TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.101 NATURE OF THE TAX
Section 160.101 Nature of
the Tax
a) The Service Use Tax is a privilege tax imposed on the
privilege of using, in this State, tangible personal property that is received
anywhere as an incident to a purchase of service from a serviceman, as
"serviceman" is defined in the Act. However, if the serviceman would
not be taxable under the Service Occupation Tax Act [35 ILCS 115] despite all
elements of the sale of service occurring in Illinois, then the tax imposed by
the Service Use Tax Act does not apply to the use of such property in this State.
[35 ILCS 110/3-55] Transfers of tangible
personal property by de minimis servicemen who incur Use Tax as described in 86
Ill. Adm. Code 140.108 do not constitute sales of service under Section 2(g) of
the Service Occupation Tax Act. As a result, customers of such de minimis
servicemen do not incur Service Use Tax liability on such transfers.
b) On
and after January 1, 2001, prepaid telephone calling arrangements shall be
considered tangible personal property subject to the tax imposed under the Act
regardless of the form in which those arrangements may be embodied,
transmitted, or fixed by any method now known or hereafter developed. [35
ILCS 110/3] "Prepaid telephone calling arrangements" means the
right to exclusively purchase telephone or telecommunications services that
must be paid for in advance and enable the origination of one or more
intrastate, interstate, or international telephone calls or other
telecommunications using an access number, an authorization code, or both,
whether manually or electronically dialed, for which payment to a retailer must
be made in advance, provided that, unless recharged, no further service is
provided once that prepaid amount of service has been consumed. Prepaid
telephone calling arrangements include the recharge of a prepaid calling
arrangement. For purposes of this Section, "recharge" means the
purchase of additional prepaid telephone or telecommunications services whether
or not the purchaser acquires a different access number or authorization code.
For purposes of this Section, "telecommunications" means that term as
defined in Section 2 of the Telecommunications Excise Tax Act [35 ILCS
630]. "Prepaid telephone calling arrangement" does not include an
arrangement whereby the service provider reflects the amount of the purchase as
a credit on an account for a customer under an existing subscription plan.
[35 ILCS 110/3-27]
c) Evidence
that property was sold by any person for delivery to a person residing in or
engaged in business in this State shall be prima facie evidence that such
property was sold for use in this State. [35
ILCS 110/4]
d) Rate
Unless
otherwise provided in this Section 160.101, the rate of tax is 6.25% of the
serviceman's selling price of the tangible personal property transferred by the
serviceman as an incident to a sale of service, but, in no event shall the
selling price be less than the cost price of the property to the serviceman.
See 86 Ill. Adm. Code 160.115 for more information on Service Use Tax
computation.
1) Effective
January 1, 1990, and prior to July 1, 2003, sales of gasohol are subject to
tax, based upon 70% of the selling price of gasohol transferred as an incident
to a sale of service. On and after July 1, 2003 and on or before July 1, 2017,
tax shall be based upon 80% of the selling price of gasohol transferred as an
incident to the sale of service. After July 1, 2017, and prior to January 1,
2024, tax shall be based upon 100% of the selling price of gasohol transferred
as an incident to the sale of service. On and after
January 1, 2024, and prior to January 1, 2029, tax shall be based upon 90% of
the proceeds of the selling price of gasohol transferred as an incident to the
sale of service. On and after January 1, 2029, tax
shall be based upon 100% of the selling price of gasohol transferred as an
incident to the sale of service. Effective July 1, 2003, if at any
time, the tax under the Act on sales of gasohol as defined by the
Use Tax Act, is imposed at the rate of 1.25%, then the tax imposed by the
Act applies to 100% of the proceeds of sales of gasohol made during
that time. [35 ILCS 110/3-10]
2) With
respect to mid-range ethanol blends, as defined in Section 3-44.3 of the Use
Tax Act, the tax imposed by the Act applies to 80% of the selling price
of property transferred as an incident to the sale of service on or after
January 1, 2024 and on or before December 31, 2028 and 100% of the selling
price of property transferred as an incident to the sale of service after
December 31, 2028. If, at any time, however, the tax under the Act on
sales of mid-range ethanol blends is imposed at the rate of 1.25%, then the tax
imposed by the Act applies to 100% of the selling price of mid-range
ethanol blends transferred as an incident to the sale of service during that
time. [35 ILCS 110/3-10]
3) With
respect to majority blended ethanol fuel, as defined in the Use Tax Act, the
tax imposed by the Act does not apply to the selling price of property
transferred as an incident to the sale of service on or after July 1, 2003 and
on or before December 31, 2028, but applies to 100% of the selling price
thereafter. [35 ILCS 110/3-10]
4) With
respect to biodiesel blends, as defined in Section 3-42 of the
Use Tax Act, with no less than 1% and no more than 10% biodiesel, the tax
imposed by the Act applies to 80% of the selling price of property
transferred as an incident to the sale of service on or after July 1, 2003 and
on or before December 31, 2018 and 100% of the proceeds of the selling price
after December 31, 2018 and before January 1, 2024. On and after January 1,
2024 and on or before December 31, 2030, the taxation of biodiesel, renewable
diesel, as defined in Section 3-42.5 of the Use Tax Act, and biodiesel
blends shall be as provided in Section 3-5.1 of the Use Tax Act. If, at any
time, however, the tax under the Act on sales of biodiesel blends, as
defined in the Use Tax Act, with no less than 1% and no more than 10% biodiesel
is imposed at the rate of 1.25%, then the tax imposed by the Act applies
to 100% of the proceeds of sales of biodiesel blends with no less than 1% and
no more than 10% biodiesel made during that time.
5) With
respect to biodiesel as defined in Section 3-41 of the Use Tax Act, and
biodiesel blends, as defined in Section 3-42 of the Use Tax Act, with
more than 10% but no more than 99% biodiesel, the tax imposed by the Act
does not apply to the proceeds of the selling price of property transferred as
an incident to the sale of service on or after July 1, 2003 and on or before
December 31, 2023. On and after January 1, 2024 and on or before December 31,
2030, the taxation of biodiesel, renewable diesel, and biodiesel blends shall
be as provided in Section 3-5.1 of the Use Tax Act.
6) The
tax shall be imposed at the rate of 1% on food prepared for immediate
consumption and transferred incident to a sale of service subject to this Act
or the Service Occupation Tax Act by an entity licensed under the Hospital
Licensing Act, the Nursing Home Care Act, the Assisted Living and Shared
Housing Act, the ID/DD Community Care Act, the MC/DD Act, the Specialized
Mental Health Rehabilitation Act of 2013, or the Child Care Act of 1969, or an
entity that holds a permit issued pursuant to the Life Care Facilities Act.
The tax shall also be imposed at the rate of 1% on food for human consumption
that is to be consumed off the premises where it is sold (other than alcoholic
beverages, food consisting of or infused with adult use cannabis, soft drinks,
and food that has been prepared for immediate consumption and is not otherwise
included in this paragraph) and prescription and nonprescription medicines,
drugs, medical appliances, products classified as Class III medical devices by the
United States Food and Drug Administration that are used for cancer treatment
pursuant to a prescription, as well as any accessories and components related
to those devices, modifications to a motor vehicle for the purpose of rendering
it usable by a person with a disability, and insulin, blood sugar testing
materials, syringes, and needles used by human diabetics. [35 ILCS
110/3-10] See 86 Ill. Adm. Code 130.310 for the definitions of "food for
consumption that is to be consumed off the premises where sold", "candy",
soft drinks", and "prescription and non-prescription medicines and
drugs".
e) If the property that is purchased from a serviceman as an
incident to a sale of service is acquired outside Illinois and used outside
Illinois before being brought to Illinois for use here and is nevertheless
taxable under the Service Use Tax Act, the tax base on which the tax is
computed shall be reduced by an amount which represents a reasonable allowance
for depreciation for the period of such prior out-of-State use. [35 ILCS 110/3-10] A "reasonable allowance for
depreciation" is deemed to be the amount of depreciation as provided in 86 Ill. Adm. Code 150.110.
f) The date of the purchase of service is deemed to be the date
of the delivery, to the user, of the tangible personal property which the
serviceman transfers as an incident to a sale of service.
g) The Service Use Tax Act complements the Service Occupation Tax
Act. That is why the Service Use Tax is restricted to cases in which the
property is purchased from a serviceman as an incident to a sale of service.
h) If a serviceman incurring Service Occupation Tax Liability is
required or authorized to collect the Service Use Tax (see Section 160.115 for
further information), the purchaser must pay the tax to the serviceman. The
Department will presume that a serviceman is required or authorized to collect
the Service Use Tax if the serviceman bills
tax to the service customer. Stated conversely, if an invoice from a
serviceman does not show the tax, the Department will presume that the
serviceman is either registered and has included the Service Use Tax in the
selling price of the tangible personal property transferred or is a de minimis
serviceman incurring a Use Tax liability, in which case there is no collection
obligation on the part of the purchaser. This presumption will be overcome
only where the Department has evidence that the serviceman and/or the service
customer were both aware that the proper tax due was the Service Use Tax and
that no action was taken to remit the Service Use Tax by either party to the
Transaction. A serviceman need not remit that part of any Service Use Tax
collected by the serviceman to the extent that
the serviceman is required to pay and does pay
Service Occupation Tax to the Department on the
serviceman's sales of service involving the transfer by the serviceman of the same property, provided,
however, that the amount paid to the Department is equal to or exceeds the
amount collected from the service customer.
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
 | TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.105 DEFINITIONS
Section 160.105 Definitions
For definitions of terms other
than "Use", "Purchased from a Serviceman",
"Purchaser", "Sale of Service", "Selling
Price", and "Serviceman maintaining a place of business in this
State", see Section 140.201 of the Service Occupation Tax Regulations (86
Ill. Adm. Code 140.201).
"Act"
means the Service Use Tax Act [35 ILCS 110].
"Purchased from a serviceman" means the
acquisition of the ownership of, or title to, tangible personal property
through a sale of service.
"Purchaser" means any person who, through a sale
of service, acquires the ownership of, or title to, any tangible personal
property.
"Sale of service"
means any transaction except:
a retail sale of tangible
personal property taxable under the Retailers' Occupation Tax Act or under the
Use Tax Act;
a sale of tangible personal
property for the purpose of resale made in compliance with Section 2c of the
Retailers' Occupation Tax Act;
except as hereinafter provided,
a sale or transfer of tangible personal property as an incident to the
rendering of service for or by any governmental body, or for or by any
corporation, society, association, foundation or institution organized and
operated exclusively for charitable, religious or educational purposes or any
not-for-profit corporation, society, association, foundation, institution or
organization which has no compensated officers or employees and which is
organized and operated primarily for the recreation of persons 55 years of age
or older that has an active exemption identification
number issued by the Department.
A limited liability company may qualify under this exception only if the
limited liability company is organized and operated exclusively for educational
purposes;
a sale or transfer of tangible
personal property as an incident to the rendering of service for owners,
lessors, or shippers of tangible personal property which is utilized by
interstate carriers for hire for use as rolling stock moving in interstate
commerce so long as so used by interstate carriers for hire, and equipment
operated by a telecommunications provider, licensed as a common carrier by the
Federal Communications Commission, which is permanently installed in or affixed
to aircraft moving in interstate commerce;
a sale or transfer of machinery
and equipment used primarily in the process of the manufacturing or assembling,
either in an existing, an expanded or a new manufacturing facility, of tangible
personal property for wholesale or retail sale or lease. (See Section
160.110(h));
the repairing, reconditioning
or remodeling, for a common carrier by rail, of tangible personal property
which belongs to such carrier for hire, and as to which such carrier receives
the physical possession of the repaired, reconditioned or remodeled item of
tangible personal property in Illinois, and which such carrier transports, or
shares with another common carrier in the transportation of such property, out
of Illinois on a standard uniform bill of lading showing the person who
repaired, reconditioned or remodeled the property to a destination outside
Illinois, for use outside Illinois;
a sale or transfer of tangible
personal property which is produced by the seller thereof on special order in
such a way as to have made the applicable tax the Service Occupation Tax or the
Service Use Tax, rather than the Retailers' Occupation Tax or the Use Tax, for
an interstate carrier by rail which receives the physical possession of such
property in Illinois, and which transports such property, or shares with
another common carrier in the transportation of such property, out of Illinois
on a standard uniform bill of lading showing the seller of the property as the
shipper or consignor of such property to a destination outside Illinois, for
use outside Illinois;
at the election of any
serviceman not required to be otherwise registered as a retailer under Section
2a of the Retailers' Occupation Tax Act, made for each fiscal year sales of
service in which the aggregate annual cost price of tangible personal property
transferred as an incident to the sales of service is less than 35%, or 75% in
the case of servicemen transferring prescription drugs or servicemen engaged in
graphic arts production, of the aggregate annual total gross receipts from all
sales of service. The purchase of such tangible personal property by the
serviceman shall be subject to tax under the Retailers' Occupation Tax Act and
the Use Tax Act. However, if a primary serviceman who has made the election
described in this paragraph subcontracts service work to a secondary serviceman
who has also made the election described in this paragraph, the primary
serviceman does not incur a Use Tax liability if the secondary serviceman:
has paid or will pay Use Tax on
the secondary serviceman's cost price of any tangible personal property
transferred to the primary serviceman; and
certifies that fact in writing
to the primary serviceman;
tangible personal property
transferred incident to the completion of a maintenance agreement; and
the purchase, employment and
transfer of such tangible personal property as newsprint and ink for the
primary purpose of conveying news (with or without other information).
"Selling price" means the consideration for a
sale valued in money whether received in money or otherwise, including cash,
credits and service, and shall be determined without any deduction on account
of the serviceman's cost of the property sold, the cost of materials used,
labor or service cost or any other expense whatsoever, but does not include
interest or finance charges which appear as separate items on the bill of sale
or sales contract nor charges that are added to prices by sellers on account of
the seller's duty to collect, from the purchaser, the tax that is imposed by the
Act. For purposes of calculating the serviceman's tax base, the
selling price shall not be less than the cost price to the serviceman of the
tangible personal property transferred to the service customer.
"Serviceman maintaining a
place of business in this State", or any like term, means and includes any
serviceman:
having or maintaining within
this State, directly or by a subsidiary, an office, distribution house, sales
house, warehouse or other place of business, or any agent or other
representative operating within this State under the authority of the
serviceman or its subsidiary, irrespective of whether such place of business or
agent or other representative is located here permanently or temporarily, or
whether such serviceman or subsidiary is licensed to do business in this State;
having a contract with a person
located in this State under which the person, for a commission or other
consideration based on the sale of service by the serviceman, directly or
indirectly refers potential customers to the serviceman by providing to the
potential customers a promotional code or other mechanism that allows the
serviceman to track purchases referred by such persons. Examples of mechanisms
that allow the serviceman to track purchases referred by such persons include,
but are not limited to, the use of a link on the person's Internet website, promotional
codes distributed through the person's hand-delivered or mailed material, and
promotional codes distributed by the person through radio or other broadcast
media. The provisions of this paragraph shall apply only if the cumulative
gross receipts from sales of service by the serviceman to customers who are
referred to the serviceman by all persons in this State under such contracts
exceed $10,000 during the preceding 4 quarterly periods ending on the last day
of March, June, September, and December; a serviceman meeting the requirements
of this paragraph shall be presumed to be maintaining a place of business in
this State but may rebut this presumption by submitting proof that the
referrals or other activities pursued within this State by such persons were
not sufficient to meet the nexus standards of the United States Constitution
during the preceding 4 quarterly periods;
beginning July 1, 2011, having
a contract with a person located in this State under which:
the serviceman sells the same
or substantially similar line of services as the person located in this State
and does so using an identical or substantially similar name, trade name, or
trademark as the person located in this State;
the serviceman provides a
commission or other consideration to the person located in this State based
upon the sale of services by the serviceman; and
the cumulative gross receipts
from sales of service by the serviceman to customers in this State under all
such contracts exceed $10,000 during the preceding 4 quarterly periods ending
on the last day of March, June, September, and December;
soliciting orders for tangible
personal property by means of a telecommunication or television shopping system
(which utilizes toll free numbers) which is intended by the retailer to be
broadcast by cable television or other means of broadcasting, to consumers
located in this State;
pursuant to a contract with a
broadcaster or publisher located in this State, soliciting orders for tangible
personal property by means of advertising which is disseminated primarily to
consumers located in this State and only secondarily to bordering
jurisdictions;
soliciting orders for tangible
personal property by mail if the solicitations are substantial and recurring
and if the retailer benefits from any banking, financing, debt collection,
telecommunication, or marketing activities occurring in this State or benefits
from the location in this State of authorized installation, servicing, or
repair facilities;
being owned or controlled by
the same interests which own or control any retailer engaging in business in
the same or similar line of business in this State;
having a franchisee or licensee
operating under its trade name if the franchisee or licensee is required to
collect the tax under this Part;
pursuant to a contract with a
cable television operator located in this State, soliciting orders for tangible
personal property by means of advertising which is transmitted or distributed
over a cable television system in this State;
engaging in activities in
Illinois, which activities in the state in which the supply business engaging
in such activities is located would constitute maintaining a place of business
in that state; or
beginning October 1, 2018,
making sales of service to purchasers in Illinois from outside of Illinois if:
the cumulative gross receipts
from sales of service to purchasers in Illinois are $100,000 or more; or
the serviceman enters into 200
or more separate transactions for sales of service to purchasers in Illinois;
and
beginning January 1, 2020, a
marketplace facilitator, as defined in Section 2d of the Act.
"Use" means the exercise by any person of any right
or power over tangible personal property incident to the ownership of that
property, but does not include the sale or use for demonstration by the person of that property in any form as tangible
personal property in the regular course of business. "Use" does not
mean the interim use of tangible personal property nor the physical
incorporation of tangible personal property, as an ingredient or constituent,
into other tangible personal property:
which is sold in the regular course of
business; or
which the person incorporating such ingredient or
constituent therein has undertaken at the time of such purchase to cause to be
transported in interstate commerce to destinations outside the State of
Illinois. [35 ILCS 110/2]
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.110 KINDS OF USES AND USERS NOT TAXED
Section 160.110 Kinds of
Uses And Users Not Taxed
a) To prevent actual or likely multistate taxation, the tax does
not apply to the use of tangible personal property in this State under the
following circumstances:
1) the use, in this State, of property acquired outside this
State by a nonresident individual and brought into this State by the individual
for that individual's own use
while temporarily within this State or while passing through this State;
2) the use, in this State, of property that is acquired
outside this State and caused to be brought into this State by a person who has
already paid a tax in another state in respect to the sale, purchase or use of that
property, to the extent of the amount of the tax properly due and paid in the
other state;
3) the temporary storage, in this State, of property that is
acquired outside this State and that after being brought into this State and
stored here temporarily, is used solely outside this State or is physically
attached to or incorporated into other property that is used solely outside
this State, or is altered by converting, fabricating, manufacturing, printing,
processing or shaping, and, as altered, is used solely outside this State;
4) the use, in
this State, of property that is acquired outside this State and that is moved
into this State for use as rolling stock moving in interstate commerce; and
5) the use, in this State, of fuel acquired
outside this State and brought into this State in the fuel supply tanks of
locomotives engaged in freight hauling and passenger service for interstate
commerce. [35 ILCS 110/3-45]
b) Since the exemptions in subsections (a)(1) through (5)
immediately above, do not exist as far as the Service Occupation Tax is
concerned, and since it would therefore serve no purpose to say that the
exemptions exist for Service Use Tax purposes insofar as the serviceman is
merely collecting Service Use Tax to reimburse himself for Service Occupation
Tax on the same property, the Department believes that the legislative
intention in these references to the acquisition of tangible personal property
outside this State was to make the references apply to cases in which the only
tax liability that could be involved is Service Use Tax liability. Therefore,
the exemptions in subsections (a)(1) through (5) above would not apply except
when the tangible personal property is acquired outside Illinois by the
purchaser in such a way that there is no Service Occupation Tax liability on
the part of the serviceman in the same transaction.
c) The Service Use Tax does not apply to the use, in this
State, of property which is acquired outside this State by a nonresident
individual who then brings the property to this State for use here, and who has
used the property outside this State for at least 3 months before bringing the
property to this State. [35 ILCS 110/3-60]
d) Where a business that is not operated in Illinois, but is operated in another state, is moved to Illinois
or opens up an office, plant or other business facility in Illinois, that
business shall not be taxed on its use, in Illinois, of used property that the
business bought outside Illinois and used outside Illinois in the operation of the
business for at least 3 months before moving such used property to Illinois for
use in this State. [35 ILCS 110/3-60]
e) The Service Use Tax will not apply to the following
entities as long as such entities have an active exemption identification
number issued by the Department. "Sale of service" does not
include:
1) a sale or transfer of tangible personal
property as an incident to the rendering of service for or by any
corporation, society, association, foundation or institution organized and
operated exclusively for charitable, religious or educational purposes, in
accordance with the provisions of 86 Ill. Adm. Code 130.2005, which is
effective as if fully set forth in this subsection (e)(1). A limited
liability company may qualify for the exemption under this paragraph only if
the limited liability company is organized and operated exclusively for
educational purposes;
2) a sale or transfer of tangible personal
property as an incident to the rendering of service for or by any
not-for-profit corporation, society, association, foundation, institution or
organization which has no compensated officers and employees and which is
organized and operated primarily for the recreation of persons 55 years of age
or older, in accordance with the provisions of 86 Ill. Adm. Code 130.2005,
which is effective as if fully set forth in this subsection (e)(2); and
3) a sale or transfer of tangible personal
property as an incident to the rendering of service for or by any governmental
body, in accordance with the provisions of 86 Ill. Adm. Code 130.2055 and
130.2080, which are effective as if fully set forth in this subsection (e)(3).
[35 ILCS 110/2(3)]
f) The Service Use Tax does not apply
to the use of game or game birds purchased at
a "game breeding and hunting preserve area" as that term is used in
the Wildlife Code [520 ILCS 5/3.27]. [35 ILCS 110/3-5(19)]
g) Since transfers of tangible personal property by de minimis
servicemen who incur Use Tax as described in 86 Ill. Adm. Code 140.108 do not
constitute sales of service under Section 2(g) of the Service Occupation Tax
Act, customers of such de minimis servicemen do not incur Service Use Tax
liability on such transfers.
h) The
Service Use Tax does not apply to a sale or transfer of machinery and
equipment used primarily in the process of the manufacturing or assembling,
either in an existing, an expanded or a new manufacturing facility, of tangible
personal property for wholesale or retail sale or lease, whether such sale or
lease is made directly by the manufacturer or by some other person, whether the
materials used in the process are owned by the manufacturer or some other
person, or whether such sale or lease is made apart from or as an incident to
the seller's engaging in a service occupation and the applicable tax is a
Service Use Tax or Service Occupation Tax, rather than Use Tax or Retailers'
Occupation Tax, and includes production related tangible personal
property, as defined in Section 3-50 of the Use Tax Act, purchased on or after
July 1, 2019; but does not include machinery and equipment used in the
generation of electricity for wholesale or retail sale; the generation or
treatment of natural or artificial gas for wholesale or retail sale that is
delivered to customers through pipes, pipelines, or mains; or the treatment of
water for wholesale or retail sale that is delivered to customers through
pipes, pipelines, or mains.
1) The
exemption in subsection (h) also includes machinery and equipment used in
the general maintenance or repair of such exempt machinery and equipment or for
in-house manufacture of exempt machinery and equipment. On and after July 1,
2017, the exemption also includes graphic arts machinery and equipment, as
defined in 35 ILCS 110/3-5(5).
2) For
the purposes of the exemption in subsection (h), each of these terms shall
have the following meanings:
A) "manufacturing
process" shall mean the production of any article of tangible personal
property, whether such article is a finished product or an article for use in
the process of manufacturing or assembling a different article 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. In relation to a
recognized integrated business composed of a series of operations which
collectively constitute manufacturing, or individually constitute manufacturing
operations, the manufacturing process shall be deemed to commence with the
first operation or stage of production in the series, and shall not be deemed
to end until the completion of the final product in the last operation or stage
of production in the series; and further, for purposes this exemption,
photoprocessing is deemed to be a manufacturing process of tangible personal
property for wholesale or retail sale;
B) "assembling
process" shall mean the production of any article of tangible personal
property, whether such article is a finished product or an article for use in
the process of manufacturing or assembling a different article of tangible personal
property, by the combination of existing materials in a manner commonly
regarded as assembling which results in a material of a different form, use or
name;
C) "machinery"
shall mean major mechanical machines or major components of such machines contributing
to a manufacturing or assembling process; and
D) "equipment"
shall include any independent device or tool separate from any machinery but
essential to an integrated manufacturing or assembly process; including
computers used primarily in a manufacturer's computer assisted design, computer
assisted manufacturing (CAD/CAM) system; or 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; or any
parts which require periodic replacement in the course of normal operation; but
shall not include hand tools. Equipment 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 wholesale or retail sale or lease.
3) The
purchaser of such machinery and equipment who has an active resale registration
number shall furnish such number to the seller at the time of purchase. The
purchaser of such machinery and equipment and tools without an active resale
registration number shall prepare a certificate of exemption stating facts
establishing the exemption, which certificate shall be available to the Department
for inspection or audit. The Department shall prescribe the form of the
certificate. [35 ILCS 110/2]
4) For
more information on the Manufacturing, Machinery, and Equipment Exemption, see
86 Ill. Adm. Code 130.330.
i) The
Service Use Tax does not apply to farm machinery and equipment, both new and
used, including that manufactured on special order, certified by the purchaser
to be used primarily for production agriculture or State or federal
agricultural programs, including individual replacement parts for the machinery
and equipment, including machinery and equipment purchased for lease, and
including implements of husbandry defined in Section 1-130 of the Illinois
Vehicle Code, farm machinery and agricultural chemical and fertilizer
spreaders, and nurse wagons required to be registered under Section 3-809 of
the Illinois Vehicle Code, but excluding other motor vehicles required to be
registered under the Illinois Vehicle Code. Farm machinery and equipment
shall include the following:
1) horticultural
polyhouses or hoop houses used for propagating, growing, or overwintering
plants shall be considered farm machinery and equipment;
2) agricultural
chemical tender tanks and dry boxes including units sold separately from
a motor vehicle required to be licensed and units sold mounted on a motor
vehicle required to be licensed if the selling price of the tender is
separately stated;
3) precision
farming equipment that is installed or purchased to be installed on farm
machinery and equipment including, but not limited to, tractors, harvesters,
sprayers, planters, seeders, or spreaders. Precision farming equipment
includes, but is not limited to, soil testing sensors, computers, monitors,
software, global positioning and mapping systems, and other such equipment;
4) computers,
sensors, software, and related equipment used primarily in the
computer-assisted operation of production agriculture facilities, equipment,
and activities such as, but not limited to, the collection, monitoring, and
correlation of animal and crop data for the purpose of formulating animal diets
and agricultural chemicals; and
5) beginning
on January 1, 2024, farm machinery and equipment also includes electrical power
generation equipment used primarily for production agriculture. [35 ILCS
110/3-5(7)]
j) The
Service Use Tax does not apply to semen used for artificial insemination of
livestock for direct agricultural production. [35 ILCS 3-5(13)]
k) The
Service Use Tax does not apply to horses, or interests in horses, registered
with and meeting the requirements of any of the Arabian Horse Club Registry of
America, Appaloosa Horse Club, American Quarter Horse Association, United
States Trotting Association, or Jockey Club, as appropriate, used for purposes
of breeding or racing for prizes. [35 ILCS 110/3-5(14)]
l) The
Service Use Tax does not apply to computers and communications equipment
utilized for any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients purchased by a lessor who leases
the equipment, under a lease of one year or longer executed or in effect at the
time the lessor would otherwise be subject to the tax imposed by the Act,
to a hospital that has been issued an active tax exemption identification
number by the Department under Section 1g of the Retailers' Occupation Tax Act.
[35 ILCS 110/3-5(24)]
m) The
Service Use Tax does not apply to personal property purchased by a lessor
who leases the property, under a lease of one year or longer executed or in effect
at the time the lessor would otherwise be subject to the tax imposed by the
Act, to a governmental body that has been issued an active tax exemption
identification number by the Department under Section 1g of the Retailers'
Occupation Tax Act. [35 ILCS 110/3-5(25)]
n) The
Service Use Tax does not apply to tangible personal property used in the
construction or maintenance of a community water supply, as defined under
Section 3.145 of the Environmental Protection Act, that is operated by a
not-for-profit corporation that holds a valid water supply permit issued under
Title IV of the Environmental Protection Act. [35 ILCS 110/3-5(26)]
o) Beginning
January 1, 2010 and continuing through December 31, 2029, materials, parts,
equipment, components, and furnishings incorporated into or upon an aircraft as
part of the modification, refurbishment, completion, replacement, repair, or
maintenance of the aircraft. The exemption includes consumable supplies
used in the modification, refurbishment, completion, replacement, repair, and
maintenance of aircraft. However, until January 1, 2024, the exemption
excludes any materials, parts, equipment, components, and consumable supplies
used in the modification, replacement, repair, and maintenance of aircraft
engines or power plants, whether such engines or power plants are installed or
uninstalled upon any such aircraft. "Consumable supplies" include,
but are not limited to, adhesive, tape, sandpaper, general purpose lubricants,
cleaning solution, latex gloves, and protective films.
1) Beginning
January 1, 2010 and continuing through December 31, 2023, the exemption applies
only to the use of qualifying tangible personal property transferred incident
to the modification, refurbishment, completion, replacement, repair, or
maintenance of aircraft by persons who hold an Air Agency Certificate and are
empowered to operate an approved repair station by the Federal Aviation
Administration, have a Class IV Rating, and conduct operations in accordance
with Part 145 of the Federal Aviation Regulations. The exemption does not
include aircraft operated by a commercial air carrier providing scheduled
passenger air service pursuant to authority issued under Part 121 or Part 129
of the Federal Aviation Regulations.
2) From
January 1, 2024 through December 31, 2029, the exemption applies only to the
use of qualifying tangible personal property by:
A) persons
who modify, refurbish, complete, repair, replace, or maintain aircraft and who:
i) hold
an Air Agency Certificate and are empowered to operate an approved repair
station by the Federal Aviation Administration;
ii) have
a Class IV Rating; and
iii) conduct
operations in accordance with Part 145 of the Federal Aviation Regulations (14
CFR 145); and
B) persons
who engage in the modification, replacement, repair, and maintenance of
aircraft engines or power plants without regard to whether or not those persons
meet the qualifications of subsection (o)(2)(A).
3) The
exemption applies continuously from January 1, 2010 through December 31, 2024;
however, no claim for credit or refund is allowed for taxes paid as a result of
the disallowance of this exemption on or after January 1, 2015 and prior to February
5, 2020, the effective date of Public Act 101-629. [35 ILCS 110/3-5(27)]
p) Tangible
personal property purchased by a public-facilities corporation, as described in
Section 11-65-10 of the Illinois Municipal Code, for purposes of constructing
or furnishing a municipal convention hall, but only if the legal title to the
municipal convention hall is transferred to the municipality without any
further consideration by or on behalf of the municipality at the time of the
completion of the municipal convention hall or upon the retirement or
redemption of any bonds or other debt instruments issued by the
public-facilities corporation in connection with the development of the
municipal convention hall. This exemption includes existing public-facilities
corporations as provided in Section 11-65-25 of the Illinois Municipal Code. [35
ILCS 110/3-5(28)]
q) Beginning
January 1, 2017 and through December 31, 2026, menstrual pads, tampons, and
menstrual cups. [35 ILCS 10/3-5(29)]
r) The
Service Use Tax does not apply to tangible personal property transferred to a
purchaser who is exempt from the tax imposed by the Act by operation of
federal law. [35 ILCS 110/3-5(30)]
s) The
Service Use Tax does not apply to qualified tangible personal property used
in the construction or operation of a data center that has been granted a
certificate of exemption by the Department of Commerce and Economic
Opportunity, whether that tangible personal property is purchased by the owner,
operator, or tenant of the data center or by a contractor or subcontractor of
the owner, operator, or tenant. Data centers that would have qualified for a
certificate of exemption prior to January 1, 2020, had P.A. 101-31
been in effect, may apply for and obtain an exemption for subsequent purchases
of computer equipment or enabling software purchased or leased to upgrade,
supplement, or replace computer equipment or enabling software purchased or
leased in the original investment that would have qualified. For the purposes
of this subsection:
1) "Data
center" means a building or a series of buildings rehabilitated or
constructed to house working servers in one physical location or multiple sites
within the State of Illinois.
2) "Qualified
tangible personal property" means:
A) Electrical
systems and equipment; climate control and chilling equipment and systems;
mechanical systems and equipment; monitoring and secure systems; emergency
generators; hardware; computers; servers; data storage devices; network
connectivity equipment; racks; cabinets; telecommunications cabling
infrastructure; raised floor systems; peripheral components or systems;
software; mechanical, electrical, or plumbing systems; battery systems; cooling
systems and towers; temperature control systems; other cabling; and other data
center infrastructure equipment and systems necessary to operate qualified
tangible personal property, including fixtures; and component parts of any of
the foregoing, including installation, maintenance, repair, refurbishment, and
replacement of qualified tangible personal property to generate, transform,
transmit, distribute, or manage electricity necessary to operate qualified
tangible personal property; and all other tangible personal property that is
essential to the operations of a computer data center.
B) The
term "qualified tangible personal property" also includes building
materials physically incorporated into the qualifying data center.
3) To
document the exemption allowed under this subsection, the retailer must
obtain from the purchaser a copy of the certificate of eligibility issued by
the Department of Commerce and Economic Opportunity, the agency responsible
for granting certificates of exemption to qualified data centers pursuant to
Section 605-1025 of the Department of Commerce and Economic Opportunity Law of
the Civil Administrative Code of Illinois [20 ILCS 605/605-1025]. [35 ILCS
110/3-5(31)]
t) Beginning
July 1, 2022, breast pumps, breast pump collection and storage supplies, and
breast pump kits. As used in this subsection (t):
1) Breast
pump" means an electrically controlled or manually controlled pump device
designed or marketed to be used to express milk from a human breast during
lactation, including the pump device and any battery, AC adapter, or other power
supply unit that is used to power the pump device and is packaged and sold with
the pump device at the time of sale.
2) "Breast
pump collection and storage supplies" means items of tangible personal
property designed or marketed to be used in conjunction with a breast pump to
collect milk expressed from a human breast and to store collected milk until it
is ready for consumption.
3) "Breast
pump collection and storage supplies" includes, but is not limited to:
breast shields and breast shield connectors; breast pump tubes and tubing
adapters; breast pump valves and membranes; backflow protectors and backflow
protector adaptors; bottles and bottle caps specific to the operation of the
breast pump; and breast milk storage bags.
4) "Breast
pump collection and storage supplies" does not include: bottles and bottle
caps not specific to the operation of the breast pump; breast pump travel bags
and other similar carrying accessories, including ice packs, labels, and other
similar products; breast pump cleaning supplies; nursing bras, bra pads, breast
shells, and other similar products; and creams, ointments, and other similar
products that relieve breastfeeding-related symptoms or conditions of the
breasts or nipples, unless sold as part of a breast pump kit that is
pre-packaged by the breast pump manufacturer or distributor.
5) "Breast
pump kit" means a kit that: contains no more than a breast pump, breast
pump collection and storage supplies, a rechargeable battery for operating the
breast pump, a breastmilk cooler, bottle stands, ice packs, and a breast pump
carrying case; and is pre-packaged as a breast pump kit by the breast pump
manufacturer or distributor. [35 ILCS 110/3-5(32)]
u) Tangible
personal property sold by or on behalf of the State Treasurer pursuant to the
Revised Uniform Unclaimed Property Act. [35 ILCS 110/3-5(33)]
v) If
the serviceman would not be taxable under the Service Occupation Tax Act
despite all elements of his sale of service occurring in Illinois, then the tax
imposed by the Act does not apply to the use in this State of the
property transferred as a necessary incident to the sale of service. [35
ILCS 110/3-55]
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.111 COMMERCIAL DISTRIBUTION FEE SALES TAX EXEMPTION (REPEALED)
Section 160.111 Commercial Distribution Fee Sales Tax
Exemption (Repealed)
(Source: Repealed at 48 Ill.
Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.115 COLLECTION OF THE SERVICE USE TAX BY SERVICEMEN
Section 160.115 Collection
Of The Service Use Tax By Servicemen
a) Servicemen who incur and remit Service Occupation Tax to the
Department; or servicemen who come within the definition of a "Serviceman
maintaining a place of business in this State" (as set out in Section
160.105 of this Part and in Section 2 of the Service Use Tax Act) and who have
a Service Use Tax collection obligation; or other servicemen who are authorized
to voluntarily collect the Service Use Tax, shall collect the tax from users at the time of purchase. The Service Use Tax shall
be based on the selling price of the tangible personal property transferred
incident to the sale of service if stated separately on the invoice from the
serviceman. If not stated separately, then the tax will be imposed on 50% of
the entire billing from the serviceman. However, the Service Use Tax which is
collected by a de minimis serviceman who incurs Service Occupation Tax on the serviceman's cost price of tangible personal
property transferred incident to service, as provided at 86 Ill. Adm. Code
140.109, shall be based upon the serviceman's
cost price of tangible personal property transferred incident to the serviceman's sales of service. For purposes of
this Part, "cost price" is defined as provided in 86 Ill. Adm. Code
140.201. When a
serviceman contracts to design, develop and produce special order machinery or
equipment, the tax imposed by the Act
shall be based on the serviceman's cost price of the tangible personal property
transferred incident to the completion of the contract. [35 ILCS 110/3d]
b) Although not required unless requested by the service
customer, the Service Use Tax may be separately stated as a distinct item on
the service bill. [35 ILCS 110/3a]
c) If the serviceman collects the Service Use Tax as a separate
item, he shall use the tax collection brackets prescribed in the Use Tax rules
(86 Ill. Adm. Code 150.Table A) with respect to the 6.25% rate when it is
impracticable to collect exactly 6.25% of the selling or cost price.
d) Every
serviceman maintaining a place of business in this State and making sales of
service involving the incidental transfer of property for use in this State
(whether those sales are made within or without this State) shall, when
collecting the tax as provided in Section 3-40 of the Act from the purchaser, give to the purchaser
(if demanded by the purchaser) a receipt for the tax in the manner and form
prescribed by the Department. The receipt shall be sufficient to relieve the
purchaser from further liability for the tax to which the receipt may refer. [35
ILCS 110/5]
e) If a
serviceman collects Service Use Tax measured by receipts or selling prices that
are not subject to Service Use Tax, or if a serviceman, in collecting Service
Use Tax measured by receipts or selling prices that are subject to tax under the Act, collects more from the purchaser than the
required amount of the Service Use Tax on the transaction, the purchaser shall
have a legal right to claim a refund of that amount from the serviceman. If,
however, that amount is not refunded to the purchaser for any reason, the
serviceman is liable to pay that amount to the Department. [35 ILCS
110/3-40]
f) Any serviceman required to
collect the tax imposed by the Act shall be liable to the Department for
the tax, whether or not the tax has been collected by the serviceman, except
when the serviceman is relieved of the duty of remitting the tax to the
Department by virtue of having paid a tax imposed by the Service Occupation Tax
Act upon the serviceman's sale of service involving the incidental
transfer by the serviceman of the same property. To the extent that a
serviceman required to collect the tax imposed by the Act has actually
collected that tax, the tax is held in trust for the benefit of the Department.
[35 ILCS 110/8]
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.116 PERSONS WHO LEASE TANGIBLE PERSONAL PROPERTY TO EXEMPT HOSPITALS
Section 160.116 Persons Who
Lease Tangible Personal Property to Exempt Hospitals
a) Effective January 1, 1996, through
December 31, 2000, and on and after August 2, 2001, computers and
communications equipment utilized for any hospital purpose and equipment used in the diagnosis,
analysis, or treatment of hospital patients that
are transferred incident to the sale of service to persons who lease those
items to exempt hospitals are not subject to Service Use Tax providing:
1) the computers and communications equipment described above
must be leased to a tax-exempt hospital under
a lease that has been executed or is in effect at the time of purchase;
2) the lease must be for a period of one year or longer; and
3) the lease must be to a hospital that has an active tax
exemption identification number issued by the Department under Section 1g of
the Retailers' Occupation Tax Act (see 86 Ill. Adm. Code 130.2007).
b) The service customer must provide the serviceman a certification that contains the following information:
1) the serviceman's name and address;
2) the service customer's name and address;
3) a description of the tangible personal property;
4) the service customer's signature and date of signing;
5) the name and address of the hospital and its tax exemption
identification number issued by the Department;
6) the date the lease was executed and the lease period; and
7) a statement
that the computer or other communications equipment or equipment used in the diagnosis, analysis, or treatment of hospital
patients is for lease to a tax-exempt hospital under a lease for
a period of one year or longer executed or in effect at the time of the purchase.
c) For purposes of this Section, "hospital patients"
means persons who seek any form of medical care including, but not limited to,
medical treatment, testing, diagnosis, or therapy at a hospital or at another
location under the control and supervision of a hospital. For example, persons
who are sent by doctors for X-rays or other tests at qualifying hospitals, even
though those persons are not admitted to those hospitals, are considered
hospital patients.
d) If the equipment
is leased in a manner that does not qualify for this exemption or is used in
any other nonexempt manner, the lessor shall be liable for the tax imposed
under the Act
or the Use Tax Act, as the case may be, based on the fair market value of the
property at the time the nonqualifying use occurs.
e) No
lessor shall collect or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by the Act or the
Use Tax Act, as the case may be, if the tax has not been paid by the lessor.
If a lessor improperly collects any such amount from the lessee, the lessee
shall have a legal right to claim a refund of that amount from the lessor. If,
however, that amount is not refunded to the lessee for any reason, the lessor
is liable to pay that amount to the Department. [35 ILCS 110/3-5(15) and
3-5(24)]
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.117 PERSONS WHO LEASE TANGIBLE PERSONAL PROPERTY TO GOVERNMENTAL BODIES
Section 160.117 Persons Who
Lease Tangible Personal Property to Governmental Bodies
a) Effective January 1, 1996, through
December 31, 2000, and on and after August 2, 2001, tangible personal
property transferred incident to a sale of service to a lessor who leases that
property to a governmental body is not subject to Service Use Tax provided
that:
1) the property must be leased to a governmental body under a
lease that has been executed or is in effect at the time of purchase;
2) the lease must be for a period of one year or longer; and
3) the lease must be to a governmental body that has an active
tax exemption identification number issued by the Department under Section 1g
of the Retailers' Occupation Tax Act (see 86 Ill. Adm. Code 130.2007).
b) When this exemption may be properly claimed, the service
customer must give the serviceman a certification that
contains the following information:
1) the serviceman's name and address;
2) the service customer's name and address;
3) a description of the tangible personal property being
purchased;
4) the service customer's signature and date of signing;
5) the name of the governmental body and its tax exemption identification
number issued by the Department;
6) the date the lease was executed and the lease period; and
7) a statement that the property is for
a lease to a governmental body under a lease for a period of one year or longer
executed or in effect at the time of the purchase.
c) If the property
is leased in a manner that does not qualify for this exemption or is used in
any other nonexempt manner, the lessor shall be liable for the tax imposed
under the Act
or the Use Tax Act, as the case may be, based on the fair market value of the
property at the time the nonqualifying use occurs.
d) No lessor
shall collect or attempt to collect an amount (however designated) that
purports to reimburse that lessor for the tax imposed by the Act or the Use Tax Act, as the case may
be, if the tax has not been paid by the lessor. If a lessor improperly
collects any such amount from the lessee, the lessee shall have a legal right
to claim a refund of that amount from the lessor. If, however, that amount is
not refunded to the lessee for any reason, the lessor is liable to pay that
amount to the Department. [35 ILCS 110/3-5(16) and 3-5(25)]
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.120 RECEIPT FOR THE TAX (REPEALED)
Section 160.120 Receipt For
The Tax (Repealed)
(Source: Repealed at 25 Ill. Reg. 5015, effective March 23, 2001)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.125 SPECIAL INFORMATION FOR USERS
Section 160.125 Special
Information For Users
a) Purchasers incurring Service Use Tax liability that is not
paid to a serviceman authorized or required to collect the tax (see Section
160.101(g) of this Part) shall pay the Service Use Tax directly to the
Department. Such remittance to the Department shall be made by the last day of
the month following the month in which the user makes any payment to the
serviceman and shall be accompanied by a return which shall be made on a return
form that the Department will provide on request. On receipt of the tax, the
Department will provide the user with a receipt if demanded by the user, but
not otherwise.
b) In general, the provisions of Subpart D of the Service
Occupation Tax Regulations (86 Ill. Adm. Code 140) (including the
authorization, under some circumstances, for quarterly tax returns and annual
tax returns, but not the requirement of an annual information return) shall
apply to returns of registered users under the Service Use Tax Act.
c) Also, registered users under the Service Use Tax Act are subject
to the provisions of Subpart F of the Service Occupation Tax Regulations.
d) If the user who must remit the Service Use Tax to the
Department is registered either under the Retailers' Occupation Tax Act [35
ILCS 120], the Use Tax Act [35 ILCS 105], the Service Occupation Tax Act [35
ILCS 115], and the Service Use Tax Act [35 ILCS 110], the
user shall report the Service Use Tax information in the space provided
for that purpose on the return which the user
files under any such registration.
e) Since transfers of tangible personal property by de minimis
servicemen who incur Use Tax as described in 86 Ill. Adm. Code 140.108 do not
constitute sale of service under Section 2(g) of the Service Occupation Tax
Act, customers of such de minimis servicemen do not incur Service Use Tax
liability on such transfers.
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.130 REGISTRATION OF SERVICEMEN
Section 160.130 Registration
Of Servicemen
a) A serviceman
maintaining a place of business in this State, if required to register under
the Retailers' Occupation Tax Act, or under the Use Tax Act, or under the
Service Occupation Tax Act, need not obtain an additional Certificate of
Registration under this Act, but shall be deemed to be sufficiently registered
by virtue of the
serviceman being registered under the Retailers' Occupation Tax Act, or
under the Use Tax Act, or under the Service Occupation Tax Act. [35 ILCS
110/6] However, any out-of-State serviceman maintaining a place of
business in this State, if not required to register under
the Retailers' Occupation Tax Act, the Use Tax Act or the Service Occupation
Tax Act, must apply to the Department for a Certificate of Registration on an
application form furnished by the Department.
1) Each such application shall
be signed and verified and shall state:
A) the name and social security
number of the applicant;
B) the address of the
applicant's principal place of business;
C) the address of the principal
place of business from which he engages in the business of selling tangible
personal property at retail in this State and the addresses of all other places
of business, if any (enumerating such addresses, if any, in a separate list
attached to and made a part of the application), from which he engages in the
business of selling tangible personal property at retail in this State;
D) the name and address of the
person or persons who will be responsible for filing returns and payment of
taxes due under this Act;
E) in the case of a publicly
traded corporation, the name and title of the Chief Financial Officer, Chief
Operating Officer, and any other officer or employee with responsibility for
preparing tax returns under the Act, and, in the case of all other
corporations, the name, title, and social security number of each corporate
officer;
F) in the case of a limited
liability company, the name, social security number, and FEIN number of each
manager and member; and
G) such other information as the
Department may reasonably require on form furnished by the Department.
2) The application shall
contain an acceptance of responsibility signed by the person or persons who
will be responsible for filing returns and payment of the taxes due under the
Act. [35 ILCS 120/2a]
3) In general, the provisions of Subpart G of the
Retailers' Occupation Tax Regulations (86 Ill. Adm. Code 130) shall apply to
such registration under the Service Use Tax Act.
b) For a definition of "Serviceman maintaining a place of
business in this State", see Section 160.105 of this Part.
c) Every out-of-State serviceman maintaining a place of business
in this State must register and collect Service Use Tax from service customers,
unless such serviceman is authorized to pay Use Tax as provided in 86 Ill. Adm.
Code 140.108.
d) The Department may, in its discretion, upon application,
authorize the collection of the Service Use Tax by any serviceman not
maintaining a place of business within this State within the meaning of the
Service Use Tax Act and Section 160.105 of this Part. Such serviceman shall be
issued, without charge, a permit to collect such tax. When so authorized, it
shall be the duty of such serviceman to collect the tax upon all tangible
personal property sold, to the serviceman's
knowledge, as an incident to a sale of service for use within this State, in
the same manner and subject to the same requirements, as a serviceman
maintaining a place of business within this State. [35
ILCS 110/7]
e) No
Certificate of Registration shall be issued to any person who is in default to
the State of Illinois for moneys due hereunder. [35 ILCS 110/6]
f) The
Department has the power, after notice and an opportunity for a hearing, to
revoke a certificate of registration issued by the Department if the holder of
the certificate of registration fails to file a return, or to pay the tax, fee,
penalty, or interest shown in a filed return, or to pay any final assessment of
tax, fee, penalty, or interest, as required by the Act or any other tax
or fee Act administered by the Department.
g) The
Department may refuse to issue, reissue, or renew a certificate of registration
if a person who is named as the owner, a partner, a corporate officer, or, in
the case of a limited liability company, a manager or member, of the applicant
on the application for the certificate of registration is or has been named as
the owner, a partner, a corporate officer, or in the case of a limited
liability company, a manager or member, on the application for the certificate
of registration of a person that is in default for moneys due under the Act
or any other tax or fee Act administered by the Department. For purposes of
this subsection, "person" means any natural individual, firm,
partnership, association, joint stock company, joint adventure, public or
private corporation, limited liability company, or a receiver, executor,
trustee, guardian or other representative appointed by order of any court. [20
ILCS 2505/2505/380]
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
ADMINISTRATIVE CODE TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160 SERVICE USE TAX
SECTION 160.135 SERVICEMAN'S RETURN
Section 160.135 Serviceman's
Return
a) Every serviceman required or authorized to collect the Service
Use Tax must file a return each month by the twentieth day of the month
covering the preceding calendar month except when the serviceman is authorized
to file tax returns on a quarterly or annual basis as hereinafter provided.
The Department has combined the Service Use Tax return form, the Service
Occupation Tax return form and the Use Tax return with the Retailers'
Occupation Tax return form. On
and after January 1, 2018, with respect to servicemen whose annual gross
receipts average $20,000 or more, all returns required to be filed pursuant to the Act shall be filed
electronically. Servicemen who demonstrate that they do not have access to the
Internet or demonstrate hardship in filing electronically may petition the
Department to waive the electronic filing requirement. Beginning on October 1,
2002, a taxpayer who has a tax liability in the amount set forth in subsection
(b) of Section 2505-210 of the Department of Revenue Law shall make all
payments required by rules of the Department by electronic funds transfer. [35
ILCS 110/9]
b) Where the sale of service is made under a conditional sales
contract, or under any other form of sale wherein the payment of the principal
sum, or a part thereof, is extended beyond the close of the return period for
which the return is filed, the serviceman, in collecting the tax, may collect,
for each return period, only the tax applicable to that part of the selling
price actually received during such return period.
c) In the serviceman's regular
return, each serviceman shall also include the total amount of Service Use Tax
due upon the selling price or cost price of tangible personal property
transferred by him as an incident to a sale of service. Such serviceman shall
remit the amount of such tax to the Department when filing such return.
d) In general, the provisions of Subpart D of the Service
Occupation Tax (86 Ill. Adm. Code 140) (including the provisions pertaining to
quarterly and annual tax returns, but not the provisions pertaining to annual
information returns) shall apply to returns of servicemen under the Service Use
Tax Act.
e) The serviceman who collects the Service Use Tax from a
purchaser and who remits, as Service Use Tax, the amount so collected is
allowed to deduct the 1.75%, not to exceed $1,000 per
month beginning on January 1, 2025, collection allowance or $5 per
calendar year, whichever is greater, in the same manner as is allowed under 86 Ill. Adm. Code 150.905.
The discount under this subsection
is not allowed for the 1.25% portion of taxes paid on aviation fuel that is
subject to the revenue use requirements of 49 U.S.C. 47107(b) and 49 U.S.C.
47133. The discount allowed under
this subsection is allowed
only for returns that are filed in the manner required by the Act.
[35 ILCS 110/9] Where a purchaser from a serviceman, however, does not
pay the Service Use Tax to the serviceman, but pays it to the Department, that
purchaser is not allowed to deduct any amount as a collection allowance.
(Source:
Amended at 49 Ill. Reg. 10825, effective August 8, 2025)
|
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.136 BOOKS AND RECORDS
Section
160.136 Books and Records
a) Every serviceman required or authorized
to collect taxes under the Act and every user who is subject to the tax
imposed by the Act shall keep such records, receipts, invoices and other
pertinent books, documents, memoranda and papers as the Department shall
require, in such form as the Department shall require. For purposes of this
Part, "records" means all data maintained by the taxpayer,
including data on paper, microfilm, microfiche or any type of machine-sensible
data compilation. For the purpose of administering and enforcing the
provisions of the Act, the Department, or any officer or employee
of the Department designated, in writing, by the Director of the Department,
may hold investigations and hearings concerning any matters covered by the
Act and not otherwise delegated to the Illinois Independent Tax Tribunal and
may examine any relevant books, papers, records, documents or memoranda of any
serviceman or any taxable purchaser for use hereunder, and may require the
attendance of the person or any officer or employee of the person, or of any
person having knowledge of the facts, and may take testimony and require proof
for its information.
b) Any
person who fails to keep books and records or fails to produce books and
records for examination, as required by Section
11 of the Act and this subsection, is liable to pay to the Department
a penalty of $1,000 for the first failure to keep books and records or produce
books and records for examination and a penalty of $3,000 for each subsequent
failure to keep books and records or produce books and records for examination
as required by Section 11 of the Act and this subsection.
The penalties imposed under this Section shall not apply if the taxpayer
shows that the taxpayer acted with ordinary business care and prudence.
[35 ILCS 110/11]
c) The provisions of Subpart G of
the rules promulgated under the Retailers' Occupation Tax (86 Ill. Adm. Code
130) shall apply to returns of servicemen under the Service Use Tax Act.
(Source:
Added at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.140 PENALTIES, INTEREST, STATUTE OF LIMITATIONS AND ADMINISTRATIVE PROCEDURES
Section 160.140 Penalties,
Interest, Statute of Limitations and Administrative Procedures
Civil penalties, provisions
concerning interest and procedures (such as the making of assessments, the
venue and mode of conducting hearings, subpoenas, matters pertaining to
judicial review and other procedural subjects), together with statutes of limitation
(except that in the case of a failure to file a return required by the Service
Use Tax Act, no notice of tax liability shall be issued on and after July 1 and
January 1 covering tax due with that return during any month or period more
than 6 years before that July 1 or January 1, respectively) to the extent not
inconsistent with the provisions of the Service Use Tax Act, are the same under
the Service Use Tax Act as those imposed under the Retailers' Occupation Tax
Act, and Section 3-7 of the Uniform Penalty and Interest Act. (See 35 ILCS
110/12.) For information concerning civil penalties and interest see the
Uniform Penalty and Interest Act [35 ILCS 735] and 86 Ill. Adm. Code 700. For
information concerning criminal penalties, see Section 15 of the Service Use
Tax Act.
(Source:
Amended at 26 Ill. Reg. 4929, effective March 15, 2002)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.145 INCORPORATION OF ILLINOIS SERVICE OCCUPATION TAX REGULATIONS BY REFERENCE
Section 160.145
Incorporation Of Illinois Service Occupation Tax Regulations By Reference
To avoid needless repetition,
the substance and provisions of all Illinois Service Occupation Tax Regulations
(86 Ill. Adm. Code 140), (whether characterized as Rules, Articles or by some
other designation), which are now in effect or which may hereafter be amended
or promulgated, and which are not incompatible with the Service Use Tax Act or
any special Rules and Regulations that may be promulgated by the Department
thereunder, are incorporated herein by reference and made a part hereof.
(Source:
Amended and effective May 21, 1962)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.150 CLAIMS TO RECOVER ERRONEOUSLY PAID TAX LIMITATIONS PROCEDURES
Section 160.150 Claims To
Recover Erroneously Paid Tax – Limitations – Procedures
a) Limitations
Upon Claims
1) If it shall appear that an amount of tax or penalty or
interest has been paid in error under the Service Use Tax Act to the Department
by a purchaser, as distinguished from the serviceman, whether the amount be
paid through a mistake of fact or an error of law, the purchaser may file a
claim for credit with the Department.
2) If it shall appear that an amount of tax or penalty or
interest has been paid in error to the Department under the Service Use Tax Act
by a serviceman who is required or authorized to collect and remit the Service
Use Tax, whether the amount be paid through a mistake of fact or an error of
law, the serviceman may file a claim for credit with the Department, provided
that no credit shall be allowed for any amount paid by any such serviceman
unless it shall appear that he bore the burden of the amount and did not shift
the burden to anyone else (as in the case of a duplicated tax payment which the
serviceman made to the Department and did not collect from anyone else), or
unless it shall appear that he or his legal representative has unconditionally
repaid the amount to his vendee:
A) Who bore the burden and has not shifted the burden directly or
indirectly in any manner whatsoever;
B) who, if he has shifted the burden, has repaid unconditionally the
amount to his own vendee, and
C) who is not entitled to receive any reimbursement therefor from
any other source than from his vendor, nor to be relieved of the burden in any
other manner whatsoever.
Claimant will
be considered to have satisfied the unconditional repayment requirement where
it provides its purchaser with an instrument upon which the customer can make a
demand upon claimant for payment of the tax recovered if the claim is allowed.
The claimant's provision of unconditional promissory notes or irrevocable
credit memoranda to its purchasers who paid tax in error would satisfy this
requirement. The purpose of requiring the claimant to make an unconditional
repayment to its purchasers is to prevent unjust enrichment on the part of the
claimant. Therefore, in order to establish that it was not unjustly enriched,
the claimant filing a claim for credit must be able to demonstrate that it gave
unconditional promissory notes or irrevocable credit memoranda to its
purchasers who paid tax in error to the claimant.
3) If it shall appear that an amount of tax has been paid in
error under the Service Use Tax Act by the purchaser to a serviceman, who
retained the tax as reimbursement for his tax liability on the same sale under
the Service Occupation Tax Act, and who remitted the amount involved to the
Department under the Service Occupation Tax Act, whether the amount be paid
through a mistake of fact or an error of law, the procedure for recovering the
tax shall be that prescribed in Sections 17, 18 and 20 of the Service
Occupation Tax Act.
4) As to any claim for credit filed with the Department on and
after January 1 but on or before June 30 of any given year, no amount of tax or
penalty or interest erroneously paid (either in total or partial liquidation of
a tax or penalty or amount of interest under the Service Use Tax Act) more than
3 years prior to such January 1 shall be credited, and as to any claim filed on
and after July 1 but on or before December 31 of any given year, no amount of
tax or penalty or interest erroneously paid (either in total or partial
liquidation of a tax or penalty or amount of interest under the Service Use Tax
Act) more than 3 years prior to the July 1 shall be credited.
5) No claim shall be allowed for any amount paid to the
Department, whether paid voluntarily or involuntarily, if paid in total or
partial liquidation of an assessment which had become final before the claim
for credit to recover the amount so paid is filed with the Department, or if
paid in total or partial liquidation of a judgment, order or decree of court.
b) Filing
Of Claims
1) Claims for credit shall be prepared and filed upon forms
provided by the Department. Where the claimant is a corporation, the claim
filed on behalf of such corporation shall be signed by the president,
vice-president, secretary or treasurer or by the properly accredited agent of the
corporation.
2) A claim for credit shall be considered to have been filed with
the Department on the date upon which it is received by the Department. Upon
receipt of any claim for credit filed under the Act, any officer or employee of
the Department, authorized in writing by the Director of Revenue to acknowledge
receipt of such claims on behalf of the Department, shall execute on behalf of
the Department, and shall deliver or mail to the claimant or his duly
authorized agent, a written receipt, acknowledging that the claim has been
filed with the Department, describing the claim in sufficient detail to
identify it and stating the date upon which the claim was received by the
Department. The written receipt shall be prima facie evidence that the
Department received the claim described in the receipt and shall be prima facie
evidence of the date when the claim was received by the Department.
3) In the absence of a written receipt, the records of the
Department as to when the claim was received by the Department, or as to
whether or not the claim was received at all by the Department, shall be deemed
to be prima facie correct upon these questions in the event of any dispute
between the claimant (or his legal representative) and the Department
concerning these questions. (See Section 17 of the Service Use Tax Act.)
c) Procedure
After Filing Of Claims
1) The Department will examine each claim for credit as soon as
practicable after the claim is filed and will notify the claimant (or his legal
representative, if the claim is filed by the legal representative, or if the
claimant has died or become incompetent and the legal representative has
notified the Department of his appointment and qualification as such legal
representative, or if the Department, on its own motion, has substituted the
legal representative in the proceeding for the deceased or incompetent
claimant) of its Tentative Determination of the amount of credit, if any, to
which the claimant or his legal representative is entitled.
2) If the claimant, or the legal representative of a deceased or
incompetent taxpayer, shall, within 60 days after the Department's Notice of
Tentative Determination of Claim, file a protest and request a hearing, the
Department shall give notice to the claimant, or to the legal representative of
a deceased or incompetent taxpayer, of the time and place fixed for the
hearing, and shall hold a hearing in conformity with the provisions of the Act,
and pursuant to that hearing shall issue its Final Determination of the amount
of credit, if any, found to be due as a result of the hearing, to the claimant,
or to the legal representative of a deceased or incompetent taxpayer.
3) If a protest to the Department's Notice of Tentative
Determination of Claim is not filed within 60 days and a request for a hearing
is not made, the said Notice shall become and operate as a Final
Determination. (See Section 18 of the Act.)
d) Use
Of Credit Memoranda To Satisfy Prior Rights of Department
1) If, following the above procedure, a credit is found to be
due, as evidence thereof a credit memorandum for the amount shall be issued in
the name of the claimant. If there is an established unpaid assessment or an
admitted unpaid liability under the Service Use Tax Act, the Service Occupation
Tax Act, the Retailers' Occupation Tax Act, the Use Tax Act, any local
occupation or use tax administered by the Department, Section 4 of the Water
Commission Act of 1985 [70 ILCS 3720/4], subsections (b), (c) and (d) of
Section 5.01 of the Local Mass Transit District Act [70 ILCS 3610/5.01], or
subsections (e), (f) and (g) of Section 4.03 of the Regional Transportation
Authority Act [70 ILCS 3615/4.03], or unpaid penalty, or interest, against the
claimant, the amount of the credit shall be credited against the tax or penalty
or interest due. If the credit is in an amount less than that of the unpaid
liability, it shall be applied pro tanto.
2) If the amount of the credit exceeds that of the unpaid
liability, after crediting an amount sufficient to liquidate or cancel out the
unpaid liability, a new credit memorandum shall be issued for an amount
representing the difference between that of the original credit found to be due
and that of the liability liquidated or paid, and the new credit memorandum
shall be delivered to the person entitled to receive delivery, provided that no
proceeding is pending against the claimant to establish an unpaid liability
under the Service Use Tax Act, the Service Occupation Tax Act, the Retailers'
Occupation Tax Act, the Use Tax Act, any local occupation or use tax
administered by the Department, Section 4 of the Water Commission Act of 1985,
subsections (b), (c) and (d) of Section 5.01 of the Local Mass Transit District
Act, or subsections (e), (f) and (g) of Section 4.03 of the Regional
Transportation Authority Act.
3) If a proceeding to establish an unpaid liability is pending,
the credit memorandum shall be held by the Department until the proceeding is
concluded. If the proceeding results in the issuance of an assessment which
becomes final under any of these Acts, the credit shall be applied by the
Department, to the extent which may be necessary, in liquidation of the
assessment, and any interest that may accrue, and the balance of the credit, if
any (after cancellation of the credit memorandum applied in liquidation of the
liability), shall be issued in the form of a new credit memorandum and
delivered to the person entitled to receive delivery.
(Source: Amended at 27 Ill.
Reg. 822, effective January 03, 2003)
ADMINISTRATIVE CODE TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160 SERVICE USE TAX
SECTION 160.151 VERIFIED CREDIT
Section 160.151 Verified
Credit
a) Verified credit. A verified credit is a
specific type of credit arising under Section 3 of the Retailers' Occupation
Tax Act, which states:
If
any payment provided for in this Section exceeds the taxpayer's liabilities
under this Act, the use Tax Act, the Service Occupation Tax Act and the Service
Use Tax Act, as shown on an original monthly return, the Department shall, if
requested by the taxpayer, issue to the taxpayer a credit memorandum no later
than 30 days after the date of payment. The credit evidenced by such credit
memorandum may be assigned by the taxpayer to a similar taxpayer under this
Act, the Use Tax Act, the Service Occupation Tax Act or the Service Use Tax
Act, in accordance with reasonable rules and regulations to be prescribed by
the Department. If no such request is made, the taxpayer may credit such excess
payment against tax liability subsequently to be remitted to the Department
under this Act, the Use Tax Act, the Service Occupation Tax Act or the Service
Use Tax Act, in accordance with reasonable rules and regulations prescribed by
the Department. If the Department subsequently determined that all or any part
of the credit taken was not actually due to the taxpayer, the taxpayer's
vendor's discount shall be reduced, if necessary, to
reflect the difference between the credit taken and that actually due,
and that taxpayer shall be liable for penalties and interest on such
difference. [35 ILCS 120/3]
b) Verified credit – explanation – no interest
paid. A verified credit is an amount of tax overpaid in a prior period that
may be rolled over and applied to subsequent tax liabilities without the need
to comply with the formalities involved in submitting a claim for credit. Since
the taxpayer has the immediate use of the verified credit to apply against its
liability without the need to file a claim for credit and prove the
overpayment, interest is not paid on verified credits (See also, 86 Ill. Adm.
Code 700.230(a)(2)). Verified credits appear on a Taxpayer Statement listing a
taxpayer's unpaid balance, available credits or returns not filed.
c) Verified credit − How used. A
verified credit may be used by a taxpayer in only 3 ways:
1) It can be used to offset liability of the
taxpayer that arises under this Act, the Service Occupation Tax Act, the
Retailers’ Occupation Tax Act or the Use Tax Act, subsequent to the origination
of the verified credit;
2) It can be converted to a credit memorandum
no later than 30 days after the date of overpayment, by making a request made
to the Department using forms prescribed by the Department and available at https://tax.illinois.gov. See 35 ILCS 120/6a, for
information to be included. Interest is not paid on verified credits that are
converted to credit memoranda in accordance with this subsection (c)(2); and
3) It can be converted to a credit memorandum
at any time, starting 30 days after the date of overpayment, by making a request
to the Department using forms prescribed by the Department and available at https://tax.illinois.gov, and without regard to the
limitations on claims for refund. See also 86 Ill. Adm. Code 160.150 for
information on limitations and procedures. Interest is not paid on verified
credits that are converted to credit memoranda in accordance with this
subsection (c)(3).
d) A verified credit that is converted to a
credit memorandum under this subsection (d) may be assigned to another taxpayer
in the same manner as other credit memoranda issued to taxpayers by the
Department.
(Source:
Amended at 49 Ill. Reg. 10825, effective August 8, 2025)
|
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.155 DISPOSITION OF CREDIT MEMORANDA BY HOLDERS THEREOF
Section 160.155 Disposition
Of Credit Memoranda By Holders Thereof
a) Assignment
Of Credit Memoranda
1) Credit memoranda issued hereunder may be assigned or
transferred only after a request for that purpose is filed with the Department
upon forms prescribed and furnished by it, and subject to the following
conditions:
A) That the assignment is made to a person who is subject to the
Service Use Tax Act, the Service Occupation Tax Act, the Retailers' Occupation
Tax Act, the Use Tax Act, any local occupation or use tax administered by the
Department, Section 4 of the Water Commission Act of 1985, subsections (b), (c)
and (d) of Section 5.01 of the Local Mass Transit District Act, or subsections
(e), (f) and (g) of Section 4.03 of the Regional Transportation Authority Act;
B) that there is no proceeding pending to establish an unpaid
liability against the assignor pursuant to notice given of the Department's
proposal to assess an amount against him either under the Service Occupation
Tax Act, or under the Service Use Tax Act, the Retailers' Occupation Tax Act,
the Use Tax Act, any local occupation or use tax administered by the
Department, Section 4 of the Water Commission Act of 1985, subsections (b), (c)
and (d) of Section 5.01 of the Local Mass Transit District Act, or subsections
(e), (f) and (g) of Section 4.03 of the Regional Transportation Authority Act and
C) that there is no established assessment or admitted liability
or interest or penalty unpaid by the assignor, either under the Retailers'
Occupation Tax Act, or under the Use Tax Act, the Service Occupation Tax Act,
the Service Use Tax Act, any local occupation or use tax administered by the
Department, Section 4 of the Water Commission Act of 1985, subsections (b), (c)
and (d) of Section 5.01 of the Local Mass Transit District Act, or subsections
(e), (f) and (g) of Section 4.03 of the Regional Transportation Authority Act:
Provided, that if the amount of the credit memorandum must first be applied, in
whole or in part, against an established unpaid assessment which has been
issued to the claimant-assignor, or in total or partial liquidation of an unpaid
admitted tax liability, or unpaid penalty, or unpaid amount of interest, due
from the claimant-assignor, notice to this effect shall be given the
claimant-assignor by the Department.
2) If any balance is due such claimant-assignor, after
application of the credit memorandum in the manner and to the purposes
aforesaid, such balance may be assigned upon receipt by the Department of
instructions to that effect. If there are no unpaid established assessments or
unpaid admitted tax liabilities, or unpaid penalties, or unpaid amounts of
interest, due from the claimant-assignor, and if there are no pending
proceedings as herein outlined, pending against the claimant-assignor, and if
the contemplated assignee is a person who is subject to the Service Occupation
Tax Act, the Service Use Tax Act, Retailers' Occupation Tax Act, Use Tax Act,
any local occupation or use tax administered by the Department, Section 4 of
the Water Commission Act of 1985, subsections (b), (c) and (d) of Section 5.01
of the Local Mass Transit District Act, or subsections (e), (f) and (g) of
Section 4.03 of the Regional Transportation Authority Act, the request for
leave to assign shall be approved. The original credit memorandum shall be
cancelled, and a new credit memorandum shall be issued to the assignee in the
amount shown on the cancelled memorandum.
3) However, before a credit is issued to the assignee, the amount
of such credit shall be applied, to the extent that may be necessary, in
liquidation of any established unpaid assessment which has been issued to such
assignee, or in liquidation of any unpaid penalty, or amount of interest due
from such assignee, or in liquidation of any unpaid admitted liability due from
the assignee under the Service Occupation Tax Act, the Service Use Tax Act, the
Retailers' Occupation Tax Act, the Use Tax Act, any local occupation or use tax
administered by the Department, Section 4 of the Water Commission Act of 1985,
subsections (b), (c) and (d) of Section 5.01 of the Local Mass Transit District
Act, or subsections (e), (f) and (g) of Section 4.03 of the Regional
Transportation Authority Act, and a credit memorandum for the balance of the
credit, if any, shall then be issued to the assignee: Provided, that there is
no proceeding pending against the assignee to establish an unpaid liability
against him.
4) If a proceeding to establish such an unpaid liability is
pending, the credit memorandum shall be held by the Department until such
proceeding is concluded. If such proceeding results in the issuance of an
assessment which becomes final under any of the said Acts, the credit shall be
applied by the Department, to the extent which may be necessary, in liquidation
of such assessment, and any interest that may accrue thereon, and the balance
of the credit, if any (after cancellation of the credit memorandum applied in
liquidation of such liability), shall be issued in the form of a new credit
memorandum and delivered to the person entitled to receive delivery thereof.
b) Submission
of Credit Memoranda With Tax Returns
1) Credit memoranda, in the hands either of the original claimant
or of his assignee, may be submitted to the Department, along with Service
Occupation Tax returns, Service Use Tax returns, Retailers' Occupation Tax
returns or Use Tax returns, in payment of any tax liability or penalty or
interest under the Service Occupation Tax Act, the Service Use Tax Act, the
Retailers' Occupation Tax Act, the Use Tax Act, any local occupation or use tax
administered by the Department, Section 4 of the Water Commission Act of 1985,
subsections (b), (c) and (d) of Section 5.01 of the Local Mass Transit District
Act, or subsections (e), (f) and (g) of Section 4.03 of the Regional
Transportation Authority Act, incurred by the holder of such credit memoranda.
2) If, after applying any such credit memorandum against the
amount of tax shown to be due by the tax return with which the credit
memorandum is submitted, there is a balance of the credit memorandum in favor
of the taxpayer, the Department will cancel the credit memorandum which the
taxpayer submits with his return and will issue and deliver to the taxpayer a
new credit memorandum for such balance. This process will be followed until
the credit, to which such taxpayer is entitled, is exhausted.
3) However, any new credit memorandum, which is issued for a
balance of credit due the taxpayer after applying the amount of a credit
memorandum to the payment of current taxes, is subject to the prior rights of
the Department to the same extent that such prior rights take precedence when a
credit memorandum is first issued (see Section 160.150(d) of this Part) or when
leave to assign a credit memorandum is requested (see Subsection (a) of this
Section).
(Source:
Amended at 25 Ill. Reg. 5015, effective March 23, 2001)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.160 REFUNDS
Section 160.160 Refunds
In case the Department determines that the claimant is
entitled to a refund, such refund shall be made only from the Aviation Fuel
Sales Tax Refund Fund or from such appropriation as may be available for that
purpose, as appropriate. If it appears unlikely that the amount available would
permit everyone having a claim allowed during the period covered by such
appropriation or from the Aviation Fuel Sales Tax Refund Fund, as appropriate,
to elect to receive a cash refund, the Department will make such refunds only in
hardship cases (i.e., in cases in which the claimant cannot use a credit
memorandum). Money from the Aviation Fuel Sales Tax Refund Fund may
only be used to make cash refunds for claims of overpayment of tax on aviation
fuel paid into the Aviation Fuel Sales Tax Refund Fund. The two most
likely situations where this would be the case are the situation in which the
claimant has discontinued business and the situation in which the claimant will
have a small volume of liability to the Department in the foreseeable future,
but receives a large credit memorandum which it therefore might take the
claimant a long time to liquidate by using it to pay current taxes. In these
instances, the claimant probably would have to sell the credit memorandum at a
loss in order to realize anything from it within any reasonable period of time.
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.165 INTEREST
Section 160.165 Interest
a) Interest paid by the Department
to taxpayers and interest charged to taxpayers by the Department shall be at
the rate set forth in Section 3-2 of the Uniform Penalty and Interest Act. [35 ILCS 735/3-2] See 86 Ill. Adm. Code 700, Uniform
Penalty and Interest Act.
b) No interest will be allowed if the overpayment is found by the
Department to have been made deliberately for the purpose of drawing interest,
or if the overpayment is ascertained not to have been bona fide for some other
reason.
c) When a claim that is allowed is paid by means of a credit
memorandum instead of by means of a cash refund, the claim will be considered
to have been paid when the credit memorandum is issued by the Department to the
claimant, and no interest will be allowed or paid by the Department for any
period subsequent to that, even if the claimant does not use or assign the
credit memorandum immediately after it is issued.
(Source:
Amended at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.170 APPLICABILITY OF REGULATIONS BY REFERENCE
Section
160.170 Applicability of Regulations By Reference
To avoid needless repetition,
the substance and provisions of 86 Ill. Adm. Code 150.803 (excluding the
provisions limiting the applicability of Section 150.803 to the period October
1, 2018, through December 31, 2020) and 150.804 (excluding the provisions
limiting the applicability of Section 150.804 to the period January 1, 2020,
through December 31, 2020) which are not incompatible with the Service Use Tax
Act or this Part, shall apply, as far as
practicable, to the subject matter of this Part.
(Source:
Added at 48 Ill. Reg. 10710, effective July 2, 2024)
| TITLE 86: REVENUE
CHAPTER I: DEPARTMENT OF REVENUE
PART 160
SERVICE USE TAX
SECTION 160.175 APPLICABILITY OF RETAILERS' OCCUPATION TAX ACT AND UNIFORM PENALTY AND INTEREST ACT
Section 160.175
Applicability of Retailers' Occupation Tax Act and Uniform Penalty and Interest
Act
All of the provisions of
Sections 1d, 1e, 1f, 1i, 1j, 1j.1, 1k, 1m, 1n, 1o, 2-6, 2-12, 2-54, 2a, 2b, 2c,
3 (except as to the disposition by the Department of the money collected under the Act), 4 (except that the time limitation
provisions shall run from the date when gross receipts are received), 5 (except
that the time limitation provisions on the issuance of notices of tax liability
shall run from the date when the tax is due rather than from the date when
gross receipts are received and except that in the case of a failure to file a
return required by the Act, no notice of tax liability shall be issued on
and after July 1 and January 1 covering tax due with that return during any
month or period more than 6 years before that July 1 or January 1,
respectively), 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5j, 5k, 5l, 5n, 6d, 7, 8, 9, 10, 11
and 12 of the Retailers' Occupation Tax Act which are not inconsistent with the
Act, and Section 3-7 of the Uniform Penalty and Interest Act [35 ILCS 735],
shall apply, as far as practicable, to the subject matter of the Act to the same extent as if such provisions
were included in the Act. [35 ILCS 110/12]
(Source:
Added at 48 Ill. Reg. 10710, effective July 2, 2024)
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