Does cooking wine sold as a food ingredient qualify for Illinois's 1% state food rate?

Plain-English summary

An ethnic-food retailer asked whether cooking wine, intended for use as a food ingredient rather than as a beverage, should be taxed at Illinois's low or high state rate.

IDOR did not classify the product. The GIL instead quoted the general rule in 86 Ill. Adm. Code 130.310: food for off-premises consumption is taxed at the 1% state rate plus applicable local taxes, rather than the 6.25% general-merchandise state rate, but that reduced rate excludes alcoholic beverages, candy, soft drinks, and food prepared for immediate consumption.

The letter defined food broadly as a solid, liquid, powder, or other item intended by the seller primarily for human consumption, including condiments, spices, seasonings, vitamins, bottled water, and ice. But it did not say whether this cooking wine was an alcoholic beverage, so the requested product-level answer remained unresolved.

What this means for you

Grocery and specialty-food retailers

Labeling a product an ingredient does not, by itself, establish the reduced rate. For cooking wine, the unresolved question is whether it falls within the alcoholic-beverage exclusion.

Accountants and tax professionals

Use this GIL only for the general rate framework. Do not cite it as a ruling that all cooking wine receives the 1% rate.

Common questions

Did IDOR approve the 1% rate for this cooking wine? No. The letter did not classify the product.

What food generally received the reduced rate? Food intended for off-premises consumption, other than alcoholic beverages, candy, soft drinks, and prepared food.

Were local taxes excluded? No. The GIL described the 1% state rate plus applicable local taxes.

Citations and references

• 35 ILCS 120/2; 86 Ill. Adm. Code 130.101
• 35 ILCS 105/3; 86 Ill. Adm. Code 150.101
• 86 Ill. Adm. Code 130.310

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2014.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2014/st-14-0013.pdf

Original ruling text

ST 14-0013-GIL 04/04/2014 FOOD
This letter discusses the State tax rates applicable to sales of food. See 86 Ill. Adm.
Code 130.310. (This is a GIL.)
April 4, 2014

Dear Xxxx:
This letter is in response to your letter dated February 1, 2014, 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 work for COMPANY which is retailer store, selling ETHNIC FOODS.
We would like to confirm the tax rate for “cooking wine” that is intended for use as an
ingredient in food rather than as a beverage.
I purchased a couple of cooking wine around ILLINOIS, and I checked out the stores
are selling this item with low tax rate.
However, COMPANY would like to make clear that the sales tax rate of “cooking wine”
should be low or high by Illinois department of Revenue.
We look forward to hear from Illinois Department of Revenue.
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 kind of tangible personal property that is purchased anywhere at retail from a retailer. 35
ILCS 105/3; 86 Ill. Adm. Code 150.101.
The Department’s regulation regarding the appropriate tax rates for food can be found at 86 Ill.
Adm. Code 130.310. Food that is to be consumed off the premises where it is sold (other than
alcoholic beverages, candy, soft drinks, and food that has been prepared for immediate consumption)
is taxed at the State rate of 1% plus applicable local taxes rather than the 6.25% general State

Page 2
April 4, 2014

merchandise rate. Food is defined as any solid, liquid, powder or item intended by the seller primarily
for human consumption, whether simple, compound or mixed, including foods such as condiments,
spices, seasonings, vitamins, bottled water and ice.
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

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