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2018 Sales Tax Letter Rulings

General Information Letters

Ruling Date Subject Synopsis
ST 18-0001-GIL 01/25/2018 Gross Receipts Costs of doing business are an element of a retailer's gross receipts subject to tax even if separately stated on the bill to the customer. See 86 Ill. Adm. Code 130.410. (This is a GIL.)
ST 18-0002-GIL 01/25/2018 Food This letter discusses the applicable sales tax rates for food and soft drinks. See 86 Ill. Adm. Code 130.310. (This is a GIL.)
ST 18-0003-GIL 02/09/2018 Gross Receipts The sale of cable and satellite programming services to subscribers is not a sale of tangible personal property and is not subject to the Retailers’ Occupation Tax, Service Occupation Tax or Telecommunications Excise Tax. See 86 Ill. Adm. Code 130.101; 86 Ill. Adm. Code 140.101; 35 ILCS 630/3 and 630/4. (This is a GIL.)
ST 18-0004-GIL 02/09/2018 Motor Vehicles The Department will not approve the accuracy of private legal publications. (This is a GIL.)
ST 18-0005-GIL 02/09/2018 Nexus This letter responds to a questionnaire regarding nexus. See Quill Corp. v. North Dakota, 112 S. Ct. 1904 (1992). (This is a GIL.)
ST 18-0006-GIL 03/27/2018 Construction Contractors When a construction contractor permanently affixes tangible personal property to real property, the contractor is deemed the end user of that tangible personal property. As the end user, the contractor incurs Use Tax on the cost price of that tangible personal property. See 86 Ill. Adm. Code 130.2075. (This is a GIL.)
ST 18-0007-GIL 03/27/2018 Sale For Resale This letter is a response to a survey regarding drop shipments. For information regarding drop shipments, see the Department’s regulation entitled “Drop Shipments,” found at 86 Ill. Adm. Code 130.225. (This is a GIL.)
ST 18-0008-GIL 03/27/2018 Motor Vehicles This letter responds to a survey concerning taxation of vehicles. (This is a GIL.)
ST 18-0009-GIL 03/30/2018 Manufacturing Machinery & Equipment Under the Retailers’ Occupation Tax Act, the manufacturing machinery and equipment exemption is available for machinery and equipment used primarily (over 50% of the time) in the manufacturing or assembling of tangible personal property for wholesale or retail sale or lease. See 86 Ill. Adm. Code 130.330. (This is a GIL.)
ST 18-0010-GIL 03/30/2018 Service Occupation Tax This letter describes how a subservice transaction is treated under the Service Occupation Tax Act. See 86 Ill. Adm. 140.145. This is a GIL.
​ST 18-0011-GIL 04/03/2018​ ​Coal Mining Equipment ​The Retailers' Occupation Tax Act does not apply to sales of coal exploration, mining, off highway hauling, processing, maintenance and reclamation equipment. The exemption also applies to individual replacement parts for such equipment. See 86 Ill. Adm. Code 130.350. (This is a GIL.)
​ST 18-0012-GIL 04/05/2018​ ​Rental Purchase Agreement Tax ​In general, items that are subject to the State 1% sales tax rate are not intended to be covered by the 6.25% Rental Purchase Agreement Occupation and Use Tax. See 35 ILCS 180/1 et seq. (This is a GIL.)
​ST 18-0013-GIL 04/05/2018​ ​Prepaid Sales Tax ​This letter describes the manner in which prepaid sales tax on motor fuel is collected and remitted. See 86 Ill. Adm. Code 130.551. (This is a GIL.)
​ST 18-0014-GIL 04/09/2018​ ​Prepaid Sales Tax ​This letter describes the manner in which prepaid sales tax on motor fuel is collected and remitted. See 35 ILCS 120/2d. (This is a GIL.)
​ST 18-0015-GIL 04/13/2018​ ​Nexus This letter addresses nexus, construction contractors, and sales for resale. See Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992); 86 Ill. Adm. 130.1940; 86 Ill. Adm. Code 130.2075; and 86 Ill. Adm. 130.1405. (This is a GIL.)
​ST 18-0016-GIL 05/15/2018​ ​Nexus ​This letter responds to a question regarding nexus. See Quill Corp. v. North Dakota, 112 S. Ct. 1904 (1992). (This is a GIL.)
ST 18-0017-GIL 05/07/2018 Miscellaneous This letter discusses the application of Metropolitan Pier and Exposition Authority Retailers’ Occupation Tax to sales of food, alcoholic beverages, and soft drinks sold on boats and other watercraft. See 70 ILCS 210/13. (This is a GIL.)
​ST 18-0018-GIL 07/13/2018​ ​Service Occupation Tax ​The Service Occupation Tax is a tax imposed upon servicemen engaged in the business of making sales of service in this State, based on the tangible personal property transferred incident to sales of service. See 86 Ill. Adm. Code Part 140. (This is a GIL.)
​ST 18-0019-GIL
 ​09/10/2018
 ​Miscellaneous
 ​This letter responds to an annual survey. (This is a GIL.)
​ST 18-0020-GIL
 09/13/2018​
 ​Rental Purchase Agreement Tax
 In general, a rental agreement with a rental term that consists of consecutive 90-day periods, but with rental payments that are due every other week, does not meet the statutory definition of “rental purchase agreement” and is therefore not subject to the Rental Purchase Agreement Occupation and Use Tax. See 35 ILCS 180/5. (This is a GIL.)​
​ST 18-0021-GIL
 09/13/2018
 ​​Rental Purchase Agreement Tax
 A "rental purchase agreement" is an agreement for the use of merchandise by a consumer for personal, family, or household purposes for an initial period of 4 months or less that is automatically renewable with each payment after the initial period and that permits the consumer to become the owner of the merchandise. See 35 ILCS 180/5. (This is a GIL.)
ST 18-0022-GIL 09/13/2018​ ​Exempt Organizations ​Exclusively religious, educational, or charitable organizations that have been given E-numbers by the Department are allowed to engage in a very limited amount of retail selling without incurring Retailers' Occupation Tax liability. See 86 Ill. Adm. Code 130.2005. (This is a GIL.)
​ST 18-0023-GIL 09/13/2018​ ​Miscellaneous ​Manufacturers, importers or wholesalers can enter into an "agency agreement" with the Department, whereby they register, file returns and remit Retailers’ Occupation Tax on behalf of their local distributors. See 86 Ill. Adm. Code 130.550. (This is a GIL.)
​ST 18-0024-GIL 09/13/2018​ Service Occupation Tax ​Under the Service Occupation Tax Act, businesses providing services (i.e., servicemen) are taxed on tangible personal property transferred as an incident to sales of service. See 86 Ill. Adm. Code 140.101. (This is a GIL.)
​ST 18-0025-GIL
 09/13/2018​ ​Sale at Retail ​Sales of intangible personal property are not taxable under the Retailers’ Occupation Tax Act. 86 Ill. Adm. Code 130.120. (This is a GIL.)
​ST 18-0026-GIL ​11/21/2018 ​Miscellaneous The exemption for 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 sunset on December 31, 2014 by operation of law pursuant to the sunset provisions of Section 2-70 of the Retailers’ Occupation Tax Act [35 ILCS 2-70]. See 86 Ill. Adm. Code 130.120(rr). (This is a GIL.)
​ST 18-0027-GIL 11/19/2018​ ​Computer Software ​This letter references the Department’s administrative rules on computer software and maintenance agreements. See 86 Ill. Adm. Code 130.1935. (This is a GIL.)
​ST 18-0028-GIL 11/19/2018​ ​Cigarette Tax Act ​This letter addresses the sale of unstamped cigarettes to out-of-State distributors. See 86 Ill. Adm. Code 440.170. (This is a GIL.)
​ST 18-0029-GIL 11/19/2018​ ​Cigarette Tax Act ​This letter discusses the licensing of cross-docking services. See 35 ILCS 130/. (This is a GIL.)
​ST 18-0030-GIL 11/21/2018​ ​Foods, Drugs, & Medical Appliances ​Items such as vitamins or dietary supplements are considered foods and may qualify for the low State rate of tax. See 86 Ill. Adm. Code 130.310. (This is a GIL.)
​ST 18-0031-GIL
 ​11/09/2018
 ​Motor Vehicles
 ​This letter responds to a survey concerning taxation of vehicles. (This is a GIL.)
​ST 18-0032-GIL 11/029/2018​ ​Enterprise Zones ​Under the Enterprise Zone building materials exemption, a deduction from Illinois Retailers’ Occupation Tax liability exists for gross receipts from retail sales of materials that will be incorporated, by remodeling, rehabilitation, or new construction, into real estate located in an enterprise zone established by a county or municipality under the Illinois Enterprise Zone Act. (See 35 ILCS 120/5k and 86 Ill. Adm. Code 130.1951(e).) (This is a GIL.)
​ST 18-0033-GIL 11/28/2018​ ​Telecommunications
 Fire alarm services provided by retailers that include the reselling of telephone services are subject to the Telecommunications Excise Tax Act. See 35 ILCS 630/3. (This is a GIL.)
​ST 18-0034-GIL
 11/30/2018​ ​Construction Contractors Persons who permanently affix tangible personal property to real estate act as construction contractors and incur Use Tax liability on their cost price of tangible personal property they physically incorporate into realty. 86 Ill. Adm. Code 130.1940. (This is a GIL.)
​ST 18-0035-GIL
 12/05/2018​
 ​Construction Contractors
 Persons who sell signs may incur a Retailers’ Occupation Tax, Service Occupation Tax or Use Tax liability, depending upon the circumstances of the particular sale. See 86 Ill. Adm. Code 130.2155 (Tax Liability of Sign Vendors); 86 Ill. Adm. Code 140.101 (Basis and Rate of the Service Occupation Tax); 86 Ill. Adm. Code 130.1940 (Construction Contractors and Real Estate Developers) and 86 Ill. Adm. Code 130.2075 (Sales To Construction Contractors, Real Estate Developers and Speculative Builders). (This is a GIL.)
​ST 18-0036-GIL
 ​12/05/2018
 ​Service  Occupation Tax
 ​This letter describes a serviceman’s liability under the Service Occupation Tax Act. See 86 Ill. Adm. 140.145. (This is a GIL.)
​ST 18-0037-GIL
 12/05/2018
 ​Telecommunications
 ​This letter discusses audio conferencing services. See 35 ILCS 630. (This is a GIL.)
​ST 18-0038-GIL
 12/05/2018​
 ​Miscellaneous
 ​The Department of Revenue has no authority to abate taxes that are required to have been collected and remitted. It can, however, provide relief from penalties (late pay or late file penalties, for instance), based upon reasonable cause grounds. 86 Ill. Adm. Code 700.300. (This is a GIL.)
ST 18-0039-GIL 
 ​12/06/2018
 ​Claims From Credit
 ​If a taxpayer pays an amount of tax under the Retailers' Occupation Tax that is not due, either as a result of a mistake of fact or an error of law, taxpayer may file a claim for credit with the Department. No credit shall be given the taxpayer unless the taxpayer shows that he or she has borne the burden of the tax or has unconditionally repaid the amount of the tax to the purchaser from whom it was collected. See 86 III Adm. Code 130.1501.  (This is a GIL.)
ST 18-0040-GIL
 12/06/2018​
 ​Farm Machinery & Equipment
 ​The sale of certain types of tangible personal property used in production agriculture is not subject to Illinois Retailers’ Occupation Tax and Use Tax. See 35 ILCS 120/2-5(2) and 86 Ill. Adm. Code 130.305. (This is a GIL.)
​ST 18-0041-GIL
 12/06/2018
 ​​Farm Machinery & Equipment
 ​The sale of certain types of tangible personal property used in production agriculture is not subject to Illinois Retailers’ Occupation Tax and Use Tax. See 35 ILCS 120/2-5(2) and 86 Ill. Adm. Code 130.305. (This is a GIL.)
​ST 18-0042-GIL

 12/06/2018
​
 ​Nexus
 ​This letter responds to a question regarding nexus. See Quill Corp. v. North Dakota, 112 S. Ct. 1904 (1992). (This is a GIL.)
​ST 18-0043-GIL
 ​12/06/2018

 ​​​Farm Machinery & Equipment
 ​An aircraft used primarily in production agriculture may qualify for the farm machinery and equipment exemption. See 86 Ill. Adm. Code 130.305. (This is a GIL.)
​ST 18-0044-GIL
 ​12/12/2018
 ​Delivery Charges
 ​This letter discusses transportation and delivery charges. See 86 Ill. Adm. Code 130.415. (This is a GIL.)

Private Letter Rulings

Ruling Date Subject Synopsis
ST 18-0001-PLR 01/31/2018 Cigarette Tax Act This letter discusses sales by secondary distributors. 35 ILCS 130/2c. (This is a PLR.)
ST 18-0002-PLR 01/31/2018 Watercraft Use Tax Watercraft whose change in ownership is due to the merger of corporations into a limited liability company is not subject to Watercraft Use Tax. See 86 Ill. Adm. Code 153.105 and 805 ILCS 5/11.39 and 11.50. (This is a PLR.)
ST 18-0003-PLR 02/08/2018 Computer Software The Department will look at the order form and any documents incorporated by reference into the order form to determine if the requirements of Section 130.1945(a)(1) have been met. See 86 Ill. Adm. Code 130.1945(a)(1). (This is a PLR.)
ST 18-0004-PLR 02/09/2018 Hotel Operators' Tax This letter discusses the exemption provided in Section 3(d-5) of The Hotel Operators’ Tax Act. See 35 ILCS 145/3. (This is a PLR.)
​ST 18-0005-PLR 06/14/2018​ ​Local Taxes ​The occupation of selling is comprised of the composite of many activities extending from the preparation for, and the obtaining of, orders for goods to the final consummation of the sale by the passing of title and payment of the purchase price. Thus, establishing where "the taxable business of selling is being carried on" requires a fact-specific inquiry into the composite of activities that comprise the retailer’s business. 86 Ill. Adm. Code 270.115. (This is a PLR.)
​ST 18-0006-PLR
 07/11/2018​
 ​Manufacturing Machinery & Equipment
 Machinery and equipment used in a recycling processing facility to produce recycled material for wholesale or retail sale qualifies for the manufacturing machinery and equipment exemption. See 86 Ill. Adm. Code 130.330. (This is a PLR.)​
​ST 18-0007-PLR
 ​07/12/2018
 ​Liquor Tax
 ​This letter discusses the applicability of the Uniformity Clause to the tax imposed by Article 8 of the Liquor Control Act (235 ILCS 5/8-1). See Federated Distributors, Inc. v. Johnson, 125 Ill.2d 1, 125 Ill. Dec. 343, 530 N.E.2d 501 (1988). NOTE: This letter is superseded by ST 18-0012-PLR. (This is a PLR)
​ST 18-0008-PLR 08/16/2018​ ​Gross Receipts ​If a retailer receives a reimbursement or rebate for a discount given to a purchaser on a sale, the amount of that reimbursement or rebate is considered part of the gross receipts received by the seller and is subject to Retailers' Occupation Tax. An incentive payment to a retailer that is not related to an individual sale is not considered part of gross receipts. Chet’s Vending Service Inc. v. Department of Revenue, 71 Ill. 2d 38 (1978). See 86 Ill. Adm. Code 130.2125. (This is a PLR.)
​ST 18-0009-PLR 08/20/2018​ ​Hotel Operators' Tax ​ Gross receipts from the rentals of rooms to "permanent residents" are not subject to Hotel Operators' Occupation Tax liability. A "permanent resident" is any person who has occupied or has the right to occupy any room or rooms in a hotel for at least 30 consecutive days. See 86 Ill. Adm. Code 480.101. (This is a PLR.)
​ST 18-0010-PLR
 09/26/2018​
 ​Computer Software
 ​This letter discusses the requirement in Section 130.1935(a)(1) regarding a written “signed” agreement. See 86 Ill. Adm. Code 130.1945(a)(1). (This is a PLR.)
​ST 18-0011-PLR 09/28/2018​ ​Agents ​An auctioneer acting on behalf of an unknown or undisclosed principal is responsible for Retailers’ Occupation Tax on the gross receipts from the sale. However, if the auctioneer is acting on behalf of a known or disclosed principal, the sale of tangible personal property is taxable to the principal and not the auctioneer if the principal is a retailer of the tangible personal property being sold at the auction. See 86 Ill. Adm. Code 130.1915. (This is a PLR).
​ST 18-0012-PLR
 09/29/2018​
 ​Liquor Tax
 ​This letter discusses the taxability of flavored malt beverage under Article 8 of the Liquor Control Act. (235 ILCS 5/8-1) NOTE: This letter supersedes ST 18-0007-PLR. (This is a PLR.)
​ST 18-0013-PLR
 12/27/2018​
 ​Automobile Renting Tax
 ​Persons who are engaged in the business of renting automobiles in Illinois under rental terms of one year or less are subject to the Automobile Renting Occupation and Use Tax set forth at 35 ILCS 155/1 et seq. See 86 Ill. Adm. Code 180.101. (This is a PLR.)