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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Did Illinois law require a lessee to pay four years of tax upfront on a true equipment lease?
Not as an Illinois tax on true-lease rental receipts. For a true lease, the lessor was the end user and owed Use Tax on its cost; Illinois imposed no tax on the lessee's rent. A lease could privately …
Was a medical-device seller exempt when it supplied orthopedic instrument kits at no extra charge to nonprofit hospitals?
The Department could not decide because the contracts did not clearly show whether the instrument kits were sold, loaned with ownership retained, included in the implant resale, or donated. If truly d…
Could a service corporation claim the replacement-tax investment credit for equipment used only by its separate manufacturing division?
No. The primarily-engaged test applied to all operations of the taxpayer, not separately to each division. IDOR looked to gross receipts earned in the corporation's ordinary course of business. Becaus…
What documentation protected an Illinois drop shipper treating a delivery to the purchaser's Illinois customer as a sale for resale?
The Illinois-registered drop shipper had to collect tax or document the resale exemption. A complete certificate with a registration or resale number valid when given ended the seller's liability if t…
Did Illinois Watercraft Use Tax apply to a privately purchased used sailboat brought to Illinois after an occasional sale?
Yes. Even if the seller's private sale qualified as an occasional sale exempt from ordinary Retailers' Occupation and Use Tax, Illinois Watercraft Use Tax separately applied to a watercraft acquired b…
Was a mandatory convenience fee for buying a show-and-meal ticket online included in Illinois taxable gross receipts?
Yes. The seller's mandatory online convenience fee was inseparably linked to purchasing the ticket through the website and became part of the selling price. Calling it a separately stated fee for reco…
How did Illinois treat custom printed bills and notices, electronic billing data, and software used in those services?
Custom print items that could not be sold to another buyer at substantially the same price generally fell under Service Occupation or Use Tax rather than Retailers' Occupation Tax. Electronically tran…
Were prescription drugs paid through Medicare Part D exempt as direct government purchases, and could tax be added to the copay?
No government-purchase exemption applied to Medicare Part D drug sales because private prescription drug plan providers, not the government, bought the drugs. Tax was due, but the GIL said it could no…
Was the state-funded Energy Star appliance rebate included in the retailer's taxable gross receipts?
Yes. Because the retailer received reimbursement for the point-of-sale markdown, the rebate remained part of taxable gross receipts. In the requester's $1,000 refrigerator example with a $150 rebate, …
What historical 2010 Illinois guidance did the Department give on sales-tax nexus, software, and digital downloads?
Historical only: the 2010 GIL said repetitive delivery and installation in Illinois created physical presence and Use Tax collection duties, while an out-of-state seller without sufficient nexus left …
Could a parent claim an Illinois dependent exemption for a child based only on paying child support?
Only if the parent was also allowed the exemption on the federal return. Illinois took the number of dependent exemptions from the taxpayer's federal return, so IDOR directed the parent to federal rul…
Did checking an online box satisfy Illinois's purchaser-signature requirement for an electronic resale certificate?
No. A process that merely required the purchaser to click a box did not satisfy the signature requirement. A digital signature might be acceptable, and an electronic certificate otherwise had to conta…
Did Illinois tax wireless Internet access sold alone or bundled with voice, messaging, and other services?
Not conclusively. Based on the limited facts, the Department said some services might avoid Telecommunications Excise Tax if their charges were disaggregated and separately identified from taxable tel…
Who owed Illinois tax when a janitorial company used cleaning supplies while providing services?
The janitorial provider owed Use Tax on the cost price of cleaning supplies it consumed while performing the service, and it could not buy those supplies for resale. The customer generally owed no tax…
Did Illinois sales tax apply to retail goods sold by an individual or corporation even when the business reported no profit?
For sales tax, the Department said Retailers' Occupation Tax applied to persons selling tangible personal property at retail, and the statutory definition of persons included natural individuals and c…
Did Illinois sales tax apply when an online game seller delivered only downloadable or emailed PDF files?
No Retailers' Occupation Tax or Use Tax applied if the transaction transferred only electronically delivered information or data, with no canned software and no tangible personal property. But canned …
Were a campground's rentals of tepees or tents as sleeping accommodations subject to Illinois Hotel Operators' Occupation Tax?
Yes, under the Department's 2010 general guidance. It said Hotel Operators' Occupation Tax did not distinguish permanent from temporary structures and that renting tents or tepees as sleeping accommod…
Where did a partnership claim the Illinois subtraction for deductions disallowed under IRC Section 280C?
On Line 28 of Form IL-1065. IDOR issued this short corrective GIL because IT 10-0003-GIL had incorrectly directed partnerships to claim the subtraction modification for deductions disallowed under IRC…
How did Illinois source broadcasting-service receipts, and did the general services throwout rule apply?
The general services throwout rule did not apply to broadcasting-service receipts governed by Section 304(a)(3)(B-7). For viewer- or listener-paid broadcasts, recipients were the viewers or listeners …
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…
Did Illinois classify a multilevel marketer's soy nuts and granola snack bars for the low or high food tax rate?
No product-specific classification was given. The Department explained that qualifying off-premises food generally received the historical 1% state rate plus local tax, while alcoholic beverages, cand…
Who owed Illinois tax when a granite-countertop business sold countertops over the counter or installed them permanently in real property?
For an over-the-counter countertop sale, the retailer owed Retailers' Occupation Tax and collected the corresponding Use Tax from the customer; a separately contracted installation service was not tax…
Could a partnership subtract wages whose federal deduction was disallowed under IRC Section 280C?
Yes. Section 203(d)(2)(J) allowed a partnership an Illinois subtraction equal to wages or salaries whose federal deduction was disallowed under IRC Section 280C, including the stated Work Opportunity …
Could a partnership claim extra Illinois depreciation by ignoring federal Section 1031 basis reduction when the relinquished property was outside Illinois?
No. A partnership's Illinois calculation began with federal taxable income, including the federal depreciation deductions based on the Section 1031 replacement property's carryover basis. Illinois all…
Could a corporation skip earlier profitable years and save 2001-2002 Illinois net losses for deductions in 2006 and 2007?
No, unless the corporation had timely elected to relinquish the entire carryback period. Each loss had to be carried to the earliest eligible year and then forward in order. The remaining amount avail…
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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.