Did a state university's Illinois Telecommunications Excise Tax exemption also exempt its service from the infrastructure maintenance fee?

Plain-English summary

A wireline telecommunications provider served a state college created by statute. It understood that qualifying state universities were exempt under the Telecommunications Excise Tax law and asked whether the same treatment carried over to Illinois' Telecommunications Infrastructure Maintenance Fee.

IDOR said no. For the excise tax, "sale at retail" excluded telecommunications furnished to the federal and state governments and state universities created by statute for their own use. The letter described qualifying universities as individually established by the Illinois legislature and funded through state appropriations.

The Infrastructure Maintenance Fee Act contained no comparable state-university exemption. It imposed a 0.5% fee on a telecommunications retailer's gross charges to Illinois service addresses for nonwireless telecommunications. The retailer remained liable on charges to state universities and had to show the customer-attributable charge separately on the bill.

What this means for you

Exemptions do not automatically carry between two telecommunications statutes. A provider must analyze the excise tax and infrastructure fee separately, even for the same government or university customer.

Common questions

Was the state university exempt from the infrastructure fee? No.

Who owed the fee? The telecommunications retailer.

Was the related customer charge separately stated? Yes, under the cited law.

Citations and references

• 35 ILCS 630/2, 630/3, and 630/4.
• 35 ILCS 635/15(b) and 635/25(a).

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-15-0074-gil.pdf

Original ruling text

ST 15-0074-GIL 12/1/15 TELECOMMUNICATIONS EXCISE TAX
The Telecommunications Infrastructure Maintenance Fee Act does not contain an exemption
for retailers selling telecommunications to state universities. 35 ILCS 635/15(b). (This a GIL.)

December 1, 2015

Dear Xxxxx:
This letter is in response to your letter dated October 25, 2015, 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:
ABC is a CITY based wireline telecommunications provider. We occasionally receive
inquiries from customers who have received a tax exemption letter/certificate from your
office. The customer in question is a State College created by statute.
Illinois Telecommunications Excise Tax.
We believe this customer/college is
exempt from Illinois Telecommunications Excise Tax per 35 ILCS 630/2(k) which states
that the exemption applies to only a precious few…including state universities created
by statute [provided however, that the exemption extends only to telecommunications
purchased by such entities for their own use…clarification provided from ST 14-0043GIL 08/11/14].
Illinois Telecommunications Infrastructure Maintenance Fee. We are not clear if
this customer/college is also exempt from Illinois Telecommunications Infrastructure
Maintenance Fee. Is there any exemption correlation between the two statutes? Has
there been a ruling that states if the customer/college is exempt from the Illinois
Telecommunications Excise Tax then they are also exempt from the Illinois
Telecommunications Infrastructure Maintenance Fee?
Please give this matter your prompt attention. Thank you for your cooperation.

DEPARTMENT’S RESPONSE:
The Telecommunications Excise Tax is imposed upon the act or privilege of originating or
receiving intrastate or interstate telecommunications in Illinois at the rate of 7% of the gross charges
for such telecommunications purchased at retail from retailers. 35 ILCS 630/3 and 630/4. "Sale at
retail" means the transmitting, supplying or furnishing of telecommunications and all services and
equipment provided in connection therewith for a consideration to persons other than the Federal and
State governments, and State universities created by statute and other than between a parent
corporation and its wholly owned subsidiaries or between wholly owned subsidiaries for their use or
consumption and not for resale. 35 ILCS 630/2.
The "State universities" to which these provisions apply are those universities which are each
individually established by the Illinois legislature and which draw their funding from State
appropriations. These universities would include, for instance, the University of Illinois and Southern
Illinois University. Each of these universities was established by legislative fiat and are governed by
boards empowered by statute. The powers attributable to each university are also specifically set
forth in various statutes applicable solely to each university.
The Telecommunications Infrastructure Maintenance Fee Act imposes a State infrastructure
maintenance fee upon telecommunications retailers equal to 0.5% of all gross charges charged by
the telecommunications retailer to service addresses in this State for telecommunications, other than
wireless telecommunications, originating or received in this State. 35 ILCS 635/15(b). A
telecommunications retailer shall charge each customer an additional charge equal to the State
infrastructure maintenance fee attributable to that customer's service address. Such additional
charge shall be shown separately on the bill to each customer. 35 ILCS 635/25(a).
The Telecommunications Infrastructure Maintenance Fee Act does not contain an exemption
for retailers selling telecommunications to state universities. Retailers are liable for the infrastructure
maintenance fee upon all gross charges charged by the telecommunications retailer to state
universities.

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
RSW:ebj