How could an Illinois restaurant document tax-free purchases of products it planned to resell?

Plain-English summary

A restaurant purchasing products for resale should give its supplier a certificate of resale. Illinois explained that a retailer delivering tangible personal property in Illinois had to charge sales tax unless the buyer documented an exemption.

The Department directed the restaurant owners to the resale-certificate requirements in 86 Ill. Adm. Code 130.1405 and enclosed the then-current Form CRT-61. The short GIL did not analyze particular products or decide whether every restaurant purchase qualified for resale treatment.

What this means for you

Use resale documentation only for property you actually plan to sell to customers. Keep the certificate with your purchase records and verify the Department's current form and requirements.

Common questions

Q: Was a restaurant automatically exempt on all store purchases?
A: No. The exemption applied to purchases for resale, not everything used by the business.

Q: What documentation did the GIL identify?
A: A certificate of resale under 86 Ill. Adm. Code 130.1405; the Department enclosed Form CRT-61 as it existed in 2010.

Subject

Sale For Resale

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-10-0102.pdf

Original ruling text

ST 10-0102-GIL 10/28/2010 SALE FOR RESALE
This letter addresses sales for resale. See 86 Ill. Adm. Code 130.1405. (This is a GIL.)

October 28, 2010

Dear Xxxxx:
This letter is in response to your letter dated October 21, 2010, in which you requested
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. In your letter you have stated and made inquiry as follows:
My husband and I own a restaurant. We frequently shop for products at STORE.
Recently we asked the clerk at STORE how we could purchase for our business tax
exempt. We were given the enclosed form letter.
I called the phone number for your office and was advised to go to your sight [sic] on
line and I would be able to find what I needed. I am unable to do this due to our very
poor internet service. We are in the country and still have dial up, which is next to
useless.
Could you please provide for me what is described in this form letter and mail it to us. If
you have any questions please call us.

DEPARTMENT’S RESPONSE:
When an Illinois retailer sells tangible personal property and delivers it in Illinois, sales tax is
due unless an exemption can be documented.
The resale exemption is applicable when making
sales to a purchaser who will in turn sell the tangible personal property. Retailers should document a
sale for resale by obtaining certificates of resale from their customers. For general information
regarding resale certificates, the Department’s regulation for resale certificates, “Seller's
Responsibility to Obtain Certificates of Resale and Requirements for Certificates of Resale,” is found

at 86 Ill. Adm. Code 130.1405 (copy enclosed). The Department also provides a standard form for
documenting sales for resale (Form CRT-61 Certificate of Resale, copy enclosed).
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,

Terry D. Charlton
Senior Counsel, Sales & Excise Taxes

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