Would Illinois approve a private handbook's description of tax exemptions for nonprofit and governmental organizations?

Plain-English summary

The Department refused to approve the accuracy of a private handbook's tax-exemption description. The publisher asked Illinois to review an excerpt addressing nonprofit, governmental, and related organizations.

Rather than certify the publication, the Department advised consulting Illinois statutes, administrative rules, and Department publications. It identified rules addressing nontaxable transactions, nonprofit arts and cultural organizations, nonprofit service enterprises, exemption identification numbers, and sales to governmental bodies, diplomats, and consular personnel.

The GIL did not decide whether any particular organization or purchase qualified for exemption.

What this means for you

Do not rely on a private handbook as Department-approved merely because it summarizes Illinois exemptions. Verify the organization's status and the particular transaction against current Illinois authority and Department documentation.

Common questions

Q: Did Illinois confirm that the handbook excerpt was correct?
A: No. The Department expressly said it does not approve the accuracy of private legal publications.

Q: Did the GIL grant an exemption to an organization?
A: No. It only identified relevant regulations.

Q: Is federal tax-exempt status by itself the ruling's answer to Illinois sales-tax exemption?
A: No. The Department did not endorse that proposition and directed the requester to Illinois-specific rules.

Subject

Miscellaneous

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2011.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2011/st-11-0013.pdf

Original ruling text

ST 11-0013-GIL 03/28/2011 MISCELLANEOUS
The Department will not approve the accuracy of private legal publications. This letter provides
reference to Department rules concerning exempt organizations. See 86 Ill. Adm. Code
130.2005 and 130.2007. (This is a GIL.)

March 28, 2011

Dear Xxxxx:
This letter is in response to your letter dated February 3, 2011, 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. In your letter you have stated and made inquiry as follows:
Thank you for your office’s cooperation in the compiling of information for HANDBOOK.
The sixth edition of this book is scheduled to go to press in April. I anticipate that it will
answer many basic questions, and reduce the workload of your staff.
To make sure that the information about your office is up-to-date and accurate, I am
requesting that you review the enclosed excerpt from this book. If the information is
correct, please note that on the enclosed reply form. If the information needs to be
revised, please indicate that on the reply form with appropriate corrections. A selfaddressed, stamped envelope is enclosed for your convenience.
I would appreciate it if you would return this reply form or fax it. There is, of course, no
charge for your office to be included in this publication.
Thank you very much for participating in this publication.
Your attachment reads as follows:
TAX EXEMPTIONS
Contact:

Local Government Services Bureau – MC3-520
Illinois Department of Revenue
101 W. Jefferson Street
Springfield, Il 62702
(800) 732-8866
(217) 782-8881
Citation: 35 ILCS 5/ §205(a)—corporate income tax; 86 Ill. Admin. Code Section
130.2007(b)—Illinois Retailers' Occupation Tax.
Requirements: Organizations exempt from federal income tax are exempt from state
corporate income tax, other than unrelated business income tax. The Retailers'
Occupation Tax exemption extends to tangible personal property sold to a
‘governmental body, to a corporation, society, association, foundation, or institution
organized and operated exclusively for charitable, religious, or educational purposes, or
to a not-for-profit corporation, society, association, foundation, institution, or
organization that has no compensated officers or employees and that is organized and
operated primarily for the recreation of persons 55 years of age or older.’ Exemption
also exists for various other entities, including property sold to a ‘not-for-profit music or
dramatic arts organization that establishes, by proof required by the Department by rule,
that it has received an exemption under Section 501(c)(3) of the Internal Revenue Code
and that it is organized and operated for the presentation of live public performances of
musical or theatrical works on a regular basis.’ More details about exemptions can be
found in publications at: http://www.revenue.state.il.us/publications/pubs/pio37.htm
Application: No special petition is required for exemption from the state income tax.
For exemption from the Illinois Retailers' Occupation Tax, submit request by letter to the
Illinois Department of Revenue; include copy of Articles of Incorporation, constitution,
and bylaws; a narrative explaining purposes, functions, and activities; the IRS
determination letter, if available; most recent financial statement (other than for religious
organizations); brochures; and other relevant information.

DEPARTMENT’S RESPONSE:
The Department does not approve the accuracy of private legal publications. We advise you to
consult Illinois statutes and administrative rules as well as Department publications on these matters.
The regulations addressing the organizations referred to in your letter can be found at 86 Ill.
Adm. Code 130.120 (Nontaxable Transactions), Section 130.2004 (Sales to Nonprofit Arts or Cultural
Organizations), Section 130.2005 (Persons Engaged in Nonprofit Service Enterprises and in Similar
Enterprises Operated As Businesses, and Suppliers of Such Persons), Section 130.2007 (Exemption
Identification Numbers) and Section 130.2080 (Sales to Governmental Bodies, Foreign Diplomats
and Consular Personnel).
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,

Debra M. Boggess
Associate Counsel
DMB:msk