Does Illinois sales tax apply to a membership fee that gives customers access to exclusive dining events and third-party restaurant perks, but no tangible goods?

Plain-English summary

A company running a membership-based dining business asked the Illinois Department of Revenue whether it must charge sales tax on its membership fees. Members pay a recurring or one-time fee that transfers no tangible personal property; instead, it gives them the opportunity to buy tickets to exclusive, curated dining events (tickets are sold separately) and access to third-party perks at partner restaurants, such as complimentary desserts or cocktails, meal discounts, and priority reservations. Those third-party perks are provided by the partner restaurants, not guaranteed by the company itself.

The Department confirmed the company's own position: membership fees are intangibles, and Illinois generally does not treat receipts from membership fees as gross receipts from selling tangible personal property. Because no tangible personal property changes hands as part of the membership itself, neither the Retailers' Occupation Tax nor the Use Tax applies to the fee.

The Department added an important qualifier that applies more broadly than this company's facts: if a membership charge entitles the customer to receive an item of tangible personal property, or to receive a service where tangible personal property is transferred incident to that service, the charge can become taxable — potentially triggering Retailers' Occupation Tax, Service Occupation Tax, or Use Tax, depending on what the business actually does.

What this means for you

Membership-based and subscription businesses

If your membership fee buys only intangible access — the right to purchase tickets, event access, discounts, or similar privileges — and no tangible goods change hands as part of the membership itself, Illinois should not treat that fee as taxable. This ruling doesn't require you to charge sales tax just because a membership unlocks perks like discounts or complimentary items provided by third parties, as long as those perks aren't guaranteed or bundled into the membership charge by your business.

Businesses that bundle goods or services with membership

Watch the flip side of this ruling closely: the moment your membership charge entitles a customer to receive tangible personal property (merchandise, a physical product, a "member kit," etc.), or to a service that includes transferring tangible personal property incident to it (for example, a service plan that includes parts or supplies), that portion of the charge can become subject to Retailers' Occupation Tax, Service Occupation Tax, or Use Tax. The tax treatment turns on what is actually transferred, not on how you label the fee.

Accountants and tax professionals

This GIL is a straightforward application of 86 Ill. Adm. Code 130.401(d) (membership fees as intangibles) and 86 Ill. Adm. Code 140.101 (Service Occupation Tax on tangible personal property transferred incident to a service). Remember that a GIL is non-binding informal guidance — it directs taxpayers to the relevant regulations but does not carry the force of a Private Letter Ruling. If a client's facts differ (e.g., the membership itself includes a physical item), you should evaluate under 86 Ill. Adm. Code 130.101, 140.101, 150.101, and 160.101 rather than assume this letter controls.

Common questions

Q: Is a membership fee automatically exempt from Illinois sales tax?
A: Generally, yes, if the membership itself does not transfer any tangible personal property. The Department treats such fees as intangibles that are not gross receipts from selling tangible personal property.

Q: What if the membership includes discounts or free items from other businesses?
A: In this ruling, the perks (complimentary desserts, cocktails, meal discounts, priority reservations) were provided by third-party partner restaurants and were not guaranteed by the company selling the membership. That structure did not make the membership fee taxable.

Q: Does selling event tickets separately change the analysis?
A: No — the ruling notes the membership fee itself does not include admission to any event; tickets to the dining events are sold separately. The membership fee and the ticket price are treated as distinct charges.

Q: When would a membership fee become taxable?
A: When the membership charge entitles the customer to receive tangible personal property, or to a service where tangible personal property is transferred incident to that service. In that case, Retailers' Occupation Tax, Service Occupation Tax, or Use Tax liability may attach, depending on the business's activities.

Q: Is this GIL binding on the Department?
A: No. A General Information Letter is informal, non-binding guidance that directs taxpayers to relevant regulations. It is not a statement of Department policy, unlike a Private Letter Ruling, which is binding as to the specific taxpayer and facts presented.

Citations and references

• 35 ILCS 120/1 (Retailers' Occupation Tax Act scope)
• 35 ILCS 120/2 (definition of "sale at retail")
• 86 Ill. Adm. Code 130.101 (general principles of Retailers' Occupation Tax)
• 86 Ill. Adm. Code 130.401(d) (membership fees treated as intangibles)
• 86 Ill. Adm. Code 140.101 (Service Occupation Tax on tangible personal property incident to services)
• 86 Ill. Adm. Code 150.101 (Use Tax)
• 86 Ill. Adm. Code 160.101 (Service Use Tax)
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedures)
• 2 Ill. Adm. Code 1200.120 (General Information Letter procedures)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2025.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2025/st25-0036-gil.pdf

Original ruling text

ST 25-0036-GIL 07/01/2025 RETAILERS' OCCUPATION TAX
Membership fees are generally considered intangibles and are not subject to
Retailers’ Occupation Tax or Use Tax. If a membership charge entitles the customer
to receive an item of tangible personal property or to receive a service and tangible
personal property is transferred incident to the service, the charge may result in
Retailers’ Occupation Tax liability, Service Occupation Tax liability, or Use Tax
liability. See 86 Ill. Adm. Code 130.401(d) and 86 Ill. Adm. Code 140.101. (This is a
GIL.)
July 1, 2025
NAME
COMPANY
ADDRESS
EMAIL
Dear NAME:
This letter is in response to your letter dated June 4, 2025, 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:
Statement of Request
Pursuant to the guidance provided by the Illinois Department of Revenue
regarding Legal Letter Rulings and General Information Letters, we
respectfully request a General Information Letter (GIL) to obtain informal,
non-binding guidance regarding the application of Illinois sales and use tax
laws to the sale of certain membership products.

COMPANY/NAME
Page 2
July 1, 2025
Statement of Facts
The petitioner (hereinafter referred to as “the Company”) operates a
membership-based business model. The salient features of the membership
offering are:
● Membership Sales: Customers pay a recurring or one-time fee to
become members.
● Nature of Membership:
○ No tangible personal property is transferred as part of the
membership.
○ Membership provides the opportunity to purchase tickets to
exclusive, curated dining events hosted by the Company.
○ Membership includes third-party perks at partner restaurants, such
as:
■ Complimentary desserts or cocktails,
■ Discounts on meals,
■ Priority access to reservations.
● Third-Party Perks: These perks are provided by third-party restaurants
and are not guaranteed by the Company.
● Tickets: Tickets to dining events are sold separately; the membership
fee itself does not include admission to any event or entertainment.
Issue or Question
Is the sale of a membership, as described above, subject to Illinois sales tax?
Relevant Illinois Statutes, Rules, and Agency Decisions
The following legal authorities are believed to be relevant to this matter:

1. 35 ILCS 120/2 – Definition of "Sale at Retail"

COMPANY/NAME
Page 3
July 1, 2025
○ Illinois sales tax is imposed on the sale of tangible personal
property at retail. The statute defines "sale at retail" as the
transfer of tangible personal property for consideration.
○ Citation: 35 ILCS 120/2

2. 35 ILCS 120/1 – Retailers' Occupation Tax Act (ROTA) Scope
   ○ The Retailers' Occupation Tax Act imposes tax on businesses
   engaged in the business of selling tangible personal property at
   retail.
   ○ Citation: 35 ILCS 120/1
3. 86 Ill. Adm. Code 130.101 – General Principles of Retailers’
   Occupation Tax
   ○ Illinois Administrative Code confirms that services are not
   subject to Retailers' Occupation Tax unless they are an incident
   of a transfer of tangible personal property.
   ○ Citation: 86 Ill. Adm. Code 130.101 (See Section 130.101 and
   general rules)
   Statement of Petitioner’s Understanding
   It is the petitioner’s position that:
   ● The membership in question does not involve the sale of tangible
   personal property.
   ● The right to purchase event tickets and receive discretionary thirdparty perks constitutes an intangible benefit.
   ● Based on 35 ILCS 120/2 and 86 Ill. Adm. Code 130.101, Illinois
   imposes sales tax only on tangible personal property unless explicitly
   extended to enumerated services.
   ● Therefore, the sale of the membership, in and of itself, should not be
   subject to Illinois sales tax.

COMPANY/NAME
Page 4
July 1, 2025
Closing
We respectfully request a General Information Letter confirming whether
Illinois sales tax applies to the membership product as described above.
We understand that General Information Letters are not binding on the Illinois
Department of Revenue and are issued solely for informational purposes.
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. 86 Ill. Adm. Code 130.101. The Use Tax Act imposes a tax upon the privilege of
using in this State tangible personal property purchased at retail from a retailer. 86 Ill. Adm.
Code 150.101. If no tangible personal property is being transferred to the customers, then
neither Illinois Retailers’ Occupation Tax nor Use Tax would apply. Likewise, the Service
Occupation Tax and Service Use Tax are imposed on the transfer of tangible personal property
incident to sales of service. 86 Ill. Adm. Code 140.101 and 160.101. If no tangible personal
property is being transferred to customers incident to the services being provided, then no
Illinois Service Occupation Tax nor Service Use Tax would apply.
Generally, the Department does not consider receipts from the sale of membership
fees to be gross receipts from the sale of tangible personal property. Rather, a membership
fee is considered an intangible, which is not subject to Retailers’ Occupation Tax or Use Tax
liability. 86 Ill. Adm. Code 130.401(d). This is the case when the sale of membership rights
does not include the transfer of tangible personal property. However, if the membership
charge entitles the customer to receive an item of tangible personal property or to receive a
service and tangible personal property is transferred incident to that service, then that charge
may result in either Retailers’ Occupation Tax liability, Service Occupation Tax liability, or Use
Tax liability, depending upon the serviceman’s activities. See 86 Ill. Adm. Code 140.101.
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 800-732-8866.
Very truly yours,

KAR:slc

Kimberly Rossini
Associate Counsel