Illinois Administrative Code › Title 86 - REVENUE › Part 140 - SERVICE OCCUPATION TAX › Subpart N - CLAIMS TO RECOVER ERRONEOUSLY PAID TAX › Section 140.1401 - Claims for Credit - Limitations - Procedures

Current through Register Vol. 48, No. 28, July 12, 2024
a) Limitations Upon Claims
1) Where a taxpayer under the Service
				Occupation Tax Act pays to the Department an amount of tax or penalty or
				interest not due under the provisions of the Act, either as the result of a
				mistake of fact or an error of law, the taxpayer may file a claim for credit
				with the Department. The Department cannot approve any claim for credit unless
				the proof submitted in support clearly establishes that the claimant has borne
				the burden of the tax erroneously paid or that the claimant has unconditionally
				repaid the amount of the tax to the vendee from whom the claimant has collected
				the amount. In the latter event, the claimant must also prove that the vendee
				has borne the burden of the amount or has unconditionally repaid persons to
				whom the vendee has shifted the burden of the amount (see Section 17 of the
				Act). In addition, no credit shall be allowed for any amount paid by or
				collected from any claimant unless it shall appear that the claimant has
				unconditionally repaid, to the purchaser, any amount collected from the
				purchaser and retained by the claimant with respect to the same transaction
				under the Service Use Tax Act. Claimant will be considered to have satisfied
				the unconditional repayment requirement where it provides its purchaser with an
				instrument upon which the customer can make a demand upon claimant for payment
				of the tax recovered if the claim is allowed. The claimant's provision of
				unconditional promissory notes or irrevocable credit memoranda to its
				purchasers who paid tax in error would satisfy this requirement. The purpose of
				requiring the claimant to make an unconditional repayment to its purchasers is
				to prevent unjust enrichment on the part of the claimant. Therefore, in order
				to establish that it was not unjustly enriched, the claimant filing a claim for
				credit must be able to demonstrate that it gave unconditional promissory notes
				or irrevocable credit memoranda to its purchasers who paid tax in error to the
				claimant. The Department cannot approve any claim for credit to the extent that
				the amount claimed is an amount which has been paid (voluntarily or
				involuntarily) in total or partial liquidation of an assessment which had
				become final before the claim for credit to recover the amount so paid is filed
				with the Department, or if paid in total or partial liquidation of a judgment,
				order or decree of court. Also, all claims for credit are subject to the
				following statute of limitations;
2) As to any claim for credit filed with the
				Department on and after January 1, but on or before June 30 of any given year,
				no amount of tax or penalty or interest erroneously paid (either in total or
				partial liquidation of a tax or penalty or amount of interest under the Act)
				more than 3 years prior to January 1 shall be credited, and as to any claim
				filed on and after July 1 but on or before December 31 of any given year, no
				amount of tax or penalty or interest erroneously paid (either in total or
				partial liquidation of a tax or penalty or amount of interest under the Act)
				more than 3 years prior to July 1 shall be credited, except that, if both the
				Department and the taxpayer have agreed to an extension of time to issue a
				notice of tax liability as provided in Section 4 of the Retailers' Occupation
				Tax Act, that claim may be filed at any time prior to the expiration of the
				period agreed upon.
3) Beginning
				June 25, 2021,
for any period included in a claim for credit or refund
				for which the statute of limitations for issuing a notice of tax liability
				under this Act will expire less than 6 months after the date a taxpayer files
				the claim for credit or refund, the statute of limitations is automatically
				extended for 6 months from the date it would have otherwise expired.
[35 ILCS
				115/19 ].