Did an adult tricycle and electric pedal-assist modification qualify for Illinois' 1% rate for disability modifications to motor vehicles?

Plain-English summary

A disabled older adult wanted to buy an adult tricycle with an electric pedal-assist system for independent trips. The requester asked whether either the tricycle or the added motor system qualified for Illinois' 1% rate for modifications that make a motor vehicle usable by a disabled person.

IDOR said no. The reduced rate applied to modifications made to a "motor vehicle" as defined by the Illinois Vehicle Code. That definition excluded low-speed electric bicycles, and the Department said an adult tricycle powered by an electric motor did not fall within it.

Because the tricycle was not a qualifying motor vehicle, neither the tricycle nor modifications purchased for it qualified for the 1% rate.

What this means for you

The purchaser's disability and the equipment's mobility benefit did not by themselves establish the reduced rate. The underlying vehicle first had to fit the statutory motor-vehicle definition.

Common questions

Did the tricycle qualify for 1% tax? No.

Did the electric assist qualify separately? No.

Why? The adult electric tricycle was not a "motor vehicle" for the cited rule.

Citations and references

• 35 ILCS 120/2-10.
• 86 Ill. Adm. Code 130.311(f).
• 625 ILCS 5/1-146.

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2015.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2015/st-15-0078-gil.pdf

Original ruling text

ST 15-0078-GIL 12/16/15 MISCELLANEOUS
An adult tricycle powered by an electric motor does not fall within the definition of “motor
vehicle” found in the Illinois Vehicle Code. Accordingly, neither the adult tricycle nor any
modifications purchased for it qualify for the 1% rate of tax. See 86 Ill. Adm. Code 130.311(f).
(This is a GIL.)

December 16, 2015

Dear Xxxxx:
This letter is in response to your letter dated October 23, 2015, 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 understand that a 1% Sales or Use Tax is available for Medical Appliances that enable
a handicapped person to use a piece of equipment that he normally would not able to
use without the addition of the modification of the appliance.
I am 90 years old, cannot drive due to peripheral neuropathy, lack of balance due to 29
days of vacomyacin infusions which destroyed my inner ear balance system. I have to
be driven places by taxi or driver. I have the handicap placard that permits my driver
and myself to park almost anywhere.
I would like to use an adult tricycle powered by an electric motor, an add on system to
the tricycle that provides power when the pedals are moving. It is fail safe in that if the
rider is not moving the pedals, the motor senses the lack of movement and cuts out the
power. This keeps the bike from running away if the rider is not moving the pedals or is
off the trike. You can see the PRODUCT system on their website.
A tricycle equipped in this way would permit me to ride to the supermarket, drugstore,
bank, or library, giving me an independence in which I would not have to rely
incessantly on other persons. A walker would be on the bike, available for me to get off
the trike at any destination for errands.

Would appreciate your authorization to use the 1% tax relief on the purchase of the
items that I need. Minimally, the add on of the PRODUCT electric bike system onto the
tricycle, and if possible, on the purchase of the adult tricycle itself.
Please feel free to call me if you have any additional questions.

DEPARTMENT’S RESPONSE:
Section 2-10 of the Retailers’ Occupation Tax Act provides, in relevant part, that “[w]ith respect
to . . . modifications to a motor vehicle for the purpose of rendering it usable by a disabled person . . .
the tax shall be imposed at the rate of 1%. 35 ILCS 120/2-10. Section 130.311(f) of the Illinois
Department of Revenue’s administrative rules further explains the application of this statutory
language. It states, in part, “modifications made to a motor vehicle, as defined in Section 1-146 of the
Illinois Vehicle Code, for the purpose of rendering it usable by a disabled person, qualify for the
reduced rate of tax. 86 Ill. Adm. Code 130.311(f).
The Illinois Vehicle Code defines “motor vehicle”, in relevant part, as “[e]very vehicle which is
self-propelled . . . , except for vehicles moved solely by human power, motorized wheelchairs, lowspeed electric bicycles, and low-speed gas bicycles. See 625 ILCS 5/1-146 (emphasis added). An
adult tricycle powered by an electric motor does not fall within the definition of “motor vehicle” found in
the Illinois Vehicle Code. Accordingly, neither the adult tricycle nor any modifications purchased for it
qualify for the 1% rate of tax.
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.

Sincerely,

Debra M. Boggess
Associate Counsel