What form or information does a manufacturer need to document a Certificate of Resale in Illinois, and can a Multijurisdictional exemption form be used instead of the state's own forms?

Plain-English summary

A manufacturer with facilities in two states wrote to the Illinois Department of Revenue about how it documents purchases it doesn't owe sales tax on. Instead of using the Department's own forms (CRT-61 or ST-587), the company had long used the Multistate Tax Commission's "Uniform Sales & Use Tax Exemption/Resale Certificate" as a blanket certificate covering both plants, and it self-assessed and paid use tax in-house on anything it ended up using rather than reselling. The company asked whether it needed a different form, whether it could pair its multijurisdictional form with a letter granting authority to use it, and what procedure it should follow when setting up a new vendor.

The Department responded with a GIL (a general pointer to its rules, not a binding ruling) explaining that Illinois does not require a particular form — what matters is that a Certificate of Resale, in whatever format, contains the elements listed in 86 Ill. Adm. Code 130.1405: the seller's name and address, the purchaser's name and address, a description of the property being bought for resale, the purchaser's (or an authorized agent's) signature and the date, and a registration number, resale number, or certification to an out-of-state purchaser. A properly completed Multijurisdictional form satisfies this as long as it includes all of that information.

The Department also explained the practical stakes: once a seller obtains a proper Certificate of Resale with a valid registration or resale number, its liability is at an end under Rock Island Tobacco and Specialty Co. v. Department of Revenue — the Department will pursue the purchaser, not the seller, if the goods are later used rather than resold. Missing a registration or resale number creates a presumption the sale wasn't for resale, though that presumption can be rebutted with other proof (such as an invoice showing the item was actually resold). The letter also confirms that a digital signature can be acceptable on a resale certificate.

What this means for you

Manufacturers and other purchasers of goods for resale

You are not locked into the Department's own CRT-61 or ST-587 forms. A Multistate Tax Commission Uniform Sales & Use Tax Exemption/Resale Certificate, or any other document, works as a Certificate of Resale as long as it contains the seller's and purchaser's name and address, a description of the property, the purchaser's signed and dated certification, and a registration or resale number. If you buy items that sometimes go into production (exempt) and sometimes get used internally (taxable), you can still self-assess and pay use tax on the taxable portion after the fact — the letter describes exactly that setup without objection, as long as items known at purchase to be for a non-exempt use are taxed at the time of purchase (unless the vendor isn't registered to collect tax).

Sellers and vendors accepting resale certificates

If you're the vendor being asked to accept a Multijurisdictional form instead of your state's standard resale certificate, the letter's message runs in your favor too: once you obtain a Certificate of Resale containing a valid registration or resale number, your liability ends under Rock Island Tobacco, and the Department will look to the purchaser (not you) if the goods are later used rather than resold. A certificate lacking a signature or registration number is riskier — expect an auditor to look behind it and ask for more proof that a given sale was truly for resale.

Accountants and tax professionals

Two practical points stand out for compliance work: first, a digital signature can satisfy the signature requirement on a Certificate of Resale, and electronic certificates are acceptable if they contain everything 86 Ill. Adm. Code 130.1405 requires. Second, a purchaser's registration or resale number can be verified directly on the Department's website through the "Tax registration inquiry" tool — useful when vetting a new vendor's or customer's certificate before relying on it.

Common questions

Q: Does Illinois require the CRT-61 or ST-587 form specifically for a Certificate of Resale?
A: No. The letter confirms that any document works as a Certificate of Resale as long as it contains the elements required by 86 Ill. Adm. Code 130.1405 — seller and purchaser name/address, a description of the property, the purchaser's signature and date, and a registration or resale number.

Q: Can a Multistate Tax Commission "Uniform Sales & Use Tax Exemption/Resale Certificate" be used in Illinois?
A: Yes, "a multi-jurisdictional form is acceptable if all the requirements for a certificate of resale are met" — meaning it still has to include everything 86 Ill. Adm. Code 130.1405 requires.

Q: What happens if I accept a resale certificate and the purchaser actually used the item instead of reselling it?
A: Under Rock Island Tobacco and Specialty Co. v. Department of Revenue, once a seller has a proper Certificate of Resale with a valid registration or resale number, the seller's liability ends; the Department pursues the purchaser instead, provided the certificate requirements were met.

Q: Can a resale certificate be signed digitally?
A: The letter states a digital signature may be acceptable, and that the Department can look at other evidence in judging whether a certificate of resale is sufficient.

Q: What if a certificate doesn't have a registration or resale number?
A: Missing a registration/resale number and certification creates a presumption the sale wasn't for resale, but that presumption can be rebutted with other evidence — for example, an invoice showing the item was actually resold, along with a statement explaining why no resale number was provided.

Citations and references

Statutes and rules:

• 86 Ill. Adm. Code 130.1405 (seller's responsibility to obtain, and required contents of, a Certificate of Resale)
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedures)
• 2 Ill. Adm. Code 1200.120 (General Information Letters are non-binding)

Case law:

• Rock Island Tobacco and Specialty Co. v. Illinois Department of Revenue, 87 Ill. App. 3d 476, 409 N.E.2d 136, 42 Ill. Dec. 641 (3rd Dist. 1980)

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/st20-0043-gil.pdf

Original ruling text

ST 20-0043-GIL 12/29/2020 SALE FOR RESALE
This letter discusses the requirements for Certificates of Resale. 86 Ill. Adm. Code 130.1405.
(This is a GIL.)

December 29, 2020
NAME
ADDRESS
Dear Xxxx:
This letter is in response to your letter received February 13, 2020, 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 the EMPLOYEE of COMPANY located in CITY, STATE. We also maintain a
facility in CITY1, STATE1. We self-assess our sales and use taxes, report and pay
them monthly on an ST-1 return online. When we purchase an item, whether its used in
production or not, we provide the vendor the attached ‘Uniform Sales & Use Tax
Exemption/Resale Certificate – Multijurisdiction’ form and self-assess this purchase inhouse. We set up this procedure with our IDOR Revenue Auditor, NAME, who has
retired within the last year.
There are a few advantages in using this form. It is used for both of our facilities, so we
can purchase the same item for either plant using this same form. Also, its set-up as a
blanket certification, so we do not need to provide certification for every purchase. In
addition, the current IDOR forms (CRT-61 & ST-587) do not really apply to our situation,
so, to use one of those forms, I would be signing what is inherently false.
From time to time, I get vendors that do not want to accept the Multijurisdictional form
we provide, which leads me to my questions. Is there a different form I should be
using? Can I provide the attached form with a letter from the state that grants authority
of its use? What procedures should I take when we are setting up a new vendor and
evaluating and reporting our purchases?

Please let me know at your convenience.
DEPARTMENT’S RESPONSE:
For general information regarding resale certificates, the Department’s regulation for resale
certificates, “Seller's Responsibility to Obtain Certificates of Resale and Requirements for Certificates
of Resale,” is found at 86 Ill. Adm. Code 130.1405. If an electronic resale certificate is kept, it should
contain all of the information required under 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. Provided that this statement is correct, the Department will
accept Certificates of Resale as prima facie proof that sales covered thereby were made for resale.
In addition to the statement, a Certificate of Resale must contain:
1) The seller's name and address;
2) the purchaser's name and address;
3) a description of the items being purchased for resale;
4) purchaser's signature, or the signature of an authorized employee or agent of the
purchaser, and date of signing;
5) Registration Number, Resale Number, or Certification of Resale to out-of-State Purchaser.
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 retailer’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
retailer, 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
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 companies in
accepting such a certification and the risk run by purchasers in providing such a certification is that an
Illinois auditor is more likely to go behind a certificate of resale that does not contain a signature and
require that more information be provided as evidence that the particular sale was, in fact, a sale for
resale.
A purchaser may provide a resale certificate at the time of purchase when the purchaser
knows it is purchasing tangible personal property for resale. A purchaser may provide a percentage
resale certificate if in fact the purchaser makes retail sales and some of the items it purchases are
truly for resale. You note in your letter that when you purchase items, whether used in production or
not, you provide the vendor with a resale certificate and self-assess Use

Tax on the items you use. If a purchaser knows at the time of purchase that items will be used for a
non-exempt purpose, it must pay tax on the items at the time of purchase unless the vendor is not
registered to collect tax.
Regarding the signature requirement, a digital signature may be acceptable. As explained
above, the law allows the Department to look at other evidence in determining the sufficiency of a
certificate of resale.
met.

A multi-jurisdictional form is acceptable if all the requirements for a certificate of resale are

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 M. Boggess
Associate Counsel
DMB:bkl