Illinois Administrative Code
Title 86 - REVENUE
Part 130 - RETAILERS' OCCUPATION TAX
Subpart S - SPECIFIC APPLICATIONS
Section 130.1948 - Tangible Personal Property Used or Consumed in the Operation of Pollution Control Facilities Located within Enterprise Zones
Current through Register Vol. 48, No. 12, March 22, 2024
a) The Retailers' Occupation Tax Act provides an exemption for tangible personal property used or consumed in the operation of pollution control facilities, as defined in Section 1a of the Retailers' Occupation Tax Act, located within an enterprise zone established pursuant to the Illinois Enterprise Zone Act [35 ILCS 120/1e ]. The exemption contained in Section 1e of the Retailers' Occupation Tax Act applies to tangible personal property used or consumed in the operation of pollution control facilities located within an enterprise zone; the exemption does not apply to pollution control facilities that were exempt under Section 1a of the Retailers' Occupation Tax Act until July 1, 2003.
b) The exemption only applies to a business that meets the following requirements contained in Section 1f of the Retailers' Occupation Tax Act:
c) The phrase "pollution control facilities" meansany system, method, construction, device, or appliance appurtenant thereto, sold or used or intended for the primary purpose of eliminating, preventing, or reducing air and water pollution as the term "air pollution" or "water pollution" is defined in the Environmental Protection Act [415 ILCS 5 ]or for the primary purpose of treating, pretreating, modifying or disposing of any potential solid, liquid or gaseous pollutant that, if released without such treatment, pretreatment, modification or disposal, might be harmful, detrimental or offensive to human, plant or animal life, or to property. [35 ILCS 120/1a ]
d) If a business enterprise is certified by DCEO, all tangible personal property used or consumed by that enterprise in the operation of pollution control facilities within an enterprise zone is exempt from tax. In order to qualify, the item must be used exclusively in the enterprise zone and the pollution control facility must be located in the enterprise zone. By way of illustration, this exemption includes:
e) No item used primarily in any activity other than the operation of pollution control facilities within an enterprise zone can qualify for this exemption. No item used or consumed outside the enterprise zone can qualify for the exemption. No item used or consumed in the operation of pollution control facilities that are located outside the enterprise zone can qualify for the exemption. By way of illustration, the exemption does not extend to:
f) This exemption from Illinois Retailers' Occupation Tax is available to all retailers registered to collect or remit Illinois sales tax. It is not restricted to retailers located in the enterprise zone.
g) For this exemption to apply, the purchaser need not itself employ the tangible personal property in the operation of pollution control facilities. If the purchaser leases the items to a certified business that uses the items in an exempt manner, the sale to the purchaser-lessor will be exempt from tax. A retailer may deduct the sales from taxable gross receipts provided the purchaser-lessor provides to the retailer a properly completed exemption certificate and the information contained in the certificate would support the exemption if the sale were made directly to the certified business. Should a purchaser-lessor lease the items to a lessee that is not a certified business or to a certified business that does not use those items in the operation of pollution control facilities within an enterprise zone, the purchaser-lessor will become liable for the tax from which it was previously exempted.
h) Documentation of Exemption
i) An item that is used primarily in a qualifying manner at a qualifying location but that is converted to a nonexempt use or is moved to a nonexempt location will become subject to tax at the time of its conversion based on the fair market value of the item at the time of conversion to the nonexempt use.