Illinois Administrative Code › Title 86 - REVENUE › Part 140 - SERVICE OCCUPATION TAX › Subpart B - DEFINITIONS › Section 140.201 - General Definitions

Current through Register Vol. 48, No. 28, July 12, 2024
a) "Act"
				means the Service Occupation Tax [35 ILCS 115].
b)
"Cost price" means the
				consideration paid by the serviceman for a purchase valued in money, whether
				paid in money or otherwise, including cash, credits and services and shall be
				determined without any deduction on account of the supplier's cost of the
				property sold or on account of any other expense incurred by the
				supplier;
but does not include charges which are added to prices by
				suppliers on account of the purchaser's tax liability under the Act or the
				Service Use Tax Act [35 ILCS 110]. Except as provided in Section
				140.145(a),
when a serviceman contracts out part or all of the services required in
				his sale of service, it shall be presumed that the cost price to the serviceman
				of the property transferred to him by his subcontractor is equal to 50% of the
				subcontractor's charges to the serviceman in the absence of proof of the
				consideration paid by the subcontractor for the purchase of such
				property
. (Section 2 of the Act)
c) "De minimis serviceman" means a serviceman
				whose annual aggregate cost price of tangible personal property transferred
				incident to sales of service is less than 35% (75% in the case of servicemen
				transferring prescription drugs or servicemen engaged in graphic arts
				production) of the aggregate annual total gross receipts from all sales of
				service. See Section 140.105 for the method used to
				determine de minimis status.
d)
				"Department" means the Illinois Department of Revenue.
e)
"Person" means any natural
				individual, firm, partnership, association, joint stock company, limited
				liability company, joint venture, public or private corporation, and any
				receiver, executor, trustee, conservator or other representative appointed by
				order of any court
. (Section 2 of the Act)
f) "Sale at Retail" means "sale at retail" as
				defined in Section 1 of the Retailers' Occupation Tax Act [35 ILCS
				120].
g)
"Sale of Service"
				means any transaction except:
1)
a retail sale of tangible personal property taxable under the
				Retailers' Occupation Tax Act or under the Use Tax Act
(Section 2(a)
				of the Act);
2)
a sale of
				tangible personal property for the purpose of resale made in compliance with
				Section 2c of the Retailers' Occupation Tax Act
(Section 2(b) of the
				Act);
3)
a sale or transfer
				of tangible personal property as an incident to the rendering of service for or
				by any governmental body or for or by any corporation, society, association,
				foundation or institution organized and operated exclusively for charitable,
				religious or educational purposes or for or by any not-for-profit corporation,
				society, association, foundation, institution or organization which has no
				compensated officers and employees and which 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 the Act only if the
				limited liability company is organized and operated exclusively for educational
				purposes.
(Section 2(c) of the Act) Effective July 1, 1987
,
				this exception will not apply unless the entities noted above have an active
				exemption identification number issued by the Department
(Section 2 of
				the Act);
4)
a sale or
				transfer of tangible personal property as an incident to the rendering of
				service for owners, lessors or shippers of tangible personal property which is
				utilized by interstate carriers for hire for use as rolling stock moving in
				interstate commerce, and equipment operated by a telecommunications provider,
				licensed as a common carrier by the Federal Communications Commission, which is
				permanently installed in or affixed to aircraft moving in interstate
				commerce.
This exemption is administeredin accordance with the
				provisions of 86 Ill. Adm. Code
				130.340 (Section 2(d-1) and
				Section 2d of the Act);
5)
a sale or transfer of machinery and equipment used primarily in the
				process of manufacturing or assembling, either in an existing, an expanded or a
				new manufacturing facility, of tangible personal property for wholesale or
				retail sale or lease, whether such sale or lease is made directly by the
				manufacturer or by some other person, whether the materials used in the process
				are owned by the manufacturer or some other person, or whether such sale or
				lease is made apart from or as an incident to the seller's engaging in a
				service occupation and the applicable tax is a Service Occupation Tax or
				Service Use Tax, rather than Retailers' Occupation Tax or Use Tax
in
				accordance with the provisions of 86 Ill. Adm. Code
				130.330 (Section 2(e) of the
				Act);
6)
at the election of
				any serviceman not required to be otherwise registered as a retailer under
				Section 2a of the Retailers' Occupation Tax Act, made for each fiscal year
				sales of service in which the aggregate annual cost price of tangible personal
				property transferred as an incident to the sales of service is less than 35%
				(75% in the case of servicemen transferring prescription drugs or servicemen
				engaged in graphic arts production) of the aggregate annual total gross
				receipts from all sales of service. The purchase of such tangible personal
				property by the serviceman shall be subject to tax under the Retailers'
				Occupation Tax Act and the Use Tax Act
(Section 2(g) of the
				Act);
7)
the repairing,
				reconditioning or remodeling, for a common carrier by rail, of tangible
				personal property which belongs to such carrier for hire, and as to which such
				carrier receives the physical possession of the repaired, reconditioned or
				remodeled item of tangible personal property in Illinois, and which such
				carrier transports, or shares with another common carrier in the transportation
				of such property, out of Illinois on a standard uniform bill of lading showing
				the person who repaired, reconditioned or remodeled the property as the shipper
				or consignor of such property to a destination outside Illinois, for use
				outside Illinois
(Section 2(d-2) of the Act);
8)
a sale or transfer of tangible
				personal property which is produced by the seller thereof on special order in
				such a way as to have made the applicable tax the Service Occupation Tax or the
				Service Use Tax, rather than the Retailers' Occupation Tax or the Use Tax, for
				an interstate carrier by rail which receives the physical possession of such
				property in Illinois, and which transports such property, or shares with
				another common carrier in the transportation of such property, out of Illinois
				on a standard uniform bill of lading showing the seller of the property as the
				shipper or consignor of such property to a destination outside Illinois, for
				use outside Illinois
(Section 2(d-3) of the Act).