Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart C - CERTAIN STATUTORY EXEMPTIONS › Section 130.310 - Food, Soft Drinks and Candy

Current through Register Vol. 48, No. 28, July 12, 2024
a)
				Food.
Until July 1, 2022 and beginning again on July 1, 2023, with
				respect to 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), the tax is imposed at the rate of 1%.
				Beginning on July 1, 2022 and until July 1, 2023, with respect to 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), the tax is imposed at the rate of 0%.
[35 ILCS
				120/2-10 ] Prescription and nonprescription medicines
				and drugs, however, shall continue to be taxed at the rate of 1% during the
				period beginning on July 1, 2022 and until July 1, 2023.
"Food for
				human consumption that is to be consumed off the premises where it is sold"
				includes all food sold through a vending machine, except soft drinks,
				candy
,
and food products that are dispensed hot from a vending
				machine, regardless of the location of the vending machine. Beginning September
				1, 2009, "food for human consumption that is to be consumed off the premises
				where it is sold" does not include candy.
[35 ILCS
				120/2-10 ] For further information on the definition
				and taxation of soft drinks, see subsection (d)(6). For further information
				regarding the definition and taxation of candy, see subsection
				(d)(7).
b) The manner in which food
				is taxed depends upon 2 distinct factors that must both be considered in
				determining if food is taxed at the high rate as "food prepared for immediate
				consumption" or the low rate as "food prepared for consumption off the premises
				where sold".
1) The first factor is whether
				the retailer selling the food provides premises for consumption of food. If so,
				a rebuttable presumption is created that all sales of food by that retailer are
				considered to be prepared for immediate consumption and subject to tax at the
				high rate. As a result of this presumption, even bulk food could potentially be
				taxable at the high rate. However, this presumption is rebutted if a retailer
				demonstrates that:
A) the area for on-premises
				consumption is physically separated or otherwise distinguishable from the area
				where food not for immediate consumption is sold; and
B) the retailer has a separate means of
				recording and accounting for collection of receipts from sales of both high and
				low rate foods. For purposes of this subsection (b)(1)(B), the phrase "separate
				means of recording and accounting for collection of receipts" includes cash
				registers that separately identify high rate and low rate sales, separate cash
				registers, and any other methods by which the tax on high and low rate sales
				are recorded at the time of collection.