
If tax becomes due under
				this
subsection (a)(7)
because of the purchaser's use of the
				aircraft in this State, the purchaser shall file a return with the Department
				and pay the tax on the fair market value of the aircraft. This return and
				payment of the tax must be made no later than 30 days after the aircraft is
				used in a taxable manner in this State. The tax is based on the fair market
				value of the aircraft on the date that it is first used in a taxable manner in
				this State.
[35 ILCS 105/3-55(h-2)]
8)
The use or purchase of tangible
				personal property by 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.
[35 ILCS
				105/3-55 (g)]