Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart S - SPECIFIC APPLICATIONS › Section 130.2070 - Sales of Containers, Wrapping and Packing Materials and Related Products

Current through Register Vol. 48, No. 28, July 12, 2024
a) Definition
When used in this Section, the term "containers" includes all
				  containers, wrapping and packing materials, bags, twines, container handles,
				  wrapping papers, gummed tapes, cellophane, boxes, bottles, drums, cartons,
				  sacks or other packing, packaging, containing and wrapping materials in which
				  tangible personal property may be contained.
b) Sales for Resale
1) Sellers of containers to purchasers who
				sell tangible personal property contained in such containers to others are
				deemed to make sales of such containers to purchasers for purposes of resale,
				the receipts from which sales are not subject to the Retailers' Occupation Tax,
				if the purchasers of such containers transfer the ownership of the containers
				to their customers together with the ownership of the tangible personal
				property contained in such containers.
2) For example, a sale of fruit boxes to a
				packer who fills the boxes with fruit and sells the fruit in such boxes is a
				sale of the boxes to the packer for resale by him. If the packer places the
				boxes upon pallets that are then transferred to purchasers and the ownership of
				the pallets also passes to the purchasers, then the packer who purchases the
				pallets would be making a purchase for resale. There is no difference between a
				returnable container whose ownership is transferred with a deposit being taken
				and a nonreturnable container. This means that if the seller charges purchasers
				a deposit for pallets, or other containers, and there is an understanding that
				the pallet or other container can be returned by purchasers for refund or
				credit of the deposit amount, then the purchase of the pallets or other
				containers by sellers are nontaxable purchases for resale. Although sales of
				containers to purchasers who retransfer such containers to others as an
				incident to engaging in a service occupation are not subject to the Retailers'
				Occupation Tax, such transactions are governed by the Service Occupation Tax
				Act (see Subpart A of Service Occupation Tax, 86 Ill. Adm. Code 140).
3) Effective August 1, 1997, nonreusable
				tangible personal property sold to food and beverage vendors, including persons
				engaged in the business of operating restaurants, cafeterias or drive-ins, is a
				sale for resale when it is transferred to customers in the ordinary course of
				business as part of the sale of food or beverages and is used to deliver,
				package, or consume food or beverages, regardless of where consumption of the
				food or beverage occurs. Examples of such items include, but are not limited
				to, paper and plastic cups, plates, baskets, boxes, sleeves, buckets or other
				containers, utensils, straws, placemats, napkins, doggie bags and wrapping or
				packaging materials that cannot be reused by the food or beverage vendor and
				which are transferred to customers as part of the sale of food or beverages.
				Such items do not include items which are used by the food vendor in conducting
				his business and which are not transferred to the customer, including, but not
				limited to, paper products, serving trays, serving dishes, utensils or
				condiment bottles.