What does Illinois General Information Letter ST 20-0022-GIL conclude about Construction Contractors?

Plain-English summary

This GIL responds to a CPA firm asking, on behalf of an out-of-state manufacturer of gas station canopies, how Illinois sales and Use Tax applies to a dozen different sale/delivery/installation scenarios. The manufacturer builds canopy parts from raw steel and ships them to wholesalers or end-users in Illinois; sometimes it also arranges installation (which makes the canopy part of the gas station's real property) and sometimes it arranges freight through a separate carrier. The company has no physical presence in Illinois.

The Department's answer walks through several distinct legal questions rather than giving scenario-by-scenario yes/no answers. First, it explains nexus: an out-of-state ("remote") retailer must register and collect Illinois Use Tax only if it has a physical presence in the state (per Hartney Fuel Oil and the "more than the slightest presence" standard from Brown's Furniture) or meets Illinois's Wayfair economic-nexus thresholds — $100,000 in cumulative Illinois sales or 200 or more separate transactions in the preceding 12 months. Since 2021, those same thresholds also apply to Retailers' Occupation Tax for remote retailers under the Leveling the Playing Field for Illinois Retail Act. Notably, the letter observes that businesses delivering goods in company-owned trucks generally are not remote retailers because that creates a physical presence.

Second, the letter addresses delivery charges: under 86 Ill. Adm. Code 130.415 and the Illinois Supreme Court's Kean v. Wal-Mart decision, delivery charges are part of the taxable selling price whenever there's an "inseparable link" between the sale and delivery — generally, when delivery charges aren't separately stated or the buyer has no option to avoid them (e.g., by picking up the item or getting free shipping).

Third, and central to the letter's title, the Department explains that construction contractors are treated as end users, not retailers, for Retailers' Occupation and Use Tax purposes. A contract combining the sale and installation of property permanently affixed to real estate is a "construction contract," and the contractor owes Use Tax on its own cost price of the materials incorporated into the real property — not sales tax collected from a customer. If the seller didn't collect Use Tax at the time of sale, the contractor must self-assess and remit it directly to the Department (with credit available for tax properly paid to another state). Finally, the letter covers resale certificates: a seller with Illinois nexus must obtain a valid Certificate of Resale (containing specific required elements under 86 Ill. Adm. Code 130.1405) to document a sale-for-resale and avoid its own tax liability, per the reasoning in Rock Island Tobacco.

What this means for you

Manufacturers and out-of-state sellers shipping into Illinois

Whether you must collect Illinois Use Tax turns on nexus, not on the nature of any single sale. If you have no Illinois office, warehouse, or employees, check the Wayfair economic thresholds ($100,000 in sales or 200+ transactions in the trailing 12 months) — and remember that delivering your own goods on company-owned trucks can itself create the "physical presence" that triggers nexus, unlike using a subcontracted freight company.

Construction contractors (including manufacturers who also install)

If you sell and install tangible personal property that becomes part of real estate — like a canopy bolted to a gas station — you are legally an end user, not a retailer, for that transaction. You owe Use Tax on your own cost price of the materials, and if your supplier didn't already collect it, you must register and self-assess it yourself. This is true even if you are also a manufacturer of the item you're installing.

Sellers relying on resale certificates

If you sell to wholesalers or others who will resell the property (rather than to end users or contractors), get a complete Certificate of Resale meeting all the elements in 86 Ill. Adm. Code 130.1405 (names/addresses, item description, signature and date, and a registration/resale number). A properly completed certificate generally ends your liability even if the buyer turns out to use the item themselves.

Common questions

Q: Does installing a canopy that becomes part of the gas station change who owes the tax?
A: Yes. Once installation makes the property part of real estate, the arrangement is a "construction contract," and Illinois treats the installing contractor as the end user who owes Use Tax on the cost price of the materials — rather than a retailer who must collect sales tax from a customer.

Q: If the manufacturer has no office or employees in Illinois, does it ever have to collect tax?
A: It can, if it meets Illinois's Wayfair economic-nexus thresholds (generally $100,000 in cumulative Illinois sales or 200+ separate transactions in the trailing four quarters), even without any physical presence. The letter notes that delivering goods on company-owned trucks (as opposed to using a subcontracted freight company) can independently establish a physical presence.

Q: Are delivery and installation charges taxable?
A: The letter addresses delivery charges directly: they're taxable when "inseparably linked" to the sale, meaning either they aren't separately stated on the invoice, or the buyer has no way to avoid them (no pickup option, no free-shipping option). The letter does not give a single blanket answer for installation charges beyond explaining that installation-into-real-property makes the transaction a construction contract governed by the end-user Use Tax rules described above.

Q: What paperwork does the manufacturer need for sales to wholesalers claiming resale?
A: A valid Certificate of Resale under 86 Ill. Adm. Code 130.1405, including the seller's and purchaser's names/addresses, a description of the resold items, the purchaser's signature and date, and a registration/resale number (or a statement that the purchaser is an out-of-state reseller). Without one, the sale is presumed taxable unless rebutted with other evidence.

Q: Is this letter binding on the Department?
A: No. It is a General Information Letter, which only directs the taxpayer to relevant regulations and general principles — it is not a statement of Department policy and does not bind the Department the way a Private Letter Ruling would.

Citations and references

• 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax imposed on sellers of tangible personal property)
• 86 Ill. Adm. Code 150.101 (Use Tax imposed on the privilege of using tangible personal property in Illinois)
• 86 Ill. Adm. Code 150.130 (credit against Use Tax for Retailers' Occupation Tax paid)
• 86 Ill. Adm. Code 270.115 (selling activities that trigger Retailers' Occupation Tax nexus)
• 35 ILCS 105/2 (definition of "retailer maintaining a place of business in Illinois," Use Tax Act)
• 86 Ill. Adm. Code 150.201 (retailer maintaining a place of business in Illinois)
• 86 Ill. Adm. Code 150.801; 150.802 (registration and physical-presence remote retailers)
• 86 Ill. Adm. Code 150.803(c)(2), (c)(3)(E) (Wayfair economic nexus thresholds and exclusions)
• 35 ILCS 120/2(b) (Retailers' Occupation Tax Act remote retailer thresholds, Leveling the Playing Field for Illinois Retail Act)
• 35 ILCS 120/1 (definition of remote retailer, Retailers' Occupation Tax Act)
• 86 Ill. Adm. Code 131 (proposed rules for remote retailers and marketplace facilitators)
• 86 Ill. Adm. Code 130.415 (transportation and delivery charges)
• 86 Ill. Adm. Code 130.1940; 130.2075 (construction contractors)
• 86 Ill. Adm. Code 150.310 (credit for tax paid to another state)
• 86 Ill. Adm. Code 130.1405 (Certificates of Resale)
• Hartney Fuel Oil Co. v. Hamer, 2013 IL 115130
• Scripto v. Carson, 362 U.S. 207 (1960); National Bellas Hess v. Department of Revenue of the State of Illinois, 386 U.S. 753 (1967); Quill Corporation v. North Dakota, 504 U.S. 298 (1992)
• Brown's Furniture v. Wagner, 171 Ill.2d 410 (1996)
• South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018), 138 S. Ct. 2080
• Kean v. Wal-Mart Stores, Inc., 235 Ill. 2d 351, 919 N.E.2d 926 (2009)
• Rock Island Tobacco and Specialty Company v. Illinois Department of Revenue, 87 Ill.App.3d 476, 409 N.E.2d 136, 42 Ill. Dec. 641 (3rd Dist. 1980)
• Public Act 100-587; Public Acts 101-0031 and 101-0604

Subject

Construction Contractors

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/st20-0022-gil.pdf

Original ruling text

ST 20-0022-GIL 10/02/2020

CONSTRUCTION CONTRACTORS

This letter discusses construction contractors. 86 Ill. Adm. Code 130.1940 and 86 Ill. Adm.
Code 130.2075. (This is a GIL.)

October 2, 2020

Dear Xxxx:
This letter is in response to your letter dated January 18, 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.
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:
I am employed with a C.P.A. accounting firm in STATE. I am assisting a STATE
corporation in verifying their sales and use tax requirements for the company’s sales to
Illinois.
The company is a manufacturer. The company purchases raw steel. It then
manufactures the parts of a gasoline station canopy, which are then shipped to either a
wholesaler or end-user. Once installed, the canopy becomes part of the real property of
the gasoline station. The company sometimes will subcontract the installation of the
canopy. Other times, the company will not include installation in the sale. The company
will also often contract with a freight company to deliver the parts.
The company has no physical presence in Illinois.
Please advise as to whether the company should collect and remit Illinois sales tax, or
pay Illinois use tax in the following scenarios where the company is shipping to a
location in Illinois. Please also advise whether the installation and freight charges, as
applicable, should be subject to sales or use tax.
The company sells the canopy to a wholesaler. On the invoice, the company includes a
delivery charge, and installation charge (the company subcontracts the freight and
installation).

ST 20-0022-GIL
Page 2

1. The company sells the canopy to the end-user. On the invoice, the company
   includes a delivery charge, and installation charge (the company subcontracts
   the freight and installation).
2. The company sells the canopy to a wholesaler. On the invoice, the company
   includes a delivery charge. There is no charge for installation, as installation is
   not part of the order.
3. The company sells the canopy to an end-user. On the invoice, the company
   includes a delivery charge. There is no charge for installation, as installation is
   not part of the order.
4. The company sells repair parts to a wholesaler and delivers them on companyowned smaller 1-ton trucks.
5. The company sells repair parts to an end-user and delivers them on companyowned smaller 1-ton trucks.
6. The company sells repair parts to a wholesaler and delivers them. On the
   invoice, the company includes an installation charge (the company subcontracts
   the installation, but delivery is on one of the company-owned smaller 1-ton
   trucks).
7. The company sells repair parts and they are picked up by the subcontracted
   installation crew from the company’s STATE facility.
8. The company sometimes purchases items such as lights or branded Mobil
   Fascia. When the company purchases them, they show the company’s sales tax
   exemption, because the company is a wholesaler of just those items in a bigger
   contract. These purchased items would stay in their box/crate and would be
   loaded with the company’s manufactured parts for shipment. Are these items
   subject to sales/use tax?
9. Is Illinois Excise tax required to be paid on any of the above scenarios?
10. On a general basis, in Illinois, is the freight that is charged by the company to
    deliver the product taxable?
11. On a general basis, in Illinois, is the installation that is charged by the company
    to install the product taxable?
12. Do you have any other information that would be helpful to the company in their
    preparation of the Illinois sales and use tax returns?
    DEPARTMENT’S RESPONSE:
    The Illinois Retailers' Occupation Tax Act imposes a tax upon persons engaged in this State in
    the business of selling tangible personal property to purchasers for use or consumption. See 86 Ill.
    Adm. Code 130.101. In Illinois, Use Tax is imposed on the privilege of using, in this State, any kind of
    tangible personal property that is purchased anywhere at retail from a retailer. See 86 Ill. Adm. Code
    150.101. These taxes comprise what is commonly known as “sales” tax in Illinois. If the purchases
    occur in Illinois, the purchasers must pay the Use Tax to the retailer at the time of purchase. The
    retailers are then allowed to reduce the amount of Use Tax they must remit by the amount of
    Retailers' Occupation Tax liability which they are required to and do pay to the Department with
    respect to the same sales. See 86 Ill. Adm. Code 150.130.

ST 20-0022-GIL
Page 3

NEXUS
An “Illinois Retailer” is one who makes sales of tangible personal property in Illinois. The
Illinois Retailer is then liable for Retailers' Occupation Tax on gross receipts from sales and must
collect the corresponding Use Tax incurred by the purchasers. Our regulations were amended in
response to the Illinois Supreme Court’s decision in Hartney Fuel Oil Co. v. Hamer, 2013 IL 115130.
The regulations specify the selling activities that trigger Retailers’ Occupation Tax liability in Illinois.
See, e.g., 86 Ill. Adm. Code 270.115.
Another type of retailer is a retailer maintaining a place of business in Illinois. The definition of
a “retailer maintaining a place of business in Illinois” is found at 35 ILCS 105/2 and described further,
in part, in 86 Ill. Adm. Code 150.201. This type of retailer is required to register with the State as an
Illinois Use Tax collector. See 86 Ill. Adm. Code 150.801. The retailer must collect and remit Use
Tax to the State on behalf of the retailer’s Illinois customers even though the retailer does not incur
any Retailers' Occupation Tax liability.
An out-of-State retailer (a “remote retailer”) making sales to Illinois purchasers from locations
outside Illinois is required to register with the Department and collect and remit Use Tax on those
sales if it falls within the definition of a “retailer maintaining a place of business in this State” in
Section 2 of the Use Tax Act, 35 ILCS 105/2. The Department is authorized to require these retailers
to act as tax collectors because they have established sufficient contacts, or nexus, with Illinois.
There are two groups of remote retailers that must collect Use Tax on sales to Illinois purchasers:
1)

Remote retailers with a physical presence in Illinois. Prior to October 1, 2018,
remote retailers had to have a physical presence in Illinois before they could be
required to collect Use Tax. The types of activities constituting a physical
presence, as limited by the series of court cases described below, are found in
Section 2 of the Use Tax Act’s definition of a “retailer maintaining a place of
business” in Illinois. See, 35 ILCS 105/2. The physical presence requirement
was established in a series of United States Supreme Court decisions. See, for
example, Scripto v. Carson, 362 U.S. 207 (1960); National Bellas Hess v.
Department of Revenue of the State of Illinois, 386 U.S. 753 (1967); Quill
Corporation v. North Dakota, 504 U.S. 298 (1992). In 1996, the Illinois Supreme
Court ruled that remote retailers need only “more than the slightest” physical
presence to be required to collect Use Tax. See Brown’s Furniture v. Wagner,
171 Ill.2d 410 (1996). Any remote retailer that has a physical presence in Illinois
will to be required to act as a Use Tax collector. Regulations describing these
types of retailers are found at 86 Ill. Adm. Code 150.801 and 150.802.
A retailer is required to collect Use Tax if it has a contract with a person
located in this State under which the person, for a commission or other
consideration based upon the sale of tangible personal property by the retailer,
directly or indirectly refers potential customers to the retailer by providing to the
potential customers a promotional code or other mechanism that allows the
retailer to track purchases referred by such persons. Examples of mechanisms
that allow a retailer to track purchases referred by such persons include but are
not limited to the use of a link on the person's Internet website, promotional
codes distributed through the person's hand-delivered or mailed material, and

ST 20-0022-GIL
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promotional codes distributed by the person through radio or other broadcast
media. The provisions of this paragraph apply only if the cumulative gross
receipts from sales of tangible personal property by the retailer to customers who
are referred to the retailer by all persons in this state under such contracts
exceed $10,000 during the preceding four quarterly calendar ending on the last
day of March, June, September, and December;
A retailer required to collect Use Tax if it has a contract with a person
located in this State under which:
A)

B)

the retailer sells the same or substantially similar line of products as the
person located in this state and do so using an identical or substantially
similar name, trade name, or trademark as the person located in this state;
and
the retailer provides a commission or other consideration to the person
located in this state based upon the sale of tangible personal property by
the retailer.

The provisions of this paragraph apply only if the cumulative gross receipts from
sales of tangible personal property by you to customers in this state under all such
contracts exceed $10,000 during the preceding four quarterly periods ending on
the last day of March, June, September, and December.
2)

Remote retailers without a physical presence in Illinois. In South Dakota v.
Wayfair, Inc., 585 U.S. ___ (2018), 138 S. Ct. 2080, the U.S. Supreme Court
upheld a South Dakota statute that imposed tax collection obligations on remote
retailers that met specific selling thresholds but had no physical presence in the
state. This decision abrogated the longstanding physical presence requirement
of Quill, deeming it “unsound and incorrect.” Illinois Public Act 100-587 enacted
nexus standards, effective October 1, 2018, that are virtually identical to those
upheld in Wayfair. This non-physical presence nexus we will call “Wayfair
nexus.”

Public Act 100-587 implemented the U.S. Supreme Court Wayfair nexus standards. It requires
remote retailers with no physical presence in Illinois to register and collect and remit Use Tax, as
provided below:
1)

Beginning October 1, 2018, a retailer making sales of tangible personal property
to purchasers in Illinois from outside of Illinois must register with the Department
and collect and remit Use Tax if:
a)

The cumulative gross receipts from sales of tangible personal property to
purchasers in Illinois are $100,000 or more; or

b)

The retailer enters into 200 or more separate transactions for the sale of
tangible personal property to purchasers in Illinois.

ST 20-0022-GIL
Page 5

2)

A retailer shall determine on a quarterly basis, ending on the last day of March,
June, September, and December, whether he or she meets either of the criteria
of paragraph (1) for the preceding 12-month period. If the retailer meets either of
the criteria of paragraph (1) for a 12-month period, he or she is considered a
retailer maintaining a place of business in Illinois and is required to collect and
remit the Use Tax and file returns for one year.
a)

At the end of that one-year period, the retailer shall determine whether he
or she met either of the criteria of paragraph (1) during the preceding 12month period. If the retailer met either of the criteria in paragraph (1) for
the preceding 12-month period, he or she is considered a retailer
maintaining a place of business in Illinois and is required to collect and
remit Use Tax and file returns for the subsequent year.

b)

If at the end of a one-year period a retailer that was required to collect and
remit the Use Tax determines that he or she did not meet either of the
criteria in paragraph (1) during the preceding 12-month period, the retailer
shall subsequently determine on a quarterly basis, ending on the last day
of March, June, September, and December, whether he or she meets
either of the criteria of paragraph (1) for the preceding 12-month period.

In determining whether a remote retailer meets the thresholds above, see 86 Ill. Adm. Code
150.803(c)(3)(E)(i). In addition, if a remote retailer makes exclusively nontaxable sales, he or she is
not subject to the Wayfair nexus requirements. See 86 Ill. Adm. Code 150.803(c)(2). If, however, the
remote retailer makes both taxable and nontaxable sales into Illinois, all sales are included, including
the nontaxable sales (other than sales for resale and other sales specified at 86 Ill. Adm. Code
150.803(c)(3)(E)). See 86 Ill. Adm. Code 150.803(c)(3)(E)(v).
Public Acts 101-0031 and 101-0604 enacted the Leveling the Playing Field for Illinois Retail
Act. The Act implements a series of structural changes to the Illinois sales tax law that are intended
to “level the playing field” between Illinois-based retailers and remote retailers by imposing State and
local retailers’ occupation taxes on Illinois retailers, remote retailers and marketplace facilitators alike.
Public Acts 101-0031 and 101-0604 require “remote retailers” to collect and remit State and local
retailers’ occupation taxes. Beginning January 1, 2021, you must remit Retailers’ Occupation Tax if
you are a remote retailer and either of the following thresholds was met during the preceding four
quarterly periods ending on the last day of March, June, September, and December:
1)

The cumulative gross receipts from sales of tangible personal property by you to
purchasers in Illinois was $100,000 or more; or

2)

you entered into 200 or more separate transactions for the sale of tangible personal
property to purchasers in Illinois. [35 ILCS 120/2(b)]

You are a “remote retailer” if you do not maintain within this State, directly or by a subsidiary, an
office, distribution house, sales house, warehouse or other place of business, or any agent or other
representative operating within this State under your authority or a subsidiary of yours, irrespective of
whether such place of business or agent is located here permanently or temporarily or whether you or

ST 20-0022-GIL
Page 6

your subsidiary is licensed to do business in this State. 35 ILCS 120/1. Generally, persons that
deliver their goods in company-owned trucks are not remote retailers because they have a physical
presence in the State.

The Department has filed proposed rules implementing the new requirements for remote
retailers and marketplace facilitators. The proposed rules can be found on the Department’s website.
86 Ill. Adm. Code 131.
DELIVERY CHARGES
The Department’s regulation regarding transportation and delivery charges can be found at 86
Ill. Adm. Code 130.415 and incorporates the decision rendered in Kean v. Wal-Mart Stores, Inc., 235
Ill. 2d 351, 919 N.E.2d 926 (2009). At issue in Kean was whether shipping charges for certain
Internet purchases of tangible personal property were subject to Illinois sales tax. The Court found in
Kean that an “inseparable link” existed between the sale and delivery of the merchandise plaintiffs
purchased from Wal-Mart’s Internet store. Thus, the court concluded that the outgoing transportation
and delivery charges were part of the gross receipts subject to the Retailers’ Occupation Tax. 86 Ill.
Adm. Code 130.415(b)(1)(B)(i). An inseparable link exists when (a) the transportation and delivery
charges are not separately identified to the purchaser on the contract or invoice or (b) the
transportation and delivery charges are separately identified to the purchaser on the contract or
invoice, but the seller does not offer the purchaser the option to receive the property in any manner
except by the payment of transportation and delivery charges added to the selling price of an item
(e.g., the seller does not offer the purchaser the option to pick up the tangible personal property or the
seller does not offer, or the purchaser does not qualify for, a free transportation and delivery option).
86 Ill. Adm. Code 130.415(b)(1)(B)(ii). In contrast, if the customer can purchase the tangible personal
property without payment of transportation or delivery charges to the retailer, then an inseparable link
does not exist and the delivery charges should not be included in the selling price of the tangible
personal property. 86 Ill. Adm. Code 130.415(b)(1)(B)(ii)-(iii).
CONSTRUCTION CONTRACTORS
Illinois law treats construction contractors as end users for Retailers’ Occupation and Use Tax
purposes.
A contract that provides for both the sale and installation of tangible personal property that is
permanently affixed or incorporated into a structure is considered a construction contract. The tax
liabilities regarding construction contractors in Illinois may be found at 86 Ill. Adm. Code 130.1940
and 130.2075 on the Department’s website. The term construction contractor includes general
contractors, subcontractors, and specialized contractors such as landscape contractors. In Illinois,
construction contractors are deemed end users of tangible personal property purchased for
incorporation into real property. As end users of such tangible personal property, these contractors
incur Use Tax liability for such purchases based upon their cost price of the tangible personal
property. See 86 Ill. Adm. Code 130.1940 and 86 Ill. Adm. Code 130.2075.
Therefore, any tangible personal property that a construction contractor purchases that he or
she will permanently affix to or incorporate into real property in this State will be subject to Use Tax.
If such contractors did not pay the Use Tax liability to their suppliers, those contractors must register
and self-assess their Use Tax liability and pay it directly to the Department. If the contractors have

ST 20-0022-GIL
Page 7

already paid a tax in another state regarding the purchase or use of such property, they will be
entitled to a credit against their Illinois Use Tax liability to the extent that they have paid tax that was
properly due to another state. See 86 Ill. Adm. Code 150.310. If a manufacturer is also a
construction contractor, the manufacturer will incur Use Tax on its cost price of the materials used in
making the item incorporated into the real estate.

With respect to your sales to Illinois construction contractors, you must determine, based on
the information above regarding nexus, whether your company must register with the Illinois
Department of Revenue and collect Use Tax from these customers.
SALE FOR RESALE
With respect to your sales to persons other than construction contractors or other end users in
Illinois, the following is a discussion of the Department’s rule on sales for resale.
If a seller has nexus in Illinois, in order to document the fact that its sale to a purchaser is a
sale for resale, a seller is obligated by Illinois to obtain a valid Certificate of Resale from the
purchaser. See 86 Ill. Adm. Code 130.1405. A Certificate of Resale is a statement signed by the
purchaser that the property purchased by him is purchased for purposes of resale. In addition to the
statement that the property is being purchased for resale, a Certificate of Resale must contain:
1)
2)
3)
4)
5)

The seller's name and address;
The purchaser's name and address;
A description of the items being purchased for resale;
Purchaser's signature, or the signature of an authorized employee or agent of the
purchaser, and date of signing; and
Registration Number, Resale Number, or a statement that the purchaser is an out-ofState purchaser who will sell only to purchasers located outside the State of Illinois.

The Department provides a standard form for documenting sales for resale. This form can be
obtained from the Department’s website.
The obligations of a seller with respect to accepting a Certificate of Resale were addressed in
Rock Island Tobacco and Specialty Company v. Illinois Department of Revenue, 87 Ill.App.3d 476,
409 N.E.2d 136, 42 Ill. Dec. 641 (3rd Dist. 1980). The Rock Island court held that when a retailer
obtains a proper Certificate of Resale that contains a registration or resale number that is valid on the
date it is given, the seller’s liability is at an end. If the purchaser uses that item himself or herself (i.e.,
it was not purchased for resale), the Department will proceed against the purchaser, not the seller,
provided the above stated conditions are met. The purchaser’s registration or reseller number can be
verified at the Department’s website by clicking on the “Tax registration inquiry” box.
Failure to present an active registration number or resale number and a certification to the
seller that a sale is for resale creates a presumption that a sale is not for resale. This presumption
may be rebutted by other evidence that all of the seller’s sales are sales for resale or that a particular
sale is a sale for resale. For example, other evidence that might be used to document a sale for
resale, when a registration number or resale number and certification to the seller are not provided,
could include an invoice from the purchaser to his customer showing that the item was actually

ST 20-0022-GIL
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resold, along with a statement from the purchaser explaining why it had not obtained a resale number
and certifying that the purchase was a purchase for resale in Illinois. The risk run by a seller in
accepting such other documentation and the risk run by purchasers in providing such other
documentation is that an Illinois auditor is more likely to require that more information be provided as
evidence that the particular sale was, in fact, a sale for resale.
In sum, a valid resale certificate must contain all of the information required in 86 Ill. Adm.
Code 130.1405.

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 Boggess
Associate Counsel

DMB:rkn