Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart A - NATURE OF TAX › Section 130.120 - Nontaxable Transactions

Current through Register Vol. 48, No. 28, July 12, 2024
The tax does not apply to receipts from sales:
a) of intangible personal property, such as
				shares of stocks, bonds, evidences of interest in property, corporate or other
				franchises and evidences of debt. These types of sales fall outside the scope
				of the Retailers' Occupation Tax Act;
b) of real property, such as lands and
				buildings that are permanently attached to the land. These types of sales fall
				outside the scope of the Retailers' Occupation Tax Act;
c) of tangible personal property for purposes
				of resale in any form as tangible personal property, provided that the
				purchaser (except in the case of an out-of-State purchaser who will always
				resell and deliver the property to his customers outside Illinois) has an
				active registration number or active resale number from the Department and
				gives the number to the vendor in connection with certifying to the vendor that
				the sale to the purchaser is nontaxable on the ground of being a sale for
				resale (see Subparts B and N of this Part). This exemption existed prior to the
				enactment of Section 2-70 and will not sunset;
d) of personal services, where rendered as
				such (see various rules relating to particular service occupations); however,
				for information concerning the tax on persons engaged in the business of making
				sales of service, see the Regulations pertaining to the Service Occupation Tax
				Act (86 Ill. Adm. Code 140). These types of sales fall outside the scope of the
				Retailers' Occupation Tax Act;
e)
				that are within the protection of the Commerce Clause of the Constitution of
				the United States (see Subpart F of this Part). These types of sales fall
				outside the scope of the Retailers' Occupation Tax Act;
f) that are isolated or occasional (see
				Section 130.110 of this Subpart). This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
g) of newspapers and
				magazines (see Section
				130.2105 of this Part). This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
h) that are made to any
				corporation, society, association, foundation or institution organized and
				operated exclusively for charitable, religious or educational purposes, or any
				not-for-profit corporation, society, association, foundation, institution or
				organization that has no compensated officers or employees and that is
				organized and operated primarily for the recreation of persons 55 years of age
				or older. A limited liability company may qualify for the exemption under this
				subsection only if the limited liability company is organized and operated
				exclusively for educational purposes (see Section
				130.2005 of this Part). This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
i) that are made to any
				governmental body (see Section
				130.2080 of this Part). This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
j) of low sulfur dioxide
				emission coal-fueled devices. This exemption existed prior to the enactment of
				Section 2-70 and will not sunset [35 ILCS 120/1a-1 ] (see Section
				130.355 of this Part);
k)
of fuel consumed or used in the
				operation of ships, barges or vessels that are used primarily in or for the
				transportation of property or the conveyance of persons for hire on rivers
				bordering on this State if the fuel is delivered by the seller to the
				purchaser's barge, ship or vessel while it is afloat upon that bordering
				river
[35 ILCS
				120/2-5(24) ] (see Section
				130.315 of this Part). This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
l) of tangible personal
				property to interstate carriers for hire for use as rolling stock moving in
				interstate commerce (see Section
				130.340 of this Part). This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
m) except as otherwise
				provided in Section 130.605(b)(1)(C),
				of a motor vehicle in this State to a nonresident even though the motor vehicle
				is delivered to the nonresident in this State, if the motor vehicle is not to
				be titled in this State, and if a drive-away permit is issued to the motor
				vehicle as provided in Section 3-603 of the Illinois Vehicle Code
				[625 ILCS
				5/3-603 ], or if the nonresident purchaser has vehicle
				registration plates to transfer to the motor vehicle upon returning to his home
				state (see Section 130.605). This exemption existed prior to the enactment of
				Section 2-70 and will not sunset;
n) until December 31, 2001, of merchandise in
				bulk when sold from a vending machine for 1¢; on and after January 1,
				2002, of merchandise in bulk when sold from a vending machine for 50¢ or
				less (see 35 ILCS 120/1 and Section
				130.2135 of this Part). These
				types of sales fall outside the scope of the Retailers' Occupation Tax
				Act;
o) of food and beverages by a
				person who is the recipient of a grant or contract under Title VII of the Older
				Americans Act of 1965 (42
				U.S.C. 3021) and serves meals to participants
				in the Federal Nutrition Program for the Elderly in return for contributions
				established in amount by the individual participant pursuant to a schedule of
				suggested fees as provided for in the Federal Act. This exemption existed prior
				to the enactment of Section 2-70 and will not sunset;
p) of farm chemicals (see Section
				130.1955 of this Part). This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
q) of manufacturing
				machinery and equipment that qualifies for exemption under provisions of
				Section 130.330 of this Part. This
				exemption existed prior to the enactment of Section 2-70 and will not
				sunset;
r) of services included in
				gross receipts for purposes of the Retailers' Occupation Tax and that are
				designated mandatory service charges by vendors of meals to the extent that the
				proceeds of the service charge are in fact turned over to the employees who
				would normally have received tips had the service charge policy not been
				introduced. Service charges that are used to fund or pay wages, labor costs,
				employee benefits or employer costs of doing business are taxable gross
				receipts. This exemption existed prior to the enactment of Section 2-70 and
				will not sunset;
s)
of
				tangible personal property sold to a purchaser if the purchaser is exempt from
				use tax by operation of federal law.
This exemption is statutorily
				exempt from the sunset provisions of Section 2-70. [35 ILCS
				120/2-5(16) ].
1) For example, federal law prohibits sellers
				from charging tax to Amtrak when it purchases tangible personal property.
				However, federal law does not relieve the seller of Retailers' Occupation Tax
				liability in these transactions. For that reason, the exemption set out in this
				subsection is necessary to relieve the seller of Retailers' Occupation Tax
				liability when making sales of tangible personal property to Amtrak.
2) The nontaxable transaction set out above
				is also applicable to local Retailers' Occupation Taxes imposed by
				municipalities, counties, the Regional Transportation Authority and Metro East
				Mass Transit District;