How did Illinois answer a 2012 survey about moving services, special-event exemptions, invoice tax display, repossessions, and responsible-person liability?

Plain-English summary

IDOR answered five groups of questions for a university's annual state-tax survey under law in effect July 1, 2012.

For moving and relocation, Illinois had no statute expressly addressing the service. A service without a transfer of tangible personal property was outside Service Occupation and Use Tax; if property was transferred, the serviceman could incur Service Occupation Tax or Use Tax. Packing materials sold to a moving or storage company were retail sales to the end user and were subject to Retailers' Occupation Tax and Use Tax.

Illinois did not provide the survey's described special exemption for events promoting tourism or favorable exposure, such as professional golf, NASCAR, or other professional sports events.

When a retailer collected Use Tax, it generally had to state the tax separately from the selling price. A posted sign could be allowed when separate collection was impracticable, but a retailer issuing invoices or sales tickets could not use the sign procedure instead of separately stating the tax. Service Use Tax could be stated separately and had to be if the service customer requested it; an unregistered de minimis serviceman using the end-user method could not collect a tax from the customer.

Repossession of property subject to a perfected security interest was not itself a sale or transfer. A later retail sale of repossessed property generally entered taxable gross receipts unless an exemption applied. An isolated or occasional retail sale by a person not habitually engaged in that business was not subject to Retailers' Occupation Tax, and sales for resale followed the resale rule.

Finally, an officer or employee responsible for filing returns and paying tax who willfully failed to do so, or willfully tried to evade the tax, could be personally liable for a penalty equal to the taxpayer's unpaid tax, interest, and penalties.

Common questions

Were all moving services taxable? The GIL did not give a blanket yes-or-no answer. It said service without transferred tangible property was outside Service Occupation and Use Tax, while a transfer of property could create tax liability.

Were packing materials taxable? Yes. A retailer's sale of packing materials to a moving or storage company was a taxable retail sale to the end user.

Did Illinois have a tourism-event sales-tax exemption? No, not the special exemption described in the survey.

Was repossession itself a retail sale? No, not when a secured creditor recovered property subject to a perfected security interest. A later retail sale generally was taxable.

Could a responsible person be personally liable? Yes, if the statutory responsibility and willfulness requirements described in 35 ILCS 735/3-7 were met.

Citations and references

• 86 Ill. Adm. Code 140.101, 140.108, 150.401, 150.1305, and 160.115(b)
• 35 ILCS 105/3, 115/3a, 120/2, 120/5j, and 735/3-7
• 86 Ill. Adm. Code 130.110, 130.210, and 130.1701(g)(3)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2012.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2012/st-12-0033.pdf

Original ruling text

ST 12-0033-GIL 07/20/2012 MISCELLANEOUS
This letter responds to an annual survey. See 86 Ill. Adm. Code, Parts 120, 130, 140,
and 160. (This is a GIL.)
July 20, 2012
Dear:
This letter is in response to your email dated June 7, 2012, 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:
The UNIVERSITY, in conjunction with Commerce Clearing House, annually undertakes
a major information collection effort with respect to the application of the tax laws of the
states. UNIVERSITY's goal in gathering this information is to assemble and publish the
GUIDE. As the market has shown, such a publication is a useful reference source for
departments of revenue, attorneys, corporate tax departments, and public accounting
firms.
UNIVERSITY is in the process of updating the GUIDE for its 2013 annual edition.
Accordingly, we ask for your state's assistance in preparing this important publication. I
have attached two Microsoft Word files—one for income tax and one for sales tax—to
serve as this year's questionnaire. The questionnaire follows the same format as in
past years. (If you do not have a copy of your 2011 response, and it would be helpful to
you in completing the 2012 questionnaire, please let me know and I will email you a
copy.)
This year, the numbering scheme and the sequence of the questions remains
essentially the same. Also, please note that the new questions are highlighted in red
font. Therefore, you should be able to easily follow the changes from last year to this
year. Because of anticipated time constraints for respondents, again this year we are
asking that you only respond to the questions for which your answers require a change
and the new questions. All unanswered questions will be considered the same as last
year's answer unless otherwise noted.
Please complete the 2012 questionnaire and return it by July 16, 2012. The enclosed
questionnaire should be answered in accordance with laws in effect as of July 1, 2012.
If there is legislation pending or recently enacted that would alter your answers, please

ST 12-0033-GIL
July 20, 2012
Page 2
explain any such changes that you are aware of at the time the questionnaire is
completed.
Beginning in the fall 2000, UNIVERSITY began a tuition assistance program for state
department of revenue employees in appreciation for their assistance in publishing the
GUIDE. A limited amount of tuition assistance is available for courses in UNIVESITY's
Online Graduate Certificate in State and Local Taxation. This Certificate program is the
first of its kind in the nation to be offered totally online. To receive the Certificate,
students must complete the four-course curriculum. For further information about the
program or available tuition assistance contact Mr. Z at the UNIVERSITY.
If you have any questions about the questionnaire or a specific question, please contact
me. Thank you for your continued cooperation and support. Your contributions are
extremely valuable in maintaining the quality of this outstanding reference work. A
complimentary copy of the 2013 GUIDE will be sent to you when it is published next
year.
[59] TAXATION OF MOVING AND RELOCATION SERVICES
YES NO
▪ Does your state impose tax on household moving services?
▪ Does your state impose tax on business moving services?
▪ If moving services are exempt, does moving or relocating items within
a building still qualify for the exemption?
▪ Is the temporary storage of their customers’ possessions by the
moving company exempt?
▪ If YES, after some number of days, does the temporary storage
service become taxable?
▪ If YES, after how many days does the temporary storage service become
taxable?
30 days
45 days
60 days
90 days
Other, explain:
▪ Are sales of packing materials (boxes, padding, etc.) subject to tax?
▪ If YES, does packing material become non-taxable to the customer if
the moving company does the packing for the customer? (In which
case the moving company would be deemed to be the consumer of
the items used and would owe use tax on the items used.)
▪ Is the rental of packing materials (padding, lifting gear, etc.) subject to
tax?

ST 12-0033-GIL
July 20, 2012
Page 3
[60] SPECIAL EVENT SALES TAX EXEMPTION
YES NO
▪ Does your state provide a special sales tax exemption for events that
promote tourism or provide positive exposure for the state, e.g.,
professional golf tournament, NASCAR race or track exemption, other
professional sports exemption?
▪ If YES, what qualifies for the exemption?
Supplies used in activity
Equipment used in activity
Other
personal property used in activity
Please specify nature of “other qualifying property,” if applicable:
[61] DISPLAYING TAX AMOUNT ON INVOICE
YES NO
▪ If tax is added to the selling price as an additional charge, must it be
shown separately on the invoice?
▪ If YES, must the separately billed tax amount be separately labeled
“tax” on the invoice?
▪ If YES, must the separately billed tax include your state’s name on the
invoice billing the tax, i.e., “State A Tax?”
[62] REPOSSESSIONS
YES NO
▪ Is the recovery of repossessed goods and the transfer of title from the
debtor to the retailer or financial institution considered a retail sale for
sales tax purposes?
▪ When repossessed goods are sold at retail, must the sale be reported
in the retailer’s gross receipts?
▪ When repossessed goods are sold for resale, how is the sale reported (check
one)?
Gross receipt and an exempt sale for resale
Bad debt allowance recovery
Other, explain:
[63] DEMAND FOR PAYMENT IN BANKRUPTCY
▪ If a corporation declares bankruptcy, may the state file a demand for
payment against any “responsible person” for the corporation for any
corporate tax liability?
▪ If YES, is there a time limit for making the demand for payment?
▪ If YES, specify time limit: __________

YES NO

DEPARTMENT’S RESPONSE:
Taxation of Moving and Relocation Services
Illinois does not have a statute that explicitly addresses the taxation of moving and relocation
services. Illinois Service Occupation and Use Taxes do not apply to sales of service that do not
involve the transfer of tangible personal property to customers. However, if tangible personal
property is transferred incident to sales of service, this will result in either Service Occupation Tax

ST 12-0033-GIL
July 20, 2012
Page 4
liability or Use Tax liability for the servicemen depending upon his activities. See 86 Ill. Adm. Code
140.101.
However, a retailer making a sale of packaging materials to a moving/van line or a storage company
is making a sale of tangible personal property to the end-user of that property. Consequently, the sale
is an Illinois retail sale subject to Retailers' Occupation Tax and Use Tax liabilities.
Special Event Sales Tax Exemption
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. See 86 Ill. Adm.
Code 130.101. The tax is measured by the seller's gross receipts from retail sales made in the
course of such business. "Gross receipts" means the total selling price or the amount of such sales.
The retailer must pay Retailers' Occupation Tax to the Department based upon its gross receipts, or
actual amount received, from the sale of the tangible personal property. 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 35 ILCS 105/3; 86 Ill. Adm. Code 150.101.
These taxes comprise what is commonly known as "sales" tax in Illinois. If the purchases occur in
Illinois, the purchasers must pay the Use Tax to the retailer at the time of purchase. The retailers are
then allowed to retain the amount of Use Tax paid to reimburse themselves for their Retailers'
Occupation Tax liability incurred on those sales. If the retailer does not collect the Use Tax from the
purchaser for remittance to the Department, the purchaser is responsible for remitting the Use Tax
directly to the Department. See 86 Ill. Adm. Code 150.130.
Illinois does not “provide a special sales tax exemption for events that promote tourism or provide
positive exposure for the state, e.g., professional golf tournament, NASCAR race or track exemption,
other professional sports exemption”.
Displaying Tax Amount on Invoice
The Retailers' Occupation Tax Act imposes a tax upon persons engaged in the business of selling at
retail tangible personal property. 35 ILCS 120/2. The Use Tax Act imposes a tax upon the privilege
of using in this State tangible personal property purchased at retail from a retailer. 35 ILCS 105/3.
According to 86 Ill. Adm. Code 150.401, the Use Tax shall whenever possible and practicable when
collected, be stated as a distinct item separate and apart from the selling price of the tangible
personal property. It is to be assumed that the seller is not collecting the tax if he does not state it as
a separate item from the selling price of the tangible personal property.
However, 86 Ill. Adm. Code 150.1305 describes the circumstances that warrant public display of a
sign stating that the selling price of the tangible personal property includes the Use Tax and the local
Retailers' Occupation Tax if applicable. Section 150.1305 states that if a retailer is required or
authorized to collect the Use Tax, his records must show that he states such tax separately to the
purchaser from the selling price of the tangible personal property which he is selling. However, the
Department can waive this requirement if it finds that it is not possible, under the facts of the case, for
the retailer to collect the tax from the purchaser as a separate item from the selling price.

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July 20, 2012
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The Department can allow the retailer to show compliance with the Section 150.1305 separatelystated requirement by publicly posting an appropriate sign. However, the sign procedure may not be
relied on to prove collection of the tax by the retailer from his customers as a separate item in types of
transactions in which such retailer does issue invoices or sales tickets to customers. If a retailer
issues receipts for sales to his or her customers, the Use Tax must be separately stated on the
invoice.
Under the Service Occupation Tax, servicemen are taxed on tangible personal property transferred
as an incident of sales of service. Under the Service Use Tax Act, a tax is imposed on the privilege of
using, in Illinois, tangible personal property that is received anywhere as an incident to a purchase of
service from servicemen. See 86 Ill. Adm. Code 160.101, which describes the nature of the tax.
Generally, under the Service Occupation Tax Act, servicemen are taxed on tangible personal
property transferred as an incident to sales of service. The liability of servicemen in these
transactions may result in either Service Occupation Tax liability or Use Tax liability for servicemen
depending upon which tax base the servicemen choose to calculate their tax liability. Servicemen
may calculate their tax base in one of four ways: 1) separately stated selling price of tangible personal
property transferred incident to service; 2) 50% of the servicemen's entire bill; 3) Service Occupation
Tax on the servicemen's cost price if the servicemen are registered de minimis servicemen; or 4) Use
Tax on the servicemen's cost price if the servicemen are de minimis and are not otherwise required to
be registered under the Retailers' Occupation Tax Act.
Although not required unless requested by the service customer, the Service Use Tax may be
separately stated as a distinct item on the service bill. 35 ILCS 115/3a; 86 Ill. Adm. Code 160.115(b).
Under the fourth method, the servicemen are considered to be the end-users of the tangible personal
property transferred incident to service. Consequently, they are not authorized to collect a "tax" from
the service customers. 86 Ill. Adm. Code 140.108.
Repossession
The repossession of tangible personal property which is the subject of a perfected security interest by
the secured creditor does not constitute a sale or transfer by the taxpayer as contemplated by 35
ILCS 120/5j and 86 Ill. Adm. Code 130.1701(g)(3).
When repossessed tangible personal property is sold at retail the gross receipts are subject to
Retailers’ Occupation Tax unless the sale is subject to one or more of the exemptions contained in
the Act.
Isolated or occasional sales of tangible personal property at retail by persons who do not hold
themselves out as being engaged (or who do not habitually engage) in selling such tangible personal
property at retail do not constitute engaging in a business of selling such tangible personal property at
retail. See 86 Ill. Adm. Code 130.110. Such persons do not incur Retailers' Occupation Tax liability
on the gross receipts from such sales. Consequently, the purchasers of that tangible personal
property do not incur a Use Tax liability on those purchases. See 86 Ill. Adm. Code 150.101.
Resale transactions are governed by the Department’s administrative rule concerning “Sales of
Tangible Personal Property to Purchasers for Resale” found at 86 Ill. Adm. Code 130.210.

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July 20, 2012
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Demand for Payment in Bankruptcy
Any officer or employee of any taxpayer subject to the provisions of a tax Act administered by the
Department who has control, supervision or responsibility of filing returns and making payment of the
amount of any tax imposed in accordance with that Act and who willfully fails to file the return or make
the payment to the Department or willfully attempts in any other manner to evade or defeat the tax
shall be personally liable for a penalty equal to the total amount of tax unpaid by the taxpayer
including interest and penalties thereon. 35 ILCS 735/3-7
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,

Richard S. Wolters
Associate Counsel