ST-261 Exemption Certificate for Property Subject to Rental Purchase Agreement Tax Instructions

Note: It is the purchaser’s responsibility to provide proof of registration under the Rental Purchase Agreement Occupation and Use Tax Act.

Generally, an exemption certificate for property subject to Rental Purchase Agreement Tax (RPAT) (35 ILCS 180/1 et seq.) is required for proof that no tax is due on any sale that is made tax-free for the purpose of renting the property under a rental purchase agreement. A “rental purchase agreement” is an agreement for the use of merchandise by a consumer for personal, family, or household purposes for an initial period of 4 months or less that is automatically renewable with each payment after the initial period and that permits the consumer to become the owner of the merchandise (815 ILCS 655/Act). The purchaser, at the seller’s request, must provide the information that is needed to complete this certificate.

The seller must keep the certificate as documentation of the exemption in their records for a period of not less than three and one-half years. The Department may request it as proof that no tax was due on the sale of the specified property. Unless otherwise directed, do not mail the exemption certificate to IDOR. 

Yes. You can use other forms or statements in place of this exemption certificate but whatever you use as proof that a sale was made for resale must contain

• the seller’s name and address;
• the purchaser’s RPAT account ID number;
• the purchaser’s name and address;
• a description of the property being purchased;
• a statement that the property is being purchased for the purpose of renting the property under a rental purchase agreement; and
• the purchaser’s signature and date of signing.

Note: A purchase order signed by the purchaser may be used as an exemption certificate for property subject to RPAT if it contains all of the above required information.

The purchaser may provide a blanket certificate to any seller from whom all purchases made are for the purpose of renting the property under a rental purchase agreement. A blanket certificate can also specify that a percentage of the purchases made from the identified seller will be for this purpose. In either instance, blanket certificates should be kept up to date. If a specified percentage changes, a new certificate should be provided. Otherwise, all certificates should be updated at least once every three years. 

Enter the seller’s name and mailing address.

Enter the purchaser’s RPAT Account ID number, date of purchase, name and mailing address.

Note: A statement by the purchaser that the property is exempt because it will be subject to tax under RPAT will not be accepted by IDOR without supporting evidence (i.e. RPAT account ID number).

Briefly describe the property that is being purchased that is exempt because it will be subject to tax under RPAT or list the invoice number. If necessary, you can attach additional sheets or attachments to provide more detail.

Check the appropriate box to certify a full or percentage blanket certificate.

Note: Blanket certificates and percentage blanket certificates must be updated at least once every three years.

The purchaser must sign, print name, provide email and phone number, and date the form. The purchaser understands that if the item(s) purchased under this certificate are used in any manner other than as just described, tax will be owed based on the item’s purchase price or as otherwise provided by law. The purchaser understands misuse or misrepresentation may also result in penalties, interest, and criminal prosecution.

Electronic signatures may be in the form of a scanned or digitized image of a handwritten signature; a handwritten signature input onto an electronic signature pad; a handwritten signature, mark, or command input on a display screen with a stylus device; or an electronic signature created by a third-party software that requires dual (two-factor) authentication.