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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What documentation supported an Illinois resale exemption for in-state, out-of-state, and auction buyers under ST 11-0040-GIL?
A properly completed Certificate of Resale, signed by the purchaser and containing the seller and buyer details, item description, signature date, and the required registration, resale, or out-of-stat…
Could an Illinois pharmacy fill prescriptions tax-free when a tax-exempt health center paid for uninsured patients?
Potentially. ST 11-0039-GIL says drugs sold to an organization holding an Illinois exemption identification number could be sold free of tax; without an E number, the sale could not be tax-free. The p…
Did knives, gloves, aprons, hairnets, and similar meat-processing items qualify for Illinois's manufacturing exemption or Manufacturer's Purchase Credit?
They did not qualify for the manufacturing machinery and equipment exemption when they were hand tools, supplies, or personal apparel; the regulation specifically excluded categories including gloves,…
Did Illinois treat a two-ounce 5-Hour Energy dietary supplement as reduced-rate food or a full-rate soft drink?
As a soft drink under the 2011 rule. ST 11-0037-GIL points out that the product contained sucralose, which Regulation 130.310 listed as a sweetener, and that the regulation specifically listed sport o…
Did an Illinois sales-tax exemption number exempt a government instrumentality from hotel room tax or the hotel's reimbursement charge?
No. ST 11-0036-GIL says Illinois Hotel Operators' Occupation Tax was imposed on the hotel operator, not on the room occupant. Because the occupant had no hotel-tax liability to which its exempt status…
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…
Did an Illinois university withhold Illinois tax from employees based permanently outside the state who sometimes returned to Illinois?
Generally not under the Illinois-compensation rule. In all eight scenarios, the employee's permanent out-of-state job location was the base of operations, so the wages were not compensation paid in Il…
Would a county health department owe Illinois sales tax when reselling toothbrushes to low-income dental patients at its cost?
Likely no. ST 11-0033-GIL says Illinois governmental bodies generally incur Retailers' Occupation Tax when selling tangible personal property to the public outside the performance of a governmental fu…
Did an Illinois contest winner owe Use Tax on noncash prizes such as outdoor furniture and lighting?
No. ST 11-0032-GIL says the donor or contest sponsor that buys tangible personal property to give it away makes the taxable use and incurs Illinois Use Tax on its purchase price. The contest winner in…
Could permanently installed vehicle-wash components qualify for Illinois's enterprise-zone building-materials sales-tax exemption?
Potentially, component by component. ST 11-0031-GIL says the enterprise-zone exemption covered qualified sales of building materials physically incorporated into real estate through a covered project.…
Could a token-pusher machine awarding toys, food, and gift cards qualify as an Illinois redemption machine or coin-operated amusement device?
Not on the limited description. ST 11-0030-GIL says a redemption machine had to involve the specified physical-object game and satisfy all five statutory conditions, including awarding only merchandis…
When did Illinois sales tax apply to layaway and partial payments, and was a nonrefundable layaway fee taxable?
When the buyer had made a binding commitment, the property was identified, and a payment was made, that payment entered the seller's taxable gross receipts when received. A nonrefundable layaway fee w…
Were charges for resold wireless broadband Internet access exempt from Illinois telecommunications tax under the Internet Tax Freedom Act?
Not conclusively on the stated facts. ST 11-0028-GIL says telecommunications purchased, used, or sold by a provider to enable Internet access fell within the then-current federal tax moratorium. But n…
Did a business qualify for Illinois's enterprise-zone Gas Use Tax exemption merely by being located in a certified zone, without separate job-creation certification?
Yes, under the rule described. ST 11-0027-GIL says a business enterprise needed only to be located in an enterprise zone certified by the Department of Commerce and Economic Opportunity to claim the G…
What Illinois tax and rate applied when a construction contractor bought materials from an out-of-state vendor for permanent incorporation into real estate?
The contractor was the end user and owed Illinois Use Tax on the materials' cost price. If an out-of-state supplier did not collect the tax, the contractor had to self-assess and pay the historical 6.…
Did a vehicle owner have to prove Illinois sales tax was paid on the old vehicle before using it as a trade-in?
No. ST 11-0025-GIL says the trade-in rules did not require the old vehicle to have been bought or taxed in Illinois, or even titled or registered in Illinois. The original purchase's taxation did not …
Who owed Illinois tax when an out-of-state facilities manager hired Illinois construction contractors and service providers for retail stores?
Construction contractors were end users of materials permanently incorporated into Illinois real estate and owed Use Tax on their cost. When subcontractors acted as construction contractors, the gener…
How did Illinois tax media postproduction, film or videotape duplication, and electronic transmission services?
Pure services without a transfer of tangible personal property were outside Retailers' Occupation, Use, Service Occupation, and Service Use Tax. When film, videotape, or other tangible media was trans…
How did Illinois tax equipment placed in a rental fleet, property bought for resale, and vehicles brought into Illinois?
For a true lease, the lessor generally was the end user and owed Use Tax on the equipment's cost price; Illinois imposed no sales tax on the rental receipts. A conditional sale was different, and all …
How did Illinois treat repair parts for material-handling equipment, dyed diesel used off highway, and an excavator leased for manufacturing work?
Repair or replacement parts incorporated into exempt manufacturing machinery could qualify when the machinery was used primarily—more than 50%—in manufacturing, but equipment used mainly before or aft…
How did Illinois tax a separately billed wireless phone-replacement program, replacement phones, and customer deductibles?
The Department said the described phone-replacement program appeared to be sold separately from the phone. A separately sold maintenance agreement was not itself a taxable transaction, and the custome…
Did unreimbursed loyalty-point and coupon discounts reduce Illinois taxable receipts for retail goods and wireless telecommunications?
Generally yes. ST 11-0019-GIL says an unreimbursed retailer discount reduced taxable gross receipts to the amount actually received. If a manufacturer, distributor, or other source reimbursed the disc…
Did nonmedicated Breathe Right nasal strips qualify as medical appliances for Illinois's reduced tax rate?
Generally no. ST 11-0018-GIL says an Illinois medical appliance had to be intended by its manufacturer to directly substitute for a malfunctioning part of the human body. Products that simply improved…
Did an Illinois seller that drop-shipped air purifiers from Canada have to collect Illinois tax when it kept no inventory or storefront?
Unresolved. ST 11-0017-GIL says the Department did not make nexus determinations in PLRs or GILs because an auditor was better positioned to gather the necessary facts. It gave general 2011 rules for …
When may an Illinois contractor buy materials tax-free for work performed under a contract with an exempt organization?
Conditionally. ST 11-0016-GIL says an Illinois construction contractor normally is the end user and owes Use Tax on materials incorporated into real estate. The contractor may buy materials tax-free w…
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…
Did Illinois classify a trade-show company's service, lease, telecom, and catering revenue items as taxable or nontaxable?
Not item by item. ST 11-0014-GIL declined the requested taxable-or-nontaxable classifications and supplied general rules. Pure services without transferred tangible property were outside Service Occup…
Would Illinois approve a private handbook's description of tax exemptions for nonprofit and governmental organizations?
No. ST 11-0013-GIL says the Department does not approve the accuracy of private legal publications. Instead of validating the handbook excerpt, it directed the publisher to Illinois statutes, administ…
Did Illinois decide whether a satellite-TV installation company owed sales or use tax on equipment reimbursed by the service provider?
No. ST 11-0012-GIL says the Department could not determine the exact arrangement between the installation company and satellite service provider, so it gave no specific sales-tax, use-tax, or registra…
Did liquor filling change Illinois's 2011 State tax rate for a product that otherwise qualified as candy?
No. ST 11-0011-GIL says the law that moved candy to the 6.25% State general-merchandise rate did not distinguish between candy with liquor filling and candy without it. Under the definition quoted, a …
Could a retired partner subtract partnership payments reported federally as interest and capital gain from Illinois income?
No. IDOR said the Illinois subtraction for retirement payments to retired partners applied only to payments excluded from federal net earnings from self-employment under IRC Section 1402(a)(10) and Tr…
How could an Illinois resident avoid double tax if Iowa taxed Conservation Reserve Program payments from Iowa farmland?
Illinois taxed the resident's Conservation Reserve Program payments because residents allocated all base income to Illinois, regardless of whether the farmland was in Iowa or Georgia. Illinois could n…
Did a registered-agent service avoid Illinois income-tax nexus when it had no employees or owned property in Illinois?
IDOR did not make a definitive nexus determination because nexus was fact-specific. It said the service's paid arrangement—providing an Illinois address and using a local law firm to receive and trans…
How did Illinois treat forklifts held for sale but temporarily rented or demonstrated before resale?
The Department did not decide the audited forklift distributor's specific transactions. It explained that a true-lease lessor was generally the end user and owed Use Tax on cost while rental receipts …
Could Illinois individuals separately subtract prior-year net operating losses and a pass-through Section 179 expense already deducted federally?
No. An individual's Illinois base-income computation began with properly computed federal adjusted gross income, and Section 203 allowed only express modifications. The taxpayers had already deducted …
Could a bookseller use its customer's billing address to source tax when the books' delivery locations were unknown at invoicing?
The GIL did not approve billing address as a general substitute for an unknown delivery address. It said that when a retailer sells property to someone in Illinois and does not know where it will be d…
Could an Illinois S corporation redirect its 2009 overpayment to its 2010 estimated tax after not making the election on its original return?
No. Under the cited regulation, a taxpayer could elect on a timely original return to apply an overpayment to estimated tax for the immediately following taxable year, and that election was irrevocabl…
Did Illinois's enterprise-zone pollution-control exemption cover the pollution-control facility itself and its repair parts?
No under the Section 1e interpretation in ST 11-0008-GIL. The exemption was limited to tangible personal property used or consumed in operating a pollution-control facility within an enterprise zone. …
How did Illinois classify baking sprinkles, flour-containing salad toppings, and nicotine-treatment gum for the food tax rate?
Under the 2011 rules described, baking sprinkles were candy and used the general-merchandise State rate; a preparation containing flour was not candy; and gum intended by its manufacturer to treat nic…
Did the statutory transfer of assets to a surviving corporation in a merger trigger Illinois sales or use tax?
No for the merger transfer described by the Department. ST 11-0006-GIL says property, debts, liabilities, and obligations vesting in the surviving corporation by operation of 805 ILCS 5/11.50 were not…
How should an out-of-state LLC report Illinois business income and nonbusiness rental loss passed through by lower-tier partnerships?
The LLC had to preserve the character and Illinois sourcing shown on the lower-tier Schedules K-1-P. Its $2,091,233 share of business income apportioned 100% to Illinois by one partnership belonged on…
Could S corporation shareholders subtract dividends from an IC-DISC that operated from an Illinois enterprise-zone address but had no payroll or property there?
No, based on the facts submitted. The IC-DISC was a Section 304(a) corporation, so the applicable enterprise-zone test used its property and payroll factors—not its sales or commission income. The req…
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…
Did an Illinois restaurant charge tax on the menu price before an unreimbursed discount or voucher?
No for an unreimbursed discount. ST 11-0003-GIL says only the discounted amount actually received by the restaurant was taxable when no supplier or other party reimbursed the discount. If the seller r…
When could refrigerated trailers leased for interstate commerce qualify for Illinois's rolling-stock exemption?
Qualification depended on use, not merely on the item being a trailer. ST 11-0002-GIL says the rolling-stock exemption could cover property sold to an interstate carrier for hire, or to a lessor under…
Which separately stated charges could be excluded from Illinois automobile-rental gross receipts?
The GIL did not classify every listed rental-car fee without reviewing the contracts. Under the 2011 rules, all consideration for an automobile rental of one year or less entered gross receipts unless…
Could an Illinois individual subtract current-year federal itemized deductions on the Illinois income tax return?
No. Illinois individual income tax began with federal adjusted gross income, which was computed before itemized deductions, and Section 203 allowed only express modifications. Section 203(a)(2)(I) all…
Could trailer buyers recover Illinois Use Tax after the seller was later assessed tax by another state?
No on the facts described. ST 10-0128-GIL says Illinois allowed a credit only when tax properly due to another state had already been paid at the time Illinois Use Tax was paid. A later assessment by …
Did Illinois classify a sweetened liquid mental-clarity supplement as food, a soft drink, or medicine?
Unresolved. ST 10-0127-GIL did not expressly say whether the referenced liquid supplement qualified for the lower rate or the general-merchandise rate. It explained that a sweetened nonalcoholic bever…
Did Illinois approve a pad-printing equipment package for the graphic-arts machinery exemption?
No specific approval was issued. ST 10-0126-GIL says the request lacked enough item-by-item purpose and use information, so the Department declined the PLR. It explained that the historical exemption …
How did Illinois tax hostess reward credits, free products, half-price items, and shipping in party-plan sales?
A hostess reward credit based on party sales entered taxable gross receipts when applied to merchandise, at the dollar amount credited. If the company instead gave merchandise away, the company owed U…
Were custom-printed checks and deposit tickets sold by a bank subject to Retailers' Occupation Tax or Service Occupation Tax?
Generally Service Occupation Tax for genuinely custom print items. ST 10-0124-GIL says a special-order product of general utility that performs substantially like a stock item was a taxable retail sal…
How did Illinois tax a remodeling contractor's resale of furniture and other items that remained personal property after installation?
The contractor was acting as a retailer when it sold items that remained tangible personal property rather than becoming part of the real estate. ST 10-0123-GIL says those items could be purchased for…
Were automobile-dealer direct-mail program fees subject to Illinois Retailers' Occupation Tax?
Apparently not under Retailers' Occupation Tax. ST 10-0122-GIL says there did not appear to be Retailers' Occupation Tax liability on the program fees billed by the automobile company to participating…
Were subscriptions to a hosted business-information database and web tools taxable in Illinois?
Conditionally no. ST 10-0121-GIL says a company providing access to a database of information without transferring software or other tangible personal property would incur no Illinois Retailers' Occup…
Did Illinois's rolling-stock exemption cover cellular data charges for GPS tracking on interstate trucks?
No. ST 10-0120-GIL says the rolling-stock exemption was available only under Illinois sales, use, service occupation, and service use taxes—not the Telecommunications Excise Tax. The Department could …
Was propane used in forklifts exempt as manufacturing machinery or eligible for Illinois Manufacturer's Purchase Credit?
Propane and other fuel did not qualify for the manufacturing machinery and equipment exemption itself. Under the historical Manufacturer's Purchase Credit rules described in ST 10-0119-GIL, a qualifyi…
How did Illinois tax prescription eyeglasses and contact lenses transferred by an optometrist?
Prescription eyeglasses and contact lenses were medical appliances eligible for the lower State rate described in the 2010 GIL. An optometrist rendering professional services did not owe Retailers' Oc…
What records did an Illinois retailer need when an authorized person bought property for an exempt organization?
The retailer had to retain the Department letter showing the organization's active Illinois E number and detailed transaction records. A purchaser paying by another method than the organization's chec…
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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.