What does Illinois Private Letter Ruling ST 20-0007-PLR conclude about Motor Fuel Tax?

Plain-English summary

The Illinois Department of Revenue ruled that a licensed motor fuel distributor ("Taxpayer") can sell dyed diesel fuel tax-free to customers reached through an unlicensed, out-of-state digital fuel exchange ("Company B"), as long as the sale meets all the statutory conditions for the dyed diesel exemption under the Motor Fuel Tax Law.

Taxpayer had a supply agreement with Company B, a nationwide digital marketplace that connects fuel sellers and buyers but never takes physical possession of the fuel itself and has no Illinois motor fuel license. Under that agreement, Taxpayer delivered dyed diesel fuel directly to Company B's Illinois customers, either into stationary bulk storage tanks marked "Dyed Diesel Fuel, Non-taxable Use Only" or directly into the fuel tanks of off-highway vehicles such as all-terrain and recreational vehicles. The Department had previously assessed Taxpayer for unpaid Motor Fuel Tax on these sales (dating back to 2016) solely because Company B was not a licensed distributor or supplier, and Taxpayer lost its motor fuel license in April 2019 as a result. After Taxpayer reapplied for its license and began a payment plan, the Department itself suggested that Taxpayer seek a PLR to resolve the issue going forward.

The Department agreed with Taxpayer's position: Section 6(7) of the Illinois Motor Fuel Tax Law (35 ILCS 505/6(7)) allows a distributor to sell dyed diesel fuel tax-free to someone other than a licensed distributor or supplier, for non-highway purposes, as long as delivery is made from a specially designed vehicle either directly into a properly marked bulk storage tank or directly into the fuel tank of a non-highway vehicle. Because Taxpayer is a licensed distributor/supplier, Company B is unlicensed, and the fuel is used in off-highway vehicles, all three statutory preconditions are satisfied — the buyer's status as an unlicensed marketplace intermediary does not, by itself, defeat the exemption.

The ruling is expressly prospective only: it does not address or resolve Taxpayer's prior assessed liabilities from 2016 onward, and it depends entirely on Taxpayer continuing to meet every delivery and documentation requirement (proper invoice notations, required shipping-paper notices, and retained records of the sale). The Department also noted that dyed diesel fuel sold tax-free from Motor Fuel Tax remains subject to Retailers' Occupation Tax and Use Tax, except for 100% biodiesel and certain biodiesel blends, which are separately exempt from those taxes.

What this means for you

Motor fuel distributors and suppliers

If you are a licensed Illinois distributor or supplier selling dyed diesel fuel to non-highway users, you can sell it tax-free even when the immediate purchaser is an unlicensed intermediary (like a fuel marketplace or exchange), as long as you personally deliver the fuel — using a vehicle designed for that purpose — either directly into a properly marked bulk storage tank or directly into the fuel supply tank of a non-highway vehicle. You must still put the required notation on every invoice or sales slip, keep the specific supporting documentation the Department requires (invoice number and date, carrier name, bill of lading/manifest number, purchaser and delivery-recipient name and address, origin/destination, and gallons sold), and make sure the "Dyed Diesel Fuel, Non-taxable Use Only, Penalty For Taxable Use" notice appears on shipping papers, bills of lading, and invoices. Missing any of these requirements exposes you to a Motor Fuel Tax assessment even if the underlying sale would otherwise qualify.

Businesses using fuel marketplaces or exchange platforms

If you buy dyed diesel through a marketplace or exchange platform that does not itself hold an Illinois distributor or supplier license, that alone does not make the sale taxable — what matters is whether the seller is a licensed distributor/supplier, whether the fuel is used off-highway, and how it is physically delivered. This ruling shows the Department will look through an unlicensed intermediary to the actual seller and delivery method.

Accountants and tax professionals

This PLR only binds the Department for this specific taxpayer and this specific fact pattern, and only prospectively — it does not retroactively resolve the Notices of Tax Liability already issued to Taxpayer for pre-ruling sales. It's a useful illustration of how the Department applies the three-part test (seller status, buyer status, non-highway use) plus the delivery/documentation rules under 35 ILCS 505/6(7) and 86 Ill. Adm. Code 500.210(g), and a reminder that Motor Fuel Tax exemption does not carry over to Retailers' Occupation Tax or Use Tax except for qualifying biodiesel.

Common questions

Q: Does selling dyed diesel through an unlicensed marketplace or exchange automatically make the sale taxable?
A: No. The Department found that the buyer's licensing status matters (the buyer must not be a licensed distributor or supplier), but an unlicensed fuel exchange that never takes physical possession of the fuel does not, by itself, disqualify the sale from the dyed diesel exemption, as long as the other statutory conditions (non-highway use, proper delivery method) are met.

Q: What are the three preconditions for a tax-free dyed diesel sale under this ruling?
A: (1) the seller must be a licensed distributor or supplier; (2) the buyer must not be a licensed distributor or supplier; and (3) the fuel must be sold for non-highway use. If all three are met, the transaction is then checked against the delivery and documentation requirements in 35 ILCS 505/6(7).

Q: Does this ruling excuse Taxpayer's prior tax liabilities?
A: No. The Department was explicit that "this ruling does not address prior established liabilities and applies only prospectively and only to the facts as described in this letter."

Q: Is dyed diesel fuel completely tax-free once the Motor Fuel Tax exemption applies?
A: No. The ruling notes that dyed diesel fuel purchased free of Motor Fuel Tax "remains subject to Retailers' Occupation Tax and Use Tax," except that 100% biodiesel and certain biodiesel blends are separately exempt from those two taxes under 35 ILCS 120/2-10 and 35 ILCS 105/3-10.

Q: What documentation must a distributor keep to support a tax-free dyed diesel sale?
A: A specific notation on the invoice or sales slip, plus records of the invoice number and date, carrier name, bill of lading/manifest number, purchaser's (and delivery recipient's, if different) name and address, Illinois origin and destination, and invoiced gallons sold, along with the required "Dyed Diesel Fuel, Non-taxable Use Only, Penalty For Taxable Use" notice on shipping papers, bills of lading, and invoices (86 Ill. Adm. Code 500.210(g)).

Citations and references

• 35 ILCS 505/6(7) (tax-free distributor sales of dyed diesel fuel for non-highway use)
• 35 ILCS 505/6a(5) (identical tax-free exception for supplier sales of dyed diesel fuel)
• 35 ILCS 505/6(6); 505/6a(4) (exemption for sales among licensed distributors and suppliers)
• 35 ILCS 505/1.2 (definition of "distributor")
• 35 ILCS 505/1.14 (definition of "supplier")
• 35 ILCS 505/1.13 (definition of "special fuel")
• 35 ILCS 505/1.13B (definition of dyed diesel fuel)
• 35 ILCS 505/4d (dyed diesel fuel designated for non-highway use)
• 35 ILCS 505/4f (required "Dyed Diesel Fuel, Non-taxable Use Only" notice)
• 35 ILCS 505/2 (imposition of Motor Fuel Tax and current tax rates)
• 35 ILCS 505/13 (reimbursement/credit provisions for tax paid on fuel not used on highways)
• 35 ILCS 120/2-10 (Retailers' Occupation Tax exemption for certain biodiesel)
• 35 ILCS 105/3-10 (Use Tax exemption for certain biodiesel)
• 86 Ill. Adm. Code 500.210(g) (required shipping-paper/invoice notice for dyed diesel sales)
• 86 Ill. Adm. Code 500.235 (reimbursement for Motor Fuel Tax paid on fuel not used on highways/waters)
• 86 Ill. Adm. Code 500.265 (distributor/supplier claims for credit)
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedures and binding effect)
• 2 Ill. Adm. Code 1200.120 (General Information Letters)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2020.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2020/st20-0007-plr.pdf

Original ruling text

ST 20-0007-PLR 10/27/2020

MOTOR FUEL TAX

A licensed motor fuel distributor may make tax free sales of motor fuel with respect to which he
is otherwise required to collect the motor fuel tax when a sale of dyed diesel fuel is made to
someone other than a licensed distributor or a licensed supplier for non-highway purposes and
the fuel is delivered from a vehicle designed for the specific purpose of such sales (i) directly
into a stationary bulk storage tank that displays the notice required by Section 4f of this Act, or
(ii) directly into the fuel supply tanks of non-highway vehicles that are not required to be
registered for highway use. See 35 ILCS 505/6(7); 86 Ill. Adm. Code 500.210(g). (This is a
PLR.)

October 27, 2020

Dear Xxxx:
This letter is in response to your letter dated September 16, 2019, in which you requested
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.
Review of your request disclosed that all the information described in paragraphs 1 through 8
of Section 1200.110 appears to be contained in your request. This Private Letter Ruling will bind the
Department only with respect to COMPANY A, for the issue or issues presented in this ruling, and is
subject to the provisions of subsection (e) of Section 1200.110 governing expiration of Private Letter
Rulings. Issuance of this ruling is conditioned upon the understanding that neither COMPANY A, nor
a related taxpayer is currently under audit or involved in litigation concerning the issues that are the
subject of this ruling request. In your letter you have stated and made inquiry as follows:
As counsel for, and on behalf of COMPANY A, Pursuant to 2 III. Admin. Code
§1200.110, we hereby formally request a Private Letter Ruling (“PLR”) confirming that
based upon the facts as represented below:
(i) Taxpayer’s sales of dyed diesel fuel to COMPANY B satisfy the statutory
preconditions for tax-free treatment and are eligible for the exemption from the
Illinois Motor Fuel Tax granted to certain sales of dyed diesel fuel.
Taxpayer is currently conversing with the Department regarding this issue and has been
advised by the Department to seek this ruling. Taxpayer is not aware of any authority
contrary to the views expressed in this PLR request. Furthermore, we ask that

ST 20-0007-PLR
PAGE 2
Taxpayer’s name, address, and any contracts which are attached be kept confidential
and deleted from the publicly disseminated version of a PLR issued in response to this
request. A Power of Attorney authorizing me to represent Taxpayer before the
Department in connection with this PLR is attached as Exhibit A.
FACTS
Taxpayer has historically been an Illinois-licensed motor fuel distributor and supplier. In
April 2016, Taxpayer and COMPANY B (“COMPANY B”) entered into a supply
agreement (“Agreement”) under which Taxpayer agreed to make sales of dyed diesel
fuel to COMPANY B and deliver the purchased fuel directly to COMPANY B’s Illinois
customers. A copy of this agreement is attached as Exhibit B.
COMPANY B is a STATE corporation that operates a nationwide digital fuel exchange
marketplace for industrial and commercial fuel purchasers. This exchange connects fuel
suppliers with fuel purchasers and provides a secure transactional platform. COMPANY
B has no physical presence in Illinois and is not an Illinois-licensed motor fuel distributor
or supplier. COMPANY B does not take physical possession of fuel that [sic] purchased
or sold through its exchange. Rather, COMPANY B directs fuel sellers to deliver
purchased fuel directly to the buyer’s location.
Taxpayer delivers dyed diesel sold through COMPANY B’s exchange in a vehicle that is
designed specifically for delivering this fuel. Deliveries in Illinois are made either (1) to
stationary bulk storage tanks that bear the notice “Dyed Diesel Fuel, Non-taxable Use
Only” or (2) directly into the fuel supply tanks of off-highway vehicles.
Taxpayer fulfilled its obligations under the Agreement without intervention from the
Department until January 2019. At that time, the Department determined that
Taxpayer’s sales of dyed diesel to COMPANY B are taxable solely because COMPANY
B is not an Illinois-licensed reseller of motor fuel. Accordingly, the Department issued
Notices of Tax Liability (“NTLs”) to Taxpayer for unpaid Motor Fuel Tax on dyed diesel
sales to COMPANY B dating back to 2016. Taxpayer unsuccessfully attempted to
contest the assessed liabilities, but did not pay the liabilities, and ultimately lost its motor
fuel license in April 2019.
Taxpayer reapplied for its license and commenced a payment plan to settle its historic
liabilities with the Department in August 2019. In order to resolve the prospective
question of whether Taxpayer’s sales of dyed diesel fuel to COMPANY B are eligible for
tax-free treatment, the Department has urged Taxpayer to seek a PLR.
ILLINOIS MOTOR FUEL TAX LAW
Section 6 of the Illinois Motor Fuel Tax Law (35 ILCS 505/6) provides that a distributor
may make tax-free sales of motor fuel in certain instances. One such instance is the
sale of dyed diesel fuel “made to someone other than a licensed distributor or licensed
supplier for non-highway purposes” if the fuel is

ST 20-0007-PLR
PAGE 3

i.

ii.

iii.

delivered from a vehicle designed for the specific purpose of such sales
and delivered directly into a stationary bulk storage tank that displays the
notice required by Section 4f of this Act,1
delivered from a vehicle designed for the specific purpose of such sales
and delivered directly into the fuel supply tanks of non-highway vehicles
that are not required to be registered for highway use, or
dispensed from a dyed diesel fuel dispensing facility that has withdrawal
facilities that are not readily accessible to and are not capable of
dispensing dyed diesel fuel into the fuel supply tank of a motor vehicle.

35 ILCS 505/6(7) (emphasis added). An identical exception exists for sales of dyed
diesel made by a supplier. 35 ILCS 505/6a(5). The Motor Fuel Taw Law defines many
of the above terms.
“Distributor” is defined as a person who either “(i) produces, refines, blends, compounds
or manufactures motor fuel in this State, or (ii) transports motor fuel into this State, or
(iii) exports motor fuel out of this State, or (iv) engages in the distribution of motor fuel
primarily by tank car or tank truck, or both, and who operates an Illinois bulk plant where
he or she has active bulk storage capacity of not less than 30,000 gallons for
gasoline[.]” 35 ILCS 505/1.2.
“Supplier” is defined as a “person other than a licensed distributor who (i) transports
special fuel into this State; (ii) exports special fuel out of this State; or (iii) engages in the
distribution of special fuel primarily by tank car or tank truck, or both, and who operates
an Illinois bulk plant where he has active bulk storage capacity of not less than 30,000
gallons for special fuel[.]” 35 ILCS 505/1.14.
“Special Fuel” is defined as “all volatile and inflammable liquids capable of being used
for the generation of power in an internal combustion engine” other than gasoline or
combustible gases. 35 ILCS 505/1.13. “Special Fuel” includes diesel fuel. Id.
Dyed diesel fuel is special fuel which has been dyed using a designated solvent. 35
ILCS 505/1.13B, 505/4d. Dyed diesel fuel is designated solely for non-highway use. 35
ILCS 505/4d.
LEGAL ANALYSIS
Re-stated, the Illinois Motor Fuel Tax Law imposes three qualifying preconditions on
tax-free sales of dyed diesel. First, the seller must be either a distributor or a supplier.
Second, the buyer may not be a licensed distributor or supplier.2 Third, the dyed diesel
must be sold for non-highway use. If each of these three preconditions are met, then the
transaction is analyzed using the delivery and documentation requirements to determine
if the transaction is excepted from Motor Fuel Tax. None of the delivery or
documentation requirements are dependent on the buyer’s status.
35 ILCS 505/4f requires “A legible and conspicuous notice stating “Dyed Diesel Fuel, Non-taxable Use Only” must appear on all
containers, storage tanks, or facilities used to store or distribute dyed diesel fuel.”
2
Transactions among licensed distributors and suppliers holding valid, unrevoked licenses are also exempt from sales tax [sic] if a
special notation is on the invoice or sales slip covering each sale. 35 ILCS 505/6(6); 505/6a(4).
1

ST 20-0007-PLR
PAGE 4

Taxpayer engages in the business of distributing motor fuels and special fuels primarily
by tank truck and maintains active bulk storage of greater than 30,000 gallons.
Taxpayer anticipates its motor fuel license will be restored prior to future sales of dyed
diesel through the COMPANY B exchange. Taxpayer therefore meets the requirements
for both distributors and suppliers for the purposes of the dyed diesel motor fuel tax
exception.
COMPANY B does not hold an Illinois license to either distribute or supply motor fuel or
special fuel within that state. COMPANY B is therefore a person other than a licensed
distributor or licensed supplier.
The dyed diesel fuel that Taxpayer delivers to COMPANY B’s customers is used in
vehicles such as all-terrain vehicles and other recreation vehicles that are not permitted
to operate on Illinois highways. Accordingly, the dyed diesel is sold for non-highways
use.
Based on the relevant statutes, taxpayer’s sales of dyed diesel fuel to COMPANY B
satisfy each of the three statutory qualifying preconditions. These sales are therefore
eligible for the exception from the Illinois Motor Fuel Tax granted to certain sales of
dyed diesel fuel.
REQUEST FOR RULING
Pursuant to 2 Ill. Admin. Code Section 1200.110, Taxpayer respectfully requests that
the Department issue a private letter ruling declaring:
(i)

Taxpayer’s sales of dyed diesel fuel to COMPANY B satisfy the statutory
preconditions for tax-free treatment and are eligible for the exception from the
Illinois Motor Fuel Tax granted to certain sales of dyed diesel fuel.

If you concur, please issue your favorable ruling to the undersigned. If you do not
concur, please advise so that we may discuss your reasoning before an adverse ruling
is issued.
DEPARTMENT’S RESPONSE:
Section 2 of the Motor Fuel Tax Law, 35 ILCS 505/2, imposes a tax on “the privilege of
operating motor vehicles upon the public highways and recreational-type watercraft upon the waters
of this State.” Beginning July 1, 2019, the rate of tax imposed on all motor fuel used in motor vehicles
operating on the public highways and recreational type watercraft is 38 cents per gallon, increased on
July 1 of each subsequent year by an amount equal to the percentage increase, if any, in the
Consumer Price Index for All Urban Consumers for all items published by the United States
Department of Labor for the 12 months ending in March of each year, rounded to the nearest onetenth of one cent.. Beginning on July 1, 2019, the tax on the privilege of operating motor vehicles
which use diesel fuel, liquefied natural gas, or propane is at the rate of tax on motor fuel plus an

ST 20-0007-PLR
PAGE 5

additional 7½ cents per gallon. For current tax rates on motor fuel and diesel, please see the
Department’s tax rate database at tax.illinois.gov.
“Motor fuel” is defined as “all volatile and inflammable liquids produced, blended or
compounded for the purpose of, or which are suitable or practicable for, operating motor vehicles.
Among other things, ‘Motor Fuel’ includes ‘Special Fuel.’” “Special fuel” is defined as “all volatile and
inflammable liquids capable of being used for the generation of power in an internal combustion
engine except that it does not include gasoline as defined in Section 5, example (A), of [the Motor
Fuel Tax Law], or combustible gases as defined in Section 5, example (B), of [the Motor Fuel Tax
Law]. ‘Special Fuel’ includes diesel fuel as defined in paragraph (b) of Section 2 of [the Motor Fuel
Tax Law].” “Diesel fuel” is defined as “any product intended for use or offered for sale as a fuel for
engines in which the fuel is injected into the combustion chamber and ignited by pressure without
electric spark.”
Generally, Motor Fuel Tax is due when motor fuel is purchased. Persons other than
distributors or suppliers who lose motor fuel through any cause or use motor fuel upon which the
Motor Fuel Tax has been paid for any purpose other than operating a motor vehicle upon the public
highways or waters, shall be reimbursed and repaid the amount so paid. See 86 Ill. Adm. Code
500.235. Distributors and suppliers may file claims for credit. See 86 Ill. Adm. Code 500.265. Section
13 of the Motor Fuel Tax Law sets forth the provisions for such reimbursement. No claims based
upon idle time are allowed.
Beginning January 1, 2000, the State of Illinois implemented a dyed diesel fuel program. This
program provides for tax-free purchases of dyed diesel fuel that will be used for nonhighway
purposes. Section 6 of the Motor Fuel Tax Law provides as follows:
“A distributor may make tax free sales of motor fuel, with respect to which he is
otherwise required to collect the tax, only as specified in the following items 1 through 7.
…
…

7. When a sale of dyed diesel fuel is made to someone other than a licensed
   distributor or a licensed supplier for non-highway purposes and the fuel is (i) delivered
   from a vehicle designed for the specific purpose of such sales and delivered directly into
   a stationary bulk storage tank that displays the notice required by Section 4f of this Act,
   (ii) delivered from a vehicle designed for the specific purpose of such sales and
   delivered directly into the fuel supply tanks of non-highway vehicles that are not
   required to be registered for highway use, or (iii) dispensed from a dyed diesel fuel
   dispensing facility that has withdrawal facilities that are not readily accessible to and are
   not capable of dispensing dyed diesel fuel into the fuel supply tank of a motor vehicle.
   A specific notation is required on the invoice or sales slip covering such sales,
   and any supporting documentation that may be required by the Department must be
   obtained by the distributor. The distributor shall obtain and keep the supporting
   documentation in such form as the Department may require by rule.
   For purposes of this item 7, a dyed diesel fuel dispensing facility is considered to
   have withdrawal facilities that are "not readily accessible to and not capable of
   dispensing dyed diesel fuel into the fuel supply tank of a motor vehicle" only if the dyed
   diesel fuel is delivered from: (i) a dispenser hose that is short enough so that it will not
   reach the fuel supply tank of a motor vehicle or (ii) a dispenser that is enclosed by a

ST 20-0007-PLR
PAGE 6

fence or other physical barrier so that a vehicle cannot pull alongside the dispenser to
permit fueling. 35 ICLS 505/6.
Section 4f of the Motor Fuel Tax Law, referenced above, provides that “[a] legible and
conspicuous notice stating "Dyed Diesel Fuel, Non-taxable Use Only" must appear on all containers,
storage tanks, or facilities used to store or distribute dyed diesel fuel.” 35 ILCS 505/4f.
Department records indicate that COMPANY A is registered as a Motor Fuel Distributor.
Based on the facts presented in this letter ruling request, it is the Department’s position that when
COMPANY A sells dyed diesel fuel to COMPANY B, an unlicensed party, and COMPANY A delivers
the dyed diesel fuel to COMPANY B’s customers in Illinois, from a vehicle designed for the specific
purpose of such sales, either (i) directly into stationary bulk storage tanks that bear the notice “Dyed
Diesel Fuel, Non-taxable Use Only” or (ii) directly into the fuel supply tanks of off-highway vehicles, it
meets the requirements for making a tax free sale of motor fuel found in Section 6, item 7 of the
Motor Fuel Tax Law (35 ILCS 505/6(7)).
It is important to note that this ruling does not address prior established liabilities and applies
only prospectively and only to the facts as described in this letter. In addition, in order for the sale to
be made tax-free, all requirements of the statute must be met. In particular, the statute provides that
a specific notation is required on the invoice or sales slip covering such sales, and any supporting
documentation that may be required by the Department must be obtained by the distributor. The
distributor shall obtain and keep the supporting documentation in such form as the Department may
require by rule. (35 ILCS 505/6(7)) The rules further provide that for each such sale of dyed diesel
fuel, a specific notation of the nature of the exemption must be made on the invoice for these sales.
The seller must retain the invoice number and date, name of carrier, bill of lading/manifest number,
name and address of purchaser, Illinois origin, Illinois destination, and invoiced gallons sold. A legible
and conspicuous notice stating "Dyed Diesel Fuel, Non-taxable Use Only, Penalty For Taxable Use"
must appear on all shipping papers (including delivery tickets or manifests and excluding material
safety data sheets), bills of lading, and invoices accompanying any sale of dyed diesel fuel (see 86 Ill.
Adm. Code 500.210(g)). In cases, as described in this letter request, where the dyed diesel is
delivered to someone other than the purchaser, the name and address of the delivery recipient must
also be retained. In the event that the conditions for making a tax-free sale as described above are
not met, the Department will assess the distributor for the Motor Fuel Tax. It is also important to note
that, under the Motor Fuel Tax Law, no one may distribute motor fuel in Illinois without a motor fuel
distributor’s or supplier’s license, as appropriate.
Please note that, although dyed diesel fuel may be purchased free of Motor Fuel Tax as
described above, it remains subject to Retailers’ Occupation Tax and Use Tax. However, 100%
biodiesel and certain biodiesel blends are exempt from Retailers’ Occupation Tax and Use Tax. 35
ILCS 120/2-10; 35 ILCS 105/3-10.
The factual representations upon which this ruling is based are subject to review by the
Department during the course of any audit, investigation, or hearing and this ruling shall bind the
Department only if the factual representations recited in this ruling are correct and complete. This
Private Letter Ruling is revoked and will cease to bind the Department 10 years after the date of this
letter under the provisions of 2 Ill. Adm. Code 1200.110(e) or earlier if there is a pertinent change in
statutory law, case law, rules or in the factual representations recited in this ruling.

ST 20-0007-PLR
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I hope this information is helpful. If you have further questions concerning this Private Letter
Ruling, you may contact me at (217) 782-2844. If you have further questions related to the Illinois
sales tax laws, 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
Chairman, Private Letter Ruling Committee
RSW:SJM:ter