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2014 Sales Tax Letter Rulings

General Information Letters

Ruling Date Subject Synopsis
ST-14-0053-GIL 12/29/2014 Motor Vehicles This letter discusses sales of motor vehicles to nonresidents. See 86 Ill. Adm. Code 130.605. (This is a GIL.)
ST-14-0052-GIL 12/18/2014 Computer Software This letter discusses the taxability of computer software licenses. See 86 Ill. Adm. Code 130.1935. (This is a GIL.)
ST-14-0051-GIL 12/02/2014 Exempt Organizations The State of Illinois or any local governments in Illinois, or any agency or instrumentality of any such government body, incurs Retailers' Occupation Tax liability when it engages in the selling of tangible personal property at retail to the public other than in the performance of a governmental function.” See 86 Ill. Adm. Code 130.2055. (This is a GIL.)
ST-14-0050-GIL 10/31/2014 Local Taxes This letter explains how to determine the local tax rate applicable to conditional sales leasing transactions. (See 86 Ill. Adm. Code 220.115.) (This is a GIL.)
ST-14-0049-GIL 10/14/2014 Miscellaneous The Department will not approve the accuracy of private legal publications. (This is a GIL.)
ST-14-0048-GIL 10/08/2014 Exempt Organizations This letter rescinds General Information Letter ST 14-0040 GIL. This letter clarifies that hospitals that meet the criteria for an exemption under Section 2-9 of the Retailers’ Occupation Tax Act (35 ILCS 120/2-9) do not incur Retailers’ Occupation Tax on its sales of food and medicine to their patients or on their sales of food from a cafeteria operated for the benefit of its employees and are not open to the public. (This is a GIL.)
ST-14-0047-GIL 09/09/2014 Telecommunications This letter discusses allowable deductions and nontaxable sales under the Telecommunications Excise Tax. See 35 ILCS 630. (This is a GIL.)
ST-14-0046-GIL 09/04/2014 Rolling Stock Exemption This letter rescinds General Information Letter ST 14-0041-GIL. This letter concerns the rolling stock exemption. See 86 Ill. Adm. Code Section 130.340. (This is a GIL.)
ST-14-0045-GIL 08/18/2014 Hotel Operators' Tax This letter discusses the Hotel Operators’ Tax Act. See 86 Ill. Adm. Code 480.101(b)(3). (This is a GIL.)
ST-14-0044-GIL 08/12/2014 Miscellaneous This letter responds to an annual survey. (This is a GIL.)
ST-14-0043-GIL 08/11/2014 Telecommunications Excise Tax Act This letter provides an overview of items subject to the Telecommunications Excise Tax Act. See 35 ILCS 630. (This is a GIL.)
ST-14-0042-GIL 08/11/2014 Tobacco Products Tax This letter rescinds General Information Letter ST 14-0038. This letter clarifies that federal excise tax is imposed on the manufacturer, is a cost of doing business of the manufacturer and is included in the manufacturer’s wholesale price of tobacco products sold to distributors for purposes of calculating the Tobacco Products Tax. 35 ILCS 143/10-5. (This is a GIL.)
ST-14-0041-GIL 08/08/2014 Rolling Stock Exemption This letter concerns the rolling stock exemption. See 86 Ill. Adm. Code Section 130.340. (This is a GIL.)(This letter is rescinded by letter ruling ST 14-0046-GIL.)
ST-14-0040-GIL 08/08/2014 Exempt Organizations Exclusively charitable hospitals that have an exempt identification “E” number from the Department do not incur Retailers’ Occupation Tax on its sales of food and medicine to their patients or on their sales of food from a cafeteria operated for the benefit of its employees, patients’ visitors, physicians, volunteer workers and staff and not open to the public. See 86 Ill. Adm. Code 130.2005(b)(1)(A). (This is a GIL.) (This letter is rescinded by letter ruling ST 14-0048-GIL.)
ST-14-0039-GIL 08/07/2014 Gross Receipts Costs of doing business are an element of the retailer's gross receipts subject to tax even if separately stated on the bill to the customer. See 86 Ill. Adm. Code 130.410. (This is a GIL.)
ST-14-0038-GIL 08/06/2014 Tobacco Products Tax The federal excise tax is imposed on the manufacturer, is a cost of doing business of the manufacturer and is included in the manufacturer’s wholesale price of tobacco products sold to distributors for purposes of calculating the Tobacco Products Tax. 35 ILCS 143/10-5. (This is a GIL.) (This letter is rescinded by letter ruling ST 14-0042-GIL.)
ST-14-0037-GIL 08/05/2014 Sale For Resale This letter addresses sales for resale. See 86 Ill. Adm. Code 130.1405. (This is a GIL.)
ST-14-0036-GIL 07/29/2014 Exempt Organizations In order for an organization to qualify for tax exempt status in Illinois, the organization must hold a valid e-number from the Illinois Department of Revenue or present a valid tax exempt card issued by the U.S. Department of State and identified in 86 Ill. Adm. Code 130.Illustration A. See 86 Ill. Adm. Code 130.2007 and 86 Ill. Adm. Code 130.2080. (This is a GIL.)
ST-14-0035-GIL 07/29/2014 Financial Institutions Lending agencies or finance companies may be subject to Retailers' Occupation Tax liability on the sale of repossessed tangible personal property. See 86 Ill. Adm. Code 130.1960(a) and 86 Ill. Adm. Code 130.110. (This is a GIL.)
ST-14-0034-GIL 07/29/2014 Computer Software This letter discusses the taxability of computer software licenses. See 86 Ill. Adm. Code 130.1935. (This is a GIL.)
ST-14-0033-GIL 07/10/2014 Sale Of Service If no tangible personal property is transferred to the customer, then no Illinois Retailers’ Occupation Tax or Service Occupation Tax would apply. See 86 Ill. Adm. Code Parts 130 and 140. (This is a GIL.)
ST-14-0032-GIL 07/07/2014 Service Occupation Tax The Service Occupation Tax is a tax imposed upon servicemen engaged in the business of making sales of service in this State, based on the tangible personal property transferred incident to sales of service. See 86 Ill. Adm. Code Part 140. (This is a GIL.)
ST-14-0031-GIL 05/12/2014 Miscellaneous The electronic download of a book is not subject to Retailers' Occupation Tax, Use Tax, Service Occupation Tax or Service Use Tax. See 86 Ill. Adm. Code 130. 2105(a)(3). (This is a GIL.)
ST-14-0030-GIL 05/05/2014 Use Tax For watercraft or aircraft, if the period of demonstration use or interim use by the retailer exceeds 18 months, the retailer shall pay Use Tax on the original cost price of the aircraft or watercraft, and no credit for that tax is permitted if the aircraft or watercraft is subsequently sold by the retailer. See 86 Ill. Adm. Code 150.306. (This is a GIL.)
ST-14-0029-GIL 05/05/2014 Construction Contractors As end users of such tangible personal property, construction contractors incur Use Tax liability for such purchases based upon the cost price of the tangible personal property. See 86 Ill. Adm. Code 130.1940 and 86 Ill. Adm. Code 130.2075 (This is a GIL.)
ST-14-0028-GIL 04/04/2014 Nexus This letter responds to a questionnaire regarding nexus. See Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992). (This is a GIL.)
ST-14-0027-GIL 04/30/2014 Manufacturing Machinery and Equipment Machinery used to shred and bale paper could qualify for the exemption if such equipment is used primarily in the manufacturing or assembling of tangible personal property for wholesale or retail sale or lease. See 86 Ill. Adm. Code 130.330(b) (This is a GIL.)
ST-14-0026-GIL 04/30/2014 Aircraft Use Tax The Aircraft Use Tax Law applies to non-retail transactions, gifts, or transfers of aircraft. See 86 Ill. Adm. Code 152.101. (This is a GIL.)
ST-14-0025-GIL 04/24/2014 Nexus This letter discusses nexus. See Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992). (This is a GIL.)
ST-14-0024-GIL 04/24/2014 Sale For Resale This letter is a response to a survey regarding drop shipments. For information regarding drop shipments, see the Department’s regulation entitled “Drop Shipments,” found at 86 Ill. Adm. Code 130.225. (This is a GIL.)
ST-14-0023-GIL 04/11/2014 Leasing This letter discusses the taxability of various items which are the subject of a lease. See 86 Ill. Adm. Code 130.220 and 86 Ill. Adm. Code 130.2010. (This is a GIL.)
ST-14-0022-GIL 04/08/2014 Telecommunications Excise Tax This letter provides an overview of items subject to the Telecommunications Excise Tax Act. See 35 ILCS 630. (This is a GIL.)
ST-14-0021-GIL 04/08/2014 Gross Receipts Costs of doing business are an element of the retailer's gross receipts subject to tax even if separately stated on the bill to the customer. See 86 Ill. Adm. Code 130.410. (This is a GIL.)
ST-14-0020-GIL 00/07/2014 Nexus This letter discusses nexus. See Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992). (This is a GIL.)
ST-14-0019-GIL 04/04/2014 Food This letter discusses the applicable sales tax rates for food. See 86 Ill. Adm. Code 130.310. (This is a GIL.)
ST-14-0018-GIL 04/04/2014 Gross Receipts This letter discusses the rules regarding handling and installation charges. See 86 Ill. Adm. Code 130.410. See also 86 Ill. Adm. Code 130.415 and 86 Ill. Adm. Code 130.450. (This is a GIL.)
ST-14-0017-GIL 04/04/2014 Computer Software This letter discusses the taxability of computer software licenses and maintenance agreements. See 86 Ill. Adm. Code 130.1935 and 86 Ill. Adm. Code 140.301. (This is a GIL.)
ST-14-0016-GIL 04/04/2014 Food This letter discusses the applicable sales tax rates for food and candy. See 86 Ill. Adm. Code 130.310. (This is a GIL.)
ST-14-0015-GIL 04/04/2014 Rolling Stock Exemption This letter concerns the rolling stock exemption. See 86 Ill. Adm. Code Section 130.340. (This is a GIL.)
ST-14-0014-GIL 04/04/2014 Farm Machinery & Equipment Nursery stock is not considered equipment under the farm machinery and equipment exemption. See 86 Ill. Adm. Code 130.305 (This is a GIL.)
ST-14-0013-GIL 04/04/2014 Food This letter discusses the State tax rates applicable to sales of food. See 86 Ill. Adm. Code 130.310. (This is a GIL.)
ST-14-0012-GIL 04/03/2014 Service Occupation Tax Membership fees are generally considered intangibles and are not subject to Retailers’ Occupation Tax or Use Tax. If a membership charge entitles the customer to receive an item of tangible personal property or to receive a service and tangible personal property is transferred incident to the service, the charge may result in Retailers’ Occupation Tax liability, Service Occupation Tax liability, or Use Tax liability. See 86 Ill. Adm. Code 130.401(d) and 86 Ill. Adm. Code 140.101. (This is a GIL.)
ST-14-0011-GIL 04/03/2014 Electricity Excise Tax The purchase price on which a self assessing purchaser must pay tax under the Electricity Excise Tax Law includes charges for transmission or any other service related to the sale or delivery of the electricity. See 35 ILCS 640/2-4(a) and 86 Ill. Adm. Code 511.110(c). (This is a GIL.)
ST-14-0010-GIL 03/10/2014 Exempt Organizations This letter discusses the rules regarding sales to exempt purchasers and certificates of resale. See 86 Ill. Adm. Code 130.210, 86 Ill. Adm. Code 130.1415, and 86 Ill. Adm. Code 130.2005 (This is a GIL.)
ST-14-0009-GIL 03/10/2014 Service Occupation Tax Sellers of special order machines are considered to be engaged primarily in a service occupation, rather than being engaged in the business of selling tangible personal property, if the test set out in 86 Ill. Adm. Code 130.2115(b) is met. See 86 Ill. Adm. Code 130.2115. (This is a GIL.)
ST-14-0008-GIL 03/07/2014 Sale For Resale This letter addresses the requirements for a certificate of resale. See 86 Ill. Adm. Code 130.1405 (This is a GIL.)
ST-14-0007-GIL 03/07/2014 Construction Contractors This letter discusses the rules regarding sales of tangible personal property to construction contractors for incorporation into real estate in an Illinois Enterprise Zone and the requirements for using “E” numbers. See 86 Ill. Adm. Code 130.1940, 35 ILCS 120/5k, and 86 Ill. Adm. Code 130.2075(d). (This is a GIL.)
ST-14-0006-GIL 03/07/2014 Machinery & Equipment This letter discusses the manufacturing, machinery & equipment exemption, the manufacturer’s purchase credit, claims for credit, and the rules for obtaining E numbers. See 86 Ill. Adm. Code 130.330 and 86 Ill. Adm. Code 130.331. See also 86 Ill. Adm. Code 130.1501 and 86 Ill. Adm. Code 130.2007 (This is a GIL.)
ST-14-0005-GIL 03/04/2014 Motor Vehicles With regard to modifications to a motor vehicle for the purpose of rendering it usable by a disabled person, the tax is imposed at the rate of 1%. See 86 Ill. Adm. Code 130.311(f). (This is a GIL.)
ST-14-0004-GIL 03/04/2014 Delivery Charges Charges designated as delivery or transportation charges are not taxable if it can be shown that they are both agreed to separately from the selling price of the tangible personal property which is sold and that such charges are actually reflective of the costs of shipping. See 86 Ill. Adm. Code 130.415. (This is a GIL.)
ST-14-0003-GIL 03/03/2014 Construction Contractors This letter discusses the tax liability of construction contractors. See 86 Ill. Adm. Code 130.1940. (This is a GIL.)
ST-14-0002-GIL 01/02/2014 Nexus This letter discusses nexus. See Quill Corp. v. North Dakota, 112 S.Ct. 1904 (1992). (This is a GIL.)

Private Letter Rulings

Ruling Date Subject Synopsis
ST 14-0006-PLR 10/20/2014 Leasing Private Letter Ruling. This letter discusses the alternative definition of “selling price” added to the Retailers’ Occupation Tax Act and Use Tax Act by Public Act 98-628 as it relates to sales of certain motor vehicles for lease. See 35 ILCS 120/1. (This is a PLR.)
ST 14-0005-PLR 08/12/2014 Medical Appliances Private Letter Ruling. Diagnostic equipment does not qualify as a medical appliance. See 86 Ill. Adm. Code 130.311(d)(5). (This is a PLR.)
ST 14-0004-PLR 07/24/2014 Computer Software Private Letter Ruling. This letter discusses the taxability of computer software licenses. See 86 Ill. Adm. Code 130.1935. (This is a PLR.)
ST 14-0003-PLR 06/26/2014 Telecommunications Private Letter Ruling. In the event this may not be a defined location, as in the case of mobile phones, paging systems, and maritime systems, service address means the customer's place of primary use as defined in the Mobile Telecommunications Sourcing Conformity Act. 35 ILCS 630/2(n). (This is a PLR.)
ST 14-0002-PLR 06/26/2014 Manufacturing Machinery and Equipment Private Letter Ruling. Post-production storage facilities do not generally qualify for the manufacturing machinery and equipment exemption. However, a refrigeration or freezer facility maintained at a specific temperature which is required in order to preserve a manufactured product, can qualify for the exemption. See 86 Ill. Adm. Code 130.330. (This is a PLR.)
ST 14-0001-PLR 01/02/2014 Manufacturing Machinery and Equipment Private Letter Ruling. The manufacturing machinery and equipment exemption includes chemicals or chemicals acting as catalysts but only if the chemicals or chemicals acting as catalysts effect a direct and immediate change upon a product being manufactured or assembled for sale or lease. See 86 Ill. Adm. Code 130.330(c)(6). (This is a PLR.)