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The Illinois Senate has introduced a bill that would make all "internet transfers" subject to Illinois use tax. The internet transfers would be included in the definition of "sale at retail", making it subject to the retailers' occupation tax and service occupation tax as well. Retailers who solicit orders for tangible personal property would be a "retailer maintaining a business in this state." (S.B. 631, introduced February 19, 2003)


Six separate online retailers are have been targeted as part of a lawsuit being filed by the Illinois Attorney General. These retailers allegedly have chosen not to charge sales tax on items sold through their websites. The lawsuit comes at a time when the budget deficit of the state is estimated to anywhere between $2.5 and 5.0 billion. (Telephone Conversation with CCH and Illinois Attorney General's Office Spokesperson, February 24, 2003)


Taxpayers are liable for filing fees incurred by the Department of Revenue for filing and releasing an assessment lien, effective January 1, 2003. (Sec. 5a [35 ILCS 120/5a])


Rolling stock sold to owners, lessors or shippers are not liable for sales and use tax. The exemption for rolling stock can also affect manufactured items like shipping containers used as rolling stock in interstate commerce. (86 Ill. Adm. Code 130.340, Dept. of Revenue, effective May 24, 2002)


Regulations on the Illinois Manufacturer’s Purchase Credit have been amended for clarification. A supplier or serviceman must now report the use of the Manufacturers Purchase Credit on sales or purchases on the IL Form ST-1 as a credit, not as a deduction or exemption from gross receipts. Also, if such certificate is not provided to the retailer or serviceman at the time of the purchase, the manufacturer or graphic arts producer must pay the appropriate Illinois use tax or service tax. The regulation also states that any tangible personal property transferred by a de minimus serviceman to manufacturer or graphic arts producer’s customer does not qualify as production-related. (86 Ill. Adm. Code 130.331, Illinois Department of Revenue, effective February 13, 2002.)



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