Did Illinois's 1% rate apply to a motorcycle hand-brake system designed for disabled riders?

Plain-English summary

A manufacturer developed a brake-assist system for disabled people who wanted to ride motorcycles and asked for Illinois's reduced tax rate.

IDOR said 35 ILCS 120/2-10 imposed a 1% rate on modifications made to render a motor vehicle usable by a disabled person. 86 Ill. Adm. Code 130.311(f) included modifications enabling a disabled person to drive or assisting in the transportation of disabled persons, such as special steering, braking, shifting, acceleration, or accessibility equipment.

On that general rule, a system allowing a disabled person to brake and otherwise operate the vehicle using the hands instead of the feet would generally qualify for the reduced rate.

What this means for you

Adaptive-equipment manufacturers and installers

Document how the modification enables vehicle operation or disabled-person transportation. The reduced rate is tied to that accessibility purpose.

Dealers and tax professionals

The GIL says “generally qualify,” not that every product or installation automatically receives the rate.

Common questions

What rate did the GIL describe? One percent.

What modifications can qualify? The rule lists special steering, braking, shifting, acceleration, and accessibility equipment as examples.

Did the Department issue a binding product ruling? No. This was a nonbinding GIL giving the general rule.

Citations and references

• 35 ILCS 120/2-10
• 86 Ill. Adm. Code 130.311(f)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2014.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2014/st-14-0005.pdf

Original ruling text

ST-14-0005-GIL 03/04/2014 MOTOR VEHICLES
With regard to modifications to a motor vehicle for the purpose of rendering it usable by a
disabled person, the tax is imposed at the rate of 1%. See 86 Ill. Adm. Code 130.311(f).
(This is a GIL.)
March 4, 2014

Dear Xxxx:
This letter is in response to your letter dated November 20, 2013, 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:
Our company, ABC, manufactures a brake assist product for handicapped individuals
that have a desire to ride a motorcycle, but are unable with standard motorcycle
equipment. As this is a product for handicapped/disabled individuals only, our company
would like to inquire and/or request a handicapped sales tax reduction for our
customers of 1%
If you would like more information about our product, please refer to our website. On
the website there are videos of our prototype. Our relative, a paraplegic, had a strong
yearning to ride, therefore the invention of PROTOTYPE. We currently have a patent
pending for our system and it is our hope that we will be able to assist other
handicapped/disabled individuals who desire to ride a motorcycle.
Also enclosed with this letter is a flyer. The flyer has our contact information, should
you need more detail.
DEPARTMENT’S RESPONSE:
Section 2-10 of the Retailers’ Occupation Tax Act provides that “[w]ith respect to . . .
modifications to a motor vehicle for the purpose of rendering it usable by a disabled person . . . the
tax shall be imposed at the rate of 1%.” (See 35 ILCS 120/2-10). Section 130.311(f) of the Illinois
Department of Revenue’s administrative rules further explains the application of this statutory
language (86 Ill. Adm. Code 130.311(f)). It states, in part, that "[t]he low rate applies to modifications
that enable a disabled person to drive a vehicle, or that assist in the transportation of disabled
persons. Examples of such modifications include, but are not limited to, special steering, braking,
shifting, or acceleration equipment, or equipment that modifies the vehicle for accessibility, such as a

chair lift." Consequently, systems that allow disabled persons to brake and otherwise operate a motor
vehicle using their hands as opposed to their feet would generally qualify for the low rate of tax.
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:lkm