What did Illinois tell a commercial tax-guide publisher, in response to its annual multistate survey, about how the state's sales and use tax applies to marketplace-facilitator fees, digital products, information services, and similar hot topics?

Plain-English summary

This isn't taxpayer guidance -- it's the Illinois Department of Revenue's reply to a commercial tax-guide publisher's annual multistate tax survey (referred to in the letter only as the "GUIDE Survey of State Tax Departments," a reference book the letter says has run "for over 40 years"). The publisher sends every state a lengthy sales-tax and corporate-income-tax questionnaire each year to compile into the next edition; Illinois said it couldn't fill out the survey's own form, but answered a subset of the individual questions in prose instead.

Because the letter is really a batch of short answers to unrelated survey questions rather than a ruling on one taxpayer's facts, there's no single holding. Instead, the Department restated existing, previously published positions on several separate topics raised by the questionnaire:

• Use Tax credit for tax paid elsewhere: Illinois Use Tax doesn't apply to property brought into Illinois if the owner already paid a legally due sales/use tax to another state on it, up to the amount properly paid there (86 Ill. Adm. Code 150.310).
• Marketplace facilitator platform fees: the fees a marketplace facilitator charges sellers for using its platform aren't themselves subject to Retailers' Occupation Tax, but if a seller folds those fees into the price of what it sells through the marketplace, the fees become a taxable cost of doing business, even if separately stated on the customer's bill (86 Ill. Adm. Code 130.410).
• Information services and digital products: purely electronic transfers of data or software (downloaded books, music, news feeds, streaming, cloud-based/SaaS software) are transfers of intangibles, not tangible personal property, and are not subject to Retailers'/Service Occupation/Use Tax -- unless the "service" is accompanied by delivery of actual tangible personal property (e.g., a hard-copy printout), or the software is "canned"/downloaded software rather than cloud-based (86 Ill. Adm. Code 130.2105(a)(3), 130.1935).
• Telecommunications fees: federal and state universal service fund fees are not part of the Retailers' Occupation Tax base, but telecommunications carriers separately owe the 7% Telecommunications Excise Tax on gross charges for originating/receiving calls in Illinois (86 Ill. Adm. Code 495.140).
• Local tax sourcing: intrastate sales are sourced to the jurisdiction where a retailer conducts three or more "primary selling activities" for a given sale, under the multi-factor test in 86 Ill. Adm. Code 270.115, with special sourcing rules for marketplace facilitators.
• Energy-related exemptions: Illinois currently has no sales/use tax exemption for solar energy systems, solar equipment, or related component parts.
• Medicines and medical appliances: qualifying medicines and medical devices (as defined by a medicinal-claim label or by substituting for a malfunctioning body part) are taxed at the reduced 1% rate rather than the general 6.25% rate; diagnostic equipment generally does not qualify (35 ILCS 120/2-10; 86 Ill. Adm. Code 130.311).
• Streaming/digital media and online games: the same intangible-transfer analysis applies -- no tax unless tangible personal property changes hands, and cloud-delivered software remains untaxed.

None of this is new law. Every answer simply points back to a regulation, statute, or earlier GIL/ruling that already existed -- the letter's function is compiling those existing positions into survey-answer format, not creating new guidance.

What this means for you

Anyone citing this ruling number

ST 25-0047-GIL isn't a private ruling resolving one taxpayer's specific facts, and it isn't even a single-topic GIL. It's Illinois's response to an outside publisher's annual questionnaire, restating pre-existing Department positions on roughly half a dozen unrelated sales-tax topics. Don't cite it as if it were a targeted ruling on your situation -- cite the underlying regulation or statute it points to instead.

Businesses selling through marketplaces or online

If you're a marketplace seller, the platform fee you pay isn't separately taxable, but folding that fee into your listed price makes it part of your taxable gross receipts. If you sell information, streaming media, or software, the make-or-break question is whether anything tangible actually changes hands (or whether the software is downloaded/"canned" rather than accessed via the cloud).

Sellers of medicines, medical devices, or solar equipment

Qualifying medicines and medical appliances get Illinois's preferential 1% rate rather than 6.25%; diagnostic equipment generally does not qualify. There is currently no Illinois sales/use tax exemption specifically for solar energy systems or components.

Multi-location retailers and marketplace facilitators

Local (as opposed to state) Retailers' Occupation Tax liability is sourced to wherever a retailer performs three or more "primary selling activities" for a given sale, per the detailed guidelines in 86 Ill. Adm. Code 270.115 -- which also has specific provisions for marketplace facilitators.

Common questions

Q: Does this letter resolve a specific taxpayer's tax question?
A: No. It's the Department's response to a commercial publisher's recurring annual survey of all state tax departments' laws, not a ruling issued on a particular taxpayer's facts.

Q: Are marketplace facilitator platform fees taxable in Illinois?
A: The fee itself, charged by the facilitator to the seller, is not subject to Retailers' Occupation Tax. But if the seller builds that fee into the price charged to the customer, it becomes part of the seller's taxable gross receipts as a cost of doing business.

Q: Is downloaded or streamed content taxable in Illinois?
A: Generally no -- electronically transferred data, software accessed via the cloud, streaming media, and similar intangible transfers are not treated as sales of tangible personal property. Downloaded "canned" software (such as gaming software) is an exception and remains taxable.

Q: Does Illinois exempt solar panels or other energy equipment from sales tax?
A: No. The letter states plainly that Illinois currently has no exemption for solar energy systems or related component parts.

Q: What rate applies to medicine and medical devices?
A: Qualifying medicines and medical appliances are taxed at a reduced 1% rate instead of the general 6.25% rate, based on definitions in 86 Ill. Adm. Code 130.311; diagnostic equipment generally does not qualify for the lower rate.

Citations and references

• 35 ILCS 120/2 (Retailers' Occupation Tax Act -- imposition of tax)
• 35 ILCS 120/2-10 (1% low rate for medicines/medical appliances; 6.25% general rate)
• 86 Ill. Adm. Code 150.310 (Use Tax credit for tax paid to another state)
• 86 Ill. Adm. Code 130.101 (imposition of Retailers' Occupation Tax)
• 86 Ill. Adm. Code 130.410 (costs of doing business in taxable gross receipts)
• 86 Ill. Adm. Code 130.2105(a)(3) (electronic transfers not tangible personal property)
• 86 Ill. Adm. Code 130.1935 (canned/gaming software definition)
• 86 Ill. Adm. Code 130.311(c)(1), (e)(1), (e)(5), (g) (medicine and medical appliance definitions)
• 86 Ill. Adm. Code 270.115(c)(2), (f), (g) (local tax sourcing; marketplace facilitators)
• 86 Ill. Adm. Code 495.140 (Telecommunications Excise Tax, 7% rate)
• 220 ILCS 5/13-301 (Illinois Universal Service Fund surcharge)
• ST 08-0042-GIL; 18 ST-0030-GIL (prior GILs referenced by the Department)

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/st25-0047-gil.pdf

Original ruling text

ST 25-0047-GIL 09/09/2025 MISCELLANEOUS
This letter responds to an annual survey. (This is a GIL.)
September 9, 2025
NAME
EMAIL
EMAIL1

Re:

GUIDE Survey of State Tax Departments

Dear NAME:
This letter is in response to your email dated June 26, 2025, in which you requested information.
Department of Revenue (“Department”) regulations require that the Department issue only two types of
letter rulings, Private Letter Rulings (“PLRs”) and General Information Letters (“GILs”). 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 against the Department, but only as to the taxpayer
issued the ruling and only to the extent the facts recited in the PLR are correct and complete. The purpose
of GILs is to direct taxpayers to Department regulations or other sources of information regarding the topic
about which they have inquired. GILs do not constitute statements of Department policy that apply,
interpret, or prescribe the tax laws, and are not binding on the Department. See 2 Ill. Admin. Code 1200
for more information. 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:
Each year, COMPANY collects and disseminates information regarding the tax laws of each
state. The results of the annual survey are published in the GUIDE, which has been one of
the premier state tax reference books for over 40 years. Your assistance in the preparation
of the 2026 edition is essential and greatly appreciated by the users of the Guide.
Please complete the attached corporate income tax and sales tax questionnaires and
email the completed questionnaires to EMAIL1 by August 29, 2025. All new questions are
highlighted in red font. To save time, please respond only to the new questions and to the
prior year questions that require a change. All unanswered questions will be considered to
have the same response as last year, unless otherwise noted. If your responses to last
year’s questionnaire would be helpful, let us know and we will send you a copy.

Instructions
All new questions are highlighted in red font. To save time, please respond only to the new
questions and to the prior year questions that require a change. All unanswered
questions will be considered to have the same response as last year, unless otherwise
noted.
Provide answers based on the state laws in effect on July 1, 2025.
Please list the state employee(s) to contact if we have a question regarding a response:
information you have previously recorded in the comments section, please make those
modifications in red font.
Please email the completed questionnaire to EMAIL1 by August 29, 2025.
If you have any questions, contact NAME at EMAIL
DEPARTMENT’S RESPONSE:
We are unable to respond to your survey in the format provided. However, we hope you find the
following information regarding the updated questions helpful.

A. SALES AND USE TAX ADMINISTRATION
[13] CREDITS
▪ Does your state allow a credit for legally imposed:
▪ Sales tax paid to a local jurisdiction in another state?
▪ Use tax paid to a local jurisdiction in another state?

 Yes  No
 Yes  No

DEPARTMENT’S RESPONSE:
The Use Tax Act provides that in order to prevent actual or likely multistate taxation, the Use Tax
does not apply to the use of tangible personal property in this State of tangible personal property that is
acquired outside this State and caused to be brought into this State by a person who has already paid a
tax in another state in respect to the sale, purchase, or use of that property, to the extent of the amount of
the tax properly due and paid in the other state. See 86 Ill. Adm. Code 150.310.
[16] NEXUS. If a corporation’s sole activity in your state is the activity identified below, does
the activity create an obligation to collect and remit sales/use tax (check each activity that
would, by itself, create sales/use tax nexus)?
[f] MARKETPLACE FACILITATORS

▪ Does your state impose sales tax on the fees charged by marketplace facilitators for the
use of their platform?  Yes  No

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 at retail to purchasers for use or consumption. See 86 Ill.
Adm. Code 130.101. Fees charged by marketplace facilitators to marketplace sellers for use of a
marketplace platform are not subject to the Retailers’ Occupation Tax. However, if a marketplace seller
includes such fees in the price of a product it sells over the marketplace, the fees would be subject to the
Retailers’ Occupation Tax as a cost of doing business. Such costs are an element of the retailer’s gross
receipts subject to tax, even if separately stated on the bill to the customer. See 86 Ill. Adm. Code 130.410.
In computing Retailers’ Occupation Tax liability, no deductions shall be made by a taxpayer from
gross receipts or selling prices on account of the cost of property sold, the cost of materials used, labor or
service costs, idle time charges, incoming freight or transportation costs, overhead costs, processing
charges, clerk hire or salesmen’s commissions, interest paid by the seller, or any other expenses
whatsoever. Costs of doing business are an element of the retailer’s gross receipts subject to tax even if
separately stated on the bill to the customer. 86 Ill. Adm. Code 130.410.

B. SALES AND USE TAX BASE
[1] TAXABLE ITEMS
[a] INFORMATION SERVICES
▪ Does your state impose sales/use tax on “information services”?
 Yes  No
▪ If YES, which of the following information services are taxable (check all that apply)?
 Press clipping services
 News feeds
 Legal research databases
 Customer lists
 Streaming stock quotes
 Real estate listings  Credit score information
 Medical records
 Real estate property tax records  Criminal background checks  Insurance claim
processing
 Data broker services including individual data detail on employment and rental history,
religious or political affiliation,
finances, income, website use, store visits, sexual orientation, and location.
 Subscription price for artificial intelligence providers such as ChatGPT
▪ Are any of these items taxable as something other than an information service?  Yes  No
▪ If YES, indicate which items and reason taxed:

DEPARTMENT’S RESPONSE:
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 provision of a service in Illinois that is not accompanied by the transfer of tangible personal
property is generally not subject to Retailers’ Occupation Tax or Service Occupation Tax liability.
Information or data that is electronically transferred or downloaded is not considered the transfer
of tangible personal property in this State. These types of transactions represent the transfer of intangibles
and are not subject to Retailers' Occupation and Use Tax. See 86 Ill. Adm. Code 130.2105(a)(3). The
Department does not consider the viewing, downloading or electronically transmitting of video, text, and
other data over the internet to be the transfer of tangible personal property. However, if a company
provides services that are accompanied with the transfer of tangible personal property (e.g., medical
records delivered to a customer in a hardcopy version, rather than sent electronically), such service
transactions are generally subject to tax liability. For general information, see 86 Ill. Code 140.101 through
140.109 regarding sales of service and Service Occupation Tax.
Computer software is defined broadly in the Retailers’ Occupation Tax Act and Service Occupation
Tax. However, computer software provided through a cloud-based delivery system – a system in which
computer software is never downloaded onto a client’s computer and is only accessed remotely - is not
subject to tax. Illinois generally does not tax subscriptions relating to a cloud-based delivery system.
[4] TAX BASE. Which items are included in the price that is subject to sales/use tax (check all that
apply)?
 Alcohol or beverage taxes  Federal luxury excise tax  Retailer’s own coupons
 Carrying charges
 Installation charges
 Sales of repossessed property
 Cash and trade discounts  Labor/service costs
 Tobacco taxes
 Credit for bad debts
 Manufacturer’s coupons  Trade-in allowance
 Delivery/shipping charges  Manufacturer’s rebates  Transportation charges
 Dues
 Personnel training costs  Retailer’s cash discount to
consumer
 Federal gas taxes
 Federal excise tax on tires  Federal excise tax on sporting
equipment
 Federal telecommunications universal service fund fee
 State telecommunications universal service fund fee

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 at retail to purchasers for use or consumption. See 86 Ill.
Adm. Code 130.101. Accordingly, federal and State telecommunications universal service fund fees are

excluded from such taxes. Note the Illinois Universal Service Fund surcharge, (220 ILCS 5/13-301), is
collected by Illinois Commerce Commission.
Telecommunications carriers are subject to the Telecommunications Excise Tax Act, which
imposes a tax upon the act or privilege of originating or receiving intrastate or interstate
telecommunications in Illinois at the rate of 7% of the gross charge for such telecommunications
purchased at retail from retailers. See 86 Ill. Adm. Code 495.140. See also ST 08-0042-GIL.
[44] LOCAL TAXATION
[e] ADMINISTRATION
▪ Does the state administer all local taxes, i.e., collect receipts and perform audits for local
jurisdictions?
 Yes
 No, local jurisdictions audit and collect their own taxes
▪ How are intrastate sales of tangible personal property sourced?
 Origin based
 Destination based

DEPARTMENT’S RESPONSE:
The Retailers’ Occupation Tax Act imposes a tax upon persons engaged in this State in the business
of selling tangible personal property at retail to purchasers for use or consumption. [35 ILCS 120/2]. A
principal consideration for retailers with selling activities in multiple jurisdictions within Illinois is a
determination of the proper situs for the business of selling to be taxed. Because of the variation of selling
activities a retailer may use; it is impossible to cover in a sourcing rule the tax consequences of every
possible scenario. To assist taxpayers in determining the proper jurisdiction for local tax liability, 86 Ill.
Adm. Code 270.115 includes guidelines which discuss in part, “primary selling activities”, “secondary
selling activities” and “short cuts”. The administrative rule provides that a retailer engaging in three or
more primary selling activities in one location in the State for a particular sale shall remit the retailers’
occupation tax imposed at that in-State location. See 86 Ill. Adm. Code 270.115(c)(2). With respect to
intrastate sales by marketplace facilitators, see 86 Ill. Adm. Code 270.115(f) and (g).
[45] ENERGY CONSERVATION EXEMPTIONS
▪ Does your state provide a sales/use tax exemption for any of these items (check all that apply)?
 Energy Star-rated appliances
 Electric/hybrid vehicles
 Windmills
 Photovoltaic panels
 Solar inverters
 Solar batteries
 Mounting structures for solar panels Solar energy meter or monitoring systems
 Energy Star-rated florescent light bulbs
 Solar electricity generating equipment
 Any device, equipment or machinery operated by hydrogen or fuel cells
 Other, explain:

DEPARTMENT’S RESPONSE:
Currently, Illinois has no exemption for solar energy systems or related component parts.
[47] DIGITAL PRODUCTS. Does your state impose sales/use tax on these items when sold in digital
form
(check all that apply)?
 Books
 Movies
 Recorded music
 Magazines
 Newspapers
 Subscriptions to magazines or
newspapers
 Streaming video
 Remote access software  Digital automated service (DAS)
 Cryptocurrency
 Nonfungible tokens (NFTs)  Online courses
 Digital art
 Digital photography
 Fitness programs
 Templates
 Guides and brochures  Games
 Calendars
 Checklists
 Newsletters
 Planners
 Other, specify:

DEPARTMENT’S RESPONSE:
See Department’s answer under “B. Sales and use Tax Base, [1] Taxable Items [a] INFORMATION
SERVICES” above. Information or data that is downloaded electronically, such as downloaded books,
musical recordings, newspapers or 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. See 86 Ill. Adm. Code 130.2105(a)(3). However, downloads of canned
software, such as gaming software, as defined in 86 Ill. Adm. Code 130.1935, are subject to Retailers'
Occupation and Use Tax.
PERSONAL CARE (without a prescription). Which of the following purchases are taxable (check
all that apply)?
 Alcohol wipes and swabs  Burn ointments  Eyedrops
 Ipecac
 Allergy relief products
 Calamine lotion  Feminine hygiene products  Lice
treatments
 Asthma preparations  Denture adhesive products  First aid kits
 Nasal drops or
sprays
 Band-aids and bandages  Diapers
 Incontinence underpads
 Teething
lotions
 Blood pressure monitors  Wearable heart monitors  Fitness trackers
 Sleep aids

 Protein supplements
relievers such as aspirin or ibuprofen

 Vitamins and supplements  Pain

DEPARTMENT’S RESPONSE:
Medicines and medical devices are subject to 1% tax under the Retailers’ Occupation Tax Act. See
35 ILCS 120/2-10. Tangible personal property that does not qualify for the low rate of tax is taxed at the
rate of 6.25% of the gross receipts from sales. See 35 ILCS 120/2-10.
A medicine or drug is defined as any pill, powder, potion, salve, or other preparation for human use
that purports on the label to have medicinal qualities. A written claim on the label that a product is
intended to cure or treat disease, illness, injury or pain, or to mitigate the symptoms of such disease,
illness, injury or pain constitutes a medicinal claim. See 86 Ill. Adm. Code 130.311(c)(1) for examples of
medicinal claims.
A medical appliance is an item that is used to directly substitute for a malfunctioning part of the
human body. An item becomes part of the human body by substituting for any part of the body that is lost
or diminished because of congenital defects, trauma, infection, tumors, or disease is considered a
medical appliance. See 86 Ill. Adm. Code 130.311(e)(1). Included within the meaning of a medical
appliances are such items as artificial limbs, dental prostheses and orthodontic braces, crutches and
orthopedic braces, wheelchairs, heart pacemakers, and dialysis machines (including the dialyzer).
Corrective medical appliances such as hearing aids, eyeglasses, and contact lenses qualify for 1% rate.
Moreover, generally, home glucose monitors, test strips, and related supplies used to treat human
diabetes also qualify for the 1% State rate of tax. See 86 Ill. Adm. Code 130.311(g). Diagnostic equipment
is generally not considered to be a medical appliance. See 86 Ill. Adm. Code 130.311(e)(5).
With respect to vitamins and supplements, see 18 ST-0030-GIL.
[76] STREAMING SERVICES
▪ Does your state impose sales/use tax on the subscription price for streaming media
services?
 Yes  No
▪ Does your state impose sales/use tax on separately billed charges, without or within a
subscription service, for the following streaming services (check all that apply)?
 Movies  Television shows  Music  Podcasts  Games
▪ Does your state impose sales/use tax on online video games?
 Yes  No
▪ Does your state impose sales/use tax on collectibles earned in online video games?
 Yes  No
▪ Does your state impose sales/use tax on currencies earned in online video games?
 Yes  No
DEPARTMENT’S RESPONSE:

If a transaction does not involve the transfer of any tangible personal property to the
customer, then it generally would not be subject to Retailers’ Occupation Tax, Use Tax, Service
Occupation Tax, or Service Use Tax. Information or data that is electronically transferred or
downloaded is not considered the transfer of tangible personal property in this State. The
Department does not consider the viewing, downloading, or electronically transmitting of video,
text, and other data over the internet to be the transfer of tangible personal property. See 86 Ill.
Adm. Code 130.2105(a)(3).
Although computer software is defined broadly in the Retailers’ Occupation Tax Act, if the
computer software is provided through a cloud-based delivery system – a system in which
computer software is never downloaded onto a client’s computer and is only accessed remotely is not subject to tax.
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 Assistance Division at
(800) 732-8866 or (217) 782-3336.
Sincerely,

TG:slc

Thomas Grudichak
Associate Counsel