Illinois Administrative Code › Title 86 - REVENUE › Part 130 - RETAILERS' OCCUPATION TAX › Subpart A - NATURE OF TAX › Section 130.110 - Occasional Sales

Current through Register Vol. 48, No. 28, July 12, 2024
a) Since the Act
				does not impose a tax upon persons who are not engaged in the business of
				selling tangible personal property, persons who make isolated or occasional
				sales thereof do not incur tax liability.
b) For example, if a retailer sells tangible
				personal property, such as machinery or other capital assets, which the
				retailer has used in its business and no longer needs, and which the retailer
				does not otherwise engage in selling, the retailer does not incur Retailers'
				Occupation Tax liability when selling such tangible personal property even if
				the sales are at retail and even if the retailer may be required to make a
				considerable number of such sales in order to dispose of such tangible personal
				property, because such sales are isolated or occasional and do not constitute a
				business of selling tangible personal property at retail.
c) However, construction contractors and real
				estate developers are not considered to be isolated or occasional sellers of
				tangible personal property to the extent noted in Section
				130.1940(c) and (d)
				 of this Part.
d) Where persons engage primarily in the
				business of selling tangible personal property other than for use or
				consumption (such as the business of selling tangible personal property
				primarily to purchasers for resale), the mere fact that their sales for use or
				consumption may comprise but a small fraction of their total sales does not
				make the retail sales isolated or occasional. The vendor is liable for tax
				measured by the gross receipts from such retail sales.
e) Regarding sale/leaseback situations,
				typically customer A purchases equipment from retailer B, and then sells it to
				lessor C who leases the equipment back to customer A. Customer A has paid tax
				when purchasing the equipment in the first transaction under a taxable retail
				sale and the second transaction where customer A sells the equipment to lessor
				C is a nontaxable occasional sale so long as A is not otherwise in the business
				of selling like-kind property.
f)
				When a person purchases an item of tangible personal property with the intent
				of reselling the item to a purchaser for use or consumption, that person
				engages in conduct equivalent to holding itself out as a retailer. In such a
				situation, the initial purchase is a sale for resale and the subsequent sale is
				a taxable sale at retail subject to Retailers' Occupation Tax, not an
				occasional sale. For example, if a hospital possessing an exemption
				identification number issued by the Department purchases a computer system with
				the intent of reselling the computer system to a group of doctors, the hospital
				may not resell the computer system to the group of doctors without incurring
				Retailers' Occupation Tax. In this instance, the hospital is holding itself out
				as a retailer and its sale of the computer system to the group of doctors is
				taxable. The hospital should provide a Certificate of Resale to its supplier on
				the purchase of the computer system. It is improper for the hospital to use its
				exemption identification number to purchase the computer system in these
				circumstances.
g) No sales made on
				a marketplace are considered to be occasional sales. (86 Ill. Adm. Code
				131.140(b)(3))
				. (For further information on the application of the Act to marketplace
				facilitators, see 86 Ill. Adm. Code
				131.130,
				131.135, 131.140, and
				131.145.)