Are a travel-marketing company's magazines, direct-mail flyers, and membership fees subject to Illinois sales and use tax?

Plain-English summary

A travel-industry marketing company asked the Illinois Department of Revenue for a private letter ruling on whether its magazines, direct-mail materials, and membership fees were subject to Illinois sales and use tax. The Department declined to issue a PLR, explaining that "due to the complexity of your client's enterprise and the necessity for very specific facts, your questions cannot be addressed in the context of a General Information Letter." Instead, it issued this GIL with only general background guidance — it did not rule on whether this particular taxpayer's fees, flyers, or mailing arrangements are actually taxable.

The company's business: it charges independently owned travel agencies ("Members") an annual membership fee that includes a subscription to its flagship travel magazine (published every other month, plus "Special Editions" supplements) and monthly travel catalogs. Members are required to mail a minimum number of these to their own clients, including clients in Illinois. The company also provides direct-marketing and advertising services to travel providers, targeting luxury travelers. All printing is done by an out-of-state contractor, and everything is mailed via USPS from outside Illinois directly to recipients, including those in Illinois.

Rather than deciding whether these specific transactions are taxed, the Department restated the framework a taxpayer would need to apply:

• Newsprint and ink exemption for magazines: A publication qualifies as an exempt "magazine" if it is published periodically (at least twice a year) in newsprint-and-ink form, and if it also shows factors like public subscribability, a magazine format (soft covers, individual pages, indexed articles), content of value to the general public, and general advertising. The Department noted that, generally, a magazine or catalog published every other month or monthly containing travel articles and travel-package information "would qualify for the newsprint and ink exemption, including any special editions," but that "individually mailed advertising fliers would not qualify."
• Direct marketing materials and printing services: These typically involve a transfer of tangible personal property incident to a service, which can trigger Service Occupation Tax or Use Tax liability for the "serviceman" (the printer or marketer), depending on which of four tax-base calculation methods applies.
• Membership fees: Fees are not taxable if they only buy an intangible right (e.g., a right to purchase products at wholesale) and are not applied toward tangible personal property. But if a membership fee represents the sale of tangible personal property, it is subject to tax; if tangible property is transferred incident to a service the fee covers, service occupation tax may apply.
• Multi-service and donor-donee situations: The letter also summarizes rules for contracted-out ("multi-service") printing/marketing arrangements and for donor-donee scenarios, where a donor who mails advertising materials into Illinois from out of state without retaining control over them after they cross into Illinois generally has not made a taxable "use" of the property in Illinois.

What this means for you

Publishers and marketing companies with member/subscriber periodicals

If you publish something at least twice a year in newsprint-and-ink form, Illinois's newsprint and ink exemption may cover it — the Department specifically flagged that a bimonthly or monthly magazine/catalog with articles of general interest (here, travel content) "would qualify," including special-edition supplements. But standalone advertising flyers mailed individually generally do not get the exemption, even from the same company.

Businesses that outsource printing and mailing out of state

Whether you owe Illinois use tax or service use tax on materials mailed into Illinois from an out-of-state printer depends on whether you (or your customer) retain any power of "control" over the materials after they cross into Illinois. The Department reiterated the donor-donee rule: if materials are mailed via USPS from outside Illinois and the sender has no power of recall or control once they arrive, no taxable Illinois "use" occurs by the donor. This letter did not, however, decide that this particular company's arrangement meets that test — it only restated the rule.

Companies charging membership or subscription fees that bundle printed materials

If your membership fee is really payment for an intangible right and isn't applied to the price of any tangible property distributed, it is not subject to sales tax. But once the fee represents payment for tangible personal property (like a magazine or catalog subscription bundled into dues), tax exposure can attach. The Department did not resolve which category this taxpayer's membership fees fall into.

Anyone whose fact pattern is genuinely complex

This is a real-world example of the Department refusing to issue a binding PLR because the facts were too complex and the law was already "dispositive" in the Department's view — meaning existing regulations already answer the general question, even if applying them to your specific facts takes more analysis than a GIL provides. If your situation is similarly complex, expect a GIL like this one: useful background, but no fact-specific answer.

Common questions

Q: Did the Department decide whether this company's magazine subscriptions are taxable?
A: No. The Department expressly declined to rule on the specific facts and instead gave only general background guidance on the newsprint and ink exemption, membership fees, and use tax rules.

Q: What is the "newsprint and ink exemption"?
A: It is an Illinois sales and use tax exemption (86 Ill. Adm. Code 130.2105) for sales of newspapers and magazines. To qualify as an exempt magazine, a publication must be published at least twice a year in newsprint-and-ink form, and the Department also considers whether the public can subscribe, whether it has a magazine format, whether it contains content of value to the general public, and whether it carries general advertising.

Q: Do individually mailed advertising flyers qualify for the exemption?
A: Generally, no. The Department specifically stated that "individually mailed advertising fliers would not qualify for the newsprint and ink exemption," even where a related periodical (like a bimonthly magazine) would qualify.

Q: Are membership fees automatically taxable or exempt?
A: Neither, automatically. Membership fees that only buy an intangible right and aren't applied to a tangible-property purchase price are not subject to sales tax. But if the fee represents the sale of tangible personal property, or tangible property is transferred incident to a service covered by the fee, tax can apply.

Q: Why did the Department issue a GIL instead of the requested PLR?
A: Under 2 Ill. Adm. Code 1200.110(a)(3)(D), the Department will decline to issue a PLR if it finds that case law or regulations are already dispositive of the request. Here, the Department found the existing rules dispositive and, given the complexity of the taxpayer's enterprise and the need for very specific facts, issued this GIL with general guidelines instead.

Citations and references

Statutes and rules:

• 35 ILCS 120/2; 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax Act)
• 35 ILCS 105/3; 86 Ill. Adm. Code 150.101 (Use Tax Act)
• 35 ILCS 105/3-45; 86 Ill. Adm. Code 150.401; 150.701(a) (Use Tax collection and self-assessment)
• 86 Ill. Adm. Code 150.130(b) (retailer credit for Use Tax collected)
• 86 Ill. Adm. Code 140.101; 140.106; 140.108; 140.109 (Service Occupation Tax Act and serviceman tax-base methods)
• 86 Ill. Adm. Code 130.2105 (newsprint and ink / magazine exemption test)
• 86 Ill. Adm. Code 140.125(i) (newsprint and ink exemption under Service Occupation Tax)
• 86 Ill. Adm. Code 130.401(b) (membership fees)
• 86 Ill. Adm. Code 140.145 (multi-service situations)
• 35 ILCS 105/2; 86 Ill. Adm. Code 150.201 (definition of "use")
• 86 Ill. Adm. Code 150.305(c) (donor-donee taxable use)
• 86 Ill. Adm. Code 130.2000 (special order printing)
• 2 Ill. Adm. Code 1200.110 (PLR procedure); 2 Ill. Adm. Code 1200.120 (GIL procedure)

Source

• Landing page: Illinois Sales Tax Letter Rulings, 2025
• Original PDF: st25-0038-gil.pdf

Original ruling text

ST 25-0038-GIL

07/03/2025

NEWSPRINT & INK

Gross receipts from the sale of newspapers and magazines in Illinois are not
subject to sales tax. 86 Ill. Adm. Code Section 130.2105. (This is a GIL.)

July 3, 2025
NAME
COMPANY1
ADDRESS
Dear NAME:
This letter is in response to your letter dated February 27, 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.
Whether to issue a private letter ruling in response to a letter ruling request is within
the discretion of the Department. 2 Ill. Adm. Code 1200.110(a)(4). If there is case law or
there are regulations dispositive of the subject of the request, the Department will decline
to issue a private letter ruling on the subject. 2 Ill. Adm. Code 1200.110(a)(3)(D). Having
reviewed your request, the Department notes that there are laws and regulations dispositive
of the subject of the request. Thus, the Department is declining to issue a private letter ruling
in response to your request. However, 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:
On behalf of the above-named taxpayer, COMPANY2 (“Taxpayer”), request is
respectfully requested for a Private Letter Ruling (“PLR”) regarding the
application of the Illinois Sales and Use tax to Taxpayer’s business operations.
The Tax Period at Issue is DATE1 through DATE2 and Taxpayer has no Sales

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and Use Tax audit or litigation pending with the Illinois Department of
Revenue. The important facts related to this request are outlined below.
FACTS AND DISCUSSION
Taxpayer has offices in CITY1, STATE1, CITY2, and CITY3 and has employees
working remotely at locations throughout the United States, including five
employees in the State of Illinois. Taxpayer has Illinois sales and use tax
nexus.
Taxpayer provides marketing-related services to the travel industry. These
services are provided to independently owned travel agency member clients
(“Members”) throughout the United States (including Illinois), Canada, Latin
America, Europe, Asia and Australia and include promotional services
delivered through periodicals published by Taxpayer. The Company’s flagship
magazine, is published every other month, complemented by Special
Editions, which are supplements to the flagship publication. Travel themed
catalogs are published monthly. The periodicals contain articles related to
travel and information on travel packages. Members are responsible for
mailing a minimum number of these publications each year to the clients of
Members as a condition of membership. Taxpayer charges Members an
annual membership fee, which includes the cost of the subscriptions each
Member is responsible for mailing. These publications, which have some
personalization related to each Member, are primarily mailed via the United
States Postal Service directly from the printer to the clients of the Member
travel agencies. Additional copies can be purchased by the Member travel
agencies at the published price. The publications are also available by
subscription to the public.
In addition to the services provided to the Members, Taxpayer provides
marketing and advertising services to travel providers. Taxpayer’s target
market is the luxury traveler. Taxpayer maintains a database to track the
Members’ clients allowing direct marketing materials and publications to be
mailed to the target market.
Taxpayer does not operate printing facilities internally, which makes it
necessary to contract with a third party to print the publications and fliers. The
outside printing contractor is located outside the state of Illinois, and the
publications are mailed via the United States Postal Service from outside the
State of Illinois.

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Copies of the recent publications and direct marketing materials are
enclosed. Also enclosed are examples of the Membership Agreement,
Conditions of Membership, and Preferred Supplier Agreement.
ISSUES PRESENTED
I.
Are the amounts charged to Illinois travel agency Members for
membership fees and publications subject to sales and use tax in Illinois?
II.
Are the amounts charged to travel providers for direct marketing
materials which are sent to Members’ clients located in Illinois subject to
sales and use tax in Illinois?
III.
Alternatively, are Taxpayer or Taxpayer’s customers subject to Illinois
use tax on the cost of the publications sent to entities and individuals within
Illinois? If so, what costs are subject to the tax?
RELEVANT AUTHORITIES AND SUPPORTING LEGAL INFORMATION
The Illinois Retailers’ Occupation Tax Act imposes a tax upon persons
engaged in the State of Illinois in the business of selling tangible personal
property to purchasers for use or consumption and the rules are provided for
in 86 Ill. Adm. Code §130.101. Use Tax is imposed on the privilege of using, in
the State of Illinois, any kind of tangible personal property that is purchased
anywhere at retail from a retailer. Such rules are provided for in 86 Ill. Adm.
Code §150.101.
Retailers’ Occupation Tax and Use Tax do not apply to sales of service. Under
the Service Occupation Tax Act, businesses providing services (i.e.,
servicemen) are taxed on tangible personal property transferred as an
incident to sales of service, as provided for in 86 Ill. Adm. Code §140.101. The
transfer of tangible personal property to service customers may result in
either Service Occupation Tax liability or Use Tax liability for servicemen.
There are various exemptions from sales and use taxes.
Magazine Sales
One of the exemptions form the Illinois sales and use taxes are certain sales
of magazines. Sales of magazines published at least twice per year are not
subject to the retailers’ occupation and use tax. Under Illinois Administrative
Code, 86 Ill. Admin. Code §130.2105, the test that must be met for a
publication to qualify as a magazine is that it must be published periodically
in the form of newsprint and ink. Periodically means at least two times per
year. The other factors to be considered are whether a member of the public
can subscribe to the publication, whether the publication is one that has the

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basic format of a magazine, including soft covers, individual pages and
indexed articles, whether it contains articles and items that have value to the
general public, and whether it contains general advertising. A publication that
has one or more of these characteristics would be considered to be a
magazine, assuming the initial test of periodic publication is met.
Sales of direct marketing materials
Direct mail advertising services typically involve the transfer of tangible
personal property incident to the sale of those services. As explained above,
tangible personal property that is transferred to the service customer may
result in either service occupation tax liability or use tax liability for the
servicemen depending upon the activities.
Under the Service Occupation Tax Act, businesses providing services are
taxed on tangible personal property transferred as an incident to sales of
service. Use tax will be imposed when a person exercises a right over tangible
personal property in the State of Illinois, according to 86 Ill. Adm. Code
§150.101
According to Illinois General Information Letters ST 04-0200-GIL, ST 01-0003GIL, ST 01-0166-GIL, printed materials used outside of Illinois and then placed
with a mail carrier also located outside Illinois for delivery into Illinois, which
results in the serviceman losing the ability to exercise control over the printed
materials after entry into Illinois, would not be subject to use tax or service use
tax since the serviceman cannot exercise control of the materials in Illinois.
REQUEST FOR RULING
Taxpayer respectfully requests that the Department provide an analysis of the
sales and use tax treatment of the transactions and issues described above,
and requests the following rulings:
I.
The periodicals distributed to the Members’ clients meet the definition
of magazines and, thus, membership fees and other charges for publications
are not subject to sales and use tax.
II.
The direct marketing materials sent into Illinois are produced, printed
and mailed from outside the State of Illinois and thus are not subject to sales
and use tax, since neither the Taxpayer nor its customers can exercise control
of the materials in Illinois.
III.
Because the publications and printed materials are used outside of
Illinois and then placed with the USPS also outside of Illinois, no use tax is due
on the cost of the publications and printed materials by Taxpayer or its

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customers, since neither the Taxpayer nor its customers can exercise control
of the materials in Illinois.
REQUIRED STATEMENTS
To the best of the knowledge of both the taxpayer and the taxpayer’s
representative, there are no authorities contrary to Taxpayer’s views
expressed above.
To the best of the knowledge of both the taxpayer and the taxpayer’s
representative, the Department has not previously ruled on the same or a
similar issue for the taxpayer or a predecessor. Furthermore, neither the
taxpayer nor any representatives have previously submitted the same or a
similar issue to the Department but withdrew it before a letter ruling was
issued.
Prior to public dissemination of the PLR, please delete the name and address
of the taxpayer and taxpayer’s representative, office locations, and any
confidential information and trade secret information.
Enclosed please find Form IL-2848, Power of Attorney. If you have any
questions or need additional information, please do not hesitate to contact
me.
DEPARTMENT’S RESPONSE:
Due to the complexity of your client’s enterprise and the necessity for very specific
facts, your questions cannot be addressed in the context of a General Information Letter.
However, this letter will provide you with basic guidelines that may be used to determine
whether your client engages in taxable transactions under Illinois law.
I.

Retailers’ Occupation Tax

The Illinois Retailers’ Occupation Tax Act (“ROTA”) 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.
These taxes comprise what is commonly known as “sales” tax in Illinois. If the purchases
occur in Illinois, the purchasers must pay the Use Tax to the retailer at the time of purchase.
35 ILCS 105/3-45; 86 Ill. Adm. Code 150.401. The retailers are then allowed to retain the
amount of Use Tax paid to reimburse themselves for their Retailers’ Occupation Tax liability
incurred on those sales. 86 Ill. Adm. Code 150.130(b). If the purchases occur outside

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Illinois, purchasers must self-assess their Use Tax liability and remit it directly to the
Department. See 35 ILCS 105/3-45; 86 Ill. Adm. Code 150.701(a).
II.

Service Occupation Tax

Retailers’ Occupation Tax and Use Tax do not apply to sales of service. Under the
Service Occupation Tax Act, businesses providing services (i.e., servicemen) are taxed on
tangible personal property transferred as an incident to sales of service. See 86 Ill. Adm.
Code 140.101. The transfer of tangible personal property to service customers may result
in either Service Occupation Tax liability or Use Tax liability for servicemen, depending upon
which tax base they choose to calculate their liability.
Servicemen may calculate their tax base in one of four ways: (1) separately-stated
selling price of tangible personal property transferred incident to service; (2) 50% of the
serviceman’s entire bill; (3) Service Occupation Tax on the serviceman’s cost price if the
serviceman is a registered de minimis serviceman; or (4) Use Tax on the serviceman’s cost
price if the serviceman is de minimis and is not otherwise required to be registered under
Section 2a of the Retailers’ Occupation Tax Act. See 86 Ill. Adm. Code Sections 140.106;
140.108; and 140.109.
Using the first method, servicemen may separately state the selling price of each
item transferred as a result of sales of service. The tax is based on the separately stated
selling price of the tangible personal property transferred. If servicemen do not wish to
separately state the selling price of the tangible personal property transferred, those
servicemen must use the second method where they will use 50% of the entire bill to their
service customers as the tax base. Both of the above methods provide that in no event may
the tax base be less than the cost price of the tangible personal property transferred. Under
these methods, servicemen may provide their suppliers with Certificates of Resale when
purchasing the tangible personal property to be transferred as a part of sales of service.
They are required to collect the corresponding Service Use Tax from their customers. See
86 Ill. Adm. Code 140.106.
The third way servicemen may account for their tax liability only applies to de minimis
servicemen who have either chosen to be registered or are required to be registered because
they incur Retailers’ Occupation Tax liability with respect to a portion of their business.
Servicemen may qualify as de minimis if they determine that their annual aggregate cost
price of tangible personal property transferred incident to sales of service is less than 35%
of their annual gross receipts from service transactions (75% in the case of pharmacists and
persons engaged in graphic arts production). This class of registered de minimis servicemen
is authorized to pay Service Occupation Tax (which includes local taxes) based upon the
cost price of tangible personal property transferred incident to sales of service. Servicemen
that incur Service Occupation Tax collect the Service Use Tax from their customers. They

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remit tax to the Department by filing returns and do not pay tax to their suppliers. They
provide suppliers with Certificates of Resale for the tangible personal property transferred
to service customers. See 86 Ill. Adm. Code 140.109.
The final method of determining tax liability may be used by de minimis servicemen
that are not otherwise required to be registered under Section 2a of the Retailers’
Occupation Tax Act. Servicemen may qualify as de minimis if they determine that the annual
aggregate cost price of tangible personal property transferred as an incident of sales of
service is less than 35% of the servicemen’s annual gross receipts from service transactions
(75% in the case of pharmacists and persons engaged in graphic arts production). Such de
minimis servicemen handle their tax liability by paying Use Tax to their suppliers. If their
suppliers are not registered to collect and remit tax, the servicemen must register, selfassess, and remit Use Tax to the Department. The servicemen are considered to be the endusers of the tangible personal property transferred incident to service. Consequently, they
are not authorized to collect a “tax” from the service customers. See 86 Ill. Adm. Code
140.108.
III.

Magazines and Marketing Materials

Sales of newspapers and magazines are not subject to the tax because of the
newsprint and ink exemption pursuant to Section 1 of the ROTA. In determining whether a
publication qualifies as a magazine for the purpose of the newsprint and ink exemption,
there is one test that must be met and several other factors to be considered. The test for a
publication to qualify as a magazine is that it must be published periodically in the form of
newsprint and ink. Periodically means at least two times per year. The other factors to be
considered are whether a member of the public can subscribe to the publication, whether
the publication is one that has the basic format of a magazine, including soft covers,
individual pages and indexed articles, whether it contains articles and items that have value
to the general public, and whether it contains general advertising. A publication that has
one or more of these characteristics would be considered to be a magazine, assuming the
initial test of periodic publication is met. 86 Ill. Adm. Code 130.2105(a)(2).
Information or data that is downloaded electronically, such as downloaded
magazines, does not constitute the transfer of tangible personal property. These types of
transactions represent the transfer of intangibles and are thus not subject to retailers’
occupation and use tax. 86 Ill. Adm. Code 130.2105(a)(2).
Similarly, the sale, employment and transfer of such tangible personal property as
newsprint and ink for physical incorporation into newspapers or magazines is exempt from
service occupation tax. 86 Ill. Adm. Code 140.125(i). The Department has also determined
that a de minimis serviceman incurring a Use Tax liability may claim any of the exemptions,
except as provided in Section 140.108(a)(2)(C), authorized under the Service Occupation

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Tax Act. For instance, these exemptions include, newsprint and ink, and graphic arts
machinery and equipment. 86 Ill. Adm. Code 140.108(a)(2)(B).
Advertising supplements that will not be distributed separately, but which will be
distributed only as inserts in newspapers, are generally considered to be a part of the
newspaper. If the advertising supplements are a part of the newspaper they qualify for the
newsprint and ink exemption under the Retailers’ Occupation Tax Act and the Service
Occupation Tax Act. If advertising supplements are printed on special order and are
distributed separately from newspapers (not as newspaper inserts), they will result in either
Service Occupation Tax liability or Use Tax liability for the servicemen depending upon which
tax base the servicemen choose to calculate their tax liability. See discussion above
regarding the Service Occupation Tax.
Generally, if a company publishes a magazine or catalog every other month or
monthly and these periodicals contain articles on travel and information on travel packages,
such magazines and catalogs would qualify for the newsprint and ink exemption, including
any special editions to the magazine. Generally, individually mailed advertising fliers would
not qualify for the newsprint and ink exemption.
IV.

Membership Fees

Membership fees are not gross receipts from the sale of tangible personal property.
Membership fees are gross receipts received in exchange for an intangible. For example,
when membership fees “buy” purchasers the right to purchase products at wholesale, but
are not applied to the purchase price of tangible personal property, they are not subject to
sales tax. However, when membership fees represent the sale of tangible personal
property, they are subject to tax. 86 Ill. Adm. Code 130.401(b). Also, if membership fees are
part of a charge for a sale of service and tangible personal property is transferred incident to
that service, those fees may be subject to service occupation tax depending upon the
method the serviceman chooses to calculate his tax base. See 86 Ill. Adm. Code 140.101.
V.

Multi-service situations.

When a serviceman contracts out all or a portion of the service that he will provide, it
is acting as a primary serviceman in a multi-service situation. As a primary serviceman, it
engages the services of a secondary serviceman to obtain all or part of the products and
services desired by the service customer. Whether the primary and secondary servicemen
are registered or de minimis will determine what type of tax will be incurred as well as who
will incur the tax. Servicemen engaging in multi-service transactions are urged to utilize one
of the methods described in subsection (a) or (c) of Section 140.145. Use of either of these
methods prevents the likelihood of tax being incurred by both servicemen, as described in
subsection (d) of Section 140.145. 86 Ill. Adm. Code 140.145(e). Depending on whether

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each of the servicemen are registered servicemen in Illinois, 86 Ill. Adm. Code 140.145(c)
may apply, and certificates of resale may be given for purchases of services involving the
transfer of tangible personal property which will be transferred incident to a subsequent sale
of service.
In multi-service situations, in order for both the primary de minimis serviceman and
the secondary de minimis serviceman to obtain any of the exemptions listed in Section
140.108(a)(2)(A) and (B), the primary de minimis serviceman should provide the secondary
de minimis serviceman with the proper documentation certifying the exemption. 86 Ill. Adm.
Code 140.108(a)(2)(E).
VI.

Donor-donee situations.

Under the Illinois Use Tax Act, donors who purchase tangible personal property, such
as advertising brochures or catalogs, and give it away in Illinois make a taxable use of the
donated property. “Use” is defined as the exercise by any person of any right or power over
tangible personal property incident to the ownership of that property. 35 ILCS 105/2; 86 Ill.
Adm. Code 150.201. The donee in a gift situation is not a taxable user, the donor who
purchases the property and gives it away makes a taxable use of the property when making
such gift. 86 Ill. Adm. Code 150.305(c).
If the donor’s use occurs in Illinois, the donor incurs Use Tax liability or potentially
Service Use Tax liability for custom printed materials. If the advertisements are mailed by
U.S. Mail into Illinois from an out-of-State location, the donor, even though it is donating the
advertising materials to Illinois recipients, has exercised no power or control over the
property in Illinois. In this instance, the donor would not have made any taxable use of the
property in Illinois. This tax analysis changes if the donor were to have any control over the
property in Illinois. For example, if the donor were to have power of recall over the property
once it entered Illinois, it could incur a Service Use Tax liability in Illinois.
When a printing company contracts to print custom printed marketing literature, a
special order printing situation exists and the transaction is subject to tax under the Service
Occupation Tax Act. Who is liable for the tax in these situations depends upon the method
chosen by the printer in calculating its Service Occupation Tax liability. See 86 Ill. Adm.
Code 130.2000 and 140.101.
I hope this information is helpful. If you have further questions concerning this
General Information Letter, you may contact me at (217) 782-7055. If you have further
questions related to the Illinois sales tax laws, please visit our website at
https://tax.illinois.gov/or contact the Department’s Taxpayer Information Division at (800)
732-8866.

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Very truly yours,

Katarzyna Kowalska
Associate Counsel

KAK:sce