Did an out-of-state winery with no Illinois location have to register and collect tax when shipping online wine orders directly to Illinois residents?

Plain-English summary

An out-of-state winery planned to sell wine through its website and catalogs and ship orders to Illinois residents. It had no Illinois location, warehouse, employees, agents, or other stated connection.

IDOR said the winery still needed an Illinois Winery Shipper's License, also described as a Direct Shipping Permit. If it was not otherwise registered under the Retailers' Occupation Tax Act, it had to register under the Use Tax Act and collect and remit Use Tax on all wine shipped to people in Illinois.

This page reports the requirements stated in the May 2013 GIL; businesses should confirm current licensing and tax rules before shipping.

Common questions

Did the winery's lack of an Illinois warehouse eliminate registration? No.

What permit did the letter identify? The Illinois Winery Shipper's License or Direct Shipping Permit.

What tax did an otherwise unregistered licensee collect? Use Tax on all gallons sold and shipped to Illinois residents.

Citations and references

• 235 ILCS 5/5-1

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-13-0025.pdf

Original ruling text

ST 13-0025-GIL 05/28/2013 LIQUOR TAX
Under the Liquor Control Act of 1934, out-of-state wineries who are going to sell wine
directly to Illinois residents must complete an Application For State Of Illinois Winery
Shipper’s License (“Direct Shipping Permit”). (This is a GIL.)
May 28, 2013
Dear:
This letter is in response to your letter dated April 4, 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 are an out-of-state winery located in STATE and we do not have any nexus
in the state of Illinois. We are going to sell wine directly to IL residents through
online catalogs and our website. We are going to ship our products via
COMPANY.
Please let us know (via mail) if we are obligated to collect IL sales tax and submit
it to IL State Sales Tax Department. We need a simple “yes” or “no” answer
along with a reference to IL sales tax law.
We do not have any location or warehouse in IL. We do not solicit sales of
taxable products or services through employees, salespersons, independent
agents, or service representatives located in Illinois. We sell our products
through our website and online catalogs & we have no connection with the state
of Illinois.
Our federal tax id # is XXX.
DEPARTMENT’S RESPONSE:
Under the Liquor Control Act of 1934, out-of-state wineries who are going to sell wine directly to
Illinois residents must complete an Application For State Of Illinois Winery Shipper’s License (“Direct
Shipping Permit”), which I have enclosed for your convenience. Further, a licensee who is not
otherwise required to register under the Retailers’ Occupation Tax Act must register under the Use

ST 13-0025-GIL
May 28, 2013
Page 2
Tax Act to collect and remit use tax to the Department of Revenue for all gallons of wine that are sold
by the licensee and shipped to persons in this State. 235 ILCS 5/5-1.
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