Would Illinois accept an MTC multistate resale certificate that omitted the description of items being purchased?

Plain-English summary

A seller asked whether an Illinois customer could use an MTC Uniform Sales and Use Tax Certificate—Multijurisdictional that carried another company name and address.

IDOR did not approve the submitted form. Illinois accepted the MTC certificate only if it contained every item required by 86 Ill. Adm. Code 130.1405, and this form omitted a description of the property being purchased for resale.

A valid certificate needed the seller's and purchaser's names and addresses, a description of the items, the purchaser's or authorized agent's signature and date, and the appropriate registration, resale, or out-of-state certification information.

Missing registration or certification created a presumption that the sale was not for resale. Other evidence—such as an invoice showing an actual resale and an explanation from the purchaser—could rebut that presumption, but incomplete or unsigned documentation invited closer audit review.

Common questions

Did Illinois accept the MTC multistate form generally? Yes, if it contained all required information.

Why was this form deficient? It lacked a description of the items purchased for resale.

Could other evidence still prove resale? Potentially, but the seller bore greater audit risk.

Citations and references

• 86 Ill. Adm. Code 130.1405
• 86 Ill. Adm. Code 130.101
• 35 ILCS 105/3; 86 Ill. Adm. Code 150.101 and 150.130

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2013.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2013/st-13-0018.pdf

Original ruling text

ST 13-0018-GIL 04/23/2013 SALE FOR RESALE
This letter addresses sales for resale. See 86 Ill. Adm. Code 130.1405. (This is a GIL.)
April 23, 2013
Dear:
This letter is in response to your letter dated April 1, 2013, 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:
We would like to verify if our customer COMPANY1, located at STREET1, CITY1, IL
could use [sic] attached Uniform Sales & Use Tax Certificate – Multi-jurisdiction under
the name of COMPANY2 at STREET2, CITY2, IL address and also a copy of our order

XXX.

Your immediate written advise in this regard is highly appreciated.
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. See 86 Ill. Adm.
Code 130.101. The tax is measured by the seller's gross receipts from retail sales made in the
course of such business. "Gross receipts" means the total selling price or the amount of such sales.
The retailer must pay Retailers' Occupation Tax to the Department based upon its gross receipts, or
actual amount received, from the sale of the tangible personal property.
In Illinois, Use Tax is imposed on the privilege of using, in this State, any kind of tangible personal
property that is purchased anywhere at retail from a retailer. See 35 ILCS 105/3; 86 Ill. Adm. Code
150.101. These taxes comprise what is commonly known as "sales" tax in Illinois. If the purchases
occur in Illinois, the purchasers must pay the Use Tax to the retailer at the time of purchase. The
retailers are then allowed to retain the amount of Use Tax paid to reimburse themselves for their
Retailers' Occupation Tax liability incurred on those sales. If the retailer does not collect the Use Tax
from the purchaser for remittance to the Department, the purchaser is responsible for remitting the
Use Tax directly to the Department. See 86 Ill. Adm. Code 150.130.
When an Illinois retailer sells tangible personal property and delivers it in Illinois, sales tax is due
unless an exemption can be documented. The resale exemption is applicable when making sales to
a purchaser who will in turn sell the tangible personal property. For general information regarding

ST 13-0018-GIL
April 23, 2013
Page 2
resale certificates, the Department’s regulation for resale certificates, “Seller's Responsibility to
Obtain Certificates of Resale and Requirements for Certificates of Resale,” is found at 86 Ill. Adm.
Code 130.1405. If an electronic resale certificate is kept, it should contain all of the information
required under 86 Ill. Adm. Code 130.1405.
A Certificate of Resale is a statement signed by the purchaser that the property purchased by him is
purchased for purposes of resale. Provided that this statement is correct, the Department will accept
Certificates of Resale as prima facie proof that sales covered thereby were made for resale. In
addition to the statement, a Certificate of Resale must contain:
1)
2)
3)
4)
5)

The seller's name and address;
the purchaser's name and address;
a description of the items being purchased for resale;
purchaser's signature, or the signature of an authorized employee or agent of the
purchaser, and date of signing;
Registration Number, Resale Number, or Certification of Resale to out-of-State
Purchaser.

Failure to present an active registration number or resale number and a certification to the seller that
a sale is for resale creates a presumption that a sale is not for resale. This presumption may be
rebutted by other evidence that all of the seller’s sales are sales for resale, or that a particular sale is
a sale for resale. For example, other evidence that might be used to document a sale for resale,
when a registration number or resale number and certification to the seller are not provided, could
include an invoice from the purchaser to his customer showing that the item was actually resold,
along with a statement from the purchaser explaining why it had not obtained a resale number and
certifying that the purchase was a purchase for resale in Illinois. The risk run by companies in
accepting such a certification and the risk run by purchasers in providing such a certification is that an
Illinois auditor is more likely to go behind a certificate of resale that does not contain a signature and
require that more information be provided as evidence that the particular sale was, in fact, a sale for
resale.
Illinois does accept the MTC Uniform Sales and Use Tax Certificate – Multijurisdictional as a
Certificate of Resale if it contains all of the information required in the regulation set forth above. I
would note the form sent to us fails to provide a description of the items being purchased for resale.
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,

Richard S. Wolters
Associate Counsel