Tag Archives: Retailers’ Occupation Tax

Illinois Department of Revenue Reaffirms Cloud-Based Services Not Taxable

In two recent General Information Letters (GILs), the Illinois Department of Revenue (Department) reaffirmed that computer software provided through a cloud-based delivery system is not subject to tax in Illinois. The Department announced that while it continues to review cloud-based arrangements and may determine they are taxable at some point, any decision to tax cloud-based … Continue Reading

Illinois Retailers Beware: Class Action Complaint Filed Against Grocer for Collecting Illinois Sales Tax on Manufacturers’ Coupons Lacking Specific Language

A class action complaint was filed in federal court last week against the operator of a grocery chain, alleging failure to deduct manufacturers’ coupons from the tax base on which sales tax was calculated and collected from customers.  This latest attack on a retailer relies on an interpretation of a Department of Revenue regulation that, if … Continue Reading

Illinois Courts Consistently Enforce Manufacturing Exemption Despite Department of Revenue Opposition

Illinois courts have issued three taxpayer-friendly manufacturing rulings in 2013 and 2014, underscoring the breadth of the exemption from use tax afforded to equipment and chemicals used in the process of manufacturing. Cook County Circuit Court Holds Chemicals Effectuate a “Direct and Immediate” Change on a Product Being Manufactured and Thus are Tax-exempt Most recently, … Continue Reading

The Illinois Two-Step: Final Sales Tax Sourcing Regulations May Cause Sales to be Sourced outside the State

Localities expecting more tax dollars due to the elimination of the controversial order acceptance test may be sorely disappointed.  Application of the final sales tax sourcing regulations, effective as of June 25, 2014 (see 38 Ill. Reg. 14292), may actually increase the number of sales that are sourced outside of the state, such that more … Continue Reading

Illinois Department of Revenue Intends to Extend Its Multifactor Post-Hartney Sourcing Regulations to Interstate Transactions

The saga over local sourcing of Illinois retailers’ occupation taxes is well known. The Illinois Department of Revenue has a dedicated webpage for the issue, and Inside SALT covered some of the litigation aspects last month (see Illinois Regional Transportation Authority Suffers A Setback In Its Sales Tax Sourcing Litigation).  A new chapter is unfolding … Continue Reading
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