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.
No Illinois rulings match these filters
Try a different search term or clear the filters.
Does a solar company that owns and installs rooftop or ground-mounted panels under a power purchase agreement owe sales/excise tax on its monthly electricity payments?
The solar panels themselves, once permanently affixed to a rooftop or ground-mounted, are treated as real property under Illinois's 'intention test' -- so the installer is a construction contractor an…
Is a solar-panel construction contractor exempt from Illinois Use Tax on materials when its contract is with a third-party owner instead of directly with the tax-exempt school district that will host the panels?
No. Because the contract is with a third-party PPA company that will own the solar panels, not with the tax-exempt school district itself, the construction contractor cannot buy the materials tax-free…
If a subcontractor for a tax-exempt organization (like a school or church) rents equipment such as a lift, does the subcontractor have to pay Illinois sales tax on the rental?
Generally yes. Illinois now taxes lease receipts directly (effective January 1, 2025), and a rental to a subcontractor is taxable unless the subcontractor itself qualifies -- for example, as a constru…
Now that Illinois taxes leases of tangible personal property as retail sales starting January 1, 2025, how do exemptions for construction contractors, exempt organizations, and resale purchases apply to a company that both rents and sells equipment and materials?
Since January 1, 2025, a lessor's gross receipts from leasing tangible personal property in Illinois are subject to State and local Retailers' Occupation Tax, replacing the old system where the lessor…
Does a manufactured (mobile) home dealer owe sales tax or use tax when it sells a home that gets permanently installed on a lot, versus one it just delivers without installing?
It depends on installation. If the dealer permanently incorporates the manufactured home into real estate (wheels, tongue, and hitch removed), the dealer acts as a construction contractor and owes use…
How does Illinois tax a construction contractor who also manufactures the modular components it installs into a building?
The contractor owes Illinois Use Tax as the end user of the materials, and when the contractor is also the manufacturer of the modular components it installs, the tax base is only what it paid for the…
Does a construction contractor owe Illinois Use Tax or Retailers' Occupation Tax on materials, like solar panels, that get permanently installed into real estate?
Construction contractors are treated as end users of the materials they permanently affix to real estate, so they owe Use Tax on the cost price of those materials rather than collecting sales tax from…
Do gates permanently set in concrete at a construction site inside an Illinois enterprise zone qualify for the enterprise zone building materials sales tax exemption?
It depends on whether the gates are permanently affixed to the real estate -- the Department's GIL says the items 'may qualify' if they are permanently incorporated into the realty (applying the same …
Can a construction contractor that can't tell at the time of purchase whether materials will be installed into real estate or sold over the counter buy everything tax-free from its supplier and self-report a flat percentage of tax later?
Only partly. Under 86 Ill. Adm. Code 130.2075(b), a contractor who genuinely can't tell at purchase whether materials will be installed into real estate or sold at retail may certify to its supplier t…
Do solar panels and related wiring, incorporated into the ground with concrete at a solar farm inside an Illinois enterprise zone, qualify as exempt 'building materials' under the enterprise zone sales tax exemption?
Possibly, but the Department would not say for sure in this GIL -- solar panels are not specifically listed in the building materials exemption regulation, but the Department noted that other equipmen…
If a company manufactures signs, hires a third party to install them, and bills its dealers for the supply, freight, and installation, does it owe Illinois Retailers' Occupation (sales) Tax, Use Tax, or Service Occupation Tax on the sign -- and does the answer change once the sign is bolted to a concrete foundation?
It depends on whether the sign has "commercial value" to buyers generally and whether it becomes permanently affixed to real estate. A sign with commercial value (e.g., one reading generic words like …
How should a construction contractor that also sells tangible personal property over-the-counter (a 'combination' or 'dual-purpose' contractor) handle Illinois sales and use tax on the materials it buys and the ST-1 return it files?
A construction contractor is treated as the end user of materials it permanently affixes to real property, so it owes Use Tax on the cost price of those materials -- but if it gave its supplier a resa…
Does a large membrane (fabric/steel-truss) structure built onto a factory in an Illinois enterprise zone qualify for the Enterprise Zone building materials exemption from Retailers' Occupation Tax?
Yes. The Department ruled that the membrane structure -- a steel-truss, fabric-clad building anchored into a poured concrete foundation and equipped with fire suppression, electrical, and utility infr…
When an out-of-state business leases identification signs (tangible personal property) to Illinois car dealers under a true lease, who owes Illinois sales/use tax, and does it matter whether the signs are treated as real property or as tangible personal property?
The lessor, not the dealer-lessee, owes the tax. Under a true lease, Illinois treats the lessor as the end user of the tangible personal property being leased, so the lessor owes Use Tax on its own co…
When a company installs cell-tower/telecom transmission equipment (wiring, cabling, and related materials) onto real property under time-and-materials or lump-sum contracts, is the company treated as a construction contractor subject to Use Tax, or as a retailer that must charge sales tax, and does using or acting as a subcontractor change the answer?
A firm that permanently affixes tangible personal property (such as telecom transmission equipment, wiring, and cabling) to real property is a construction contractor, not a retailer, and owes Use Tax…
Does a permanently anchored racking system installed in a building qualify for Illinois's Enterprise Zone building materials sales tax exemption?
It depends on whether the racking has actually become part of the real estate. The Department explained that the Enterprise Zone building materials exemption only covers building materials incorporate…
Is a supplier's sale of equipment to a contractor exempt from Illinois sales tax when the contractor resells it to a government agency under a construction contract, even without a CRT-61 at the time of shipment?
It depends, and the Department could not say for sure on the facts given. Sales of building materials to a construction contractor are exempt from Illinois Retailers' Occupation Tax and Use Tax only i…
Does a federal construction contractor owe Illinois Use Tax on materials and equipment it buys to fulfill federal government contracts?
Generally yes. The Department explained that a government contractor who buys items to fulfill a contract with a governmental unit is using those items and owes Illinois Use Tax, even if ownership of …
What does Illinois General Information Letter ST 20-0028-GIL conclude about Construction Contractors?
Construction contractors in Illinois are treated as end users, not resellers, of the tangible personal property they buy to permanently incorporate into real estate, so they owe Use Tax on their cost …
Can an electrical contractor buy small hand tools tax-free because it is working on a project covered by the manufacturing machinery and equipment exemption?
No. The manufacturing machinery and equipment exemption only covers hand tools and other production related property that a manufacturer itself uses or consumes inside its manufacturing facility. A co…
What does Illinois General Information Letter ST 20-0026-GIL conclude about Construction Contractors?
Construction contractors who permanently affix tangible personal property (like cleanroom walls, doors, flooring, or filtration systems) to real property are treated as the 'end user' of that property…
What does Illinois General Information Letter ST 20-0022-GIL conclude about Construction Contractors?
Construction contractors in Illinois are treated as end users, not retailers: they owe Use Tax on their cost price of materials permanently incorporated into real property (like an installed gas stati…
What does Illinois General Information Letter ST 20-0014-GIL conclude about Construction Contractors?
When a construction contractor permanently affixes tangible personal property to real property, Illinois treats the contractor as the 'end user' of that property, meaning the contractor owes Use Tax (…
Does the Illinois Enterprise Zone sales tax exemption on building materials cover the components used to build a privately owned solar farm?
It depends item by item. Illinois exempts 'building materials' permanently incorporated into real estate within an Enterprise Zone from sales/use tax, but only if the purchaser holds an Enterprise Zon…
What does Illinois General Information Letter ST 20-0005-GIL conclude about Sale At Retail?
It depends on whether the seller has a contract to permanently affix the home to real estate. If so, the seller acts as a construction contractor and owes Illinois Use Tax on its own cost price of the…
We manufacture custom signs and sell them into Illinois, where we're registered; an independent contractor installs them (attached to a building or a pole set in concrete) and an independent carrier delivers them, with installation and freight separately billed above our cost -- do we charge sales tax or owe use tax, does tax apply to the freight and installation charges, and what happens if we use subcontractors to install?
It depends on whether the sign has 'commercial value' to anyone besides the buyer: a generic sign (for example, one that just reads "real estate" or "insurance" without the customer's name or brand) t…
I sell and install manufactured product elements for customers -- how do I know whether Illinois taxes it as tangible personal property (sales tax) or as a real estate conversion (use tax on me as a contractor)?
The Department could not tell this taxpayer whether its specific 'PRODUCT' counts as real property or tangible personal property for Illinois sales/use tax purposes -- the facts submitted (a manual an…
When a company sells custom signs into Illinois and has them installed by an independent contractor, does it charge sales tax, or does the customer owe use tax -- and what about the freight and installation charges?
It depends on the sign. A sign with 'commercial value' to more than just that buyer (e.g., a generic 'insurance' or 'hamburgers' sign) is taxable retail sale under Retailers' Occupation Tax, including…
If I sell modular homes bought from out-of-state factories and have contractors permanently install them, do I owe Illinois sales/use tax, and do I need to file monthly sales tax returns?
It depends on whether you're contractually obligated to permanently affix the home to real estate. If you are, you're acting as a construction contractor and you owe Use Tax on your cost price of the …
Does equipment installed during a building expansion — like a hand-washing/sanitizing station, cabinetry and workstations, and internal wall systems — qualify for the Illinois Enterprise Zone building materials sales-tax exemption?
It depends on whether the items are permanently affixed to the real estate, but based on the limited facts described, the Department said it appears the specific items described (a hygiene/sanitizing …
If my business sells, installs, and repairs garage doors in Illinois, do I owe sales tax, use tax, or both on the materials and labor involved?
It depends on whether you're acting as a construction contractor or a retailer. The Department didn't rule on the taxpayer's five specific numbered scenarios one-by-one; instead it explained the gener…
What does Illinois General Information Letter ST 18-0015-GIL conclude about Nexus?
The Department explained the general nexus rules but did not confirm the taxpayer's specific conclusion: whether this out-of-state distributor must collect Illinois Use Tax depends on nexus, and separ…
Does an out-of-state contractor owe Illinois sales or use tax on installing, maintaining, and supplying car wash equipment in Illinois?
A construction contractor who permanently affixes tangible personal property (like installed equipment, electrical, or plumbing materials) to real property is the end user of that property and owes Il…
When a construction contractor buys materials and permanently installs them into real property, who owes Illinois Use Tax, and can a subcontractor's out-of-state tax payment avoid double taxation down the sales chain?
The construction contractor (or subcontractor doing the installing) that permanently affixes tangible personal property to real estate is the 'end user' of that property and owes Illinois Use Tax on i…
Are separately listed delivery and installation charges subject to Illinois sales tax?
Not automatically exempt. Under Illinois' Retailers' Occupation Tax, delivery and installation charges are generally part of taxable gross receipts even when listed separately on the invoice. They are…
When are custom-designed precast concrete components treated as a service rather than a taxable retail sale in Illinois?
A custom component can be treated as special-order property produced in a service occupation only if the purchaser primarily hires the seller for engineering or scientific skill, the item has use or v…
Can an Illinois intermediary use a general contractor's resale number or a minority-participation program to buy HVAC equipment tax-free?
No Illinois sales-tax exemption existed merely because a transaction involved a minority-participation program. If the intermediary bought equipment for resale, it had to give the seller a valid Certi…
When do Illinois construction contractors owe use tax, and what documentation supports exempt-entity or enterprise-zone purchases?
Construction contractors were end users and owed Use Tax on the cost of property permanently incorporated into Illinois real estate. Audiovisual and telecommunications systems sold and installed for o…
Who owes Illinois use tax when a subcontractor buys and installs drainage tile as part of a pipeline project?
The party contractually required to buy drainage tile for permanent incorporation into real estate was the construction contractor and owed Use Tax on its cost. If the subcontractor bought and install…
May an Illinois construction contractor buy materials tax-free for incorporation into property owned by an exempt organization or government entity?
Yes, if the contractor buys tangible personal property for physical incorporation into real estate owned by an exempt organization or government entity that has a valid Illinois E number. The contract…
Did an Illinois Public Water Supply Construction Permit satisfy the permit requirement for the nonprofit community-water construction exemption?
Yes. IDOR said a Public Water Supply Construction Permit issued by the Illinois EPA under Title IV counts as a valid water-supply permit for the community-water exemption. A qualifying not-for-profit …
How does Illinois tax a manufacturer's sales of window and door frames, including sales to construction contractors?
A manufacturer that sells window or door frames without installing them sells tangible personal property and owes Retailers' Occupation Tax unless an exemption, such as resale, applies. When a constru…
How did Illinois tax dealership entrance towers or signs that were installed on concrete foundations?
If an entrance tower or sign was permanently affixed to real property, the installer was a construction contractor and the end user of the materials, owing Use Tax on cost rather than sales tax on the…
How did Illinois tax a facilities manager's fixed service fees, repair materials, construction work, and subcontracted services?
IDOR did not classify every fee. Permanently installed materials made the provider a construction contractor owing Use Tax on material cost, with no authority to bill the customer 'sales tax.' For oth…
Was an exempt organization's Illinois E-number letter enough for its contractor to buy floor-covering materials tax-free?
No. A contractor incorporating materials into real estate owned by an exempt organization or government entity could buy them tax-free, but it had to give the supplier both the owner's active E-number…
Could a contractor use an exempt end user's E-number alone to buy construction materials tax-free in Illinois?
No. A contractor incorporating materials into real estate owned by an exempt organization or government entity could make a tax-free purchase only by giving the supplier the owner's active E-number an…
Did the permanent-affixation test for a construction contractor's tank depend on the property being in an enterprise zone?
No. IDOR said the permanent-affixation analysis it had quoted from ST 08-0003-PLR remained applicable even though the facility was not in an enterprise zone. When a construction contractor permanently…
Did a 250,000-gallon fire-protection tank bolted to a concrete foundation remain personal property, or was the subcontractor a construction contractor owing Use Tax on materials?
IDOR did not decide whether this tank was permanently incorporated into real estate. It said the classification was highly fact-intensive and directed the subcontractor to prior letters, including a P…
Did independent sales managers, local installers, and direct shipments from Illinois require a Missouri LED-sign seller to collect Illinois tax?
IDOR declined to decide the seller's nexus, saying those facts were better developed in an audit. Under the historical framework it described, physical presence included an agent or representative and…
Was a proposed sale of installed distributed-antenna-system equipment a taxable retail sale, a resale transaction, or a construction contract?
IDOR did not classify the proposed DAS transaction. If equipment was bought with the intent to resell it, the first purchase could be for resale and the later sale would be a taxable retail sale, supp…
How does Illinois tax fabricated structural steel sold without installation, incorporated under a construction contract, or shipped out of state?
It depends on the product, design work, contract, and delivery. A fabricated item substantially similar to stock or standard property produced Retailers' Occupation Tax on the full selling price witho…
How did Illinois treat an out-of-state repair manager that hired local contractors for plumbing, electrical, painting, and building repairs?
Illinois did not expressly decide the repair manager's nexus or final tax liability. It explained that contractors permanently incorporating property into real estate were end users owing Use Tax on c…
How did Illinois analyze sales tax, service tax, nexus, and voluntary disclosure for an out-of-state repair dispatcher using Illinois contractors?
Illinois did not expressly decide the repair dispatcher's nexus or final tax liability. It explained that construction contractors were end users owing Use Tax on materials permanently incorporated in…
Who owes Illinois tax on building and remodeling materials that a construction contractor permanently incorporates into real property?
The construction contractor owed Use Tax on the cost of materials permanently affixed to or incorporated into Illinois real property. If the supplier did not collect the tax, the contractor had to sel…
Could an Illinois construction contractor claim the expanded enterprise-zone exemptions for manufacturing or pollution-control property?
No. Illinois revoked ST 10-0101-GIL and clarified that the expanded enterprise-zone exemptions for property used in manufacturing or assembling and for property used in pollution-control facilities we…
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.…
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…
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…
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…
Who owed Illinois Use Tax when custom countertops were sold and installed as part of one construction contract?
The construction contractor that purchased the countertops for permanent incorporation into the home was the end user and owed Use Tax on its cost. Under ST 10-0109-GIL, the customer did not owe Use T…
Browse Illinois rulings by topic
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.