What did a 2015 Illinois receipt label for 'non-Prescrip' likely mean, and which tax rate applied?

Plain-English summary

An Illinois consumer saw an additional five-cent amount labeled "non-Prescrip" on a receipt and asked whether it was a lawful tax or an arbitrary fee.

IDOR could not determine the correct treatment without reviewing the receipt and would not speculate about the retailer's internal labels. It said the notation likely distinguished items subject to the lower rate from general merchandise.

Under the rates described in this 2015 letter, prescription and nonprescription medicines, drugs, medical appliances, motor-vehicle modifications that made a vehicle usable by a disabled person, and insulin, urine-testing utensils, syringes, and needles used by diabetics for human use were taxed at 1% plus applicable local taxes. Items that did not qualify were taxed at the 6.25% general-merchandise rate plus applicable local taxes.

What this means for you

This is historical 2015 rate guidance. A receipt label alone did not establish whether the charge was correct; the purchased item had to satisfy the categories in 86 Ill. Adm. Code 130.311.

Common questions

Did IDOR decide whether the five-cent amount was correct? No.

Were all nonprescription items taxed at the lower rate? No. Only qualifying items covered by the regulation received it.

Could local tax be added to either State rate? Yes.

Citations and references

• 86 Ill. Adm. Code 130.311.

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2015.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2015/st-15-0044-gil.pdf

Original ruling text

ST 15-0044 GIL – 07/08/2015 - TAX RATE
With respect to prescription and non-prescription medicines, drugs, medical appliances, modifications to
a motor vehicle for the purpose of rendering it usable by a disabled person and insulin, urine testing
utensils, syringes and needles used by diabetics, for human use, the tax is imposed at the rate of 1% plus
any applicable local taxes. Items that do not qualify for the lower rate of tax are taxed at the general
merchandise rate of 6.25% plus any applicable local taxes. See 86 Ill. Adm. Code 130.311.

July 8, 2015
Dear Mrs. XXXX:
This letter is in response to the complaint that you filed on DATE with the Illinois Office of the
Attorney General regarding COMPANY’S collection of sales tax. The Office of the Attorney General
forwarded your complaint to the Illinois Department of Revenue. 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:
NAME OF SELLER/PROVIDER OF SERVICE
REDACTED
COMPLAINT DESCRIPTION
After completing my transaction for several items, I reviewed my receipt and it reflected an
arbitrary tax of an additional 5 cents, and the designation was for “non-Prescrip”. I do not know what
this means, but I am concerned about being charged an arbitrary fee that no one in the store seems
to understand what the charge is for.

REQUESTED RELIEF
I want an investigation to determine if the transaction of the fee is legal and for what purpose.
NOTIFY BUSINESS
I have no objections to the content of this complaint being forwarded to the business or person
the complaint is directed against.
DEPARTMENT’S RESPONSE:

The Department’s regulation regarding the appropriate tax rate for drugs and medical appliances
can be found at 86 Ill. Adm. Code 130.311. With respect to prescription and non-prescription
medicines, drugs, medical appliances, modifications to a motor vehicle for the purpose of rendering it
usable by a disabled person and insulin, urine testing utensils, syringes and needles used by
diabetics, for human use, the tax is imposed at the rate of 1% plus any applicable local taxes such as
the Regional Transportation Authority (RTA) Retailers’ Occupation Tax.
Those items that do not qualify for the lower rate of tax are taxed at the general merchandise rate
of 6.25% plus any applicable local taxes such as the RTA Retailers’ Occupation Tax. Without reviewing
the receipt for your transaction we cannot determine the appropriate tax rate for the items that you
purchased. It is likely that the retailer’s designation for the tax was a method of differentiating between
low rate items and general merchandise. However, we cannot speculate as to the retailer’s methods of
doing business.

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:mdb