Do I have to charge Illinois sales tax when I sell Deal-of-the-Day vouchers for golf tee times or pro-shop merchandise?

Plain-English summary

Someone planning to run a Groupon-style marketing website -- selling digital "Deal-of-the-Day" vouchers on behalf of golf courses, redeemable either for a round of golf or for pro-shop items like golf balls -- asked whether they need to charge sales tax when selling the vouchers, and whether it matters if the voucher is for a service versus a physical good.

The Department's answer separates the SALE of the voucher from its REDEMPTION. Selling a Deal-of-the-Day voucher is always a sale of an intangible right to redeem, not a sale of tangible property or a service -- so the voucher platform itself never charges or collects sales tax when it sells the voucher, regardless of what the voucher is redeemable for.

What happens at REDEMPTION depends entirely on what's redeemed. If the voucher is redeemed for a service with no transfer of goods -- like a round of golf, since operating a golf course is legally a "service occupation" in Illinois -- there's no tax at all, either at sale or redemption. But if the voucher is redeemed for tangible personal property -- like a sleeve of golf balls -- the REDEEMING retailer (the golf course) owes Retailers' Occupation Tax at that point, just as if the customer paid cash. The tax base is whatever the customer actually paid for the voucher if the redeeming retailer knows that amount; if the retailer doesn't know what the customer paid, tax is instead based on the item's normal full retail price. Either way, the voucher SELLER never collects or remits tax on any of these transactions -- only the retailer honoring the voucher for a taxable good does.

What this means for you

Deal-of-the-day / voucher platform operators

You never charge sales tax on the sale of your vouchers themselves, whether they're redeemable for services or goods -- vouchers are intangible property. Just be clear with the redeeming merchants about what the customer actually paid, since that determines their tax base if the voucher is later redeemed for tangible goods.

Golf courses, restaurants, and other merchants honoring vouchers

If your service doesn't involve transferring any tangible personal property (a round of golf, a massage, a haircut), redeeming a voucher for it is never taxable. But the moment a voucher is redeemed for a physical item (golf balls, retail merchandise, food to go), YOU -- as the redeeming retailer -- owe Retailers' Occupation Tax on that transaction, based on what the customer paid for the voucher if you know it, or your normal retail price if you don't.

Accountants and tax professionals

Track whether your client is the voucher SELLER (never collects tax on the voucher sale) or the redeeming RETAILER (owes tax only on redemptions for tangible goods, never on redemptions for pure services). Also confirm whether the underlying business is a "service occupation" under Illinois law (like golf course operation, 86 Ill. Adm. Code 130.2030(b)(1)) before assuming a voucher redemption is taxable.

Common questions

Q: Do I charge sales tax when I sell a Deal-of-the-Day voucher?
A: No, never -- selling the voucher is a sale of intangible property, regardless of what it's redeemable for.

Q: Is redeeming a voucher for a round of golf taxable?
A: No. Golf course operation is a service occupation in Illinois, and a transaction with no transfer of tangible personal property isn't subject to Retailers' Occupation Tax, Use Tax, Service Occupation Tax, or Service Use Tax.

Q: Is redeeming a voucher for golf balls or other merchandise taxable?
A: Yes. That's a sale of tangible personal property, so the redeeming retailer owes Retailers' Occupation Tax at redemption -- based on what the customer paid for the voucher (if known to the retailer) or the item's normal retail price (if not).

Q: Who is responsible for collecting the tax on a taxable redemption -- the voucher platform or the merchant?
A: The redeeming merchant/retailer. The voucher-selling platform is never required to collect or remit tax on any voucher sale.

Q: Can I rely on this letter for my own voucher platform?
A: No. This is a General Information Letter -- it's not binding on the Department. Confirm your specific business model with a tax professional, especially if you sell vouchers across multiple types of underlying goods or services.

Citations and references

Statutes:

• 35 ILCS 120/2; 35 ILCS 105/3 (Retailers' Occupation Tax Act; Use Tax Act)
• 35 ILCS 115/3; 35 ILCS 110/3 (Service Occupation Tax Act; Service Use Tax Act)
• 35 ILCS 120/1 (definition of "gross receipts"/"selling price")

Regulations:

• 86 Ill. Adm. Code 130.2125 (Deal-of-the-Day vouchers treated as intangible personal property)
• 86 Ill. Adm. Code 130.2030(b)(1) (golf course operation as a service occupation)

Source

• Landing page: Illinois 2026 Sales Tax Letter Rulings
• Original PDF: ST26-0014-GIL.pdf

Original ruling text

ST 26-0014-GIL 04/28/2026 RETAILERS’ OCCUPATION TAX
Deal-of-the-Day vouchers are intangible personal property. Therefore, sales of
Deal-of-the-Day vouchers are not subject to sales tax. See 86 Ill. Adm. Code
130.2125. (This is a GIL).
April 28, 2026
NAME
COMPANY
EMAIL
Dear NAME:
This letter is in response to your letter dated March 18, 2026, 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.
INQUIRY:
I plan to sell digital prepaid golf vouchers online on behalf of the golf courses
or golf venues as a marketing agent. The customer would buy a digital voucher
on my business website for the deal price and they would receive it instantly
by email post purchase. (No physical good) Customer would then book a tee
time separately with the golf course and show voucher at check in to be
validated and redeemed.

1. Since the golf course is the actual service do I need to charge sales tax on
   these digital vouchers on my website?

COMPANY/NAME
Page 2
April 28, 2026

2. Can I sell digital prepaid vouchers for items in the golf pro shops? (Golf
   balls, tees, hats, shirts, etc) Ex. Customer buy on my website a prepaid digital
   voucher for one sleeve of 3 golf balls for that specific golf course. Then when
   they go to the golf course they would show voucher and golf balls would be
   paid for. Pending answer to #1 above, if I don’t charge sales tax, does this
   apply here? Or since it’s a physical good at the course then I do charge sales
   tax? Or can I pass sales tax onto golf course for the balls to be paid by
   customer at the golf course to the golf course?
   DEPARTMENT’S RESPONSE:
   The Illinois Retailers’ Occupation Tax Act imposes a tax upon persons engaged in this
   State in the business of selling tangible personal property to purchasers for use or
   consumption. See 35 ILCS 120/2; 86 Ill. Adm. Code 130.101. In Illinois, Use Tax is imposed
   on the privilege of using, in this State, any kind of tangible personal property that is
   purchased anywhere at retail from a retailer. See 35 ILCS 105/3; 86 Ill. Adm. Code 150.101.
   These taxes comprise what is commonly known as “sales” tax in Illinois. Retailers’
   Occupation Tax and Use Tax do not apply to sales of service. The Service Occupation Tax
   Act imposes a tax upon persons engaged in this State in the business of making sales of
   service, based on tangible personal property transferred incident to sales of service. See 35
   ILCS 115/3; 86 Ill. Adm. Code 140.101. Service Use Tax is imposed on the privilege of using,
   in this State, tangible personal property that is received anywhere as an incident to a
   purchase of service from a serviceman. See 35 ILCS 110/3; 86 Ill. Adm. Code 160.101.
   The Department refers to transactions like the ones you propose as Deal-of-the-Day
   transactions. In contrast to the retailers selling the tangible personal property or services
   when the Deal-of-the-Day vouchers are redeemed, the persons engaged in the business of
   selling vouchers which entitle purchasers to the right to redeem those vouchers for tangible
   personal property or services are not engaged in selling tangible personal property or
   services. Rather, they are making sales of intangibles, which are not subject to the Retailers’
   Occupation Tax, Use Tax, Service Occupation Tax, or Service Use Tax.
   Regarding whether the golf course is subject to tax when a voucher is redeemed for a
   round of golf: in Illinois, the operation of golf courses is considered a service occupation and
   is not subject to Retailers’ Occupation Tax or Use Tax. See 86 Ill. Adm. Code 130.2030(b)(1).
   Because Service Occupation Tax is a tax on the transfer of tangible personal property
   incident to a sale of service, charges for a round of golf not involving the transfer of any
   tangible personal property are not subject to Service Occupation Tax or Service Use Tax.
   Therefore, a Deal-of-the-Day voucher for a service, such as a round of golf, is not subject to
   tax either at the point sale of the voucher or when redeemed for the service.

COMPANY/NAME
Page 3
April 28, 2026

The analysis is different for a Deal-of-the-Day voucher for an item of tangible personal
property, e.g., a sleeve of golf balls. The Retailers’ Occupation Tax is imposed “at the rate of
6.25% of the gross receipts from sales of tangible personal property made in the course of
business.” “Gross receipts” means “the total selling price or the amount of such sales, as
hereinbefore defined.” See 35 ILCS 120/1. “Selling price or the amount of sale” means “the
consideration for a sale valued in money whether received in money or otherwise, including
cash, credits, property, other as hereinafter provided, and services . . . . ‘Selling price’ shall
be determined without any deduction on account of the cost of the property sold, the cost
of materials used, labor or service cost or any other expense whatsoever.” See 35 ILCS
120/1.
When Deals-of-the-Day involve vouchers redeemable for tangible personal property
(e.g., golf balls), the sale of the voucher by the Deal-of-the-Day seller is still a non-taxable
sale of intangibles. However, the redemption of the voucher at the retailer is a taxable
transaction, because it involves the sale of tangible personal property. Therefore, when a
customer presents a voucher entitling them to some piece of tangible personal property to
a retailer, like a sleeve of golf balls, a hat, etc., that transaction is subject to Retailers’
Occupation Tax. The tax base of such transactions is determined based on whether the
retailer knows how much the customer paid for the voucher. If the retailer knows how much
the customer paid for the voucher, then tax is charged based on that amount. If the retailer
does not know how much the customer paid for the voucher, then tax must be charged
based on the full value of the voucher. For example, if a seller sells a voucher for a sleeve of
golf balls to a customer for $5.00, and the golf course knows that is what the customer paid
for the voucher, then the golf course pays Retailers’ Occupation Tax and charges the
customer Use Tax on $5.00, regardless of the price the golf course would otherwise charge
for the sleeve of golf balls. However, if the facts are the same, except the golf course does
not know how much the customer paid for the voucher, then the golf course pays Retailers’
Occupation Tax and charges the customer Use Tax on the price they would normally charge
for the sleeve of golf balls, because the voucher is treated the same as a customer
presenting any other form of payment for the sleeve of golf balls. There are no circumstances
under which the Deal-of-the-Day seller is required to collect or remit tax on sales of
vouchers.
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,

COMPANY/NAME
Page 4
April 28, 2026

Edward Mroczkowski
Associate Counsel
EM:slc

Printed by the authority of the State of Illinois
Electronic Only - One Copy
Issued 04/28/2026, Redacted 5/14/2026