Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart B - SALE AT RETAIL › Section 130.210 - Sales of Tangible Personal Property to Purchasers for Resale

Current through Register Vol. 48, No. 28, July 12, 2024
a) The sale of
				tangible personal property to a purchaser for the purpose of resale in any form
				as tangible personal property, to the extent not first subjected to a use for
				which it was purchased, is not subject to Retailers' Occupation Tax.
b) Sales of tangible personal property, which
				property, to the extent not first subjected to a use for which it was
				purchased, as an ingredient or constituent, goes into and forms a part of
				tangible personal property subsequently the subject of a "sale at retail", are
				not sales at retail as defined in the Act, provided that the property purchased
				is deemed to be purchased for the purpose of resale, despite first being used,
				to the extent to which it is resold as an ingredient of an intentionally
				produced product or byproduct of manufacturing. For this purpose, slag produced
				as an incident to manufacturing pig iron or steel and sold is considered to be
				an intentionally produced byproduct of manufacturing.
c) However, such sales for resale cannot be
				made tax-free unless 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 such number to suppliers in connection with
				certifying to any supplier that any sale to such purchaser is nontaxable
				because of being a sale for resale. Failure to present an active registration
				number or resale number and a certification to the seller that a sale is for
				resale creates a presumption that a sale is not for resale. This presumption
				may be rebutted by other evidence that all of the seller's sales are sales for
				resale, or that a particular sale is a sale for resale.
d) Except to the extent stated in Subsection
				(b) of this Section, tangible personal property, even though it is essential to
				the process of manufacturing or otherwise producing other tangible personal
				property that will be sold is, nevertheless, sold at retail (and not for resale
				within the meaning of the Act) if it is sold to a manufacturer or other
				producer who uses or consumes such property in the manufacturing or other
				production process, but does not physically incorporate such property into the
				tangible personal property which he manufactures or otherwise produces and
				sells.
e) Divisible Type of Sale.
				There can also be a divisible type of sale where the tangible personal property
				is bought partly for "use" and partly for "resale" in the first place. An
				example of this is the sale of coal and coke to a steel manufacturer who buys
				coal and coke partly to produce heat for "use" in the manufacturing operation,
				and partly to provide carbon as an ingredient of the steel as well as various
				byproducts which the purchasing manufacturer will sell. In this case, the coal
				and coke bought for "use" in the manufacturing operation are taxable, and the
				sale of the coal and coke which the purchaser bought to provide carbon is a
				nontaxable sale for resale.