Illinois Administrative Code › Title 86 - REVENUE › Part 140 - SERVICE OCCUPATION TAX › Subpart A - NATURE OF TAX › Section 140.101 - Basis and Rate of the Service Occupation Tax

Current through Register Vol. 48, No. 28, July 12, 2024
a) The Service Occupation Tax Act (the Act or
				the SOTA) [35 ILCS 115 ] imposes a tax upon
				persons engaged in this State in the business of making sales of service, based
				on tangible personal property transferred incident to sales of service. These
				persons are referred to in this Part as servicemen.
b) Rate of Tax
1) The rate of Service Occupation Tax (SOT)
				incurred by a serviceman from October 1, 1969 through December 31, 1983, is 4%,
				and on and after January 1, 1984 and prior to January 1, 1990, is 5% of the
				serviceman's cost price of tangible personal property transferred by the
				serviceman incident to a sale of service. On and after January 1, 1990, if SOT
				is computed on the selling price or Use Tax is computed on the cost price of
				the tangible personal property transferred incident to sales of service, the
				rate is 6.25 %. Effective January 1,
				1990 and prior to July 1, 2003, sales of
"gasohol" (a motor fuel that
				is no more than 90% gasoline and at least 10% denatured ethanol that contains
				no more than 1.25 % water by weight
[35 ILCS
				105/3-40 ]) are subject to tax, based upon 70% of the
				proceeds of sales. On and after July 1, 2003 and on or before July 1, 2017, tax
				shall be based upon 80% of the proceeds from sales of gasohol. After July 1,
				2017, tax shall be based upon 100% of the proceeds of sales of gasohol.
				However, from July 1, 1997 to June 30, 1998, the rate was 85% for gasohol sold
				in this State during the 12 months beginning July 1 following any calendar year
				for which the Department determined that the percentages in Section 10 of the
				Gasohol Fuels Tax Abatement Act were not met. The Gasohol Fuels Tax Abatement
				Act was repealed effective July 1, 1998.
Effective July 1, 2003, if at
				any time the tax under
the SOTA
on sales of gasohol is imposed
				at the rate of 1.25%, then the tax imposed by the
SOTA
applies
				to 100% of the proceeds of sales of gasohol made during that time. With respect
				to majority blended ethanol fuel, as defined in Section 3-44 of the Use Tax
				Act, the tax imposed by the
SOTA
does not apply to the
				proceeds of sales made on or after July 1, 2003 and on or before December 31,
				2023, but applies to 100% of the proceeds of sales made thereafter. With
				respect to biodiesel blends, as defined in Section 3-42 of the Use Tax Act,
				with no less than 1% and no more than 10% biodiesel, the tax imposed by
				the
SOTA
applies to 80% of the proceeds of sales made on or
				after July 1, 2003 and on or before December 31, 2018 and 100% of the proceeds
				of the selling price after December 31, 2018 and before January 1, 2024. On and
				after January 1, 2024, the taxation of biodiesel, renewable diesel, and
				biodiesel blends shall be as provided in 86 Ill. Adm. Code
				130.320. If at any time,
				however, the tax under the
SOTA
on sales of biodiesel blends,
				as defined in the Use Tax Act, with no less than 1% and no more than 10%
				biodiesel is imposed at the rate of 1.25%, then the tax imposed by the
SOTA
applies to 100% of the proceeds of sales of biodiesel blends with
				no less than 1% and no more than 10% biodiesel made during that time. With
				respect to biodiesel, as defined in Section 3-41 of the Use Tax Act, and
				biodiesel blends, as defined in Section 3-42 of the Use Tax Act, with more than
				10% but no more than 99% biodiesel, the tax imposed by the
SOTA
does not apply to the proceeds of sales made on or after July 1, 2003
				and on or before December 31, 2023.
[35 ILCS
				115/3-10 ]
On and after January 1, 2024, the
				taxation of biodiesel, renewable diesel, and biodiesel blends shall be as
				provided in
86 Ill. Adm. Code 130.320. On and after January 1, 1993,
				if SOT is computed on the cost price of tangible personal property transferred
				incident to service, the rate is also 6.25%. Exceptions to these rules,
				however, are as follows:
A) On and after
				January 1, 1984, and prior to January 1, 1990, food for human consumption that
				is to be consumed off the premises where it is sold (other than soft drinks,
				alcoholic beverages and food that has been prepared for immediate consumption
				and except as provided in subsection (b)(1)(B)) and prescription and
				nonprescription medicines, drugs, medical appliances and insulin, urine testing
				materials, syringes and needles used by diabetics, for human use, will be taxed
				at the rate of 0%. On and after January 1, 1990, except for the period
				beginning July 1, 2022 and until July 1, 2023 as provided in subsection
				(b)(1)(D), the rate of tax will be 1%. For further discussion of food for human
				consumption that is to be consumed off the premises where sold and prescription
				and nonprescription medicines, drugs, medical appliances, and similar items,
				see 86 Ill. Adm. Code
				130.310 and
				130.311.
B) Effective January 1, 1993, except for the
				period beginning July 1, 2022 and until July 1, 2023 as provided in subsection
				(b)(1)(D),
food prepared for immediate consumption and transferred
				incident to a sale of service by an entity licensed under the Hospital
				Licensing Act or the Nursing Home Care Act shall be subject to tax at the rate
				of 1%. Effective August 13, 1999,
except for the period beginning July
				1, 2022 and until July 1, 2023 as provided in subsection (b)(1)(D),
the
				1% rate shall also apply to food prepared for immediate consumption and
				transferred incident to a sale of service by an entity licensed under the Child
				Care Act of 1969.
Effective July 1, 2010 and through December 31,
				2011, the 1% rate shall also apply to food prepared for immediate consumption
				and transferred incident to a sale of service by an entity licensed under the
				MR/DD Community Care Act. Effective January 1, 2012, except for the period
				beginning July 1, 2022 and until July 1, 2023 as provided in subsection
				(b)(1)(D), the 1% rate shall also apply to food prepared for immediate
				consumption and transferred incident to a sale of service by an entity licensed
				under the ID/DD Community Care Act. Effective June 28, 2011, except for the
				period beginning July 1, 2022 and until July 1, 2023 as provided in subsection
				(b)(1)(D), the 1% rate shall also apply to food prepared for immediate
				consumption and transferred incident to a sale of service by an entity licensed
				under the Specialized Mental Health Rehabilitation Act of 2013. Effective July
				29, 2015, except for the period beginning July 1, 2022 and until July 1, 2023
				as provided in subsection (b)(1)(D), the 1% rate shall also apply to food
				prepared for immediate consumption and transferred incident to a sale of
				service by an entity licensed under the MC/DD Act. Effective June 17, 2021,
				except for the period beginning July 1, 2022 and until July 1, 2023 as provided
				in subsection (b)(1)(D), the 1% rate shall also apply to food prepared for
				immediate consumption and transferred incident to a sale of service by an
				entity licensed under the Assisted Living and Shared Housing Act or an entity
				that holds a permit issued pursuant to the Life Care Facilities Act. (Section
				3-10 of the Act)
C)
Beginning on July 1, 2000 through December 31, 2000, with respect to
				motor fuel and gasohol, the tax is imposed at the rate of 1.25%
(Section 3-10 of the Act). (See the provisions of 86 Ill. Adm. Code
				130.101, which is incorporated
				by reference as if fully set forth in this subsection (b).)
D)
Beginning on July 1, 2022 and
				until July 1, 2023, the tax shall be imposed at the rate of 0% on food prepared
				for immediate consumption and transferred incident to a sale of service subject
				to the
SOTA
or the Service Use Tax Act
(SUTA)
by an entity licensed under the Hospital Licensing Act, the Nursing
				Home Care Act, the Assisted Living and Shared Housing Act, the ID/DD Community
				Care Act, the MC/DD Act, the Specialized Mental Health Rehabilitation Act of
				2013, or the Child Care Act of 1969, or an entity that holds a permit issued
				pursuant to the Life Care Facilities Act. Beginning July 1, 2022 and until July
				1, 2023, the tax shall also be imposed at the rate of 0% on 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 adult use
				cannabis, soft drinks,
candy,
and food that has been prepared
				for immediate consumption and is not otherwise included in this
				paragraph).
(Section 3-10 of the Act)