Could an LLC use its sole owner's Illinois registration number on the LLC's certificate of resale?

Plain-English summary

An LLC bought components for display packaging intended for resale and gave its supplier a CRT-61 certificate using the Illinois registration number issued to the LLC's sole owner and manager. The parties later disputed whether the mismatch invalidated the exemption.

IDOR did not decide the specific owner-versus-LLC number question. It explained that a seller should obtain a signed certificate of resale containing the seller and purchaser details, a description of the items, the signature and date, and an active registration or resale number or qualifying out-of-state certification.

Without an active number and resale certification, Illinois presumes the sale is not for resale. Other evidence may rebut that presumption—for example, an invoice showing the purchaser actually resold the item plus a statement explaining the missing number—but IDOR warned that auditors are more likely to look behind incomplete documentation and demand more proof.

Common questions

Did IDOR approve use of the owner's number by the LLC? No. The GIL left that exact issue unresolved.

Can other evidence prove resale? Potentially, but incomplete certificates carry greater audit risk.

Citations and references

• 35 ILCS 105/3
• 86 Ill. Adm. Code 130.1405
• 86 Ill. Adm. Code 150.130

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2013.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2013/st-13-0050.pdf

Original ruling text

ST 13-0050-GIL 09/11/2013 SALE FOR RESALE
This letter addresses sales for resale. See 86 Ill. Adm. Code 130.1405. (This is a GIL.)

September 11, 2013
Dear Xxxxx:
This letter is in response to your letter dated December 12, 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:
By way of introduction I am the attorney for the above referenced COMPANY
the sole member/manager PERSON. COMPANY designs and produces display
packaging as a reseller. In 2011 COMPANY for various components for the
display production, intended for resale, from a third party Seller. My client and
the Seller are currently involved in litigation over the sales tax related to the
purchase of said goods.
Although my client provided a CRT-61 Certificate of Resale to the Seller in late
2011, the Seller is claiming that registration number provided was not valid
because the registration number is actually in the name of the sole owner and
manager of COMPANY, PERSON, as opposed to being in the name of
COMPANY itself.
To me, although a difference does technically exist, the difference is without
distinction and the Certificate Number provided should have sufficed for sales tax
exclusion purposes. Based on the proposed lack of a registration number, the
Seller claims to have voluntarily paid the sales tax to the Department of Revenue;

to the best of my knowledge, the Department of Revenue did not ask the Seller to
pay such tax.
I kindly ask that some direction on this issue be provided by your office.
Specifically, I would like to know whether a registration number provided to the
sole owner and member of an LLC can be sued [sic] for purchases made by such
LLC itself.
I thank you in advance for your consideration.

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.
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.
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. 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. If an electronic resale certificate is kept, it
should contain all of the information required under 86 Ill. Adm. Code 130.1405.
A Certificate of Resale is a statement signed by the purchaser that the property purchased
by him is purchased for purposes of resale. Provided that this statement is correct, the
Department will accept Certificates of Resale as prima facie proof that sales covered thereby
were made for resale. In addition to the statement, a Certificate of Resale must contain:
1)
2)

The seller's name and address;
the purchaser's name and address;

3)
4)
5)

a description of the items being purchased for resale;
purchaser's signature, or the signature of an authorized employee or agent of the
purchaser, and date of signing;
Registration Number, Resale Number, or Certification of Resale to out-of-State
Purchaser.

Failure to present an active registration number or resale number and a certification to the
seller that a sale is for resale creates a presumption that a sale is not for resale. This presumption
may be rebutted by other evidence that all of the seller’s sales are sales for resale, or that a
particular sale is a sale for resale. For example, other evidence that might be used to document a
sale for resale, when a registration number or resale number and certification to the seller are not
provided, could include an invoice from the purchaser to his customer showing that the item was
actually resold, along with a statement from the purchaser explaining why it had not obtained a
resale number and certifying that the purchase was a purchase for resale in Illinois. The risk run
by companies in accepting such a certification and the risk run by purchasers in providing such a
certification is that an Illinois auditor is more likely to go behind a certificate of resale that does
not contain a signature and require that more information be provided as evidence that the
particular sale was, in fact, a sale for resale.
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,

Samuel J. Moore
Associate Counsel
SJM:msk