Stay up to date with sales tax: Join our mailing list!


Illinois has enacted legislation that imposes an annual reporting requirement on Illinois taxpayers that receive corporate or personal income tax credits, sales tax exemptions, or the abatement of property tax under the Economic Development for a Growing Economy Tax Credit Act, the River Edge Redevelopment Zone Act, or the Enterprise Zone Act, including the High Impact Business program. Recipients of any of the above incentives must provide the Department of Commerce and Economic Opportunity a detailed list of the occupation or job classifications and number of new employees or retained employees to be hired in full-time, permanent jobs; a schedule of anticipated starting dates for new hires and the actual average wage by occupation or job classification; and the total payroll to be created as a result of the incentives. Select data must be provided quarterly while other information is required annually.(P.A. 98-0397 (H.B. 1544), Laws 2013, effective August 16, 2013)

(05/06/2014)

The Illinois Department of Revenue has issued a general information letter stating that it intends to propose regulations concerning online software transactions including application service providers, software hosting, and Web-based software.The Department believes that the proper forum for providing guidance regarding these transactions is through a formal administrative rulemaking process rather than through individual inquires such as letter ruling requests. The Department is currently researching the nature and type of services and products provided by these types of providers. Therefore, the Department will not address fact specific request for ruling requests until after it has issued the revised rules.  No expected date for the rules has been indicated.  (General Information Letter ST 13-0049-GIL, Illinois Department of Revenue, September 11, 2013, released November 2013)

(05/06/2014)

Illinois service occupation tax (SOT) applies to sales of prescription drugs to prescription drug providers (PDPs) under the Medicare Part D Prescription Plan because the drugs are not sold directly to the government. Sales to Medicare and Medicaid are exempt as sales to a government body. Under the plan, the government provides funds on a per capita basis to the PDPs, and the PDPs act as private insurance companies under contract with the government. The SOT is not considered a premium tax, fee, or other similar assessment that federal law prohibits from being imposed by any state on payments that a PDP makes on behalf of a Part D Plan.(General Information Letter ST 13-0037-GIL, Illinois Department of Revenue, August 2, 2013)

(04/29/2014)

Illinois has enacted legislationeffective June 1, 2014 that amends the sales and use tax treatment of electricity, natural or artificial gas and water.  Per the legislation, transactions involving the following are exempt from retailers’ occupation tax, use tax, service occupation tax (SOT), and service use tax (SUT): electricity delivered to customers by wire; natural or artificial gas that is delivered to customers through pipes, pipelines, or mains; and water that is delivered to customers through pipes, pipelines, or mains.  The sales and use tax machinery and equipment exemption does not apply to machinery and equipment, repair and replacement parts, or in-house manufactured 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. Per the legislation, for purposes of the retailers’ occupation tax, use tax, SOT, and SUT, the term "computer software" includes software used to operate 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. (P.A. 98-583 (S.B. 2243), Laws 2013, effective June 1, 2014)

(04/11/2014)

A service provider that installs racking systems for customers is considered a construction contractor who must pay Illinois use tax on its purchases because the racking systems are materials that are permanently affixed to real estate. Even though there were contradictory letter rulings on similar facts, the Department ruled that racking systems that are bolted to the floor, intended for removal within a few years and attached in such a manner that there is not permanent damage to the real property are deemed permanently attached and the installer is deemed a contractor.  Tangible personal property that a construction contractor purchases that will be permanently affixed to or incorporated into real property is subject to use tax. (ST 13-0002-PLR, Illinois Department of Revenue, July 31, 2013)

(04/11/2014)

Pages

Scroll to Top