Illinois State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Illinois, with full citations and the original source on every page.
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How did Illinois tax bundled computer hardware, canned software, maintenance, labor, updates, and delivery charges?
Canned software was generally taxable regardless of delivery method; qualifying licenses and custom software could be nontaxable. A maintenance bundle with unseparated canned-software upgrades was ful…
How did Illinois tax game access codes, downloadable software, subscription or points cards, and online content?
Cards or coupons redeemable for property were generally intangible when sold, with tax arising when property was redeemed. Ordinary electronically transferred data was intangible, but downloaded canne…
When is Illinois sales tax due on computer software licenses and software maintenance agreements?
Canned (prewritten) computer software is taxable tangible personal property in Illinois, whatever the medium; genuinely custom software may not be. A software license is not a taxable retail sale if t…
When were licensed software, updates, support, training, and maintenance taxable in Illinois?
IDOR declined to decide the reseller's specific transactions. Generally, canned software was taxable regardless of delivery unless every signed-license criterion in Rule 130.1935(a)(1) was met; then t…
Was a claimed Illinois software-license exemption valid based only on the limited documents submitted?
Unresolved. Canned software was generally taxable regardless of delivery method, but a license could be nontaxable only if every requirement in 86 Ill. Adm. Code 130.1935(a)(1) was met, including a si…
Were hosted canned-software license fees and mandatory maintenance fees taxable when Illinois customers accessed the system online?
IDOR did not give a fact-specific yes-or-no answer. It said canned software is generally taxable even when transferred electronically, but a license is not a taxable retail sale if it satisfies all fi…
Can an Illinois software reseller treat canned-software sales as exempt when the publisher, rather than the reseller, signs the license with the customer?
Yes, potentially. The reseller did not have to be the licensor. If the signed license between the software publisher and the customer met all five requirements in 86 Ill. Adm. Code 130.1935(a)(1), the…
Did checking an online box create the signed software-license agreement needed for Illinois's canned-software license exemption?
No. In this 2013 GIL, IDOR said checking a box to accept online license terms was not a written agreement signed by both licensor and customer. Canned software and updates generally were taxable unles…
Did IDOR decide whether the software license attached to ST 13-0015-GIL qualified for Illinois's canned-software exemption?
No. IDOR declined to issue a PLR or decide whether the attached agreement met the exemption, saying 86 Ill. Adm. Code 130.1935 was clear enough for licensors and licensees to apply. It stated generall…
Would IDOR give yes-or-no answers to a 2013 nexus survey, and what historical guidance did it provide instead?
No. IDOR said nexus was too fact-specific for the survey's yes-or-no format. It instead summarized the law it applied as of December 31, 2012: accepting Illinois orders or filling them from Illinois i…
How did Illinois treat software, static-control items, and climate equipment used by an electronics manufacturer?
Software used to operate exempt manufacturing machinery was not subject to Retailers' Occupation Tax, but that software did not earn Manufacturer's Purchase Credit. General climate-control equipment q…
Was proprietary software licensed for integration into a customer's product exempt from Illinois sales tax merely because it was not stand-alone and would be sublicensed?
Not automatically. Software that was not custom remained taxable canned software even when it was not stand-alone or was delivered electronically. A license avoided Retailers' Occupation Tax only if i…
Was a supplier's charge for a website taxable in Illinois when the work was delivered electronically?
The GIL did not classify the particular website invoice. It explained that electronically transferred information or data was not tangible personal property, and a service without a property transfer …
Was cloud-streamed dental patient-education video subject to Illinois sales and use tax when customers received no property or software?
Generally no, if the customer only received online access and no software or other tangible personal property. ST 11-0052-GIL says a company providing access to a database of information without trans…
How did Illinois treat downloaded ringtones, media, music, videos, and software for sales tax and telecommunications excise tax?
For sales tax, electronically downloaded information or data was not tangible personal property, but canned software remained taxable even when transmitted electronically; custom software might not be…
How did Illinois tax canned software, custom software, exempt software licenses, and maintenance agreements under ST 11-0042-GIL?
Canned software was taxable regardless of delivery method, while custom software prepared to special order might not be taxable. A canned-software license avoided Retailers' Occupation Tax only if it …
Were separately sold support, maintenance, and update agreements taxable when the underlying software license met Illinois's five-part license exemption?
No, under the stated assumption. ST 11-0041-GIL says that when a software license met all five criteria in 86 Ill. Adm. Code 130.1935(a)(1), charges for support, maintenance, or updates of that licens…
How did Illinois treat downloaded media, downloaded canned software, and local sales-tax sourcing for online sales to Chicago customers?
Electronically downloaded music or video was not tangible personal property and was outside Illinois Retailers' Occupation and Use Tax, while canned software remained taxable even when downloaded unle…
Were subscription digital certificates and authentication services taxable as computer software in Illinois?
Generally no for the digital certificate, authentication, and resolution services themselves. ST 11-0015-GIL says a digital signature or identification was not computer software and electronically tra…
Were separately stated optional and mandatory maintenance charges taxable when tied to a qualifying software license?
Assuming the software license met every condition in 86 Ill. Adm. Code 130.1935(a)(1), the GIL says charges for support, maintenance, and updates under the qualified license were not subject to Retail…
Were software-maintenance charges taxable when separately invoiced but governed by the same contract as a qualifying software license?
Assuming the software license met every condition in 86 Ill. Adm. Code 130.1935(a)(1), the GIL says support, maintenance, and update charges provided under that qualified license were not subject to R…
How did Illinois treat access codes, points cards, stored-value cards, virtual goods, and downloadable video-game software?
The GIL did not conclusively classify every product. A card or coupon redeemable for tangible personal property was an intangible when sold; tax arose when a retailer later transferred the property. E…
Did reselling access to an online employability assessment create Illinois sales or service tax when no property was transferred?
Generally no under the facts stated. ST 10-0111-GIL says a transaction with no transfer of tangible personal property created neither Retailers' Occupation Tax, Use Tax, Service Occupation Tax, nor re…
Did Illinois decide whether a New York provider's web-based software and training were taxable or created Illinois collection duties?
Unresolved for the described web-based provider. The Department declined to determine nexus and said ASP, hosting, and web-software guidance belonged in rulemaking. Under the 2010 rules it described, …
Did Illinois decide whether subscriptions to remotely hosted application-service-provider platforms were taxable software or nontaxable information services?
Unresolved. The Department refused to classify application-service-provider subscriptions through a letter ruling and said the subject belonged in formal rulemaking. Until that review was complete, ea…
Did Illinois decide whether an out-of-state eye-monitoring service with devices in patients' homes had nexus or owed tax on its monthly service fees?
Unresolved. The Department did not decide nexus, registration, or the taxability of the monthly eye-monitoring service. It outlined four Service Occupation Tax or Use Tax methods for property transfer…
How did Illinois distinguish taxable conditional-sale payments from rent under a true equipment lease?
A $1 or other nominal buyout generally makes the arrangement a conditional sale, so all lessor receipts are taxable. A fair-market-value option can preserve a true lease; the lessor then owes Use Tax …
When did Illinois treat electronically delivered canned software, software licenses, and maintenance agreements as taxable?
Electronically delivered canned software was generally taxable, but a software license and its updates were not taxable if the license met every requirement in 86 Ill. Adm. Code 130.1935(a)(1), includ…
Did Illinois approve a service-company tax matrix, and how did it explain tax on property transferred with services, electronic data, software, and equipment leases?
No. Illinois would not approve the private tax matrix. It explained that services with no tangible-property transfer generally produced no Retailers' Occupation or Use Tax, while property transferred …
Did Illinois approve a medical-practice software license and maintenance contract as exempt from Retailers' Occupation Tax?
No specific approval was issued. The Department declined the requested Private Letter Ruling and gave general rules: prewritten software was taxable unless a license met all five Section 130.1935(a)(1…
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These are official tax letter rulings and advisory opinions issued by Illinois's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.