Are sales of products to Amtrak exempt from Illinois sales tax, and what records does a retailer need to keep to prove it?

Plain-English summary

A distributor that had just signed a contract to supply products to Amtrak in Illinois asked the Department to formally rule (as a Private Letter Ruling) that its Amtrak sales are exempt from Illinois sales tax, and to explain what paperwork it needs to keep to prove the exemption on audit -- because Amtrak, unlike most exempt organizations, can't get a standard Illinois exemption certificate or "E-number." The Department declined to issue a PLR (existing law already resolved the question) but answered fully as a GIL.

The legal path here is federal, not a state-created exemption: federal law (49 U.S.C. § 24301(l)) directly prohibits any state or local government from taxing sales of tangible personal property to Amtrak. Illinois's own statutes and regulations simply recognize that federal preemption -- exempting a sale from Retailers' Occupation Tax and Use Tax (state AND local, including transit-authority taxes) whenever the purchaser is exempt from tax "by operation of federal law." The twist is that Amtrak legally isn't a federal government agency or instrumidentality, so it can't use the normal governmental-exemption paperwork route, and there's no process for Amtrak to get the usual Illinois exemption certificate/E-number that most exempt buyers present at the register.

Because that standard certificate route doesn't exist for Amtrak, the Department explained what a retailer needs instead: general recordkeeping rules require any retailer claiming an exempt/non-taxable sale to keep documentation good enough to identify the customer, the nature of the transaction, the date, and the amount -- and for Amtrak specifically, that means keeping the contract terms and records of the actual sales and payments to Amtrak, available to the Department on request.

What this means for you

Suppliers and distributors selling to Amtrak

Don't wait for an exemption certificate from Amtrak -- there isn't one. Instead, keep your Amtrak sales contract and detailed records of what was sold, when, and for how much, in a form you could hand to an auditor. That documentation, not a certificate, is what supports your exemption.

Retailers claiming any exemption without a standard certificate

This letter is a useful template beyond just Amtrak: whenever a buyer is legally exempt but there's no certificate-issuing process available (because the buyer doesn't fit the normal exempt-organization categories), the fallback is the general recordkeeping rule -- customer identity, transaction character, date, and amount, sufficient to establish the nontaxable nature of the sale.

Accountants and tax professionals

Note that the exemption here flows through TWO Illinois provisions working together: 35 ILCS 120/2-5(16) (Retailers' Occupation Tax) and 35 ILCS 105/3-5(39) (Use Tax), both keyed to federal-law exemption rather than a state-specific carve-out -- and the exemption explicitly extends to LOCAL retailers' occupation taxes (municipal, county, RTA, Metro East), not just the state-level tax.

Common questions

Q: Is Amtrak treated as a federal government agency for Illinois tax purposes?
A: No -- federal law specifically says Amtrak is NOT a federal department, agency, or instrumentality, which is exactly why it can't use the normal governmental exemption certificate process.

Q: If there's no exemption certificate, how does a retailer prove the sale was exempt?
A: Through its own books and records -- contract terms and transaction records (customer, character of the transaction, date, and amount) sufficient to establish the sale's nontaxable nature under 86 Ill. Adm. Code 130.805 and 130.810.

Q: Does this exemption cover local sales tax too, or just the state rate?
A: Both. The exemption extends to local retailers' occupation taxes imposed by municipalities, counties, the Regional Transportation Authority, and the Metro East Mass Transit District, not just the state-level tax.

Q: Why did the Department answer with a GIL instead of the requested PLR?
A: The Department can decline to issue a Private Letter Ruling when existing case law or regulations already resolve the question (2 Ill. Adm. Code 1200.110(a)(3)(D)) -- which it did here, since the Amtrak exemption and its documentation requirements were already established.

Q: Can I rely on this letter for my own sales to Amtrak?
A: The underlying federal exemption applies broadly by its own terms, but this GIL itself isn't binding on the Department and doesn't create a right of reliance the way a Private Letter Ruling would -- keep your own documentation and confirm specifics with a tax professional.

Citations and references

Statutes:

• 40 U.S.C. § 24301(a)(3) (Amtrak not a federal government instrumentality)
• 49 U.S.C. § 24301(l) (federal tax exemption for Amtrak, its subsidiaries, and by extension its suppliers)
• 35 ILCS 120/2-5(16) (Illinois Retailers' Occupation Tax exemption, federal-law-exempt purchasers)
• 35 ILCS 105/3-5(39) (Illinois Use Tax exemption, federal-law-exempt purchasers)

Regulations:

• 86 Ill. Adm. Code 130.120(s) (Amtrak exemption example; extension to local ROT)
• 86 Ill. Adm. Code 130.805 (recordkeeping for exempt/non-taxable receipts)
• 86 Ill. Adm. Code 130.810 (documentation required to support exemption deductions)

Source

• Landing page: Illinois 2026 Sales Tax Letter Rulings
• Original PDF: ST26-0015-GIL.pdf

Original ruling text

ST 26-0015-GIL 05/01/2026 BOOKS AND RECORDS
Retailers must maintain all records that are necessary to determine the correct tax liability
under the Retailers’ Occupation Tax Act including documentation for exempt and other
non-taxable receipts, and those records must be made available to the Department upon
request. See 86 Ill. Adm. Code 130.805. (This is a GIL).
May 1, 2026
NAME
COMPANY1
ADDRESS
Dear NAME:
This letter is in response to your letter dated March 12, 2026, 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 Department’s regulation “Public Information, Rulemaking and Organization”
provides that “[w]hether to issue a private letter ruling in response to a letter ruling request
is within the discretion of the Department. The Department will respond to all requests for
private letter rulings either by issuance of a ruling or by a letter explaining that the request
for ruling will not be honored.” 2 Ill. Adm. Code 1200.110(a)(4). Further, the Department’s
regulations regarding Private Letter Rulings provide that “[i]f there is case law or there are
regulations dispositive of the subject of the request, the Department will decline to issue a
letter ruling on the subject.” 86 Ill. Adm. Code 1200.110(a)(3)(D). The Department recently
met and determined that it would decline to issue a Private Letter Ruling in response to your
request. We hope, however, the following General Information Letter will be helpful in
addressing your questions. In your letter you have stated and made inquiry as follows:
INQUIRY:

COMPANY1/NAME
Page 2
May 1, 2026
On behalf of our client, COMPANY, ("the Company), we respectfully request
the Illinois Department of Revenue ("the Department") to issue a Private Letter
Ruling with respect to the factual situation discussed below. Our request is
pursuant to 2 Ill. Adm. Code 1200.110. We request a ruling that sales of
PRODUCT to Amtrak are exempt from the Illinois Retailers' Occupation Tax
("ROT") and the Illinois Use Tax ("UT") for both the retailer and Amtrak, and also
ask for guidance as to the documentation required to be maintained in the
retailer's books and records in order to support the exemption claim in the
event of an audit. The relevant facts are outlined below.
GENERAL INFORMATION
l.

Enclosed please find an original Form IL 2848, Power of Attorney,
authorizing COMPANY1 to represent COMPANY before the Illinois
Department of Revenue (the "Department").

2.

This Private Letter Ruling ("PLR") is not requested with regard to
hypothetical or alternative proposed transactions. This PLR is
requested to determine the ROT consequences of the actual business
practices of the Company.

3.

The Company is not currently engaged in litigation with the Department
in regard to this or any other tax matter.

4.

The Company is not currently under audit by the Department in regard
to this or any other tax matter.

5.

The Department has not previously ruled regarding this matter for the
Company. In addition, the Company has not submitted the same or
similar issue to the Department.

6.

The Company requests that certain information be redacted from the
PLR prior to dissemination to others. The Company requests that its
name, address, the names of its representatives, all references to
Exhibits, and the Exhibits themselves be redacted.

7.

The Company knows of no authority contrary to the authorities referred
to and cited below.
STATEMENT OF MATERIAL FACTS

COMPANY1/NAME
Page 3
May 1, 2026
COMPANY is a corporation qualified to do business in Illinois. It has been in
business since XXXX. COMPANY is a privately held company recognized as an
innovative leader in the distribution and marketing of PRODUCTS in many
parts of the United States. COMPANY has recently contracted with Amtrak to
supply PRODUCT to Amtrack [sic] in Illinois. Attached as Exhibits A is the
current contract with Amtrak.
Prior to finalizing the contract, COMPANY asked Amtrak to provide an
exemption letter from the Department and Amtrak has indicated that they do
not have an exemption letter. Amtrak indicated that federal law prohibits the
imposition of taxes on sales of tangible personal property to Amtrak pursuant
to 40 U.S.C. §24301(1).
Ruling Requested
On behalf of the Company, we respectfully request the Department to rule
that COMPANY sales are appropriately exempt from both the Illinois ROT and
UT for purposes of state and local taxation. We further request that the
Department identify the documentation required to be maintained in the
retailer's books and records in order to support the exemption claim in the
event of an audit.
Relevant Authorities
•

40 U.S.C. §24301(a)(3)
o
Amtrak is not a department, agency, or instrumentality of the
United States Government, and shall not be subject to title 31.

•

49 uses§ 24301(1)
o
(1) In general. Amtrak, a rail carrier subsidiary of Amtrak, and
any passenger or other customer of Amtrak or such subsidiary,
are exempt from a tax, fee, head charge, or other charge,
imposed or levied by a State, political subdivision, or local
taxing authority on Amtrak, a rail carrier subsidiary of Amtrak, or
on persons traveling in intercity rail passenger transportation or
on mail or express transportation provided by Amtrak or such a
subsidiary, or on the carriage of such persons, mail, or express,
or on the sale of any such transportation, or on the gross
receipts derived therefrom after.

•

35 ILCS 120/2-5

COMPANY1/NAME
Page 4
May 1, 2026
o

Gross receipts from proceeds from the sale, which, on and after
January 1, 2025, includes the lease, of the following tangible
personal property are exempt from the tax imposed by this Act:[
... ] (16) Tangible personal property sold to a purchaser if the
purchaser is exempt from use tax by operation of federal law.

•

35 ILCS 105/3-5
o
Use, which, on and after January 1, 2025, includes use by a
lessee, of the following tangible personal property is exempt
from the tax imposed by this Act: [ ... ] (39) Tangible personal
property purchased by a purchaser who is exempt from the tax
imposed by this Act by operation of federal law.

•

86 Ill. Admin. Code 130.120
o
The tax does not apply to gross receipts from sales, which, on
and after January 1, 2025, includes leases:[ ... ] (s) of tangible
personal property sold to a purchaser if the purchaser is exempt
from use tax by operation of federal law. This subsection (s) is
exempt from the sunset provisions of Section 2-70. [35 ILCS
120/2-5(16)]. (1) For example, federal law prohibits sellers from
charging tax to Amtrak when it purchases tangible personal
property. However, federal law does not relieve the seller of
retailers' occupation tax liability in these transactions. For that
reason, the exemption set out in this subsection is necessary to
relieve the seller of retailers' occupation tax liability when
making sales of tangible personal property to Amtrak. (2) The
nontaxable transaction set out above is also applicable to local
retailers' occupation tax imposed by municipalities, counties,
the Regional Transportation Authority, and Metro East Mass
Transit District.
Discussion and Analysis

The tax commonly known as the Illinois "sales tax" is composed of the
Retailers' Occupation Tax ("ROT"), the service occupation tax ("SOT"), the use
tax ("UT'), and the service use tax ("SUT"). The Illinois ROT Act imposes a tax
on persons engaged in the business of making retail sales of tangible personal
property. 35 Illinois Compiled Statutes 120/2 (hereinafter "ILCS"); 86 Ill. Adm.
Code § 130.10 [sic] (hereinafter "Ill. Admin. Code"). In accordance with
Section 2-10 of the Act, this tax is measured by the seller's gross receipts. 35
ILCS 120/2-10; 86 Ill. Admin. Code 130.101. The legal incidence of the ROT

COMPANY1/NAME
Page 5
May 1, 2026
falls on the seller, who effects reimbursement by collecting UT from its
customer. 86 Ill. Admin. Code 130.101(d).
Generally speaking, all sales of tangible personal property, including
PRODUCT, are presumed subject to the ROT unless it can be established that
the transfer of property is incident to a service or an exemption applies. The
seller has the burden of proving that a transaction is not taxable or otherwise
not subject to the ROT. 86 Ill. Admin. Code 130.801(f) [sic] The ROT authorizes
municipalities to impose corresponding local ROT. 65 ILCS 5/8-11-1.
Federal law provides that Amtrak is not a department, agency, or
instrumentality of the United States Government, and shall not be subject to
title 31. 40 U.S.C. §24301(a)(3). The significance of this provision is that
Amtrak cannot avail itself the exemption granted to purchases by a
governmental body as provided for in 35 ILCS 105/3-5(4) and therefore is
unable to secure an exemption letter from the Illinois Department of Revenue.
Likewise, the Company cannot avail itself of the exemption granted to sales
to a governmental body as provided for in 35 ILCS 120/2-5(11). Significantly,
this means that the exemption for sales to the federal government pursuant
to the ROT and UT does not apply to sales of PRODUCT to Amtrak.
Because federal law does provide an exemption from state and local tax on
property of Amtrak, sales of PRODUCT to Amtrak are exempt from the Illinois
Use Tax pursuant to federal law 49 USCS § 24301(l). Illinois recognizes this
exemption in 35 ILCS 105/3-5(39). The exemption is further extended to the
Retailer of PRODUCT to Amtrak pursuant to 35 ILCS 120/2-5(16) and 86 Ill.
Admin. Code 130.120(s). Unfortunately, it does not appear as though there is
a process for Amtrak to secure an exemption certificate and corresponding ENumber from the Illinois Department of Revenue (see Form ST AX-1 attached
as Exhibit B). As a result, the Company respectfully requests guidance as to
what documentation will be required to prove the exemptions listed above in
the event of an audit by the Illinois Department of Revenue.
CONCLUSION
We respectively request that the Department issue a ruling stating that sales
of PRODUCT to Amtrak are exempt from the Illinois and local ROT and UT for
both the retailer and Amtrak, and provide guidance as to the documentation
required to be maintained in the retailer's books and records in order to
support the exemption claim in the event of an audit.

COMPANY1/NAME
Page 6
May 1, 2026
If the Department cannot conclude that the sales to Amtrak are exempt from
both the ROT and UT at the state and local level for the reasons outlined
above, we respectfully request that the Department contact the undersigned
at PHONE to determine what additional information is required or to allow the
taxpayer to rescind this ruling request.
Thank-you in advance for your prompt consideration of this matter.
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. 35 ILCS 120/2. The Use Tax Act, which complements the Retailers’
Occupation 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. 35 ILCS 105/3. These
taxes comprise what is commonly known as “sales tax” in Illinois.
Federal law prohibits taxing sales of tangible personal property to Amtrak. 40 U.S.C.
§24301(l). The Retailers’ Occupation Tax does not apply to gross receipts from sales of
tangible personal property to a purchaser if that purchaser is exempt from Use Tax by
operation of federal law. 35 ILCS 120/2-5(16). Moreover, 86 Ill. Adm. Code 130.120(s)
provides that retail sales of tangible personal property to Amtrak are an example illustrating
the application of the exemption. The exemption also applies to local retailers’ occupation
taxes imposed by municipalities, counties, the Regional Transportation Authority, and the
Metro East Mass Transit District. See 86 Ill. Adm. Code 130.120(s)(2). See 35 ILCS 105/35(39) for the exemption under the Use Tax Act.
Retailers must maintain all records that are necessary to determine the correct tax
liability under the Retailers’ Occupation Tax Act, and those records must be made available
to the Department upon request. See 86 Ill. Adm. Code 130.805. Such records must include
documentation for exempt and other non-taxable receipts, such as the name of the exempt
entity, Illinois Account ID number, resale certificate, or records relating to sales in interstate
commerce. See Id. at (a)(9). To support deductions made on the tax return form, as
authorized under the Act, such records that will clearly indicate the information required for
filing returns must be kept. See 86 Ill. Adm. Code 130.810(a). Additionally, subsection (b)
requires that books, records, or other pertinent papers or documents of the taxpayer in
relation to those deductions shall be in detail sufficient to show:
1)

the name and address of the taxpayer’s customer in each such
transaction;

COMPANY1/NAME
Page 7
May 1, 2026
2)

the character of every such transaction (e.g., whether it is a sale for
resale, a sale made within the protection of the Commerce Clause of
the Constitution of the United States, an isolated or occasional sale,
etc.);

3)

the date of every such transaction;

4)

the amount of receipts realized from every such transaction; and

5)

such other information as may be necessary to establish the
nontaxable character of such transaction under the Act.

86 Ill. Adm. Code 130.810(b).
For sales made to Amtrak, information the Department would require to clearly
support the exemption would include access to the information required under the terms of
the contract with Amtrak detailing sales to and payments from Amtrak. This documentation
must be made available to the Department upon request.
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,

TG:slc

Printed by the authority of the State of Illinois
Electronic Only - One Copy
Issued 05/01/2026, Redacted 5/26/2026

Thomas Grudichak
Associate Counsel