What did Illinois tell a commercial vehicle-tax-guide publisher in response to its 2026 annual survey about how the state taxes vehicle sales, leases, and out-of-state deliveries?

Plain-English summary

This letter is not a taxpayer asking the Department how a tax rule applies to their situation. It is the Department's reply to a commercial publisher that maintains a reference book ("BOOK" in the redacted letter) used by government offices nationwide, listing each state's vehicle sales/use tax rules. The publisher's annual survey email pasted its own draft write-up of Illinois's rules on vehicle titling, private-party vehicle use tax, leased and rental vehicles, and asked the Department to confirm it was correct for 2026 or suggest changes.

The Department's actual response is narrow: it declined to approve or edit the publisher's text. Its "DEPARTMENT'S RESPONSE" section states plainly, "The Department cannot approve third-party publications," and directs the publisher to the Illinois Compiled Statutes, the Administrative Code, and the Department's own publications instead.

That said, the Department did not stop there -- it flagged that "recently enacted legislation may require a reevaluation" of the publisher's explanation, and went on to summarize several real, citable legal changes relevant to vehicle sales:

• Destination sourcing for out-of-state deliveries (86 Ill. Adm. Code 131.110): Since February 1, 2022, an out-of-state retailer that uses its own delivery vehicle to ship or deliver a titled/registered item into Illinois has a physical presence here. Until January 1, 2025, that only created a Use Tax collection duty. Starting January 1, 2025, it instead creates a full state-and-local Retailers' Occupation Tax obligation, sourced to the delivery address. If an Illinois purchaser instead travels out of state to pick up a titled/registered item, only Use Tax applies to the purchaser.
• Remote-seller/marketplace-facilitator nexus (35 ILCS 105/2, 105/2d, 120/2): From February 1, 2022 through December 31, 2025, a remote retailer or marketplace facilitator is "engaged in the occupation of selling at retail" in Illinois -- and owes state and local retailers' occupation tax and use tax -- once its Illinois sales reach $100,000 in gross receipts or 200 separate transactions. Beginning January 1, 2026, the 200-transaction prong is eliminated, leaving only the $100,000 gross-receipts threshold, per P.A. 104-0006.
• 15% assessment for missing sourcing data (35 ILCS 120/4, as amended by P.A. 104-0006): If a taxpayer fails to provide the information needed to determine the Illinois delivery/possession location for sales sourced under the Act, the Department will assess tax on those gross receipts at a flat 15% rate, in lieu of the usual unprocessable-return penalty.
• LLC nonresident-vehicle-exemption presumption (35 ILCS 105/3-55(h)-(h-1.5), as amended by P.A. 104-0006): The multistate exemption that normally protects nonresidents buying a vehicle in Illinois for titling elsewhere no longer automatically applies if the purchaser is an LLC with an Illinois-resident member. That is now a rebuttable presumption -- the LLC can overcome it with evidence such as insuring or garaging the vehicle outside Illinois.

What this means for you

Researchers and tax professionals searching this archive

Not every entry filed under a "GIL" ruling number is substantive guidance answering one taxpayer's question. This one began life as an annual courtesy update to a commercial tax-guide publisher and the Department's core answer was a refusal to bless the publisher's own text. Still, unlike a purely administrative letter, the Department used the reply to summarize genuine, currently-effective legal changes to Illinois vehicle sales/use tax law -- so it is worth reading for those updates even though it resolves no taxpayer's dispute.

Out-of-state vehicle dealers, lessors, and marketplace facilitators

If you ship or deliver titled or registered vehicles into Illinois using your own delivery vehicles, confirm whether you are past January 1, 2025: you may now owe destination-sourced state and local Retailers' Occupation Tax, not just Use Tax, on those sales. If you are a remote seller or marketplace facilitator, track your Illinois gross receipts against the $100,000 threshold -- the separate 200-transaction trigger disappears January 1, 2026, so having under 200 transactions will no longer keep you out of scope on its own.

LLCs buying vehicles for out-of-state titling

If your LLC has an Illinois-resident member, don't assume the multistate nonresident exemption for out-of-state vehicle titling applies automatically. The Department now presumes it does not, unless you can show facts like out-of-state insurance or garaging to rebut that presumption.

Common questions

Q: Did the Department approve or endorse the tax guide's summary of Illinois vehicle tax rules? A: No. The letter states directly that "the Department cannot approve third-party publications" and points the publisher to the actual statutes, Administrative Code, and Department publications instead.

Q: Is there any real Illinois tax law in this letter, or is it purely administrative boilerplate? A: There is real substance, unlike some other survey-reply GILs. The Department's response section describes several specific, citable statutory and regulatory changes -- destination sourcing for out-of-state vehicle deliveries, remote-seller nexus thresholds, a 15% assessment for missing sourcing data, and a new LLC-member presumption affecting the nonresident vehicle exemption.

Q: Can a taxpayer rely on this letter the way they could rely on a Private Letter Ruling? A: No. This is a General Information Letter, which by regulation is not a statement of Department policy and is not binding on the Department. It was also issued in response to a publisher's general survey, not a specific taxpayer's facts, so it carries even less weight than a typical GIL.

Citations and references

Regulations and statutes:

• 86 Ill. Adm. Code 131.110 (destination sourcing when an out-of-state retailer delivers a titled/registered item using its own vehicle)
• 35 ILCS 105/2, 35 ILCS 105/2d, 35 ILCS 120/2 (remote retailer / marketplace facilitator nexus and tax liability)
• 35 ILCS 120/4, as amended by P.A. 104-0006 (15% assessment in lieu of unprocessable-return penalty when sourcing data is missing)
• 35 ILCS 105/3-55(h)-(h-1.5), as amended by P.A. 104-0006 (LLC-member presumption against the nonresident multistate vehicle exemption)
• 35 ILCS 120/1 (definition of "selling price" for vehicles sold for long-term leasing)
• 2 Ill. Adm. Code 1200.110, 1200.120 (PLR/GIL procedures, cited generically in the boilerplate explanation of letter-ruling types)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2025.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2025/st25-0044-gil.pdf

Original ruling text

ST 25-0044-GIL

8/11/2025

MISCELLANEOUS

This letter responds to an annual survey. (This is a GIL.)

August 11, 2025
NAME
COMPANY
EMAIL
Dear NAME:
This letter is in response to your email dated July 11, 2025, 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 https://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: We are updating the information in BOOK which is used by government offices throughout the country…..would you like any changes made to the information below for 2026 or is it correct as displayed? OCCUPATION AND USE TAX/SALES TAX APPLICABLE TO TITLING — NOTE: Updates may be implemented. State tax rate is 6.25% with some locally imposed taxes. RESIDENTS who purchase a new or used vehicle from out-ofstate dealers, lending institutions, or leasing companies pay state tax of 6.25% but may include LOCAL TAXES depending on location in the state, on the net price after trade-in allowance, with CREDIT for sales or use taxes paid to other state. MILITARY PERSONNEL ARE NOT EXEMPT from sales taxes. Individuals moving into Illinois are EXEMPT from the USE TAX if vehicle was purchased AND titled in another state for at least 3 months prior to moving into Illinois. With some exceptions, NON-RESIDENTS who purchase

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a vehicle in Illinois for registration in another state are not subject to tax if not titled in Illinois. Nonresidents are not entitled to this exemption if the vehicle will be titled in a state that does not give Illinois residents an exemption on their purchases in that state of vehicles that will be titled in Illinois (i.e. if there is no reciprocal exemption). Purchaser must acquire or affix driveaway permit or purchaser must affix non-Illinois license plates to remove from Illinois. Vehicles sold to an INTERSTATE CARRIER to be used for hire, governmental body, a corporation, society, association, foundation, or institution organized and operated exclusively for charitable, religious, or educational purposes, with an active identification number issued by the Department are EXEMPT. The gift, transfer, or purchase of a vehicle from a private party other than a retailer is subject to PRIVATE PARTY VEHICLE USE TAX (Form RUT-50) on the model year if the selling price was less than $15,000, and on the selling price if $15,000 or more. The PRIVATE PARTY VEHICLE USE TAX on gifts, transfers, or purchases of motorcycles and ATVs is $25.00, and $15.00 on motor vehicles when the gift, transfer, or purchase of any motor vehicle is between spouse, parent, brother, sister, or child. Effective September 1, 2021, a
$15.00 tax liability applies when a transfer is from one spouse to the other spouse in a dissolution of marriage and the transfer is made no later than 90 days from the date of a final, non-appealable order of dissolution of marriage. The Illinois Department of Revenue collects Chicago and Cook County’s Local Vehicle Use Tax on non-retail transactions on Form RUT-50 as well. TAX EXEMPT when transferring to a surviving spouse. NOTE: There are NO USE TAXES on PRIVATE PARTY TRANSFERS on mobile homes, trailers, and snowmobiles. You need a use permit. The gift, transfer, or non-retail purchase of an airplane or boat is subject to the AIRCRAFT or WATERCRAFT USE TAX, respectively, at the rate of 6.25% with no locally imposed taxes. The tax is based on the selling price or fair market value of the airplane or boat, whichever is greater. TAX EXEMPT when purchased from a non-retailer for use by an EXEMPT ORGANIZATION or INTERSTATE CARRIER for hire, is given to a SURVIVING SPOUSE, or is used in PRODUCTION AGRICULTURE. When a customer receives more than one vehicle from a dealer for their trade-in, and no money changes hands (even trade), a completed tax form is required with every Application for Title, regardless of whether taxes are due or not. The net purchase price is defined as the actual purchase price less the trade-in value(s). If the net purchase price is zero or less, then the tax due is zero. To receive assistance with tax computation and for updates please contact the Illinois Department of Revenue at (800) 732-8866 or (217) 782-3336 or visit https://mytax.illinois.gov/_/. By mail contact Illinois Department of Revenue, Sales and Use Taxes, 101 W. Jefferson Street, Springfield, IL 62702 and on the

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Internet www.tax.illinois.gov. Also consider accessing the Leveling the Playing Field for Illinois Retail Act and 86 III. Adm. Code 131.101 et seq. OCCUPATION USE TAX/SALES TAX APPLICABLE TO REGISTRATION — None. For information please contact the Illinois Department of Revenue at (800) 732-8866 or (217) 782-3336. By mail contact Illinois Department of Revenue, Sales and Use Taxes, 101 W. Jefferson Street, Springfield, IL 62702 and on the Internet www.tax.illinois.gov LEASED VEHICLES — TAXES — All vehicles brought into Illinois to be titled and registered require an Illinois Use Tax Transaction Return (Form RUT-25) to be filed within 30 days of bringing the vehicle into the state. (Note: Taxes on vehicles purchased from an Illinois dealer are generally handled directly by the dealer.) For LEASED VEHICLES (periods of more than one year): Lessor is considered user of the vehicle and incurs Illinois Use Tax liability when vehicle is brought into the state. Effective January 1, 2015, the taxable “selling price” of motor vehicles of the first division and certain motor vehicles of the second division sold for the purpose of leasing the vehicles for a defined period of more than one year is based on the amount of the lease contract, with no credit for trade-ins. See the definition of “selling price” at 35 ILCS 120/1. The Illinois Use Tax is due upfront at the time of applying for title and registration and is based on address of lessee where vehicle will be titled and registered. The STATE TAX rate is 6.25% but may include LOCAL TAXES up to 7.25% depending on location in the state. For a sale of a leased vehicle a Bill of Sale or other specific proof of the purchase price must be submitted with the Use Tax Return. Trade-in deduction (except in cases where the taxable selling price is the amount of the lease contract) and/or credit for sales tax previously paid in another state is allowed to reduce Illinois Use Tax but only if clearly and separately stated on the Bill of Sale or other proof of purchase. For RENTAL VEHICLES (one year or less): Renter is considered user of vehicle. If renter is currently registered to collect AUTOMOBILE RENTING TAX in Illinois, vehicle is exempt from up front Illinois Use Tax, however a Use Tax Return is still required when applying for title and registration. Renter pays Automobile Renting Tax each month based on receipts received from renting. AUTOMOBILE RENTING TAX rate is 5% STATE, 1% LOCAL (if applicable), and 6% METROPOLITAN PIER AND EXPOSITION AUTHORITY (if applicable). No PERSONAL PROPERTY TAXES. MUNICIPAL OR COUNTY USE TAX on vehicles imposed by certain home rule municipalities or by Cook County, which, except for Chicago in some cases, are administered and collected by the municipality or county. For details on updates to the

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Retailers’ Occupation Tax Act and trailers please contact the state. The Illinois Department of Revenue administers collections of state taxes on vehicles. NOTE: Updates may be implemented please contact Taxpayer Assistance at (800) 732-8866 or (217) 782-3336. The issuance of titles and registrations of vehicles are administered by the Office of the Secretary of State. For more information, call (217) 782-6387 or visit https://mytax.illinois.gov/_/ DEPARTMENT’S RESPONSE: The Department cannot approve third-party publications. You should consult the Illinois Complied Statutes, Administrative Code, and Department’s publications for information on these matters. However, recently enacted legislation may require a reevaluation of your explanation of Illinois sales tax. Beginning February 1, 2022, when a retailer located outside of Illinois ships or delivers titled or registered items to purchasers in Illinois using its own delivery vehicle the delivery vehicle establishes a physical presence in Illinois and the retailer is a retailer maintaining a place of business in this State. In this situation, until January 1, 2025, the retailer incurred only a Use Tax collection obligation on the transaction. On and after January 1, 2025, such retailer incurs State and local retailers’ occupation taxes at the rate in effect at the address to which the titled or registered item is delivered (“destination sourcing”). However, for a transaction in which an Illinois purchaser travels to an out-ofState location to take possession of an item that is required to be titled or registered with an agency of the State of Illinois, only Use Tax is incurred by the Illinois purchaser. 86 Ill. Adm. Code 131.110. Beginning February 1, 2022 and until January 1, 2026, a retailer or marketplace facilitator making sales of tangible personal property, including titled and registered property, to purchasers in Illinois from outside of Illinois are engaged in the occupation of selling at retail in Illinois, for the purposes of the Retailers’ Occupation Tax Act and the Use Tax Act, if the cumulative gross receipts from sales of tangible personal property to purchasers in Illinois are $100,000 or more or if the remote retailer or marketplace facilitator enters into 200 or more separate transactions for the sale of tangible personal property to purchasers in Illinois. Such retailers are liable for all applicable State and locally imposed retailers’ occupation taxes and use tax administered by the Department on retail sales made by such retailors or marketplace facilitators. 35 ILCS 105/2, 35 ILCS 105/2d, and 35 ILCS 120/2. Beginning January 1, 2026, the 200 transaction threshold is no longer in effect. 35 ILCS 105/2, 35 ILCS 105/2d, and 35 ILCS 120/2 as amended by P.A. 1040006.

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Article 25 of Public Act 104-0006 provides that for sales sourced under the Act to the Illinois location to which the tangible personal property is shipped or delivered or at which possession is taken by the purchaser, if the taxpayer fails to provide the information, schedules, or supporting documents necessary to determine such location, the Department shall, in lieu of imposing a penalty for an unprocessable return under the Uniform Penalty and Interest Act, assess tax on the gross receipts of such sales at the rate of 15%. 35 ILCS 120/4 as amended by P.A. 104-0006. Article 35 of Public Act 104-0006 clarifies that the multistate exemption to prevent actual or likely multistate taxation of motor vehicles purchased by a nonresident does not apply if the purchaser of said motor vehicle is a limited liability company and a member of the limited liability company is a resident of Illinois. This presumption may be rebutted by other evidence, such as evidence the motor vehicle is insured for primary use at an address outside of Illinois or evidence that the motor vehicle will be permanently stored or garaged at a physical address outside Illinois. 35 ILCS 105/3-55((h)-(h-1.5)) as amended by P.A. 104-0006. I hope this information is helpful. If you require additional information, please visit our website at https://tax.illinois.gov/ or contact the Department’s Taxpayer Information Division at 800-732-8866. Very truly yours, George L. Encarnacion, Jr. Associate Counsel GLE:sce