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For purposes of determining the selling price subject to sales tax, are incentives such as rebates, discounts, or coupons taxable?
In a retail transaction, incentives for retail purchasers, such as coupons, discounts, or rebates, are considered part of the selling price and subject to sales tax if the retailer receives reimbursement for offering the incentive, as with a manufacturer's rebate or an employee discount.
Incentives are not subject to sales tax if the retailer does not receive reimbursement for the cost of the incentive from any source.
See 86 Ill. Adm. Code 130.401 and 130.2125 for more information.