Can a foreign visitor obtain an Illinois sales-tax refund for merchandise bought and received in Illinois before taking it abroad?

Plain-English summary

A foreign visitor could not obtain an Illinois tax exemption or refund merely because merchandise bought and received in Illinois would later be taken abroad.

Illinois treated possession in the state as use. A sale remained taxable when the purchaser took physical possession in Illinois and immediately transported the property elsewhere.

Seller-delivery interstate exemption

The result differed when the seller was obligated by its agreement with the purchaser to deliver the property from Illinois to an out-of-state destination, actually made that delivery, and the property was not returned to Illinois.

The GIL says delivery in Illinois to a freight forwarder that arranged shipment outside the United States could qualify. The visitor's purchases did not qualify because the visitor personally received the items in Illinois.

What this means for you

International visitors

Illinois did not provide a traveler exemption for ordinary over-the-counter purchases received in the state.

Retailers shipping abroad

Keep the agreement and delivery records showing that the seller was obligated to make out-of-state delivery. Buyer removal after in-state possession is different.

Common questions

Q: Does foreign citizenship create an Illinois sales-tax exemption?
A: No.

Q: Is an item exempt if the buyer carries it abroad immediately?
A: No when the buyer first receives it in Illinois.

Q: Can delivery to a freight forwarder qualify?
A: Yes under the seller-obligated delivery facts described.

Citations and references

• 86 Ill. Adm. Code 150.101 — Illinois Use Tax and in-state use.
• 86 Ill. Adm. Code 130.605(a)(2) — in-state receipt followed by buyer removal.
• 86 Ill. Adm. Code 130.605(d) — seller-obligated interstate delivery.

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-11-0054.pdf

Original ruling text

ST 11-0054-GIL 07/13/2011 USE TAX
Citizens of foreign countries are not exempt from Use Tax liability for purchases of
merchandise at retail within the State of Illinois. See 86 Ill. Adm. Code 130.605. (This is a
GIL.)

July 13, 2011

Dear Xxxxx:
This letter is in response to your telephone inquiry on June 29, 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 phone call you indicated that you are a non-resident of the United States. You live in
COUNTRY. While you were in Chicago for business, you made several purchases for yourself. You
would like to know if you can get the sales tax back that you paid for those purchases because you
are a non-resident of the United States.
DEPARTMENT’S RESPONSE:
The Illinois Retailers’ Occupation Tax Act imposes a tax upon persons engaged in this State in
the business of selling tangible personal property to purchasers for use or consumption. The tax is
measured by the seller’s gross receipts from such sales made in the course of such business. See 86
Ill. Adm. Code 130.101. In Illinois, Use Tax is imposed on the privilege of using, in this State, any kind
of tangible personal property that is purchased anywhere at retail from a retailer. See 86 Ill. Adm.
Code 150.101. Mere possession in Illinois is considered a use. Consequently, if the purchase occurs
in Illinois, the purchaser must pay the Use Tax to the retailer. Please note that a sale is taxable even
though a purchaser that receives physical possession of the property in this State immediately
transports the property out of this State for use outside the State. See 86 Ill. Adm. Code
130.605(a)(2). The State of Illinois has no specific exemption for purchases by foreign or domestic
travelers if the property is delivered and used in Illinois.

Sales of property originating in Illinois are specifically addressed at 86 Ill. Adm. Code 130.605.
Subpart (d) of this regulation states that the gross receipts from such sales are not subject to tax
when a sale is conducted in which the seller is obligated, under the terms of an agreement with the
purchaser, to make delivery of the property from a point in this State to a point outside this State, not
to be returned to this State, provided that such delivery is actually made. See 86 Ill. Adm. Code
130.605(d). Such sales are considered to be sales in interstate commerce and are exempt from
Illinois and local Retailers' Occupation Tax. For example, the exemption would apply when a seller
makes delivery in Illinois to a freight forwarder who handles the arrangements for the property to be
delivered outside the United States, not to be returned to the United States. Based upon the
information you provided, none of the items that were purchased would qualify for this exemption
since they were all received by you in this State.
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.
Sincerely,

Samuel J. Moore
Associate Counsel

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