Is software sold with a click-through license taxable in Illinois, and does it matter whether the software is downloaded or purely cloud-based?

Plain-English summary

An IT reseller that resells several software products under click-through licenses -- some purely cloud-based, some with a locally-installed component, one bundled with VoIP phone service -- had been charging a flat 10% tax on everything and asked the Department to sort out which of four specific fact patterns are actually taxable, after being challenged on why competitors don't charge tax on similar products.

The Department's answer starts with a bright-line rule: computer software delivered purely through the cloud, where NOTHING is ever downloaded onto the customer's computer, is treated as a nontaxable SERVICE (software as a service, or "SaaS") -- Illinois generally doesn't tax SaaS subscriptions. But the moment a product includes ANY downloaded software component -- even alongside cloud features -- it's "canned" (prewritten) computer software, which Illinois treats as taxable tangible personal property, regardless of the medium (disc, download, or otherwise).

There's a narrow escape hatch: a software license isn't a taxable sale if it satisfies ALL FIVE conditions in 86 Ill. Adm. Code 130.1935(a)(1) -- (1) a WRITTEN agreement signed by both the licensor and the customer; (2) it restricts the customer's duplication/use; (3) it bars sublicensing/transfer to third parties without the licensor's continued control; (4) the licensor has a policy of replacing lost/damaged copies at minimal or no cost, or letting the customer keep an archival copy; and (5) the customer must destroy or return all copies at the end of the license (automatically satisfied for a perpetual license). Critically, a standard online click-through "I agree" checkbox does NOT satisfy the written-signature requirement -- only an actual signed agreement, or an electronic agreement with a verifiable, authenticatable electronic signature, qualifies. Since most of the reseller's software here uses ordinary click-wrap licensing, the exemption generally won't apply to its downloaded-component products.

A separate wrinkle: if a service provider gives a subscriber an API, applet, desktop agent, or remote-access agent to reach the provider's network, that IS "receiving computer software" even without a separate fee for it -- so even a mostly-cloud product with a thin local access agent can trigger tax analysis under the serviceperson framework, unless it independently qualifies as an exempt license.

Finally, on the VoIP-bundled product: telephone service delivered over the internet (VoIP) is separately and squarely taxable under Illinois's Telecommunications Excise Tax (8.65% as of July 1, 2025) and any applicable municipal Simplified Municipal Telecommunications Tax -- federal law's general moratorium on "Internet access" taxes does NOT protect VoIP, because Congress specifically carved voice/video services with a separate charge out of the protected "Internet access" definition.

What this means for you

Software resellers, VARs, and IT service providers

Sort your product catalog by delivery method FIRST: pure cloud/no-download products are generally non-taxable services; anything with a downloaded component is taxable UNLESS you have an actual signed (or verifiably e-signed) license agreement meeting all five conditions in 130.1935(a)(1) -- a checkbox click-through almost never qualifies. Don't apply one flat tax rate across your whole catalog without checking each product's delivery and license terms.

SaaS companies bundling APIs, desktop agents, or remote-access tools

Even if your core service is cloud-delivered, providing an API, applet, desktop agent, or remote-access agent to reach your platform counts as delivering computer software -- which can trigger tax analysis under the serviceperson framework (one of four calculation methods) even without a separately stated software fee.

Businesses reselling or bundling VoIP/telephone services

Don't assume federal internet-tax protections cover VoIP -- they don't. VoIP is squarely taxable under Illinois's Telecommunications Excise Tax and municipal telecommunications taxes, and Congress specifically excluded voice/video services with a separate charge from the protected "Internet access" definition.

Accountants and tax professionals

For a client's SaaS/software mix, walk through: (1) is anything downloaded? If no, likely nontaxable service. (2) If yes, does the license meet ALL FIVE 130.1935(a)(1) factors, especially the written/verifiable-signature requirement? If not, it's taxable canned software. (3) Is any component telecommunications (VoIP)? If so, that's taxed separately and isn't shielded by internet-tax-moratorium arguments.

Common questions

Q: Is software delivered entirely through the cloud (nothing downloaded) taxable in Illinois?
A: Generally no -- it's treated as a nontaxable software-as-a-service subscription, provided truly nothing is downloaded to the customer's computer.

Q: Does a standard "click to accept" online license agreement exempt downloaded software from tax?
A: No. The exemption requires a WRITTEN agreement signed by both parties (or an electronic agreement with a verifiable, authenticatable electronic signature) -- an ordinary click-through checkbox doesn't meet that standard.

Q: If my cloud product includes a small local agent or API for connectivity, does that make it taxable?
A: It means the customer is "receiving computer software" for purposes of the regulation, which can trigger a tax analysis under the serviceperson framework -- even without a separate fee for that component -- unless the arrangement independently qualifies as an exempt license.

Q: Is VoIP telephone service protected from state tax by the federal Internet Tax Freedom Act?
A: No. VoIP is subject to Illinois's Telecommunications Excise Tax and applicable municipal telecommunications taxes; Congress specifically excluded voice/video services billed separately from the Act's protected "Internet access" definition.

Q: Can I rely on this letter for my own software resale business?
A: No. This is a General Information Letter -- not binding on the Department. Given how fact-specific delivery/licensing analysis is, confirm each product line with a tax professional.

Citations and references

Statutes:

• 35 ILCS 120/2-25 (definition of "computer software")
• 35 ILCS 630/3(c), 4(c) (Telecommunications Excise Tax, 8.65% effective July 1, 2025)
• 35 ILCS 636/5-7, 5-10, 5-15 (Simplified Municipal Telecommunications Tax Act)
• 47 U.S.C. § 151 note, § 1101, § 1105 (Internet Tax Freedom Act; VoIP not "Internet access")

Regulations:

• 86 Ill. Adm. Code 130.1935(a), (a)(1), (a)(3), (a)(4) (canned software; five-factor license exemption; SaaS; API/agent access)
• 86 Ill. Adm. Code 140.101, 140.105, 140.106, 140.108, 140.109 (Service Occupation Tax framework; de minimis)

Source

• Landing page: Illinois 2026 Sales Tax Letter Rulings
• Original PDF: ST26-0009-GIL.pdf

Original ruling text

ST 26-0009-GIL 03/26/2026 COMPUTER SOFTWARE:
Computer software provided via a cloud-based delivery system, where the software
is never downloaded onto a client’s computer and is only accessed remotely, is not
subject to tax. See 86 Ill. Adm. Code 130.1935(a)(3). Voice Over Internet Protocol
(“VoIP”) is telecommunications subject to tax within the meaning of
“Telecommunications” and “Gross Charges” pursuant to The Telecommunications
Excise Tax. 86 Ill. Adm. Code 495.100. (This is a GIL).
March 26, 2026
NAME
COMPANY
ADDRESS
EMAIL
Dear NAME:
This letter is in response to your letter dated November 2, 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 Department’s regulation “Public Information, Rulemaking and Organization”
provides that “[w]hether to issue a private letter ruling in response to a letter ruling request
is within the discretion of the Department. The Department will respond to all requests for
private letter rulings either by issuance of a ruling or by a letter explaining that the request
for ruling will not be honored.” 2 Ill. Adm. Code 1200.110(a)(4). Further, the Department’s
regulations regarding Private Letter Rulings provide that “[i]f there is case law or there are
regulations dispositive of the subject of the request, the Department will decline to issue a
letter ruling on the subject.” 86 Ill. Adm. Code 1200.110(a)(3)(D). The Department recently
met and determined that it would decline to issue a Private Letter Ruling in response to your
request. We hope, however, the following General Information Letter will be helpful in
addressing your questions. In your letter you have stated and made inquiry as follows:

COMPANY/NAME
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In your letter you have stated and made inquiry as follows:
I am writing to respectfully request a Private Letter Ruling (PLR) pursuant to
2 Ill. Adm. Code 120.110 regarding the sales tax treatment of certain
transactions conducted by COMPANY.

1. Taxpayer Information
   •
   •
   •
   •
   •

Name: COMPANY
FEIN/ Account ID (if available): FEIN
Mailing Address: ADDRESS
Contact Person: NAME
Email/ Phone: EMAIL

2. Statement of Facts
   Below are separate factual situations for which we seek clarification. Each
   fact pattern is independent and may warrant its own determination:
   General Fact Pattern:
   We are an IT service provider with an Illinois Resale Certificate #XXXX-XXXX.
   We purchase and resell PRODUCT licenses and have been charging sales tax
   on those services but have recently been challenged to why we are charging
   sales tax when others don’t charge sales tax on the same licenses. I am
   looking for clarity to make sure we are complying with all appropriate laws.
   Fact Pattern 1:
   We resell PRODUCT1 to a company with offices in CITY, IL Cook County.
   PRODUCT includes a click-through license. PRODUCT restricts duplication
   outside of the license. PRODUCT prohibits transferring the license. PRODUCT
   provides alternate licenses if the software is damaged or lost. PRODUCT
   disables the software after the license is completed. PRODUCT1 includes
   both cloud-based services as well as downloaded software that is run locally
   to access and process those cloud-based services. Therefore I believe since
   this software includes downloaded applications and uses a click-through
   license this software is taxable at the 10% rate.
   Fact Pattern 2:
   We resell PRODUCT2 to a company in CITY1, IL Cook County. As the above
   pattern, this software also includes a click-through license but PRODUCT2
   has no locally installed software; the software services are fully utilized
   through a cloud interface. Because there is no installed software, I believe

COMPANY/NAME
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March 26, 2026
this could be non-taxable as it is a service, however we have been charging a
10% tax on this as well but seeing some of the notes on line believe we may
have been doing this incorrectly.
Fact Pattern 3:
We resell PRODUCT3 to a company in COUNTY, IL PRODUCT3 service is a
service that incorporates the PRODUCT3 application locally but allows the
end-user to make phone calls. We are not provided tax information for this by
PRODUCT for the phone lines and believe the appropriate phone related taxes
and regulatory fees are paid by PRODUCT directly based on the license cost.
Are these licenses also separately taxed with sales tax?
Fact Pattern 4:
We resell PRODUCT4 cloud hosting to a company in CITY1, IL PRODUCT4
provides cloud hosted servers and services similar to PRODUCT5 or
PRODUCT6. As these are completely cloud hosted services, we believe these
services are not taxable. Do you agree?

4. Issues Presented
   For each fact pattern above, we request clarification on the following issues:
   •

Whether the transactions described in Fact Pattern 1 are taxable or
non-taxable under Illinois sales tax law and what tax rate is
appropriate.

•

Whether the transactions described in Fact Pattern 2 are taxable or
non-taxable under Illinois sales tax law and what tax rate is
appropriate.

•

Whether the transactions described in Fact Pattern 3 are taxable or
non-taxable under Illinois sales tax law and what tax rate is
appropriate.

•

Whether the transactions described in Fact Pattern 4 are taxable or
non-taxable under Illinois sales tax law and what tax rate is
appropriate.

4. Relevant Law and Analysis
   The taxpayer understands that under 35 ILCS 120/2 and 86 Ill. Adm. Code, tax
   applies to retail sales of tangible personal property and certain specified

COMPANY/NAME
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March 26, 2026
services. However, due to the nature of these transactions- mixed tangible
and digital components, bundled services, or online delivery -the correct
classification is unclear.

5. Ruling Requested
   We respectfully request a Private Letter Ruling confirming whether each of the
   transactions described above is taxable or non-taxable under Illinois law, and
   guidance on how sales tax should be applied and reported in each scenario.
6. Declarations
   I certify that:
   •

The issue presented is not currently under audit or litigation by IDOR or
any other tax authority.

•

This request concerns actual business transactions, not hypothetical
or speculative scenarios.

•

To the best of my knowledge, all material facts are true, accurate, and
complete.

Thank you for your time and consideration. Please contact me at PHONE if
you require any additional details or supporting documentation.
DEPARTMENT’S RESPONSE:
Retailers’ Occupation Tax
The Retailers’ Occupation Tax Act imposes a tax upon persons (i.e., retailers)
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. 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 86 Ill. Adm. Code 150.101. These taxes comprise
what is commonly known as “sales tax” in Illinois.
Service Occupation Tax
Retailers’ Occupation Tax and Use Tax do not apply to sales of services. Under the
Service Occupation Tax Act, persons (i.e., servicepersons) engaged in this State in the

COMPANY/NAME
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March 26, 2026
business of making sales of service are taxed on tangible personal property transferred as
an incident to such sales of service. See 35 ILCS 115/3; 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 servicepersons, depending upon which tax
base they choose to calculate their liability. Servicepersons may calculate their tax base in
one of four ways:
(1)

Service Occupation Tax on separately-stated selling price of tangible personal
property transferred incident to service;

(2)

Service Occupation Tax on 50% of the serviceperson’s entire bill;

(3)

Service Occupation Tax on the serviceperson’s cost price if the serviceperson
is a registered de minimis serviceperson; or

(4)

Use Tax on the serviceperson’s cost price if the serviceperson 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, servicepersons may separately list the selling price of each
item transferred as a result of a sale of service. The tax is then calculated based on the
separately stated selling price of the tangible personal property transferred. If the
servicepersons do not separately list the selling price of the tangible personal property
transferred, they must use 50% of the total bill to the service customer as the tax base (the
second method described above). Both methods specify that, under no circumstances, can
the tax base be less than the serviceperson’s cost price of the tangible personal property
transferred. See 86 Ill. Adm. Code 140.106. These servicepersons also collect a
corresponding amount of Service Use Tax from their customers, unless an exemption
applies.
The third method servicepersons can use to account for their tax liability applies only
to de minimis servicepersons who have either chosen to register or are required to do so
because they incur Retailers’ Occupation Tax liability with respect to a portion of their
business. See 86 Ill. Adm. Code 140.109. Servicepersons may qualify as de minimis if they
determine that the annual aggregate cost price of tangible personal property transferred as
an incident of the sale of service is less than 35% of the total annual gross receipts from
service transactions (75% in the case of pharmacists and persons engaged in graphics arts
production). Registered de minimis servicepersons are authorized to pay Service
Occupation Tax (which includes local taxes) based upon their cost of tangible personal
property transferred incident to the sale of service. They should provide suppliers resale

COMPANY/NAME
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certificates and remit Service Occupation Tax using the Service Occupation Tax rates for
their locations. These servicepersons also collect a corresponding amount of Service Use
Tax from their customers, unless an exemption applies.
Note that under the first three methods described above, if the Illinois Service
Occupation Tax on a transaction is being remitted to the Department by the serviceperson,
the serviceperson shall also pay any local Service Occupation Tax to the Department on the
same transaction, based on the location where the serviceperson’s selling activities took
place, if that location is in a jurisdiction with a local Service Occupation Tax. See 86 Ill. Adm.
Code 280.115 and 86 Ill. Adm. Code 270.115.
The final method for determining tax liability may be used by de minimis
servicepersons who are not otherwise required to register under Section 2a of the Retailers’
Occupation Tax Act. Such de minimis servicepersons handle their tax liability by paying Use
Tax to their suppliers. If their suppliers are not registered to collect and remit tax, the
servicepersons must register, self-assess, and remit Use Tax to the Department. The
servicepersons are considered end users 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.
Computer Software
“Computer software” means a set of statements, data, or instructions used directly
or indirectly in a computer to produce a specific result, in any form in which those
statements, data, or instructions may be embodied, transmitted, or stored, by any method
now known or hereafter developed. This applies regardless of whether the statements,
data, or instructions can be perceived or communicated by humans, and includes
prewritten or canned software. 35 ILCS 120/2-25. Computer software encompasses all
types, including operational, applicational, utility, compiler, template, shell, and other
forms. See 86 Ill. Adm. Code 130.1935(a). Generally, sales or transfers of “canned”
computer software intended for widespread or repeated use are taxable retail sales in
Illinois. Canned software is considered tangible personal property regardless of its form,
including tape, disc, card, electronic means, or other media.
Software License
The sale or transfer by a retailer of computer software that is subject to manufacturer
licenses restricting its use or reproduction is also taxable. See 86 Ill. Adm. Code
130.1935(a). However, if all the criteria in subsection (a)(1) of Section 130.1935 are met,
then neither the sale nor transfer of the software nor the subsequent software updates is
subject to Retailers’ Occupation Tax. Specifically, a license of software is not a taxable retail
sale if:

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March 26, 2026
A)

It is evidenced by a written agreement signed by the licensor and the
customer;

B)

It restricts the customer’s duplication and use of the software;

C)

It prohibits the customer from licensing, sublicensing or transferring the
software to a third party (except to a related party) without the permission and
continued control of the licensor;

D)

The licensor has a policy of providing another copy at minimal or no charge if
the customer loses or damages the software, or permitting the licensee to
make and keep an archival copy, and such policy is either stated in the license
agreement, supported by the licensor’s books and records, or supported by a
notarized statement made under penalties of perjury by the licensor; and

E)

The customer must destroy or return all copies of the software to the licensor
at the end of the license period. This provision is deemed to be met, in the
case of a perpetual license, without being set forth in the license agreement.

See 86 Ill. Adm. Code 130.1935(a)(1).
If a license for canned computer software does not satisfy all the criteria, the
software is taxable. Note that it is common for software to be licensed online, with the
customer checking a box to accept the license terms. This form of acceptance does not
constitute a written agreement signed by both the licensor and the customer, as required by
subsection (a)(1)(A) of Section 130.1935. To fulfill the signature requirement for an exempt
software license, the agreement must include the written signatures of both parties. An
electronic agreement that includes a verifiable, authenticatable electronic signature from
the customer, attached to or incorporated into the license, will meet this requirement. See
86 Ill. Adm. Code 130.1935(a)(1)(A).
Software as a Service
A provider of software as a service is acting as a serviceperson. Software as a service
refers to computer software delivered through a cloud-based system, where the software is
never downloaded onto a client’s computer and is accessed remotely. Provided no tangible
personal property is downloaded as part of the transaction, the sale of such service
generally would not be subject to Retailers’ Occupation Tax or Service Occupation Tax or
their companion use taxes. Illinois generally does not tax software as a service
subscriptions. 86 Ill. Adm. Code 130.1935(a)(3).

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If a service provider offers the subscriber an API, applet, desktop agent, or remote
access agent to enable the subscriber to access the provider’s network and services, the
subscriber is receiving computer software. 86 Ill. Adm. Code 130.1935(a)(4). Although there
may not be a separate fee for the computer software, the service provider is still subject to
tax under one of the four methods for taxing servicepersons described above, unless the
transfer qualifies as a non-taxable license of computer software or is otherwise not taxable.
Conversely, if an Illinois customer downloads computer software, separate from their
subscription of software as a service, for free from an out-of-State retailer’s website or
server that is also located out-of-State, the retailer, even though it is providing tangible
personal property to the customer, has exercised no power or control over the property in
Illinois. In this instance, the retailer would not have made any taxable use of the property in
Illinois. The customer would incur no Use Tax liability as the customer did not acquire the
software from a retail transaction.
Telecommunications
The Illinois Telecommunications Excise Tax Act imposes a tax on the act or privilege
of originating or receiving intrastate or interstate telecommunications by persons in Illinois
at the rate of 8.65%, effective July 1, 2025, of the gross charges for such telecommunications
purchased at retail by such persons. See 35 ILCS 630/3(c) and 4(c), as amended by Public
Act 104-0006; 86 Ill. Adm. Code 495.140. The Simplified Municipal Telecommunications Tax
Act allows municipalities to impose a tax on the act or privilege of originating or receiving in
such municipality, intrastate or interstate telecommunications by persons in Illinois at a
rate not to exceed 6% for municipalities with a population of less than 500,000, and at a rate
not to exceed 7% for municipalities with a population of 500,000 or more, of the gross
charges for such telecommunications purchased at retail from retailers by such persons.
35 ILCS 636/5-10 and 5-15.
“Gross charges” means the amount paid for the act or privilege of originating or
receiving telecommunications in this State and for all services and equipment provided in
connection therewith by a retailer, valued in money whether paid in money or otherwise,
including cash, credits, services and property of every kind or nature, and shall be
determined without any deduction on account of the cost of such telecommunications, the
cost of materials used, labor or service costs or any other expense whatsoever. “Amount
paid” means the amount charged to the taxpayer’s service address in this State, regardless
of where such amount is billed or paid. See 35 ILCS 630/2(a) and 35 ILCS 636/5-7.
Further, the definition of telecommunications under each Act is very broad and
encompasses Voice Over Internet Protocol communications. More specifically, both Acts
define “Telecommunications” as, in addition to the meaning ordinarily and popularly
ascribed to that term, including, without limitation, messages or information transmitted
through use of local, toll and wide area telephone service; private line services; channel

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services; telegraph services; teletypewriter; computer exchange services; cellular mobile
telecommunications service; specialized mobile radio; stationary two-way radio; paging
service; or any other form of mobile and portable one-way or two-way communications; or
any other transmission of messages or information by electronic or similar means, between
or among points by wire, cable, fiber-optics, laser, microwave, radio, satellite or similar
facilities. See 35 ILCS 636/5-7 and 35 ILCS 630(2)(c). “Telecommunications” does not
include “value added services in which computer processing applications are used to act
on the form, content, code and protocol of the information for purposes other than
transmission.” (Emphasis added.) See 35 ILCS 636/5-7 and 35 ILCS 630/2(c).
Voice Over Internet Protocol (“VoIP”) is telecommunications subject to tax within the
meaning of “Telecommunications” and “Gross Charges” pursuant to The
Telecommunications Excise Tax, 86 Ill. Adm. Code 495.100; the Telecommunications
Infrastructure Maintenance Fee, 35 ILCS 635/10; and the Simplified Municipal
Telecommunications Tax Act, 35 ILCS 636/5-7. Neither the Telecommunications Excise Tax
Act nor the Simplified Municipal Telecommunications Tax Act provide any exemption for
VoIP services.
Further, federal law has preserved States’ ability to tax VoIP services. The Internet
Tax Freedom Act imposes a federal moratorium on state or municipal taxes on Internet
access. 47 USCA § 151 note; § 1101. However, states are allowed to tax VoIP services as
Congress specifically excluded them, defining “Internet access” as:
(A)

means a service that enables users to connect to the Internet to access
content, information, or other services offered over the Internet;

(B)

includes the purchase, use or sale of telecommunications by a provider of a
service described in subparagraph (A) to the extent such telecommunications
are purchased, used or sold- (i) to provide such service; or (ii) to otherwise
enable users to access content, information or other services offered over the
Internet;

(C)

includes services that are incidental to the provision of the service described
in subparagraph (A) when furnished to users as part of such service, such as
a home page, electronic mail and instant messaging (including voice and
videocapable electronic mail and instant messaging), video clips, and
personal electronic storage capacity;

(D)

does not include voice, audio or video programming, or other products and
services (except services described in subparagraph (A), (B), (C), or (E)) that
utilize Internet protocol or any successor protocol and for which there is a
charge, regardless of whether such charge is separately stated or aggregated

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with the charge for services described in subparagraph (A), (B), (C), or (E); and
(E) includes a homepage, electronic mail and instant messaging (including
voice and video-capable electronic mail and instant messaging), video clips,
and personal electronic storage capacity, that are provided independently or
not packaged with Internet access.
47 USCA § 151 note; § 1105.
Additionally, in a note on section 152 of the Federal Communications Act (of which
the Internet Tax Freedom Act is a part), Congress specified, in relevant part, that nothing in
the Act or the amendments made by it “shall be construed to modify, impair, or supersede,
or authorize the modification, impairment, or supersession of, any State or local law
pertaining to taxation,” subject to certain unrelated exceptions. See Pub. L. 104-104, Title
VI, §601, 110 Stat. 143, 47 U.S.C. §152 note (1996) (“Pub. L. 104-104”).
As such, VoIP communications either originating in or received in a municipality that
has imposed the Simplified Municipal Telecommunications Tax are subject to the
applicable tax rate for that municipality. Additionally, VoIP communications are subject to
the Illinois Telecommunications Excise Tax.
I hope this information is helpful. 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.
Very truly yours,
Thomas Grudichak
Associate Counsel
TG:slc