Part 130: RETAILERS' OCCUPATION TAX

Section 130.2101 Sellers of Floor Coverings a) Sellers who make sales of floor coverings to users in retail sale situations incur Retailers' Occupation Tax liability on their gross receipts from such sales. In retail sale situations, the seller should provide certificates of resa…

Section 130.2105 Sellers of Newspapers, Magazines, Books, Sheet Music and Musical Recordings, and Their Suppliers; Transfers of Data Downloaded Electronically a) Sellers of Newspapers, Magazines, Books, Sheet Music and Musical Recordings 1) Sellers of books, sheet music and music…

Section 130.2110 Sellers of Seeds and Fertilizer a) Sellers of Seeds – When Liable for Tax Persons engaged in the business of selling seeds to purchasers who use the seeds in raising lawn grass, vegetables, crops, or other plants that they will use or consume and not resell, are …

Section 130.2115 Sellers of Machinery, Tools and Special Order Items a) When Liable For Retailers' Occupation Tax 1) Sellers of machinery, tools, dies, jigs, patterns, gauges, models, exhibits, and the like to users or consumers incur Retailers' Occupation Tax liability except as…

Section 130.2120 Suppliers of Persons Engaged in Service Occupations and Professions a) When Liable For Retailers' Occupation Tax Suppliers of persons engaged in service occupations and professions incur Retailers' Occupation Tax liability when, apart from engaging in a service o…

Section 130.2125 Discount Coupons, Gift Situations, Trading Stamps, Automobile Rebates and Dealer Incentives a) Application of Tax 1) Application of Retailers' Occupation Tax A retailer incurs Retailers' Occupation Tax on its gross receipts from sales, which is defined as the tot…

Section 130.2130 Undertakers and Funeral Directors a) Funeral Directors – When Liable For Tax 1) A funeral director is engaged in the business of selling tangible personal property to purchasers for use or consumption when he sells such items of tangible personal property as cask…

Section 130.2135 Vending Machines a) Vending Machine Sales – To Whom Taxable Except as provided in subsection (e) of this Section, where tangible personal property is sold to users or consumers by means of vending machines, the person owning the property contained in such vending…

Section 130.2140 Vendors of Curtains, Slip Covers and Other Similar Items Made to Order a) When Liable For Tax 1) Persons who engage in the business of selling portieres, drapes, curtains, marquee curtains, slip covers, tents, tarpaulins and other similar items incur Retailers' O…

Section 130.2145 Vendors of Meals a) Vendors of Meals − When Liable for Tax 1) Persons engaged in the business of selling meals to purchasers for use or consumption incur retailers' occupation tax liability on their receipts from those sales. It is immaterial that no profit is re…

Section 130.215 Illustrations of Sales for Use or Consumption Versus Sales for Resale a) A manufacturer of ice cream may require machinery, freezers, fuel, ammonia, and other equipment and supplies. Sales of such items to the manufacturer are sales for use or consumption. Such it…

Section 130.2150 Vendors of Memorial Stones and Monuments a) When Liable For Tax 1) Persons who engage in the business of selling monuments, grave markers and the like to purchasers for use or consumption and not for resale incur Retailers' Occupation Tax liability on their recei…

Section 130.2155 Tax Liability of Sign Vendors a) Persons who sell signs may incur a Retailers' Occupation Tax, Service Occupation Tax or Use Tax liability, depending upon the circumstances of the sale. b) When Liable for Retailers' Occupation Tax 1) Persons who engage in selling…

Section 130.2156 Vendors of Steam a) When Liable for Retailers' Occupation Tax Persons who engage in the business of selling steam to purchasers for use or consumption and not for resale, incur Retailers' Occupation Tax liability on their receipts from such sales. For example, wh…

Section 130.2160 Vendors of Tangible Personal Property Employed for Premiums, Advertising, Prizes, Etc. a) When Liable For Retailers' Occupation Tax 1) Persons engaged in the business of selling tangible personal property to purchasers who give such property away for premiums, ad…

Section 130.2165 Veterinarians a) Veterinarians as Servicemen Veterinarians are engaged primarily in rendering service to their clients and so are considered to be servicemen. As medical professionals regulated under the Veterinary Medicine and Surgery Practice Act of 2004 (the A…

Section 130.2170 Warehousemen a) When Liable For Tax In cases in which warehousemen hold themselves out to the public as being engaged in the business of selling, to purchasers for use or consumption, secondhand furniture or other tangible personal property to which they have acq…

Section 130.220 Sales to Lessors of Tangible Personal Property a) Effective August 1, 1967, and through December 31, 2024, the sale of tangible personal property to a purchaser who will act as a lessor of such tangible personal property is a sale at retail and is subject to Retai…

Section 130.225 Drop Shipments a) A drop-shipment situation is one in which out-of-State purchasers (purchasers) that are not registered with the State of Illinois and that do not have sufficient nexus with Illinois to require them to collect Illinois Use Tax or remit Retailers' …

Section 130.2500 Direct Payment Program a) Effective July 1, 2001, a Direct Payment Program is established. Applicants who have been approved to participate in the Direct Payment Program will be issued a Direct Pay Permit (permit) by the Department, which participants may provide…

Section 130.2505 Qualifying Transactions, Non-transferability of Permit a) The Direct Payment Program shall be limited to taxes paid under the Retailers' Occupation Tax Act, the Use Tax Act, and any local occupation tax acts administered by the Department that would be incurred o…

Section 130.2510 Permit Holder's Payment of Tax a) If a sale by the retailer of the qualifying tangible personal property would not be subject to tax, then the permit holder does not have to remit tax on that purchase to the Department. For example, a permit holder purchasing exe…

Section 130.2515 Application for Permit a) Applicants must apply on a form prescribed by the Department. b) Applicants who are not already registered with the Department as a retailer under this Part must register with the Department prior to submitting an application for partici…

Section 130.2520 Qualification Process and Requirements Applicants must comply with the following requirements in order to qualify for a Direct Pay Permit. a) Applicants must demonstrate their ability to comply with the State's sales and use tax laws, including reporting and paym…

Section 130.2525 Application Review a) The Department shall review all applications to determine compliance with qualification requirements. The review of applications shall be conducted in a timely manner so that applicants receive notification of authorization, denial or reques…

Section 130.2530 Recordkeeping Requirements In accordance with Sections 130.801 and 130.805 of this Part, holders of Direct Pay Permits shall maintain all records necessary to determine the correct liability for all applicable taxes. Retailers who are presented with copies of Dir…

Section 130.2532 Annual Review a) Beginning on March 31, 2025, and by March 31 of each year thereafter, a holder of a Direct Pay Permit shall review its purchase activity to verify that the purchases made during the immediately preceding 12-month period of the calendar year endin…

Section 130.2535 Revocation and Withdrawal a) The Department may revoke a Direct Pay Permit for a violation of any of the provisions of the Retailers' Occupation Tax, the Use Tax, or any local occupation taxes administered by the Department. If the Department seeks revocation of …

Section 130.305 Farm Machinery and Equipment a) Notwithstanding the fact that the sales may be at retail, the Retailers' Occupation Tax Act ("Act") does not apply to sales of machinery and equipment, both new and used, and including machinery and equipment manufactured on special…

Section 130.310 Food, Soft Drinks and Candy a) Food. Until July 1, 2022 and beginning again on July 1, 2023, with respect to 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 adu…

Section 130.311 Drugs, Medicines, Medical Appliances, and Grooming and Hygiene Products a) General. With respect to prescription and nonprescription medicines, drugs, medical appliances, products classified as Class III medical devices by the United States Food and Drug Administr…

Section 130.315 Fuel Sold for Use in Vessels on Rivers Bordering Illinois a) Effective July 26, 1967, notwithstanding the fact that such sales are at retail, the Retailers' Occupation Tax does not apply to sales of fuel consumed or used in the operation of ships, barges or vessel…

Section 130.320 Gasohol, Majority Blended Ethanol, Biodiesel Blends, and 100% Biodiesel a) Effective January 1, 1990 and prior to July 1, 2003, sales of gasohol, as defined in Section 3-40 of the Use Tax Act, are subject to tax, based upon 70% of the proceeds of sales. On and aft…

Section 130.321 Fuel Used by Air Common Carriers in Flights Engaged in Foreign Trade or Engaged in Trade Between the United States and any of its Possessions a) Until June 30, 2013, notwithstanding the fact that sales may be at retail, fuel and petroleum products sold to or used …

Section 130.325 Graphic Arts Machinery and Equipment Exemption Through June 30, 2003, and beginning again on September 1, 2004 through August 30, 2014, notwithstanding the fact that sales may be at retail, the Retailers' Occupation Tax does not apply to the sale of machinery and …

Section 130.330 Manufacturing Machinery and Equipment a) General Provisions Applicable to All Types of Machinery and Equipment Under This Section Notwithstanding the fact that the sales may be at retail, the Retailers' Occupation Tax Act does not apply to the sales of machinery a…

Section 130.331 Manufacturer's Purchase Credit a) Earning Manufacturer's Purchase Credit 1) Effective January 1, 1995 through June 30, 2003, and beginning again on September 1, 2004 through August 30, 2014, a manufacturer may earn a credit when purchasing exempt manufacturing mac…

Section 130.332 Automatic Vending Machines a) General. Notwithstanding the fact that the sales may be at retail, effective January 1, 2000 and through December 31, 2001, the Retailers' Occupation Tax does not apply to sales of new or used automatic vending machines that prepare a…

Section 130.333 Sustainable Aviation Fuel Purchase Credit a) Earning Sustainable Aviation Fuel Purchase Credit 1) From July 1, 2023 through December 31, 2032, sustainable aviation fuel ("SAF") sold to or used by an air common carrier, certified by the carrier to be used in Illino…

Section 130.335 Pollution Control Facilities and Low Sulfur Dioxide Emission Coal-Fueled Devices a) Through June 30, 2003, notwithstanding the fact that the sales may be at retail, sales of pollution control facilities are exempt from the Retailers' Occupation Tax. This exemption…

Section 130.340 Rolling Stock a) Notwithstanding the fact that the sale is at retail, the Retailers' Occupation Tax does not apply to sales of tangible personal property to owners or lessors, lessees, or shippers of tangible personal property that is utilized by interstate carrie…

Section 130.341 Commercial Distribution Fee Sales Tax Exemption (Repealed) (Source: Repealed at 49 Ill. Reg. 5419, effective April 1, 2025)

Section 130.345 Oil Field Exploration, Drilling and Production Equipment a) General 1) Notwithstanding any other provision of this Section, the exemption provided in this Section is effective through June 30, 2003. On and after July 1, 2003, the tax applies to sales of new or use…

Section 130.350 Coal Exploration, Mining, Off Highway Hauling, Processing, Maintenance and Reclamation Equipment a) General. The exemption provided in this Section terminated on June 30, 2003, pursuant to P.A. 93-24. P.A. 98-456, effective August 16, 2013, reinstated the coal exe…

Section 130.351 Aggregate Exploration, Mining, Off Highway Hauling, Processing, Maintenance and Reclamation Equipment a) General. The exemption provided in this Section terminated on June 30, 2003, pursuant to P.A. 93-24. P.A. 98-456, effective August 16, 2013, reinstated the agg…

Section 130.401 Meaning of Gross Receipts "Gross receipts" means all the consideration actually received by the seller, except traded-in tangible personal property. a) Filing Returns on Gross Sales Basis Deferred payments made by purchasers are not required to be included in gros…

Section 130.405 How to Avoid Paying Tax on State or Local Tax Passed on to the Purchaser a) "Gross receipts", on the basis of which Retailers' Occupation Tax liability must be computed, do not include charges which are added to prices on account of the seller's Illinois Retailers…