What proof did an Illinois restaurant need for tax-exempt government, nonprofit, or foreign-diplomat sales, and was a Moorish card valid?

Plain-English summary

A restaurant company asked what documents it should accept from state and local governments, nonprofit organizations, and foreign consuls seeking sales-tax exemption. It also submitted a Moorish National identification and tax card for review.

IDOR said qualifying exempt organizations and governmental entities needed an active Illinois exemption identification number, commonly called an E-number. The sale had to be invoiced to the organization or governmental entity itself; purchases by an individual member or client generally remained taxable.

Certain foreign diplomats, government personnel, embassies, and international organizations could use valid tax-exemption cards issued by the U.S. Department of State and identified in Illinois's recognized-card illustration.

The Department concluded that the submitted Moorish National identification and tax-exempt card was invalid for Illinois sales-tax purposes.

What this means for you

A customer organization's name or claimed status was not enough. The seller needed the recognized exemption credential and had to ensure the entity itself—not an individual member—was the purchaser being invoiced.

Common questions

Was the Moorish card valid? No.

Could an exempt organization's member use the organization's status personally? Generally no.

What diplomatic card qualified? A valid U.S. Department of State card recognized in Illinois's rule.

Citations and references

• 86 Ill. Adm. Code 130.120(h)-(i).
• 86 Ill. Adm. Code 130.2007 and 130.2080.
• 86 Ill. Adm. Code 130.Illustration A.

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-14-0036.pdf

Original ruling text

ST 14-0036-GIL 07/29/14 EXEMPT ORGANIZATIONS
In order for an organization to qualify for tax exempt status in Illinois, the organization must hold a
valid e-number from the Illinois Department of Revenue or present a valid tax exempt card issued by
the U.S. Department of State and identified in 86 Ill. Adm. Code 130.Illustration A. See 86 Ill. Adm.
Code 130.2007 and 86 Ill. Adm. Code 130.2080. (This is a GIL.)
July 29, 2014

Dear Xxxx:
This letter is in response to your letter dated June 19, 2014, 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:
May we request for a Private Letter Ruling on the sales tax exemption documentations
required from the following organizations who are customers of our Restaurants
requesting exemption from sales tax:
1.
2.
3.

State and local government body
Nonprofit organizations
Foreign consuls

Attached is a copy of a Moorish National Identification and Tax Card from the ‘Great
Seal National Association of Moorish Affairs – Moorish Nation’. Please give us
guidance or ruling regarding this card when used as a sales tax exemption card.
We need a Private Letter Ruling in the Illinois Department of Revenue letterhead to
show the customers who do not have the required sales tax exemption documentation.
Please mail the Private Letter Ruling to the following address:
NAME
Tax Department
COMPANY
ADDRESS
CITY, STATE, ZIP CODE

COMPANY
Page 2
July 29, 2014
DEPARTMENT’S RESPONSE:
Sales to exempt organizations (organizations that qualify as exclusively religious, charitable, or
educational, or for the recreation of persons age 55 and older) and governmental entities are subject
to tax unless the exempt organization or governmental entity has obtained an active exemption
identification number ("E" number) from the Department. See 86 Ill. Adm. Code 130.120(h)-(i). See
also 86 Ill. Adm. Code 130.2007 and 130.2080. Persons or businesses selling tangible personal
property to these organizations or governmental entities must be provided with an "E" number for the
sales to be tax exempt. It is important to note that only sales of tangible personal property invoiced to
the organization or governmental entity itself are exempt. Sales made to an individual member or
client of an exempt organization or entity are generally subject to tax.
Some foreign diplomats are exempt from paying taxes because of the Foreign Missions Act.
This area of law is largely administered by the U.S. State Department. The Moorish National
identification and tax exempt card that you have attached to the letter is invalid for purposes of sales
tax. In order for an organization to qualify for tax exempt status in Illinois, the organization must hold
a valid e-number from the Illinois Department of Revenue or present a valid tax exempt card issued
by the U.S. Department of State and identified in 86 Ill. Adm. Code 130.Illustration A. Such cards are
issued to certain foreign government personnel, embassies, and international organizations. These
cards have very distinct and recognizable features in order to verify their validity. We encourage you
to familiarize yourself with 86 Ill. Adm. Code 130.2080 and 86 Ill. Adm. Code 130.Illustration A so that
you can easily identify valid tax exemption cards.
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,

Cara Bishop
Associate Counsel

CB:lkm