86 Ill. Adm. Code 150.331 — Persons Who Lease Tangible Personal Property to Exempt Hospitals

# Persons Who Lease Tangible Personal Property to Exempt Hospitals

ADMINISTRATIVE CODE

TITLE 86: REVENUECHAPTER I: DEPARTMENT OF REVENUEPART 150 USE TAXSECTION 150.331 PERSONS WHO LEASE TANGIBLE PERSONAL PROPERTY TO EXEMPT HOSPITALS

Section 150.331 Persons Who Lease Tangible Personal Property to Exempt Hospitals a) Effective January 1, 1996 through December 31, 2000, and on and after August 2, 2001, computers and communications equipment utilized for any hospital purpose that are purchased by persons who lease those items to exempt hospitals are not subject to Use Tax. As noted in this subsection, the exemption is not available during the period January 1, 2001 through August 1, 2001 because it expired under the provisions of Section 3-90 of the Use Tax Act [35 ILCS 105/3-90] and was not reinstated until August 2, 2001. The exemption is otherwise available, provided that: 1) the computers and communications equipment described above must all be purchased for lease to a tax exempt hospital under a lease that has been executed or is in effect at the time of purchase; 2) the lease must be for a period of one year or longer; and 3) the lease must be to a hospital that has an active tax exemption identification number issued by the Department under Section 1g of the Retailers' Occupation Tax Act (see 86 Ill. Adm. Code 130.2007).

b) Effective January 1, 1996 through December 31, 2000, and on and after August 2, 2001, equipment, other than that specified in subsection (a), used in the diagnosis, analysis, or treatment of hospital patients that is purchased by persons who lease that equipment to exempt hospitals is not subject to Use Tax. As noted in this subsection, the exemption is not available during the period January 1, 2001 through August 1, 2001 because it expired under the provisions of Section 3-90 of the Use Tax Act [35 ILCS 105/3-90] and was not reinstated until August 2, 2001. The exemption is otherwise available, provided that: 1) the equipment described above must all be purchased for lease to a tax exempt hospital under a lease that has been executed or is in effect at the time of purchase; 2) the lease must be for a period of one year or longer; and 3) the lease must be to a hospital that has an active tax exemption identification number issued by the Department under Section 1g of the Retailers' Occupation Tax Act (see 86 Ill. Adm. Code 130.2007).

c) The purchaser must provide the certification described below to the seller.

1) When this exemption may be properly claimed on the purchase of computer or other communications equipment, the purchaser must give the seller a certification stating that the computer or other communications equipment is being purchased for lease to a tax exempt hospital under a lease for a period of one year or longer executed or in effect at the time of the purchase.

2) When this exemption may be properly claimed on the purchase of equipment used in the diagnosis, analysis, or treatment of hospital patients, the purchaser must give the seller a certification stating that the equipment is being purchased for lease to a tax exempt hospital under a lease for a period of one year or longer executed or in effect at the time of the purchase, and that the equipment is for use in the diagnosis, analysis, or treatment of hospital patients.

3) The certification described in subsections (c)(1) and (c)(2) of this Section must also contain all of the following:

A) The seller's name and address;

B) The purchaser's name and address;

C) A description of the tangible personal property being purchased;

D) The purchaser's signature and date of signing;

E) The name and address of the hospital and its tax exemption identification number issued by the Department; and F) The date the lease was executed and the lease period.

d) For purposes of this Section, "hospital patients" means persons who seek any form of medical care including, but not limited to, medical treatment, testing, diagnosis, or therapy at a hospital or at another location under the control and supervision of a hospital. For example, persons who are sent by doctors for X-rays or other tests at qualifying hospitals, even though those persons are not admitted to those hospitals, are considered hospital patients.

e) If computers or other equipment are purchased by a lessor under the provisions of this Section and the computers or other equipment are used in a manner that does not qualify for the exemption or are used in any other non-exempt manner, the lessor is liable for the appropriate tax imposed under the Use Tax Act. Computers or other equipment being leased under qualifying leases that were entered into between January 1, 1996 and December 31, 2000 pursuant to the provisions of this Section continue to be exempt after January 1, 2001 until such time as the computers or other equipment is no longer being leased under those qualifying leases or is used in any other non-qualifying manner. In the event that the computers or other equipment is no longer leased in an exempt manner or is used in any other non-exempt manner, the amount of Use Tax liability incurred by the lessor is based on the fair market value of the computers or other equipment at the time the non-qualifying use occurred. (Source: Amended at 26 Ill. Reg. 971, effective January 15, 2002)

Section 150.331 Persons Who Lease Tangible Personal Property to Exempt Hospitals

a) Effective January 1, 1996 through December 31, 2000, and on and after August 2, 2001, computers and communications equipment utilized for any hospital purpose that are purchased by persons who lease those items to exempt hospitals are not subject to Use Tax. As noted in this subsection, the exemption is not available during the period January 1, 2001 through August 1, 2001 because it expired under the provisions of Section 3-90 of the Use Tax Act [35 ILCS 105/3-90] and was not reinstated until August 2, 2001. The exemption is otherwise available, provided that:

1) the computers and communications equipment described above must all be purchased for lease to a tax exempt hospital under a lease that has been executed or is in effect at the time of purchase;

2) the lease must be for a period of one year or longer; and

3) the lease must be to a hospital that has an active tax exemption identification number issued by the Department under Section 1g of the Retailers' Occupation Tax Act (see 86 Ill. Adm. Code 130.2007).

b) Effective January 1, 1996 through December 31, 2000, and on and after August 2, 2001, equipment, other than that specified in subsection (a), used in the diagnosis, analysis, or treatment of hospital patients that is purchased by persons who lease that equipment to exempt hospitals is not subject to Use Tax. As noted in this subsection, the exemption is not available during the period January 1, 2001 through August 1, 2001 because it expired under the provisions of Section 3-90 of the Use Tax Act [35 ILCS 105/3-90] and was not reinstated until August 2, 2001. The exemption is otherwise available, provided that:

1) the equipment described above must all be purchased for lease to a tax exempt hospital under a lease that has been executed or is in effect at the time of purchase;

2) the lease must be for a period of one year or longer; and

3) the lease must be to a hospital that has an active tax exemption identification number issued by the Department under Section 1g of the Retailers' Occupation Tax Act (see 86 Ill. Adm. Code 130.2007).

c) The purchaser must provide the certification described below to the seller.

1) When this exemption may be properly claimed on the purchase of computer or other communications equipment, the purchaser must give the seller a certification stating that the computer or other communications equipment is being purchased for lease to a tax exempt hospital under a lease for a period of one year or longer executed or in effect at the time of the purchase.

2) When this exemption may be properly claimed on the purchase of equipment used in the diagnosis, analysis, or treatment of hospital patients, the purchaser must give the seller a certification stating that the equipment is being purchased for lease to a tax exempt hospital under a lease for a period of one year or longer executed or in effect at the time of the purchase, and that the equipment is for use in the diagnosis, analysis, or treatment of hospital patients.

3) The certification described in subsections (c)(1) and (c)(2) of this Section must also contain all of the following:

A) The seller's name and address;

B) The purchaser's name and address;

C) A description of the tangible personal property being purchased;

D) The purchaser's signature and date of signing;

E) The name and address of the hospital and its tax exemption identification number issued by the Department; and

F) The date the lease was executed and the lease period.

d) For purposes of this Section, "hospital patients" means persons who seek any form of medical care including, but not limited to, medical treatment, testing, diagnosis, or therapy at a hospital or at another location under the control and supervision of a hospital. For example, persons who are sent by doctors for X-rays or other tests at qualifying hospitals, even though those persons are not admitted to those hospitals, are considered hospital patients.

e) If computers or other equipment are purchased by a lessor under the provisions of this Section and the computers or other equipment are used in a manner that does not qualify for the exemption or are used in any other non-exempt manner, the lessor is liable for the appropriate tax imposed under the Use Tax Act. Computers or other equipment being leased under qualifying leases that were entered into between January 1, 1996 and December 31, 2000 pursuant to the provisions of this Section continue to be exempt after January 1, 2001 until such time as the computers or other equipment is no longer being leased under those qualifying leases or is used in any other non-qualifying manner. In the event that the computers or other equipment is no longer leased in an exempt manner or is used in any other non-exempt manner, the amount of Use Tax liability incurred by the lessor is based on the fair market value of the computers or other equipment at the time the non-qualifying use occurred.

(Source: Amended at 26 Ill. Reg. 971, effective January 15, 2002)