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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Does an Illinois aircraft dealer owe Use Tax when an inventory aircraft is used for demonstrations and remains unsold for more than 18 months?
Yes. Demonstration or interim use by a retailer was exempt while the aircraft remained inventory and available for sale, but the 18-month period began when the aircraft was purchased. If it was not so…
Can a foreign visitor obtain an Illinois sales-tax refund for merchandise bought and received in Illinois before taking it abroad?
No. Foreign or domestic traveler status did not exempt merchandise delivered and used in Illinois, and mere possession in Illinois counted as use. A sale remained taxable when the buyer received the p…
How did Illinois tax a vehicle lessor leasing vehicles to the U.S. government, and what exempt-entity rule could apply?
For a true lease, the lessor generally was the end user and owed Illinois Use Tax on its cost price; Illinois imposed no sales tax on the rental receipts, so the lessee incurred no sales-tax liability…
How did Illinois treat downloaded media, downloaded canned software, and local sales-tax sourcing for online sales to Chicago customers?
Electronically downloaded music or video was not tangible personal property and was outside Illinois Retailers' Occupation and Use Tax, while canned software remained taxable even when downloaded unle…
Did an Illinois contest winner owe Use Tax on noncash prizes such as outdoor furniture and lighting?
No. ST 11-0032-GIL says the donor or contest sponsor that buys tangible personal property to give it away makes the taxable use and incurs Illinois Use Tax on its purchase price. The contest winner in…
What Illinois tax and rate applied when a construction contractor bought materials from an out-of-state vendor for permanent incorporation into real estate?
The contractor was the end user and owed Illinois Use Tax on the materials' cost price. If an out-of-state supplier did not collect the tax, the contractor had to self-assess and pay the historical 6.…
How did Illinois tax a separately billed wireless phone-replacement program, replacement phones, and customer deductibles?
The Department said the described phone-replacement program appeared to be sold separately from the phone. A separately sold maintenance agreement was not itself a taxable transaction, and the custome…
Did Illinois decide whether a satellite-TV installation company owed sales or use tax on equipment reimbursed by the service provider?
No. ST 11-0012-GIL says the Department could not determine the exact arrangement between the installation company and satellite service provider, so it gave no specific sales-tax, use-tax, or registra…
Could a bookseller use its customer's billing address to source tax when the books' delivery locations were unknown at invoicing?
The GIL did not approve billing address as a general substitute for an unknown delivery address. It said that when a retailer sells property to someone in Illinois and does not know where it will be d…
Did the statutory transfer of assets to a surviving corporation in a merger trigger Illinois sales or use tax?
No for the merger transfer described by the Department. ST 11-0006-GIL says property, debts, liabilities, and obligations vesting in the surviving corporation by operation of 805 ILCS 5/11.50 were not…
Who owed Illinois Use Tax when custom countertops were sold and installed as part of one construction contract?
The construction contractor that purchased the countertops for permanent incorporation into the home was the end user and owed Use Tax on its cost. Under ST 10-0109-GIL, the customer did not owe Use T…
Could a telecommunications provider use Illinois's manufacturing machinery exemption for equipment used to build its network?
No. ST 10-0105-GIL says Illinois did not allow the manufacturing machinery and equipment exemption for telecommunications equipment, even though another state might. The purchaser therefore had to pay…
When a restaurant gave customers complimentary meals and drinks, was Illinois Use Tax based on menu price or the restaurant's cost?
The restaurant owed Use Tax on its cost price, not the normal menu price. Taking food or drinks from inventory and giving them to a customer made the restaurant the end user. It could satisfy the tax …
Did delivering appliances into an Illinois county make an out-of-state retailer owe that county's local school sales tax?
Not merely because of delivery. The GIL said local tax was sourced to where the sale occurred, unless an out-of-state sale involved inventory located in an Illinois taxing jurisdiction. When both the …
Can Illinois body shops buy sandpaper, masking tape, paint guns, and other repair supplies tax-free for resale?
No, not when the shop uses or consumes the item instead of physically transferring it to the customer. Sandpaper, masking tape, thinners, brushes, paint guns, wrenches, and shop tools were taxable whe…
When must an Illinois retailer report later customer payments, and when does temporary storage avoid Use Tax?
A retailer filing on the gross-receipts basis reported later payments in the period received; gross-sales filers paid upfront and had to notify the Department to change methods. Temporary-storage reli…
Does donating medical instruments to an Illinois nonprofit hospital avoid Use Tax because a direct sale to the hospital might be exempt?
No. The donor was the end user and made a taxable use by giving the instruments away, regardless of the donee's entity type. Illinois said a donation differs from an exempt sale to an organization and…
When should an Illinois appliance or home-theater installer collect sales tax from the customer, and when is it a construction contractor owing Use Tax on cost?
A retail sale of an appliance or other item remained taxable when installation was separately contracted; the separate installation charge was not subject to Retailers' Occupation Tax. A single contra…
Does an Illinois seller avoid tax when an out-of-state buyer or its representative picks up goods in Illinois for immediate removal, or when the buyer claims resale?
No interstate-commerce exemption applied when the buyer or its agent took possession in Illinois, even if the goods were immediately carried out of state. The Illinois seller therefore owed tax unless…
Did Illinois approve a seller's export affidavit, and what documents supported exemptions for foreign shipments through freight forwarders or sales for resale?
Illinois did not approve the proposed Statement of Goods for Export. It said an interstate or foreign-commerce exemption could apply when the seller was obligated to deliver the property out of state …
When did Illinois exempt farm machinery and equipment, and how were farm real-estate improvements taxed?
Machinery, equipment, and replacement parts used primarily in production agriculture could be exempt when the purchaser certified the qualifying use. Ordinary real-estate improvements such as fences, …
Did a utility-maintenance company have to collect Illinois sales tax when it occasionally sold used surplus trucks, vehicles, and equipment?
Generally no, if the company bought and used the assets in its business, later sold them because they were no longer needed, and did not hold itself out as a dealer in those items. A qualifying occasi…
Did separately stating fabricated steel and erection labor turn a permanent steel-installation contract into a taxable retail sale?
No. If the fabricator also permanently affixed the structural steel to Illinois real property, the transaction remained a construction contract even when steel and erection charges were separately sta…
Did a retailer owe Illinois Use Tax when it withdrew products from resale inventory and donated them to an exempt charity?
Yes. A retailer that withdrew an item from resale inventory and gave it away became the end user and owed Use Tax on its cost price. The result did not change because the recipient was an exempt organ…
Was a medical-device seller exempt when it supplied orthopedic instrument kits at no extra charge to nonprofit hospitals?
The Department could not decide because the contracts did not clearly show whether the instrument kits were sold, loaned with ownership retained, included in the implant resale, or donated. If truly d…
Who owed Illinois tax when a janitorial company used cleaning supplies while providing services?
The janitorial provider owed Use Tax on the cost price of cleaning supplies it consumed while performing the service, and it could not buy those supplies for resale. The customer generally owed no tax…
Did Illinois sales tax apply to retail goods sold by an individual or corporation even when the business reported no profit?
For sales tax, the Department said Retailers' Occupation Tax applied to persons selling tangible personal property at retail, and the statutory definition of persons included natural individuals and c…
Who owed Illinois tax when a granite-countertop business sold countertops over the counter or installed them permanently in real property?
For an over-the-counter countertop sale, the retailer owed Retailers' Occupation Tax and collected the corresponding Use Tax from the customer; a separately contracted installation service was not tax…
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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.