Energy Efficient Appliance Rebates Subject to Illinois Tax

Gross receipts subject to Illinois Retailer’s Occupation (sales) Tax are defined as all the consideration actually received by the seller, except traded-in tangible personal property. If a seller receives a reimbursement or rebate for a discount, the amount of that reimbursement or rebate is considered part of the gross receipts received by the seller and it is fully taxable. Therefore, rebates that retailers receive under the Illinois Energy Efficient Appliance Rebate Program are considered part of the gross receipts received by the retailer and are subject to retailer’s occupation tax.

To coincide with Earth Day, from April 16th through April 25th, 2010, the Illinois Department of Commerce and Economic Opportunity (DCEO) will offer an appliance rebate program. Rebates on sales of clothes, washers, dishwashers, refrigerators, freezers, and room air conditioners will be offered through the retail channel as a 15% point-of-sale markdown at each participating retailer. Retailers will collect specific program data (customer zip codes, product models sold, total incentives paid) and submit the information as a company for reimbursement from the State on a monthly basis. Additional rules and regulation may apply. (General Information Letter ST 10-0011-GIL, Illinois Department of Revenue, February 26, 2010)

Posted on March 30, 2010