Illinois State Tax Rulings
Free plain-English summaries of state tax letter rulings and advisory opinions issued in Illinois, with full citations and the original source on every page.
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Did an Illinois seller that drop-shipped air purifiers from Canada have to collect Illinois tax when it kept no inventory or storefront?
Unresolved. ST 11-0017-GIL says the Department did not make nexus determinations in PLRs or GILs because an auditor was better positioned to gather the necessary facts. It gave general 2011 rules for …
Did a registered-agent service avoid Illinois income-tax nexus when it had no employees or owned property in Illinois?
IDOR did not make a definitive nexus determination because nexus was fact-specific. It said the service's paid arrangement—providing an Illinois address and using a local law firm to receive and trans…
Could an out-of-state direct seller collect and remit Illinois tax for its independent distributors under one filing arrangement?
Potentially, but only through a Department-approved agency agreement. ST 10-0108-GIL says a manufacturer, importer, or wholesaler could use Form RR-80 to assume registration, return, and Retailers' Oc…
Did Illinois decide whether a New York provider's web-based software and training were taxable or created Illinois collection duties?
Unresolved for the described web-based provider. The Department declined to determine nexus and said ASP, hosting, and web-software guidance belonged in rulemaking. Under the 2010 rules it described, …
Did Illinois decide whether an out-of-state mail-order medical-supply seller using a drop-ship distributor had nexus or qualified for reduced tax rates?
Unresolved. The Department did not determine the seller's nexus, drop-shipment obligations, or the classification of its medical supplies. It directed the seller to the general drop-shipment rule and …
Did Illinois decide whether an out-of-state eye-monitoring service with devices in patients' homes had nexus or owed tax on its monthly service fees?
Unresolved. The Department did not decide nexus, registration, or the taxability of the monthly eye-monitoring service. It outlined four Service Occupation Tax or Use Tax methods for property transfer…
Did Illinois decide whether an out-of-state seller of prostate immobilization devices had to register and collect tax, or whether the devices qualified for the medical-appliance rate?
No specific determination was made. Illinois declined to decide the seller's nexus and only outlined the 2010 nexus rules. It also explained that a medical appliance received the reduced rate only whe…
When did Illinois treat electronically delivered canned software, software licenses, and maintenance agreements as taxable?
Electronically delivered canned software was generally taxable, but a software license and its updates were not taxable if the license met every requirement in 86 Ill. Adm. Code 130.1935(a)(1), includ…
Could an out-of-state administrative-services company have Illinois income-tax nexus through an affiliate's Illinois employees?
IDOR did not decide nexus because the determination was fact-specific. It explained that a taxpayer generally had Illinois nexus when its agents were physically present in the state providing services…
Did a foreign manufacturer lose P.L. 86-272 protection when it approved its distributor's customers and used an Illinois home-office salesperson?
IDOR did not make a final nexus determination. An Illinois-resident employee's in-home-office marketing to wholesalers to encourage purchases from an unrelated distributor could be protected missionar…
Did Illinois use a 30-man-hour threshold to decide whether a reseller's in-state training or technical services defeated P.L. 86-272 protection?
No. IDOR declined to make a fact-specific nexus determination but said Illinois did not use a 30-man-hour safe harbor. Training, technical assistance, design services, accepting orders, and other acti…
Could an out-of-state contractor create Illinois income-tax nexus by hiring Illinois subcontractors for repair services?
IDOR did not decide nexus because the issue was fact-specific. It explained that a taxpayer generally had Illinois nexus when its agents were physically present in the state providing services on its …
Did selling gift codes or cards through Illinois retailers create nexus, and when was Illinois sales tax due on the gift-code transaction?
Illinois made no nexus determination for the gift-code issuer or affiliated online retailers. It did decide the transaction sequence generally: selling a card or code that only gave the buyer a right …
Did Illinois decide whether a New York maintenance contractor using Illinois subcontractors had nexus or approve its proposed prospective settlement?
No. Illinois declined to determine whether the contractor's use of in-state subcontractors created nexus, because it considered nexus too fact-specific for a letter ruling. It also did not approve the…
Did Illinois decide whether an out-of-state CAD/CAM software reseller with visits to Illinois still had nexus after closing its Illinois office?
No. Illinois declined to determine whether the CAD/CAM software, training, and services reseller still had nexus after closing its Illinois office. It supplied the 2010 nexus framework and said physic…
What documentation protected an Illinois drop shipper treating a delivery to the purchaser's Illinois customer as a sale for resale?
The Illinois-registered drop shipper had to collect tax or document the resale exemption. A complete certificate with a registration or resale number valid when given ended the seller's liability if t…
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These are official tax letter rulings and advisory opinions issued by Illinois's revenue authority in response to questions from specific taxpayers about how the tax law applies to their facts. A ruling is binding on the department only for the taxpayer who requested it and cannot be relied on by anyone else, but it is strong evidence of how the state reads the law. Every ruling above has a plain-English question and short answer, plus a link to the full original source.