When is a sale exempt from Illinois sales tax as an interstate-commerce sale or a sale for resale, and who can seek a refund if tax was charged anyway?

Plain-English summary

This General Information Letter answers a dispute over a car sale: a foreign buyer bought a vehicle in Illinois from an Illinois dealership, intending to export it abroad, and paid Illinois sales tax at the time of purchase. After the car was shipped out and exported, the buyer's representative asked the Department of Revenue for a refund, arguing the sale should have been tax-exempt as an interstate or export sale. The Department's response walks through why that tax was properly charged, and separately explains the rules for sales-for-resale exemptions, using the request as a jumping-off point for general guidance.

The key point on interstate commerce is that a sale is not treated as exempt interstate commerce just because the buyer later moves the goods out of Illinois. If the buyer or the buyer's representative takes physical possession of the property in Illinois, the sale is taxable — even if the buyer immediately trucks it out of state. The exemption only applies when the seller is contractually obligated to ship the goods directly out of Illinois (for example, via a common carrier where the seller is listed as consignor/shipper on the bill of lading), or when a narrow nonresident-vehicle exception applies and the retailer has documented the buyer's non-residency in the specific way the regulation requires. In the underlying facts, the documentation showed the buyer was a resident of the state where the car would be titled, and that state does not offer a reciprocal exemption to Illinois residents, so the nonresident-vehicle exception did not apply either.

Separately, the letter covers sales for resale: a seller can treat a sale as tax-exempt if it obtains a valid Certificate of Resale from the buyer (Illinois' standard form is CRT-61), containing the seller's and buyer's name and address, a description of the resold items, the buyer's signature and date, and either a registration/resale number or a statement that the buyer is an out-of-state reseller. Without that certificate and a valid resale number, Illinois presumes the sale is not for resale, though a seller can try to rebut that presumption with other proof.

Finally, the letter clarifies who can seek a refund when sales tax was collected and remitted: only the retailer that paid the tax to the Department can file a claim for credit or refund — not the retail customer. Whether a retailer chooses to refund a customer and then seek its own credit from the Department is a private matter between the retailer and the customer; the Department cannot force a retailer to do so.

What this means for you

If you sell tangible goods that customers plan to take out of state

Do not assume a sale is tax-exempt just because you know (or the customer tells you) that the goods are headed out of Illinois. The exemption depends on who has physical possession in Illinois and who is listed as consignor/shipper on the shipping documents. If your customer or their representative picks up the goods here, the sale is taxable regardless of the customer's later plans — unless you fall within the narrow vehicle nonresident exception and can document it exactly as required.

If you sell vehicles to out-of-state or foreign buyers

The nonresident-vehicle exemption under 86 Ill. Adm. Code 130.605(b)(1) requires specific documentary proof of non-residency, and it does not apply at all if the buyer's home state does not offer Illinois residents a reciprocal exemption. You are not required to honor a customer's claimed exemption if you are not convinced the sale actually qualifies — and if it turns out the buyer doesn't meet the requirements, you (the retailer) remain the one liable for the tax, not the customer.

If you sell for resale or buy for resale

Get a properly completed Certificate of Resale (Form CRT-61) before treating a sale as exempt, including a valid registration or resale number, and keep it on file. Under the Rock Island Tobacco precedent cited in this letter, once a seller has a facially valid certificate with a valid resale number, the seller's liability ends even if the buyer later misuses the goods — the Department pursues the buyer, not the seller, in that scenario.

If you're a customer who was charged tax you believe was exempt

You cannot file your own refund claim with the Department. Only the retailer that remitted the tax can do that, and it's up to the retailer whether to refund you and then seek credit from the Department. If a retailer won't cooperate, your recourse is with the retailer, not a direct Department claim.

Common questions

Q: I bought something in Illinois and shipped it out of state myself right after — is that sale tax-exempt as interstate commerce?
A: No. If you or your representative received physical possession of the goods in Illinois, the sale is taxable, even if you then transported the goods out of state yourself. The interstate-commerce exemption generally requires the seller to be the one shipping the goods directly out of state under the sales agreement.

Q: Is there any exemption for a nonresident buying a vehicle in Illinois?
A: There is a narrow one, but it requires the retailer to document the buyer's non-residency in the specific way the regulation spells out, and it does not apply if the buyer's home state won't give a reciprocal exemption to Illinois residents titling a vehicle there.

Q: What do I need to document a sale as a resale?
A: A valid Certificate of Resale (Form CRT-61) from the buyer, including the seller's and buyer's name/address, a description of the resold items, the buyer's signature and date, and a registration or resale number (or a statement that the buyer is an out-of-state reseller who will resell only outside Illinois).

Q: I paid sales tax on a purchase I think was exempt. Can I ask the Department for a refund directly?
A: No. Only the retailer that remitted the tax to the Department can file a refund/credit claim. Whether that retailer then refunds you is a matter between you and the retailer; the Department cannot force the retailer to do it.

Q: Does a GIL like this one bind the Department in my situation?
A: No. A General Information Letter only points to relevant regulations and general principles; it is not a statement of Department policy and is not binding on the Department, unlike a Private Letter Ruling issued for a specific taxpayer's facts.

Citations and references

Statutes and regulations:

• 86 Ill. Adm. Code 130.605 (interstate commerce sales; nonresident vehicle purchase exception)
• 86 Ill. Adm. Code 130.1405 (Certificate of Resale requirements)
• 86 Ill. Adm. Code 130.1501 (claims for credit or refund)
• 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax imposition); 35 ILCS 120/2
• 86 Ill. Adm. Code 150.101 (Use Tax); 35 ILCS 105/3
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedure)
• 2 Ill. Adm. Code 1200.120 (General Information Letters)

Case law:

• Rock Island Tobacco and Specialty Company v. Illinois Department of Revenue, 87 Ill.App.3d 476, 409 N.E.2d 136, 42 Ill. Dec. 641 (3rd Dist. 1980) (seller's liability ends upon accepting a facially valid Certificate of Resale with a valid resale number)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2024.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2024/ST24-0037-GIL.pdf

Original ruling text

ST 24-0037-GIL 11/07/2024 INTERSTATE COMMERCE/SALE FOR RESALE
This letter discusses sales into interstate commerce that originate in Illinois to
locations outside Illinois never to return. Appropriate documentation must be
obtained in support of sales in interstate commerce and for resale. See 86 Ill. Adm.
Code 130.605 and 130.1405. (This is a GIL).
November 7, 2024
NAME
COMPANY
ADDRESS
Dear NAME:
This letter is in response to your letter dated October 23, 2024, in which you
requested 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 https://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:
As holders of the Power of Attorney, we are writing on behalf of our client,
NAME1, to request a General Information Letter or Private Ruling, as you
may see fit, to resolve a Sales Tax impasse involving an automobile dealer
in CITY, II.
On September 10, 2024, NAME1 visited COMPANY1, to purchase an
automobile he needed to export to one of his customers in the FOREIGN
COUNTRY (his business consists of buying cars for export to that country).
First, NAME1 wanted to purchase the vehicle using the name of a
Dealership based in STATE, where he lives and conducts his business.
However, still, the dealer insisted on selling the car to him as an individual,
leaving him without a choice. Further, NAME1 objected to paying the sales

NAME1/COMPANY
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November 7, 2024
tax precisely because the car was not going to be licensed in Illinois but
transported to STATE to be shipped to the FOREIGN COUNTRY. Again,
NAME1 had no choice but to pay the sales tax.
After that, once the car was exported, we contacted the Department of
Revenue to inquire about a refund of the sales tax paid. We were directed
back to the dealer to ask that they amend their tax and refund our client.
Although we supplied the dealer with complete documentation
substantiating the automobile’s destination, the dealer refused.
We are enclosing the Power of Attorney and a copy of the documentation
we supplied COMPANY1 with to assist you in issuing the appropriate letter
we would need.
Thank you in advance for your cooperation on this matter.
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 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. See 35 ILCS 105/3; 86 Ill. Adm. Code
150.101. These taxes comprise what is commonly known as “sales” tax in Illinois. Thus,
when tangible personal property is located in this State at the time of its sale and then
delivered in Illinois to the purchaser, the seller is taxable if the sale is at retail.
Interstate Commerce
Where tangible personal property is located in this State at the time of its sale (or
is subsequently produced in Illinois), and then delivered in Illinois to the purchaser, the
seller is taxable if the sale is at retail. The sale is not deemed to be in interstate commerce
if the purchaser or his representative receives the physical possession of the property in
this State. This is so notwithstanding the fact that the purchaser may, after receiving
physical possession of the property in this State, transport or send the property out of the
State for use outside the State or for use in the conduct of interstate commerce. 86 Ill.
Adm. Code 130.605(a).
There are three exceptions to the rule that the sale is not deemed to be a sale in
interstate commerce if the purchaser or his representative receives physical possession
of the property in Illinois. One exemption from sales tax is for the purchase of a vehicle
in Illinois by a nonresident when the vehicle will not be titled in this State. See 86 Ill. Adm.
Code 130.605(b)(1). To claim the exemption, the retailer must keep documentary
evidence that the purchaser is not a resident of Illinois. The documentation required to

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November 7, 2024
prove non-residency is specified in 86 Ill. Adm. Code 130.605(b)(1)(A)(i) and (ii). If the
retailer meets the document requirements of either subsection (b)(1)(A)(i), or (ii) then,
absent fraud, the Department shall pursue any claim that the exemption does not apply
solely against the vehicle purchaser. However, the exemption under 86 Ill. Adm. Code
130.605(b)(1) does not apply if the state in which the motor vehicle will be titled does not
allow a reciprocal exemption for a motor vehicle sold and delivered in that state to an
Illinois resident when the vehicle will be titled in Illinois. Id. at (b)(1)(C). STATE is not a
reciprocal state.
The documentation you provided to the Department shows on its face that the car
was being purchased by a STATE resident. A retailer is not required to honor a
purchaser’s claim of an exemption if the retailer is not convinced that the retail sale
qualifies for the exemption.
The tax does not extend however to gross receipts from sales in which the seller
is obligated, under the terms of their agreement with the purchaser, to make physical
delivery of the goods from a point in this State to a point outside this State, not to be
returned to a point within this State, provided that the delivery is actually made. The tax
does not apply to gross receipts from sales in which the seller, by carrier (when the carrier
is not also the purchaser) under the terms of their agreement with the purchaser, delivers
the goods from a point in this State to a point outside this State not to be returned to a
point within this State. The fact that the purchaser actually arranges for the common
carrier or pays the carrier that effects delivery does not destroy the exemption. However,
it is critical that the seller is shown as the consignor or shipper on the bill of lading. If the
purchaser is shown as either the consignor or the shipper, the exemption will not apply.
Sales of these type are deemed to be within the protection of the Commerce Clause of
the Constitution of the United States. 86 Ill. Adm. Code 130.605(c)-(e).
Sales for Resale
There is also an exemption for sales for resale. In order to document that a sale
to a purchaser is a sale for resale, a seller must obtain a valid Certificate of Resale from
the purchaser. See 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. In addition to the statement that the property is being purchased for resale, a
Certificate of Resale must contain:
1)

The seller’s name and address;

2)

The purchaser’s name and address;

3)

A description of the items being purchased for resale;

4)

Purchaser’s signature, or the signature of an authorized employee or agent
of the purchaser, and date of signing; and

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November 7, 2024
5)

Registration Number, Resale Number, or a statement that the purchaser is
an out-of-State purchaser who will sell only to purchasers located outside
the State of Illinois.

The Department provides a standard form for documenting sales for resale (Form
CRT-61 Certificate of Resale). This form can be obtained from the Department’s website.
The obligations of a seller with respect to accepting a Certificate of Resale were
addressed in Rock Island Tobacco and Specialty Company v. Illinois Department of
Revenue, 87 Ill.App.3d 476, 409 N.E.2d 136, 42 Ill. Dec. 641 (3rd Dist. 1980). The Rock
Island court held that when a retailer obtains a proper Certificate of Resale that contains
a registration or resale number that is valid on the date it is given, the retailer’s liability is
at an end. If the purchaser uses that item themselves (i.e., it was not purchased for
resale), the Department will proceed against the purchaser, not the retailer, provided the
above stated conditions are met. The purchaser’s registration or reseller number can be
verified at the Department’s website by clicking on the “Tax registration inquiry” box.
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 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 a retailer
in accepting such other documentation and the risk run by purchasers in providing such
other documentation is that an Illinois auditor is more likely to require that more
information be provided as evidence that the sale was, in fact, a sale for resale.
Claim for Refund
Since the dealership paid the sales tax directly to the Department, the dealership
is the only party withstanding to file a claim regarding an overpayment of the tax. See 86
Ill. Adm. Code 130.1501. A retailer’s determination as to whether it will make a refund of
the amount of the tax to a customer and file a claim for credit with the Department is a
matter between the retailer and their customer. The Department has no authority to
compel a retailer to refund taxes to a customer and file a claim for credit.
I hope this information is helpful. If you require additional information, please visit
our website at https://tax.illinois.gov/ or contact the Department’s Taxpayer Information
Division at (217) 782-3336.

NAME1/COMPANY
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November 7, 2024
Very truly yours,
Richard S. Wolters
Associate Counsel
RSW:slc