Could church staff or members use the church's Illinois E number for meals or supplies they bought personally and were later reimbursed for?

Plain-English summary

A small church with staff and members meeting in restaurants asked whether its exemption covered meals, gasoline, and supplies bought personally and later reimbursed by the church.

IDOR said federal 501(c)(3) status alone did not establish the Illinois purchase exemption. A qualifying religious, educational, or charitable organization needed an Illinois exemption identification number—an E number.

Even with an E number, the exemption applied to purchases made by the organization in furtherance of its purposes:

• Meals bought by staff and members could not be purchased tax-free using the church's E number.
• Individuals who bought property with their own funds and were later reimbursed generally could not make those purchases tax-free.
• The sale had to be made to the exempt organization itself.

The response did not separately state a gasoline-specific conclusion.

Common questions

Was 501(c)(3) status enough? No. The organization needed an Illinois E number.

Could a staff member use the E number for a restaurant meal? No.

Could personal purchases become exempt through reimbursement? Generally no.

Citations and references

• 86 Ill. Adm. Code 130.2007

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-12-0044.pdf

Original ruling text

ST 12-0044-GIL 07/30/2012 EXEMPT ORGANIZATIONS
Organizations possessing “E” numbers issued by the Department are exempt on
purchases used in furtherance of their organizational purposes. See 86 Ill. Adm. Code
130.2007. (This is a GIL.)
July 30, 2012
Dear:
This letter is in response to your letter dated July 19, 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:
I am writing to inquire about specific tax exempt purchases made by our organization.
Our church is currently renting a meeting space. When we meet with staff and
members, we typically meet in restaurants. We also incur gasoline expenses as a
result of these meetings. In addition, because we are a small church we have a number
of people assist in purchasing supplies for the organization. My questions are as
follows:
•
•
•
•

Do restaurant purchases qualify as exempt from sales tax?
Do gasoline purchases qualify as exempt from sales tax?
Must these purchases be made directly with church funds (church credit
card or check)? or
Is it allowable for individuals to make sales tax exempt purchases for
supplies with their own funds and then be reimbursed by the church
provided we keep thorough records documenting that these purchases
were used solely by and for the church?

Thank you in advance for your help in this matter. We want to be sure we are using our
tax exempt status appropriately. If you have any questions, please do not hesitate to
contact me at X.
DEPARTMENT’S RESPONSE:
The Illinois Retailers' Occupation Tax Act imposes a tax upon persons engaged in this State in the
business of selling tangible personal property to purchasers for use or consumption. 35 ILCS 120/2;
86 Ill. Adm. Code 130.101. In Illinois, Use Tax is imposed on the privilege of using, in this State, any

ST 12-0044-GIL
July 30, 2012
Page 2
kind of tangible personal property that is purchased anywhere at retail from a retailer. 35 ILCS 105/3;
86 Ill. Adm. Code 150.101.
Organizations that are recognized as non-profit under Internal Revenue Code Section 501(c)(3), are
not necessarily exempt organizations pursuant to Illinois tax law. Such organizations must obtain an
exemption identification number (an “E number”) to qualify. See 86 Ill. Adm. Code 130.2007.
Organizations that make application to the Department of Revenue and are determined to be
exclusively religious, educational, or charitable, receive an E number. The E number evidences that
the Department recognizes the organizations as exempt from incurring Use Tax when purchasing
tangible personal property in furtherance of their organizational purposes. If an organization does not
have an E number, then its purchases are subject to tax. Please be aware that currently only sales to
organizations holding the E number are exempt, not sales to individual members of the organization.
For example, the purchase of meals by staff and members may not be made tax-free on the basis of
the E number issued to the church.
As a general proposition, individual members or clients of exempt organizations who purchase items
of tangible personal property with their own funds and are then reimbursed by the exempt
organization, cannot purchase the items tax-free. As noted above, the sale must be made to the
exempt organization, and the "E" number can only be used in making purchases in furtherance of
organizational purposes.
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