Illinois Administrative Code › Title 86 - REVENUE › Part 140 - SERVICE OCCUPATION TAX › Subpart N - CLAIMS TO RECOVER ERRONEOUSLY PAID TAX › Section 140.1420 - Verified Credit

Current through Register Vol. 48, No. 28, July 12, 2024
a) Verified
				credits. A verified credit is a specific type of credit arising under Section 3
				of the Retailers' Occupation Tax Act, which states:
If any payment provided for in this Section exceeds
				  the taxpayer's liabilities under this Act, the Use Tax Act, the Service
				  Occupation Tax Act and the Service Use Tax Act, as shown on an original monthly
				  return, the Department shall, if requested by the taxpayer, issue to the
				  taxpayer a credit memorandum no later than 30 days after the date of payment.
				  The credit evidenced by such credit memorandum may be assigned by the taxpayer
				  to a similar taxpayer under this Act, the Use Tax Act, the Service Occupation
				  Tax Act or the Service Use Tax Act, in accordance with reasonable rules and
				  regulations to be prescribed by the Department. If no such request is made, the
				  taxpayer may credit such excess payment against tax liability subsequently to
				  be remitted to the Department under this Act, the Use Tax Act, the Service
				  Occupation Tax Act or the Service Use Tax Act, in accordance with reasonable
				  rules and regulations prescribed by the Department. If the Department
				  subsequently determined that all or any part of the credit taken was not
				  actually due to the taxpayer, the taxpayer's 2.1 % and
				  1.75 %
				  vendor's discount shall be reduced by 2.1% or 1.75% of the difference between
				  the credit taken and that actually due, and that taxpayer shall be liable for
				  penalties and interest on such difference.
[35 ILCS 120/3
				  ]
b) Verified credit -
				explanation - no interest paid. A verified credit is an amount of tax overpaid
				in a prior period that may be rolled over and applied to subsequent tax
				liabilities without the need to comply with the formalities involved in
				submitting a claim for credit. Since the taxpayer has the immediate use of the
				verified credit to apply against its liability without the need to file a claim
				for credit and prove the overpayment, interest is not paid on verified credits
				(See also, 86 Ill. Adm. Code
				700.230(a)(2)).
				Verified credits appear on a taxpayer's Statement of Account.
c) Verified credit - How used. A verified
				credit may be used by a taxpayer in only 3 ways:
1) It can be used to offset liability of the
				taxpayer that arises under the Retailers' Occupation Tax Act, the Use Tax Act,
				the Service Occupation Tax Act, or the Service Use Tax Act subsequent to the
				origination of the verified credit;
2) It can be converted to a credit memorandum
				no later than 30 days after the date of overpayment, upon request made to the
				Department upon forms prescribed by the Department. Interest is not paid on
				verified credits that are converted to credit memoranda in accordance with this
				subsection (c)(2); and
3) It can be
				converted to a credit memorandum at any time, starting 30 days after the date
				of the overpayment, by making a request to the Department using forms
				prescribed by the Department and available at
www.tax.illinois.gov
, and without regard to
				the limitations on claims for refund. See also 86 Ill. Adm. Code
				140.1401,
				for limitations on claims. Interest is not paid on verified credits that are
				converted to credit memoranda in accordance with this subsection
				(c)(3).