Should an Illinois telecommunications carrier charge Telecommunications Excise Tax to a consular official who holds a federal diplomatic tax exemption?

Plain-English summary

An Illinois carrier should not impose Telecommunications Excise Tax to the extent a consular official is protected from the tax by federal law and the Vienna Convention. Section 4 of the Illinois Act said the tax did not apply where the Constitution or statutes of the United States prevented the State from taxing the telecommunications.

The Department did not determine a particular official's exemption status in the GIL. Instead, it tied the Illinois result directly to the scope of the federal diplomatic or consular exemption: if and to the extent the official enjoyed that protection, a carrier otherwise required to collect Illinois telecom tax should not charge it.

What this means for you

Carriers and consular offices should verify the official's current federal exemption documentation and the transactions it covers. The GIL does not create a blanket exemption for every foreign official or every telecommunications charge.

Common questions

Q: Did Illinois recognize the federal consular exemption for telecom tax?
A: Yes, to the extent federal law and the Vienna Convention actually protected the official from state taxation.

Q: Did the GIL certify the named individual's eligibility?
A: No. The Department said it could not give a specific answer in a General Information Letter.

Citations and references

• 35 ILCS 630/1 et seq. (Telecommunications Excise Tax Act)
• 35 ILCS 630/4 (federal constitutional and statutory limitation)
• Vienna Convention on Diplomatic and Consular Relations
• 2 Ill. Adm. Code 1200.120 (GILs)

Subject

Telecommunications Excise Tax

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2010.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2010/st-10-0074.pdf

Original ruling text

ST 10-0074-GIL 08/13/2010 TELECOMMUNICATIONS EXCISE TAX
Section 4 of the Telecommunications Excise Tax provides that the tax is not imposed “on the
act or privilege [of originating or receiving telecommunications] to the extent such act or
privilege may not, under the Constitution and statutes of the United States, be made the
subject of taxation by the State.” To the extent to which consular officials enjoy tax exemption
pursuant to the Vienna Convention on Diplomatic and Consular Relations, the Illinois
Telecommunications Excise Tax should not be imposed by carriers who are otherwise required
to collect the tax. (This is a GIL).

August 13, 2010

Dear Xxxxx:
This letter is in response to your letters dated June 16, 2010 and July 20, 2010, in which you
request information. The Department issues two types of letter rulings. Private Letter Rulings
(“PLRs”) are issued by the Department in response to specific taxpayer inquiries concerning the
application of a tax statute or rule to a particular fact situation. A PLR is binding on the Department,
but only as to the taxpayer who is the subject of the request for ruling and only to the extent the facts
recited in the PLR are correct and complete. Persons seeking PLRs must comply with the
procedures for PLRs found in the Department’s regulations at 2 Ill. Adm. Code 1200.110. The
purpose of a General Information Letter (“GIL”) is to direct taxpayers to Department regulations or
other sources of information regarding the topic about which they have inquired. A GIL is not a
statement of Department policy and is not binding on the Department. See 2 Ill. Adm. Code
1200.120. You may access our website at www.tax.illinois.gov to review regulations, letter rulings
and other types of information relevant to your inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. The two letters you submitted were basically identical. As a result, this GIL will serve as a
response to both letters. In your letter of June 16, 2010 you have stated and made inquiry as
follows:
The AGENCY is responsible for administering the Diplomatic Tax Exemption Program
in the eight-state Midwest Region. Recently, we have been in communication with
COMPANY regarding the eligibility for tax exemption from the State of Illinois
Telecommunications Excise Tax of a consular officer assigned to the Consulate
General of the REPUBLIC in Chicago.
My office provided COMPANY with a copy of the attached letter, dated October 20,
1992, from the Illinois Department of Revenue’s Legal Services Bureau to support the
consular officer’s tax exempt status. However, COMPANY has requested a more
recent statement from IDOR before rectifying their error.
Therefore, we would like to confirm the finding in the attached letter, that foreign officials
who enjoy tax exemption under the Vienna Convention on Consular Rights [sic:
Relations] are not subject to taxes such as the Illinois Telecommunications Excise Tax.

DEPARTMENT’S RESPONSE:
Although we cannot give you a specific answer in the form of a General Information Letter, we
hope you find the following information helpful:
The Illinois Telecommunications Excise Tax Act (“Act”), 35 ILCS 630/1 et seq., imposes a tax
upon the act or privilege of originating or receiving interstate or intrastate telecommunications by
persons in Illinois who have purchased such telecommunications at retail from a retailer.
Section 4 of the Act provides, however, that “such tax is not imposed on the act or privilege to
the extent such act or privilege may not, under the Constitution and statutes of the United States, be
made the subject of taxation by the State.” 35 ILCS 630/4.
In accordance with Section 4 of the Act, to the extent that consular officials enjoy tax
exemption pursuant to the Vienna Convention on Diplomatic and Consular Relations, the Illinois
Telecommunications Excise Tax should not be imposed by carriers who are otherwise required to
collect the tax.
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.
Very truly yours,

Jerilynn Troxell Gorden
Deputy General Counsel, Sales and Excise Taxes