Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart D - GROSS RECEIPTS › Section 130.405 - How to Avoid Paying Tax on State or Local Tax Passed on to the Purchaser

Current through Register Vol. 48, No. 28, July 12, 2024
a) "Gross
				receipts", on the basis of which Retailers' Occupation Tax liability must be
				computed, do not include charges which are added to prices on account of the
				seller's Illinois Retailers' Occupation Tax liability, or on account of the
				seller's liability for local Retailers' Occupation Taxes administered by the
				Department, or on account of the seller's duty to collect the tax imposed by
				the Use Tax Act.
b) If a retailer
				does not keep a detailed record for the return period of the Use Tax which he
				collects so as clearly to segregate this added charge from other receipts, it
				will at least be assumed that the Use Tax collected equals the Retailers'
				Occupation Tax payable on such transactions if the retailer collects the Use
				Tax in accordance with the bracket schedule prescribed by the Department in
				Subpart D of the Use Tax Regulations (86 Ill. Adm. Code 150).
c) The retailer may eliminate the amount of
				Use Tax which he collects from the total receipts which he receives from
				taxable sales in arriving at his taxable receipts from such sales by
				subtracting the amount so collected from the purchaser as Use Tax, as shown by
				such retailer's books and records. He may also accomplish this result by
				subtracting, from the total receipts which he receives from taxable sales, the
				figure obtained by dividing such receipts by 1.0625 and multiplying the result
				by .0625.
d) To the extent to which
				such sales are also taxable for Home Rule Municipal Retailers' Occupation Tax
				purposes, Home Rule County Retailers' Occupation Tax purposes or any other
				locally-imposed Retailers' Occupation Tax at a 1/4 of 1% rate (with an amount
				equivalent to the Municipal Retailers' Occupation Tax or County Retailers'
				Occupation Tax being passed on to purchasers by the seller as a separate item
				from the selling price) and the formula is used for determining how much may be
				subtracted from the total receipts which the seller receives from taxable sales
				in arriving at the taxable gross receipts from such sales, the amount to be
				subtracted on this account will be determined by dividing such total receipts
				by 1.065 and multiplying the result by .065 ( 6.25 % for the Use Tax and 1/4%
				for the local Retailers' Occupation Tax.)
e) To the extent to which such sales are also
				taxable for Home Rule Municipal Retailers' Occupation Tax purposes, Non-Home
				Rule Municipal Retailers' Occupation Tax purposes, Home Rule County Retailers'
				Occupation Tax purposes or any other locally-imposed Retailers' Occupation Tax
				at a 3/4 of 1% rate (with an amount equivalent to the Municipal Retailers'
				Occupation Tax or County Retailers' Occupation Tax being passed on to
				purchasers by the seller as a separate item from the selling price) and the
				formula is used for determining how much may be subtracted from the total
				receipts which the seller receives from taxable sales in arriving at the
				taxable gross receipts from such sales, the amount to be subtracted on this
				account will be determined by dividing such total receipts by 1.07 and
				multiplying the result by .07 ( 6.25% for the Use Tax and 3/4 of 1% for the
				local Retailers' Occupation Tax).
f) To the extent to which such sales are also
				taxable for Home Rule Municipal Retailers' Occupation Tax purposes, Non-Home
				Rule Municipal Retailers' Occupation Tax purposes or Home Rule County
				Retailers' Occupation Tax purposes or any other locally-imposed Retailers'
				Occupation Tax at a 1% rate (with an amount equivalent to the Municipal
				Retailers' Occupation Tax or County Retailers' Occupation Tax being passed on
				to purchasers by the seller as a separate item from the selling price) and the
				formula is used for determining how much may be subtracted from the total
				receipts which the seller receives from such sales, the amount to be subtracted
				on this account will be determined by dividing such total receipts by 1.0725
				and multiplying the result by .725 (6.25% for the Use Tax and 1% for the local
				Retailers' Occupation Tax).
g) If
				the seller, in collecting such tax or its equivalent, does not state it to the
				purchaser as a separate item from the selling price in accordance with
				procedures described in Section
				150.1305 of
				the Use Tax Regulations (86 Ill. Adm. Code 150.1305), the failure to state the
				tax separately will create a rebuttable presumption that the tax was not
				collected. The seller will not be entitled to any deduction from total receipts
				because of having collected tax or its equivalent from the purchaser unless the
				seller can produce documentary evidence which shows that the tax or its
				equivalent was in fact collected..