Does Illinois sales and use tax apply to explosives, blasting agents, and detonator equipment a company sells and uses to break up rock for its quarrying and mining customers?

Plain-English summary

An explosives company asked the Illinois Department of Revenue whether it owes sales or use tax on the blasting agents, high explosives, boosters, and detonator equipment it uses when it blasts rock apart for mining and quarrying customers. The company sells these "Products" bundled together with its blasting "Services" (site evaluation, drilling boreholes, placing explosives, and detonating) under a single invoice that does not separately list a price for the Products.

The Department ruled in the company's favor: on these specific facts, the Products are exempt manufacturing machinery and equipment (MME) under 35 ILCS 120/2-5(14) and 86 Ill. Adm. Code 130.330. Illinois regulations specifically identify "blasting agents, high explosives, detonators, lead-in line and blasting machines" used in the extractive process of quarrying or mining as examples of exempt MME (86 Ill. Adm. Code 130.330(b)(4)). Courts have held that blasting can count as "manufacturing" when it changes rock into a materially different form -- see Nokomis Quarry Co. v. Department of Revenue, 295 Ill. App. 3d 264 (5th Dist. 1998).

Because the exemption is use-based, the Department confirmed the products only qualify if used primarily (over 50%) to produce rock/aggregate that is ultimately sold at wholesale or retail, or used in another manufacturing process ending in a sale. The company reported that the "vast majority" of the aggregate it produces is either sold to third parties or fed into further manufacturing, which satisfied that test. The ruling also addressed a separate wrinkle: about 20% of the company's Illinois sales are "product-only" sales (explosives delivered but not detonated by the company). For those single-use items sold separately, the Department said the company can give its supplier an exemption certificate stating 80% MME-exempt use and 20% resale-exempt use, but retail sales of the product alone are still subject to Retailers' Occupation Tax.

What this means for you

Mining and quarrying operators / explosives suppliers

If you sell or use blasting agents, explosives, boosters, or detonator systems in an extractive process like quarrying, this ruling supports treating that equipment as exempt manufacturing machinery and equipment -- but only if the resulting rock or aggregate is primarily (over 50%) sold at wholesale/retail or used as an ingredient in further manufacturing. If your blasted material instead goes straight into your own construction use (the ruling gives the example of paving asphalt under a construction contract), the exemption does not apply -- see Illinois Valley Paving, Inc. v. Department of Revenue, 294 Ill. App. 3d 1123 (1998).

Businesses that bundle products with services

The favorable ruling here turned on a specific invoicing structure: the company invoiced customers for "Services only" without separately listing the Products as a line item. The Department's answer does not necessarily extend to the two other invoicing methods the company originally asked about but withdrew from this narrowed request. If you bundle taxable-adjacent goods into a service charge, how you structure and describe that invoice can matter to the tax result.

Accountants and tax professionals

Note the interplay between the Retailers' Occupation Tax Act, the Use Tax Act, and the Service Occupation Tax Act here: because the Products qualify for the MME exemption, the Service Occupation Tax Act also does not reach them when transferred incident to the blasting service (86 Ill. Adm. Code 140.125(o)). For the ~20% of sales where explosives are sold as standalone products (not detonated by the company), the Department accepted a partial exemption certificate approach: 80% manufacturing-exempt, 20% resale-exempt, based on the company's own usage data. A PLR like this binds the Department only for this taxpayer and only if the facts it gave were accurate and complete, and it expires after 10 years under 2 Ill. Adm. Code 1200.110(e).

Common questions

Q: Are explosives and blasting equipment automatically exempt from Illinois sales tax?
A: No. The manufacturing machinery and equipment exemption is use-based -- the equipment must be used primarily (over 50%) to manufacture or assemble tangible personal property that is ultimately sold at wholesale or retail, or used in further manufacturing toward such a sale. Blasting agents, high explosives, detonators, lead-in line, and blasting machines are only exempt when used in that qualifying manner in an extractive process like quarrying or mining. See 86 Ill. Adm. Code 130.330(a)(3) and (b)(4).

Q: Does blasting rock actually count as "manufacturing" under Illinois law?
A: Generally, extractive activities are not considered manufacturing, but the regulation carves out an exception for blasting agents, explosives, detonators, and related equipment used in mining/quarrying extraction. Illinois courts have also held that blasting can be manufacturing when it changes rock into a materially different form with new qualities -- see Nokomis Quarry Co. v. Department of Revenue, 295 Ill. App. 3d 264 (5th Dist. 1998).

Q: What if the company just sells explosives without providing the detonation service?
A: The ruling addresses this. About 20% of the company's Illinois gross receipts are "product-only" sales where explosives are delivered but not detonated by the company. Those product-only sales are subject to Retailers' Occupation Tax unless the customer gives a proper exemption certificate. The Department accepted an 80%/20% split (manufacturing exemption / resale exemption) on the supplier-facing exemption certificate for those single-use items, based on the company's reported usage percentages.

Q: What happens to the rock/aggregate matters for the exemption -- why?
A: Because the exemption requires the manufactured product to end up sold at wholesale or retail (by the taxpayer or by whoever owns the materials) or used as an ingredient in further manufacturing toward such a sale. The company reported that the "vast majority" of aggregate it produces is sold to third parties or used in further manufacturing, which the Department found sufficient. Compare Illinois Valley Paving, Inc. v. Department of Revenue, 294 Ill. App. 3d 1123 (1998), where equipment used to produce material for the taxpayer's own construction contract (not for sale) did not qualify.

Q: Can other explosives companies rely on this ruling?
A: No. This is a Private Letter Ruling binding only on the Department with respect to the specific requesting taxpayer, and only to the extent the facts given were accurate and complete. It expires 10 years from issuance or sooner if the law or facts change. Other companies facing similar facts should seek their own guidance rather than rely directly on this PLR.

Citations and references

Statutes and regulations:

• 35 ILCS 120/2-5(14) (Retailers' Occupation Tax Act -- manufacturing machinery and equipment exemption)
• 35 ILCS 120/2-45 (definitions of "machinery" and "equipment," including chemicals acting as catalysts)
• 35 ILCS 105/3-5(18) (Use Tax Act -- parallel MME exemption)
• 86 Ill. Adm. Code 130.330 (MME exemption regulation, including (a)(3) use-based requirement, (b)(1) definition of manufacturing, and (b)(4)/(b)(5) extractive-process examples)
• 86 Ill. Adm. Code 130.101 (Retailers' Occupation Tax imposition)
• 86 Ill. Adm. Code 140.101 and 140.125(o) (Service Occupation Tax Act and application of the MME exemption to servicemen)
• 86 Ill. Adm. Code 150.101 (Use Tax imposition)
• 2 Ill. Adm. Code 1200.110 (PLR procedures and 10-year expiration)

Cases and prior guidance:

• Nokomis Quarry Co. v. Department of Revenue, 295 Ill. App. 3d 264 (5th Dist. 1998) (calculated blasting that changes limestone into materials with a different form can be manufacturing)
• Illinois Valley Paving, Inc. v. Department of Revenue, 294 Ill. App. 3d 1123 (1998) (equipment not used in a qualifying manner where output goes to the taxpayer's own construction contract)
• ST 09-0149-GIL (11/09/2009) (prior General Information Letter reaching a similar conclusion on nearly identical facts, though obsolete due to age)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2021.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2021/st21-0005-plr.pdf

Original ruling text

ST-21-0005 09/09/2021 MANUFACTURING MACHINERY AND EQUIPMENT
Under the Retailers’ Occupation Tax Act, the manufacturing machinery and
equipment exemption is available for blasting agents, high explosives,
detonators, lead-in line and blasting machines used in the extractive process of
quarrying if they are used primarily to manufacture or assemble tangible personal
property for wholesale or retail sale or lease. See 86 Ill. Adm. Code 130.330.
(This is a PLR.)
September 9, 2021
Dear NAME:
This letter is in response to your letter dated August 12, 2021, 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 COMPANY1., 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 COMPANY1., 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:
Re:

COMPANY1.
Revised Private Letter Ruling Request

Greetings:
As counsel for, and on behalf of COMPANY1, doing business
as COMPANY2, ("COMPANY2''), we, pursuant to 2 Ill. Admin. Code
§1200. 110, hereby formally request a Private Letter Ruling ("PLR")
regarding how COMPANY2 should collect Use Tax ("UT") from its
customers and remit Retailer's Occupation Tax," ("ROT") (collectively,
"sales taxes"). COMPANY2 is not currently under audit by the Illinois
Department of Revenue ("Department") regarding this issue. In

COMPANY1/NAME
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September 3, 2021
addition, COMPANY2 is not aware of any authority contrary to its views
expressed in this request. Furthermore, we ask that our client's name,
address, and any contracts or exhibits attached be kept confidential and
deleted from the publicly disseminated version of the PLR.
Please note that this request is a revision of a request submitted
in December 2020, to which the Department issued GIL ST-21-0020 on
May 25, 2021. Following informal discussions, COMPANY1 and the
Department held a phone conference in July 2021 during which the
Department asked several clarifying questions. COMPANY2 now
responds to these questions in the following, narrowed request for a
PLR.
FACTS
COMPANY2 sells explosives and provides licensed explosives
services to customers that need to break up rock masses for excavation
for mining and quarrying purposes. Illinois and other states tightly
regulate the use of high explosives, so COMPANY provides various
services in addition to the explosive materials that it sells. Each of
these are discussed in turn below.
a.

COMPANY2’S Services

Safely breaking a large rock mass into smaller pieces requires
diligent preparation and expert skill. To this end, COMPANY2’S
explosives workers evaluate each rock mass and determine the
combination of explosive materials best suited to the task. This
combination depends on environment factors such as the type, density,
moisture levels, bedding, and size of the rock masses that will be
broken up. Explosives workers also consider the area surrounding the
detonation site and weather conditions. Once the workers determine
the correct combination of materials, they prepare the rock face by
drilling "boreholes" into the rock surface at appropriate depths and
intervals. The workers then place the explosive materials into the
boreholes, set up the blast management system, and safely break up
the rock face by detonating the explosives. In some instances,
COMPANY2 may pump explosive materials into boreholes, combine
these materials with additional chemicals to form an explosive, and
then detonate using a blast management system. For purposes of this
Request, we refer to these services collectively as the "Services".
b.

COMPANY2’S Products

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The exact combination of explosive materials used varies from
job to job, but always includes some combination of blasting agents,
high explosives, boosters and a blast management system to provide
the Services (the "Products"). Each of these items plays a
complementary role in breaking up rock masses.
Chemical blasting agents are used with explosive compositions
to enhance reactivity at detonation. For example, ANFO, a common
blasting agent, is produced by mixing ammonium nitrate and fuel oil to
create an explosive. The ammonium nitrate "oxidizes" the composition,
helping to absorb the fuel oil uniformly and enhance the detonation.
Chemical blasting agents detonate and create a blast but are not
classified as an "explosive" under Illinois law.
COMPANY2’S explosives are modern, refined versions of the
what we commonly think of as "dynamite". These explosives include
Titan® and Blastex® products which produce a powerful detonation
reaction when triggered by a blast management system. COMPANY2
also uses certain "gassed" emulsions, which are pumped into a
borehole and mixed with additional chemicals to form an explosive. The
explosive(s) used depends on the conditions at the detonation site.
Some explosives, such as Titan are ideal for wet conditions, while
others, such as DYNOMIX™, are best suited for dryer conditions and soft
to medium rock types. Explosives workers may also use ·a chemical
booster to detonate the explosives.
Importantly, these Products are stable and will not detonate
without an external initiation signal from a blast management system.
COMPANY'S2 explosives workers set up these systems by connecting
the placed explosive materials to a detonator device. This can be done
using wires that will conduct an electric signal or a "lead line" that will
conduct a nonelectric signal. Once everything is safely in place, the
explosives worker triggers the detonator device and initiates the
detonation reaction.
COMPANY2’S blasting agents, high explosives, and boosters
are all single- use, while some components of the detonator delivery
systems can be used repeatedly.
c.

Transaction at Issue

COMPANY2’S original request contemplated three different
ways in which COMPANY2 invoices its customers for product-plusservice transactions. For purposes of obtaining a private letter
ruling, COMPANY2 has narrowed its request to just one transaction

COMPANY1/NAME
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September 3, 2021
type and requests the Department's guidance on the correct sales
tax treatment of Products in instances where COMPANY2 invoices
its customers for Services only and does not list the Products as a
separate line item. COMPANY2 believes that any Products used in
this situation are exempt manufacturing equipment.
ILLINOIS LAW & ANALYSIS
Illinois generally imposes ROT on all retail sales of tangible
personal property, but exempts machinery and equipment used
primarily to manufacture tangible personal property. 35 ILCS 120/25(14) and 86 Ill. Admin Code 130.330. Illinois also provides an
identical exemption from UT. 35 ILCS 105/3-5(18).
"Manufacturing", as defined in the regulation, is the
production of any article of tangible personal property, whether it be
a finished product or an article for use in manufacture of a different
article of tangible personal property. 86 Ill. Admin Code
130.330(b)(1). The production process must occur by procedures
commonly regarded as manufacturing, processing, fabricating, or
refining that changes some existing materials into a material with a
different form, use, or name. Id. This change must be substantial
and significant. Id.
"Machinery" is defined as a major mechanical machine or
major components of a machine contributing to a manufacturing or
assembling process and "equipment" is defined as an independent
device or tool separate from machinery, but essential to an integrated
manufacturing process. 35 ILCS 120/2-45. Exempt equipment
includes chemicals and chemicals acting as catalysts if they effect a
direct and immediate change upon a product being manufactured.
Id. Manufacturing machinery and equipment is exempt " whether the
materials used in the process are owned by the manufacturer or
some other person". 35 ILCS 120/2-5(14); 35 ILCS 105/3-5(18).
Although extractive industrial activities are not generally
considered to be “manufacturing", the regulation specifically states
that blasting agents, high explosives, detonators, lead-in line, and
blasting machines used the extractive processes of mining or
quarrying constitute exempt manufacturing equipment. 86 Ill.
Admin. Code 130.330(b)(4).
The Department directly addressed a nearly-identical set of
facts in a 2009 GIL, concluding that explosives and blasting
equipment used in quarries for the purpose of fragmenting rock

COMPANY1/NAME
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September 3, 2021
masses into a manageable size qualified as exempt manufacturing
machinery and equipment ("MME"). ST 09-0149-GIL (11/09/2009).
Although this GIL is obsolete due to age, the Department's
conclusion relies on the same sections of the Retailers' Occupation Tax
Act and regulation cited above, the relevant language of which has not
been amended since the Department issued the GIL.
LEGAL ANALYSIS
During the July 2021 conference, the Department asked two additional
questions to confirm whether COMPANY2’S Products are exempt:
1.

What percentage of COMPANY2’S sales are product-only
and do not include services?

Roughly 20% of COMPANY2’S Illinois gross receipts are
Product-only sales in which COMPANY2 delivers Product but does
not detonate the explosive materials. COMPANY2 charges Illinois
sales taxes for these transactions unless the customer provides a
properly executed exemption certificate. For the avoidance of doubt,
these transactions are not included in the factual situation for which
COMPANY2 seeks a ruling.
2.

What percentage of aggregate produced during the
blasting process is sold at retail or wholesale to a third
party?

Per the general manager of COMPANY2’S Illinois site, the
"vast majority" of aggregate produced from COMPANY2’S Services
is either (i) sold directly to a third party or (ii) used as an ingredient in
an additional manufacturing process. This is true regardless of how
the produced aggregate is measured, whether that be by volume, by
dollar value, or by the number of jobs/transactions.
Based on these responses, the Department should rule that
COMPANY2 is not required to remit ROT or UT on Products used in the
transaction described above. COMPANY2 uses Products to convert
masses of rock into smaller pieces of rock. The blasting agents, high
explosives, and boosters which create the detonation reaction are all
chemicals specifically designated by the Department as exempt
manufacturing equipment in certain circumstances. 35 ILCS 120/25(14) and 120/2-45; 35 ILCS 105/3-5(18); ST 09-0149-GIL (11 /09 /
2009). More specifically, these items qualify as exempt when used as a
catalyst to affect a direct and immediate change upon the product being
manufactured. 35 ILCS 120/2-45; 86 Ill. Admin. Code 130.330(b)(4).

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September 3, 2021
Illinois defines "manufacturing" broadly to include the production of any
article of tangible personal property, whether it be a finished product or
an article for use in the manufacture of a different article of tangible
personal property, and occurs when existing materials undergo
substantial and significant changes which result in a material with a
different form, use, or name. 86 Ill. Admin. Code 130.330(b)(l). The
manufactured products must be sold at wholesale or retail by either the
taxpayer claiming the exemption or the entity which owns the materials
used in the manufacturing process in order for the exemption to apply.
35 ILCS 120/2-5(14). Here, the chemicals affect a direct and
immediate change on rock masses through the detonation reaction,
beginning the process of turning large, unusable rock into manageable
aggregate which may be further processed for a variety of other
construction and landscaping uses. As stated by the Department, a
majority of this aggregate must be sold or used as an ingredient for
further manufacturing in order for the exemption to apply. In the
transaction contemplated, the vast majority of the aggregate
COMPANY2’S Products and Services produce is either (i) sold at retail
or wholesale by COMPANY2 or the entity which owns the mine or
quarry; or (ii) used as an ingredient for additional manufacturing.
Accordingly, COMPANY2 is engaged in manufacturing and these
chemicals are exempt from sales and use taxes because they are used
solely to affect this process. The detonator delivery systems
COMPANY2 uses have also been defined as exempt manufacturing
equipment in the regulation. See 86 Ill. Adm in. Code 130.330(b)(4).
This equipment is essential to the manufacturing process because it
provides the external stimulus necessary to trigger a detonation
reaction. Accordingly, COMPANY2 is engaged in a manufacturing
process and the Products used are exempt from ROT and UT.
REQUEST FOR RULING
Pursuant to 2 Ill. Admin. Code Section 1200.110, Taxpayer
respectfully requests that the Department issue a private letter ruling
declaring that:
(i)

ln the facts outlined in this Request,
COMPANY2’Ss Products are used in a
manufacturing process and are exempt from ROT
and UT.

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. A Power of
Attorney authorizing or- representation of COMPANY2 is enclosed.

COMPANY1/NAME
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September 3, 2021
DEPARTMENT’S RESPONSE:
The Retailers' Occupation Tax Act imposes a tax upon persons engaged in this
State in the business of selling tangible personal property at retail to purchasers for use
or consumption. See 86 Ill. Adm. Code 130.101. 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.
Retailers' Occupation Tax and Use Tax do not apply to sales of service. Under
the Service Occupation Tax Act, businesses providing services (i.e., servicemen) are
taxed on tangible personal property transferred as an incident to sales of service. See
86 Ill. Adm. Code 140.101. The purchase of tangible personal property that is
transferred to the service customer may result in either Service Occupation Tax liability
or Use Tax liability for the servicemen depending upon his activities. The serviceman’s
liability may be calculated in one of four ways:
1) separately stated selling price of tangible personal property transferred
incident to service;
2) 50% of the serviceman's entire bill;
3) Service Occupation Tax on the serviceman's cost price if the serviceman is a
registered de minimis serviceman; or
4) Use Tax on the serviceman's cost price if the serviceman is de minimis and is
not otherwise required to be registered under Section 2a of the Retailers'
Occupation Tax Act.
The Retailers' Occupation Tax Act does not apply to sales of machinery and
equipment used primarily (over 50%) in the manufacturing or assembling of tangible
personal property for wholesale or retail sale or lease. See 86 Ill. Adm. Code 130.330.
Accordingly, the Service Occupation Tax Act also does not apply to these sales, and the
provisions of Section 130.330 are used to determine whether a piece of equipment,
transferred incident to a sale of service, qualifies for the manufacturing machinery and
equipment exemption. See 86 Ill. Adm. Code 140.125(o).
"Manufacturing", as defined in Section 130.330, is the production of articles of
tangible personal property, whether such articles are finished products or articles for
use in the process of manufacturing or assembling different articles of tangible personal
property, by procedures commonly regarded as manufacturing, processing, fabricating,
or refining which changes some existing material or materials into a material with a
different form, use or name. These changes must result from the process in question
and be substantial and significant. See 86 Ill. Adm. Code 130.330(b)(1).

COMPANY1/NAME
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September 3, 2021
Manufacturing equipment, as noted in Section 2-45 of the Act and in Section
130.330(c)(2), includes any independent device or tool separate from any machinery
but essential to an integrated manufacturing or assembling process, including any
subunit or assembly comprising a component of any machinery or auxiliary, adjunct, or
attachment parts of machinery, such as tools, dies, jigs, fixtures, patterns, and molds,
and any parts that require periodic replacement in the course of normal operation. As
Section 2-45 of the Act notes, the exemption also includes chemicals or chemicals
acting as catalysts but only if the chemicals or chemicals acting as catalysts effect a
direct and immediate change upon a product being manufactured or assembled for sale
or lease.
Generally, the types of equipment and material that you describe in your letter
may qualify for the manufacturing machinery and equipment exemption. As Section
130.330(b) of the Department’s regulations states, a manufacturing process occurs
when an existing material is changed into a material with a different form, use or name
by a process commonly regarded as manufacturing. The extractive processes of
mining or quarrying may constitute manufacturing. See Nokomis Quarry v. Department
of Revenue, 295 Ill. App. 3d 264 (5th Dist. 1998) (holding that a calculated blasting
method that is performed with specific desired results, which changes limestone
deposits into materials with a different form, possessing new qualities or combinations,
constitutes manufacturing). Blasting agents, high explosives, detonators, lead-in line
and blasting machines are all examples of tangible personal property that is often used
in the extractive process of quarrying and may qualify for the exemption. See 86 Ill.
Adm. Code 130.330(b)(5).
The manufacturing machinery and equipment exemption is a use-based
exemption. As a result, items do not qualify in and of themselves, but only if they are
used primarily (over 50%) in a qualifying manner. See 86 Ill. Adm. Code 130.330(a)(3).
If the blast management systems, detonator delivery systems, and other manufacturing
equipment (such as drills to make boreholes) are used primarily in a qualifying manner
(used to produce rock offered for wholesale or retail sale or lease or used to produce
rock used in another manufacturing process in which the end product is offered for
wholesale or retail sale or lease), these items qualify for the manufacturing machinery
and equipment exemption. See Illinois Valley Paving, Inc. v. Department of Revenue,
294 Ill. App. 3d 1123 (1998). (If a Company’s customer subsequently uses the rock to
make and lay asphalt pursuant to a construction contract, the items are not being used
in a qualifying manner.) The blasting agents, boosters, and high explosives also
qualify for the manufacturing machinery and equipment exemption if used in a
qualifying manner.
You state in your letter that approximately 20% of the Company’s gross
receipts are product-only sales in which the Company delivers product but does not
detonate the explosive materials. For the single-use items (i.e., blasting agents,
boosters, and high explosives) and any other items sold separately, the Company may

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September 3, 2021
provide its supplier with an exemption certificate stating that 80% of these items will be
used in the manufacturing process and qualify for manufacturing machinery and
equipment exemption and 20% of the items qualify for the resale exemption. Any
tangible personal property that you sell at retail (product-only sale) is subject to
Retailers' Occupation Tax, including any applicable local taxes.
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.
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:rkn

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