Did a small auto repair shop's de minimis serviceman status eliminate Form ST-1 filing for its retail tire sales?

Plain-English summary

A small auto repair shop sold about 15 tires every three months and filed the tire user fee return. The owner had been told that de minimis serviceman status meant the shop did not need Form ST-1.

IDOR separated the transactions:

• Automobile repair was a service; tangible property transferred with the repair followed Service Occupation Tax rules.
• A tire sold at retail was a retail sale subject to the Retailers' Occupation Tax Act.

Because the shop sold tangible personal property at retail, it had an ST-1 filing obligation. The historical rule required monthly filing by the 20th day of the following month unless IDOR authorized quarterly or annual filing.

Quarterly filing could be authorized when average monthly liability did not exceed $200 under the rule then in effect. Until authorized otherwise, the taxpayer had to file monthly. Filing only the ST-8 tire user fee return did not replace ST-1.

Common questions

Did de minimis serviceman status eliminate ST-1 for tire sales? No.

Could the shop file quarterly? Only with Department authorization under the applicable threshold.

Was ST-8 alone sufficient? No.

Citations and references

• 86 Ill. Adm. Code 130.501 and 130.502
• 86 Ill. Adm. Code 140.101

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2012.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2012/st-12-0037.pdf

Original ruling text

ST 12-0037-GIL 07/24/2012 RETURNS
Every person engaged in the business of selling tangible personal property at retail
must file a Form ST-1 on a monthly basis on or before the 20th day of each month. A
taxpayer can be authorized by the Department to file a quarterly return. See 86 Ill. Adm.
Code 130.501 and 86 Ill. Adm. Code 130.502. (This is a GIL.)
July 24, 2012
Dear:
This letter is in response to your letter dated June 11, 2012, 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:
My husband has a small auto repair store that sales [sic] tires. He was told by his
accountant that he was a de minimus [sic] serviceperson and did not have to complete
the ST-1 sales tax return for the tires that he sold. He does submit the ST-8 tire user
fee. Is this correct? Is my husband exempt from completing the ST-1 sales tax return
because he is a deminimus [sic] serviceperson? Should be submit the ST-8 only? He
normally has sales of around 15 tires every 3 months.
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.
The Retailers' Occupation Tax Act imposes a tax upon persons engaged in the business of selling at
retail tangible personal property. See 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. See 35
ILCS 105/3.
Retailers' Occupation Tax and Use Tax do not apply to receipts from sales of personal Services (e.g.,
automobile repairs). Personal services that do not involve the transfer of tangible personal property
are not subject to sales tax. However, under the Service Occupation Tax Act, servicemen are taxed
on tangible personal property transferred incident to sales of service. For your general information
we refer you to the Department’s regulation at 86 Ill. Adm. Code 140.101 regarding sales of service
and Service Occupation Tax.

ST 12-0037-GIL
July 24, 2012
Page 2
The kinds of sales and services described in your letter are taxed under the Retailers' Occupation Tax
Act or the Service Occupation Tax Act depending upon the nature of the transaction. The sale of
tires would be a sale at retail and subject to the Retailers’ Occupation Tax Act. The sale of
automobile repair services would be a sale of services subject to the Service Occupation Tax Act on
the transfer of any tangible personal property incident to the sale of services.
Note, every person engaged in the business of selling tangible personal property at retail must file a
Form ST-1 on a monthly basis on or before the 20th day of each month as required by 86 Ill. Adm.
Code 130.501. A taxpayer can be authorized by the Department to file a quarterly return if provisions
for filing quarterly (average monthly liability does not exceed $200) are fulfilled. The provisions are
described in 86 Ill. Adm. Code 130.502. The decision to permit quarterly or annual filing will be based
on the taxpayer's average monthly liability during the first year of registration and, unless authorized
or required to file on a quarterly or annual basis, all taxpayers are required to file monthly returns.
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