Could a qualifying industrial vacuum loader bought in 1999 still use Illinois's former pollution-control-facility exemption when the owner later sought title?

Plain-English summary

Illinois did not issue a binding ruling on the taxpayer's 1999 industrial vacuum loader. It declined the PLR because it viewed the applicable regulations as dispositive, then explained the former exemption.

The exemption covered qualifying purchases through June 30, 2003

Before July 1, 2003, Illinois excluded qualifying pollution-control facilities from taxable tangible personal property. The cited rule covered systems, methods, devices, or appliances primarily used to eliminate, prevent, or reduce pollution or to treat potential pollutants that could harm people, plants, animals, or property.

The Department said sales of qualifying facilities made through June 30, 2003 were exempt. It also said certain integrated industrial vacuum-loader vehicles, whose primary purpose was recovering harmful releases and abating pollution in vessels, tanks, pits, ponds, and wastewater-treatment facilities, had qualified and might be similar to the requester's vehicle.

That statement stopped short of determining that this particular loader qualified.

Vehicle filing was still required

Form RUT-25 was used to remit Use Tax on a new or used motor vehicle purchased from an out-of-state retailer. The GIL states the form had to be filed even when an exemption was available.

The GIL did not answer the request to eliminate tax, penalty, or interest when the taxpayer later sought title.

What this means for you

Owners of property bought before the exemption expired

The purchase date alone did not establish exemption. The equipment also had to satisfy the former primary-purpose pollution-control test.

Owners of out-of-state vehicles

An available exemption did not eliminate the RUT-25 filing requirement described in the GIL.

Common questions

Q: When did the pollution-control-facility exemption expire?
A: July 1, 2003; qualifying sales through June 30, 2003 could be exempt.

Q: Did industrial vacuum loaders qualify?
A: Illinois said certain integrated loaders primarily used to recover harmful releases and abate pollution had qualified, but it did not rule on this taxpayer's vehicle.

Q: Was Form RUT-25 required if the vehicle was exempt?
A: Yes under the rule stated.

Q: Did the GIL waive tax, penalty, or interest?
A: No.

Citations and references

• 35 ILCS 120/1a and 86 Ill. Adm. Code 130.335(a) — former pollution-control-facility exemption.
• 35 ILCS 120/2 and 35 ILCS 105/3 — Retailers' Occupation Tax and Use Tax.
• 86 Ill. Adm. Code 130.425 — gross receipts and vehicle trade-in value.
• Form RUT-25 — required filing for an out-of-state vehicle purchase even when an exemption was available.

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2011.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2011/st-11-0095.pdf

Original ruling text

ST 11-0095-GIL 11/30/2011 POLLUTION CONTROL FACILITIES
The pollution control exemption expired in July 1, 2003. See, 86 Ill. Adm. Code 130.335(a).
(This is a GIL.)

November 30, 2011

Dear Xxxxx:
This letter is in response to your letter dated October 27, 2011, 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:
This is to advise you that we are counsel for CORPORATION and pursuant to Section
1200.110, request a private letter ruling regarding a sales tax exemption for the
purchase of a pollution control facility purchased and brought into the State of Illinois
prior to 2003.
CORPORATION is an environmental response contractor. One of the environmental
cleaning services provided by CORPORATION involves the use of an industrial vacuum
loader vehicle. These are built for clean up and recovery of a wide range of hazardous
materials, including solids, powders, liquids, slurries, and sludge. The sole purpose is
environmental response clean-up services.
On 1999, CORPORATION purchased an industrial vacuum loader from ABC located in
CITY, STATE. The purchase price for the chassis and module of this industrial vacuum
loader was $$. A copy of the purchase invoice is enclosed. The industrial vacuum
loader was delivered to CORPORATION on 1999.
CORPORATION did not pay sales taxes on the purchase of this industrial vacuum
loader. In 1999, the purchase of a pollution control facility was not considered a
purchase, use or sale of tangible personal property under Illinois law and was thus
exempt from the retailer’s [sic] occupation tax.

35 ILCS 120/ Retailers' Occupation Tax Act.
Sec. 1a.
‘Pollution control facilities’ means any 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’, enacted by the 76th General
Assembly, or for the primary purpose of treating, pretreating, modifying or
disposing of any potential solid, liquid or gaseous pollutant which if
released without such treatment, pretreatment, modification or disposal
might be harmful, detrimental or offensive to human, plant or animal life, or
to property.
Until July 1, 2003, the purchase, employment and transfer of such tangible
personal property as pollution control facilities is not a purchase, use or
sale of tangible personal property. P.A. 93-24 eff. 6-20-03. (Emphasis
added)
At the time of delivery, ABC provided to CORPORATION a Certificate of Origin. A copy
of that Certificate of Origin dated 1999 is enclosed. CORPORATION believed that the
Certificate of Origin was sufficient to constitute title in the State of Illinois. Therefore, at
the time the vehicle was brought into the State of Illinois in August, 1999, no title was
sought. Illinois sales taxes were not paid on this purchase.
In 1999, CORPORATION notified the Secretary of State’s office of this purchase and
applied for license plates. They then received apportioned plates from the Secretary of
State through the use of this Certificate of Origin, which only bolstered their belief that
the vehicle information was properly documented with the State of Illinois. The invoice
for the apportioned plates is dated 1999, showing that CORPORATION was disclosing
to a State Agency that this vehicle was being brought into the State of Illinois.
CORPORATION paid the amount due to the State for those plates and has continued to
make payments on those plates annually.
CORPORATION is now seeking to sell this vehicle and has learned that a title is
necessary. CORPORATION was informed that upon securing a title it will have to now
pay sales taxes and penalties – even though it was an exempt purchase – because they
did not seek the exemption at the time of purchase.
We believe that this would be an inaccurate application of the law because the
exemption applied to pollution control facility purchases made up until June 2003.
CORPORATION submits that under the statute there are two questions which must be
answered: 1) did this vehicle qualify as a pollution control facility under the statute and
2) was the purchase made prior to 2003?
As for the first question, the industrial vacuum loader clearly qualifies under the statute
as a pollution control facility. These industrial vacuum loaders have the design
specifications and equipment necessary for proper removal and hazardous spills. A
copy of the specifications is enclosed. Environmental response is actually the business
of CORPORATION, which was performing the type of work encouraged and
contemplated by the legislature in enacting the statute.

We are also enclosing an Affidavit of PERSON of CORPORATION. PERSON is the
individual employed by CORPORATION with the most knowledge regarding the use of
the industrial vacuum loader. The Affidavit attests to the fact that the sole purpose for
this industrial vacuum loader is for cleanup efforts of hazardous materials which may
pollute the air, water and ground.
This industrial vacuum truck was used, for example, when XYZ had a major break
requiring a vacuuming of the spill. As an environmental response contractor,
CORPORATION was contacted and was the first on site with this industrial vacuum
which was then used to vacuum the spill so as to prevent hazardous pollution to the
soil.
The legislature intended to encourage diverse means for reducing pollution through the
use of tax exemptions. Columbia Quarry Company v. Dept. of Revenue of the State of
Illinois, 506 N.E.2d 795; American Welding Supply v. Dept. of Revenue, 106 Ill. App.3d
93, 435 N.E.2d 761 (1982).
The second question is also answered in the affirmative. It is undisputed that this sale
took place prior to June 30, 2003. The invoice is dated 1999, and the Certificate of
Origin is dated 1999. The exemption applied to purchases through June, 2003.
While an RUT-25 form was mistakenly not filed, which would have clearly set forth the
applicable exemption, it is clear from the conduct of CORPORATION in applying for
license plates that at all times it attempted to comply with all requirements of the State,
and there is no evidence of any effort to evade payment to the Illinois Department of
Revenue or the Office of the Secretary of State for any fees or taxes due and owing.
CORPORATION is now seeking to sell this vehicle and needs to have it titled. The
legislature intended for a vehicle purchased and brought into the State of Illinois prior to
2003 to be exempt from paying sales tax when they are providing the benefit to the
pollution control facility. It is in furtherance of the intention of the legislature that this
vehicle, the pollution control facility, which was purchased and brought into the State of
Illinois prior to June 2003, be extended that very exemption as all other pollution control
facilities and qualifying vehicles were at that time.
We are requesting that a letter ruling be issued that the sale of this pollution control
facility be deemed exempt and that there be no penalty or interest since no tax would
have been owed at that time.

DEPARTMENT’S RESPONSE:
The Department’s regulation “Public Information, Rulemaking and Organization” provides that
“[w]hether to issue a private letter ruling in response to a letter ruling request is within the discretion of
the Department. The Department will respond to all requests for private letter rulings either by
issuance of a ruling or by a letter explaining that the request for ruling will not be honored.” 2 Ill. Adm.
Code 1200.110(a)(4). Further, the Department’s regulations regarding Private Letter Rulings provide
that “[i]f there is case law or there are regulations dispositive of the subject to the request, the
Department will decline to issue a letter ruling on the subject." 86 Ill. Adm. Code 1200.110(a)(3)(D).
The Department declines to issue a Private Letter Ruling since its regulations are dispositive of the
subject of your request.

The Retailers' Occupation Tax Act imposes a tax upon persons engaged in the business of
selling at retail tangible personal property. 35 ILCS 120/2. The Use Tax Act imposes a tax upon the
privilege of using in this State tangible personal property purchased at retail from a retailer. 35 ILCS
105/3.
Sales of new vehicles are subject to sales tax based on the gross receipts from the sale.
Under 86 Ill. Adm. Code 130.425, the value of, or the credit given for a trade-in would not be counted
as gross receipts. Any tax due would be based upon the gross receipts received in payment for the
vehicle. Form RUT-25, Use Tax Return, is used to remit Use Tax to the Department if a new or used
motor vehicle, watercraft, or aircraft is purchased from an out-of-State retailer. This form is required
to be filed even if an exemption from the tax is available.
The pollution control facilities sales tax exemption contained in Section 1a of the Retailers’
Occupation Tax Act was, until July 1, 2003, available for “any 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 ‘pollution’ is defined in the Environmental
Protection Act (415 ILCS 5/1 et seq.), or for the primary purpose of treating, pretreating, modifying or
disposing of any potential solid, liquid, gaseous pollutant which if released without such treatment,
pretreatment, modification or disposal might be harmful, detrimental or offensive to human, plant or
animal life, or to property”. 86 Ill. Adm. Code 130.335(a). Thus, sales of qualifying pollution control
facilities made through June 30, 2003 would be exempt from Illinois sales tax. The Department has
determined that certain industrial vacuum loader vehicles that are an integrated system that could not
be separated and whose primary purpose is to recover harmful releases and abate pollution in
vessels, tanks, pits, ponds, and waste water treatment facilities (that may be similar to the one in your
letter) qualified for the pollution control facilities 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
Enc.