Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart S - SPECIFIC APPLICATIONS › Section 130.2101 - Sellers of Floor Coverings

Current through Register Vol. 48, No. 28, July 12, 2024
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
				resale to suppliers and pay Retailers' Occupation Tax on his gross receipts
				from sales.
b) Sellers who make
				sales of floor coverings to users in construction contract situations incur tax
				liability on the cost price of the floor coverings. In construction contract
				situations, the seller should pay tax in accordance with the rules set forth in
				subsection (d) of this Section.
c)
				Retail sale situations. The contractual relationship between the seller and his
				customer determines whether the floor covering has been sold in a retail sale
				situation or whether it has been transferred in a construction contract
				situation.
1) In general, a sales contract
				that does not require the seller (or the seller's representative) to
				permanently affix the floor covering to real estate constitutes a "sale at
				retail".
2) However, where the
				seller (or the seller's representative) will permanently affix the floor
				covering to real estate, the transaction remains a retail transaction if the
				following Safe Harbor Rule is satisfied.
A)
				Safe Harbor Rule. A contract or similar document that provides that the seller
				(or the seller's representative) will install the floor covering by permanently
				affixing it to real estate evidences a "sale at retail" where the contract or
				similar document demonstrates that the seller and the customer agreed to the
				installation charge separately from the selling price of the floor covering.
				The evidence required to be maintained by the seller to demonstrate that the
				seller and the customer agreed to the installation charge separately from the
				selling price of the floor covering is a contract or similar document that is
				signed by the customer and that sets out the following items:
selling price of floor covering (plus) sales tax subtotal
				  (plus) installation charges total
(customer's
				  signature)
B)
				Where the Safe Harbor Rule of subsection (c)(2)(A) cannot be met only because
				the customer's signature does not appear on the face of a contract containing
				the items set out in subsection (c)(2)(A), the Department shall use its best
				judgment and information to determine whether the selling price of the floor
				covering was agreed to separately from the charge for installation. Relevant
				information includes, but is not limited to, situations where a written quote
				for installed floor covering that contains the items set out in subsection
				(c)(2)(A) becomes a signed purchase order. In that case, the signature on the
				purchase order will satisfy the signature requirement of this
				Section.
C) A contract or similar
				document containing the items set out in subsection (c)(2)(A) will also
				establish that the installation charges are not subject to Retailers'
				Occupation Tax liability. See 86 Ill. Adm. Code
				130.450(b)
				of this Part.
D) Taxation of
				delivery charges will be determined in accordance with the provisions of
				Section
				130.415
				of this Part.