Can taxpayers rely on ST 10-0039-GIL's conclusion that a United States possession was not outside the United States for the air-carrier fuel exemption?

Plain-English summary

ST 10-0039-GIL is rescinded and should not be relied on. When issued on May 5, 2010, it stated that a United States possession was not a location outside the United States for the air-carrier fuel exemption. It used a flight from Los Angeles to Guam with a Hawaii stopover as an example that would not qualify as an international flight for this exemption.

The original GIL described an exemption for certified fuel and petroleum products used by a qualifying commercial air common carrier on a regularly scheduled flight destined for or returning from a location outside the United States, without regard to domestic stopovers.

On July 27, 2010, the Department issued ST 10-0055-GIL, rescinding this letter while it reconsidered whether a United States possession counted as outside the United States. The later notice did not state the Department's new position.

What this means for you

The original Guam conclusion is historical only. Confirm the current law and Department position from effective authority rather than using this rescinded GIL.

Common questions

Q: What did ST 10-0039-GIL originally say?
A: It said a United States possession was not outside the United States for the cited exemption.

Q: Is that conclusion still effective because it appears in the PDF?
A: No. ST 10-0055-GIL expressly rescinded it effective July 27, 2010.

Q: Did the rescission notice decide the issue the other way?
A: No. It announced reconsideration but gave no replacement conclusion.

Citations and references

• 35 ILCS 120/2-5(22)
• 86 Ill. Adm. Code 130.321(a) and (b)
• ST 10-0055-GIL (rescission effective July 27, 2010)

Subject

Miscellaneous

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2010.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2010/st-10-0039.pdf

Original ruling text

ST 10-0039-GIL 05/05/2010 MISCELLANEOUS
Fuel and petroleum products sold to or used by an air common carrier, certified by the carrier
to be used for consumption, shipment, or storage in the conduct of its business as an air
common carrier, for a flight destined for or returning from a location or locations outside the
United States without regard to previous or subsequent domestic stopovers is exempt from
Retailers' Occupation Tax. See 86 Ill. Adm. Code 130.321. (This is a GIL.)

May 5, 2010

Dear Xxxxx:
This letter is in response to your letter dated March 9, 2010, in which you request information.
The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are issued by the
Department in response to specific taxpayer inquiries concerning the application of a tax statute or
rule to a particular fact situation. A PLR is binding on the Department, but only as to the taxpayer
who is the subject of the request for ruling and only to the extent the facts recited in the PLR are
correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in the
Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information Letter
(“GIL”) is to direct taxpayers to Department regulations or other sources of information regarding the
topic about which they have inquired. A GIL is not a statement of Department policy and is not
binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website at
www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to your
inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
COMPANY is a non-income tax consulting company. Among our clients are a number
of airlines, so we frequently seek clarification of state statutes and regulations that could
affect our clients’ non-income tax obligations.
An exemption from the retailers’ occupation tax for fuel and petroleum products sold to
or used by an air common carrier in the conduct of its business as an air common
carrier for a flight destined for or returning from a location outside the United States is
provided in 35 ILCS 105/3-5(12). The exemption is reiterated in 86 Ill. Adm. Code
130.321.
My question is whether a possession of the United States is considered a ‘location
outside the United States’ for the purpose of this exemption.
For comparison, I refer you to 26 USC, section 4221. This statute exempts from the
federal excise tax purchases of fuel used in foreign trade or trade between the United
States and any of its possessions. Although the federal statute specifically mentions
U.S. possessions and the Illinois statute does not, it seems reasonable to assume that a
location outside the United States would include a U.S. possession.

DEPARTMENT’S RESPONSE:
Although we cannot give you a specific answer in the form of a General Information Letter, we
hope you find the following helpful.
Notwithstanding the fact that sales may be at retail, “fuel and petroleum products sold to or
used by an air carrier, certified by the carrier to be used for consumption, shipment, or storage in the
conduct of its business as an air common carrier, for a flight destined for or returning from a location
or locations outside the United States without regard to previous or subsequent domestic stopovers”
is exempt from Retailers’ Occupation Tax. 35 ILCS 120/2-5(22); 86 Ill. Adm. Code 130.321(a)
(emphasis added). For purposes of the exemption, an air carrier means a commercial air common
carrier certified and authorized to conduct international flights involving passengers or cargo for hire,
on a regularly-scheduled basis. See Section 130.321(b).
As you can see, in order to be eligible for this exemption, a flight has to be destined for or
returning from a location or locations outside the United States. A possession of the United States is
not considered a location outside the United States. As such, for example, a flight originating in Los
Angeles, destined for Guam with a stopover in Hawaii would not be considered an international flight
for purposes of this exemption.
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.
Very truly yours,

Debra M. Boggess
Associate Counsel
DMB:msk