Section 150.201 General Definitions

Section 150

Section 150.201  General

Definitions

"Act"

means the Use Tax Act [35 ILCS 105]

"Department" means

the Department of Revenue.

"Person" means any

natural individual, firm, partnership, association, joint stock company, joint

adventure, public or private corporation, limited liability company, or a

receiver, executor, trustee, guardian or other representative appointed by

order of any court.

"Purchase at retail"

means the acquisition of the ownership of or title to tangible personal

property through a sale at retail.

"Purchaser" means

anyone who, through a sale at retail, acquires the ownership of tangible

personal property for a valuable consideration.

For purposes of this Part,

"remote retailer" has the same meaning as defined in 86 Ill. Adm.

Code 131.105.

"Retailer" means and

includes every person engaged in the business of

selling tangible personal

property for use and not for resale.

Effective October 1, 1974,

a

person who is the recipient of a grant or contract under Title VII of the Older

Americans Act of 1965

[42 U.S.C. 3001 et seq.]

and serves meals to

participants in the federal Nutrition Program for the Elderly in return for

contributions established in amount by the individual participant pursuant to a

schedule of suggested fees as provided for in the federal Act is not a retailer

under

the Act

with respect to such transactions.

[35 ILCS 105/2]

Nonprofit Sellers

A person whose activities are

organized and conducted primarily as a not-for-profit service enterprise, and

who engages in selling tangible personal property at retail (whether to the

public or merely to members and their guests) is a retailer with respect to

such transactions, excepting only a person organized and operated exclusively

for charitable, religious or educational purposes either:

to the extent of sales by such

person to its members, students, patients or inmates of tangible personal property

to be used primarily for the purposes of such person, or

to the extent of sales by such

person of tangi

eir guests) is a retailer with respect to

such transactions, excepting only a person organized and operated exclusively

for charitable, religious or educational purposes either:

to the extent of sales by such

person to its members, students, patients or inmates of tangible personal property

to be used primarily for the purposes of such person, or

to the extent of sales by such

person of tangible personal property which is not sold or offered for sale by

persons organized for profit.  The selling of

schoolbooks

and school

supplies by schools at retail to students is not "primarily for the

purposes of" the school which does such selling.

This definition

does not apply

to nor subject to taxation occasional dinners, social or similar activities of

a person organized and operated exclusively for charitable, religious or

educational purposes, whether or not such activities are open to the public.

Special Order Sales

A person who holds

oneself

out

as being engaged (or who habitually engages) in selling tangible personal

property at retail is a retailer

under the Act

with respect to such

sales (and not primarily in a service occupation) notwithstanding the fact that

such person designs and produces such tangible personal property on special

order for the purchaser and in such a way as to render the property of value

only to such purchaser, if such tangible personal property so produced on

special order serves substantially the same function as stock or standard items

of tangible personal property that are sold at retail

ion) notwithstanding the fact that

such person designs and produces such tangible personal property on special

order for the purchaser and in such a way as to render the property of value

only to such purchaser, if such tangible personal property so produced on

special order serves substantially the same function as stock or standard items

of tangible personal property that are sold at retail.

When Construction Contractor or

Real Estate Developer is a Retailer

A construction contractor or real

estate developer

who, in the course of conducting such business, transfers

tangible personal property to users or consumers in the finished form in which

it was purchased, and which does not become real estate, under any provision of

a construction contract or real estate sale or real estate sales agreement

entered into with some other person arising out of or because of nontaxable

business, is a retailer to the extent of the value of the tangible personal

property so transferred.

[35 ILCS 105/2]  See also 86 Ill. Adm. Code

130.1940.

Isolated or Occasional Sales

The isolated or occasional sale

of tangible personal property at retail by a person who does not hold

oneself

out as being engaged (or who does not habitually engage) in selling

such tangible personal property at retail or a sale through a bulk vending

machine does not make such person a retailer

under the Act.  [35 ILCS

105/2]

Leasing or Renting Motor Vehicles

A person who is engaged in the

business of leasing or renting motor vehicles to others and who, in connection

with such business sells any used motor vehicle to a purchaser for

the

purchaser's

use and not for the purpose of resale, is a retailer engaged in the

business of selling tangible personal property at retail under

the Act

to

the extent of the value of the vehicle sold.  For the purpose of

this

paragraph,

"motor vehicle" has the meaning prescribed in Section

1-157 of the Illinois Vehicle Code

[625 ILCS 5]

, as now or hereafter

amended

icle to a purchaser for

the

purchaser's

use and not for the purpose of resale, is a retailer engaged in the

business of selling tangible personal property at retail under

the Act

to

the extent of the value of the vehicle sold.  For the purpose of

this

paragraph,

"motor vehicle" has the meaning prescribed in Section

1-157 of the Illinois Vehicle Code

[625 ILCS 5]

, as now or hereafter

amended.  (Nothing provided herein shall affect liability incurred under

the Act

because of the use of such motor vehicles as a lessor.)

[35

ILCS 105/1a]

"Retailer maintaining a

place of business in this State", or any like term, means and includes any

of the following retailers:

A retailer having or

maintaining within this State, directly or by a subsidiary, an office,

distribution house, sales house, warehouse or other place of business, or any

agent or other representative operating within this State under the authority

of the retailer or its subsidiary, irrespective of whether such place of

business or agent or other representative is located here permanently or

temporarily, or whether such retailer or subsidiary is licensed to do business

in this State.  However, the ownership of property that is located at the

premises of a printer with which the retailer has contracted for printing and

that consists of the final printed product, property that becomes a part of the

final printed product, or copy from which the printed product is produced shall

not result in the retailer being deemed to have or maintain an office,

distribution house, sales house, warehouse, or other place of business within

this State.

[35 ILCS 105/2(1)]

It does not matter that an agent

may engage in business on the agent's own account in other transactions, nor

that the agent may act as an agent for other persons in other transactions, nor

that the agent is not an employee but is an independent contractor acting as an

agent.  The term "agent" is broader than the term

"employee"

r other place of business within

this State.

[35 ILCS 105/2(1)]

It does not matter that an agent

may engage in business on the agent's own account in other transactions, nor

that the agent may act as an agent for other persons in other transactions, nor

that the agent is not an employee but is an independent contractor acting as an

agent.  The term "agent" is broader than the term

"employee".  "Agent" includes anyone acting under the

principal's authority in an agency capacity.

Beginning July 1, 2011, a

retailer having a contract with a person located in this State under which:

the retailer sells the same or

substantially similar line of products as the person located in this State and

does so using an identical or substantially similar name, trade name, or

trademark as the person located in this State; and

the retailer provides a

commission or other consideration to the person located in this State based

upon the sale of tangible personal property by the retailer.

The provisions of this paragraph

shall apply only if the cumulative gross receipts from sales of tangible

personal property by the retailer to customers in this State under all such

contracts exceed $10,000 during the preceding 4 quarterly periods ending on the

last day of March, June, September, and December.

[35 ILCS 105/2(1.2)]

Beginning January 1, 2015,

a

retailer having a contract with a person located in this State under which the

person, for a commission or other consideration based upon the sale of tangible

personal property by the retailer, directly or indirectly refers potential

customers to the retailer by providing to the potential customers a promotional

code or other mechanism that allows the retailer to track purchases referred by

such persons

ving a contract with a person located in this State under which the

person, for a commission or other consideration based upon the sale of tangible

personal property by the retailer, directly or indirectly refers potential

customers to the retailer by providing to the potential customers a promotional

code or other mechanism that allows the retailer to track purchases referred by

such persons.  Examples of mechanisms that allow the retailer to track

purchases referred by such persons include but are not limited to the use of a

link on the person's Internet website, promotional codes distributed through

the person's hand-delivered or mailed material, and promotional codes

distributed by the person through radio or other broadcast media.  The

provisions of this paragraph shall apply only if the cumulative gross receipts

from sales of tangible personal property by the retailer to customers who are

referred to the retailer by all persons in this State under such contracts

exceed $10,000 during the preceding 4 quarterly periods ending on the last day

of March, June, September, and December.  A retailer meeting the requirements

of this paragraph shall be presumed to be maintaining a place of business in

this State but may rebut this presumption by submitting proof that the

referrals or other activities pursued within this State by such persons were

not sufficient to meet the nexus standards of the United States Constitution

during the preceding 4 quarterly periods.

[35 ILCS 105/2(1.1)]

The following documentation is

required in order to rebut this presumption:

Retailer Agreement.  The retailer

must have an agreement that prohibits persons operating under the agreement

from engaging in any solicitation activities in Illinois that refer potential

customers to the retailer, including, but not limited to, distributing flyers,

coupons, newsletters, and other printed promotional materials or electronic

equivalents, verbal soliciting, initiating telephone calls, and sending e-mails

or text messages

an agreement that prohibits persons operating under the agreement

from engaging in any solicitation activities in Illinois that refer potential

customers to the retailer, including, but not limited to, distributing flyers,

coupons, newsletters, and other printed promotional materials or electronic

equivalents, verbal soliciting, initiating telephone calls, and sending e-mails

or text messages.  If the person in Illinois with whom the retailer has an

agreement is an organization or corporation, such as a club or nonprofit group,

the agreement must provide that the organization will maintain on its website

information alerting its members to the prohibition against each of the

solicitation activities described in this paragraph.  The agreement must be

maintained in the retailer's records and shall be made available to the Department

for inspection or audit.

Annual Certification.  The person

or persons operating under the agreement in Illinois shall certify by January 1

of each year, under penalty of perjury, that they have not engaged in any

prohibited solicitation activities in Illinois at any time during the previous

year.  If the person in Illinois with whom the retailer has an agreement is an

organization or corporation, the annual certification shall also include a

statement from the organization or corporation, signed by an officer of the

organization or corporation, certifying that its website includes information

directed at its members alerting them to the prohibition against the

solicitation activities described in this paragraph.  The certification should

be made on forms prescribed by the Department, must be completed and provided

to the retailer, must be maintained in the retailer's records, and shall be

made available to the Department for inspection or audit

hat its website includes information

directed at its members alerting them to the prohibition against the

solicitation activities described in this paragraph.  The certification should

be made on forms prescribed by the Department, must be completed and provided

to the retailer, must be maintained in the retailer's records, and shall be

made available to the Department for inspection or audit.  If the retailer

accepts a properly and timely completed certification in good faith and the

retailer does not know or have reason to know that the certification is false

or fraudulent, that certification will be conclusive proof that the person that

provided the certification was in compliance with the agreement for the year

covered by the certification.  If the retailer fails to obtain the

certifications from all persons operating under the agreements and fails to

make those records available upon the Department's request, the presumption

that the retailer is maintaining a place of business in Illinois will not be

rebutted.

Beginning October 1, 2018, a

retailer making sales of tangible personal property to purchasers in Illinois

from outside of Illinois if:

the cumulative gross receipts

from sales of tangible personal property to purchasers in Illinois are $100,000

or more; or

the retailer enters into 200 or

more separate transactions for the sale of tangible personal property to

purchasers in Illinois.

Beginning January 1, 2020,

neither the gross receipts from nor the number of separate transactions for

sales of tangible personal property to purchasers in Illinois that a retailer

makes through a marketplace facilitator and for which the retailer has received

a certification from the marketplace facilitator pursuant to Section 2d of

the

Act

shall be included for purposes of determining whether the retailer has

met the thresholds of this paragraph

om nor the number of separate transactions for

sales of tangible personal property to purchasers in Illinois that a retailer

makes through a marketplace facilitator and for which the retailer has received

a certification from the marketplace facilitator pursuant to Section 2d of

the

Act

shall be included for purposes of determining whether the retailer has

met the thresholds of this paragraph.

[35 ILCS 105/2(9)]

Beginning January 1, 2020, a

marketplace facilitator who meets either of the following thresholds is

considered the retailer for each sale of tangible personal property made

through its marketplace:

the cumulative gross receipts

from sales of tangible personal property to purchasers in Illinois by the

marketplace facilitator and by marketplace sellers selling through the

marketplace are $100,000 or more; or

the marketplace facilitator and

marketplace sellers selling through the marketplace cumulatively enter into 200

or more separate transactions for the sale of tangible personal property to

purchasers in Illinois.

[35 ILCS 105/2(10) and 35 ILCS 105/2d]

For purposes of this definition, a

retailer

without physical presence in this State

or

a marketplace

facilitator

shall determine on a quarterly basis, ending on the last day of

March, June, September, and December, whether

it

meets either of

the

foregoing

criteria for the preceding 12-month period.  If the retailer

or

marketplace facilitator

meets the threshold of either

criteria

for a

12-month period,

it

is considered a retailer maintaining a place of

business in this State and is required to collect and remit

use tax

and

file returns for one year.

At the end of that one-year

period, the retailer

or marketplace facilitator

shall determine whether

it

met the threshold of either

criteria

during the preceding 12-month

period

itator

meets the threshold of either

criteria

for a

12-month period,

it

is considered a retailer maintaining a place of

business in this State and is required to collect and remit

use tax

and

file returns for one year.

At the end of that one-year

period, the retailer

or marketplace facilitator

shall determine whether

it

met the threshold of either

criteria

during the preceding 12-month

period.  If the retailer

or marketplace facilitator

met either of the

criteria for the preceding 12-month period,

it

is considered a retailer

maintaining a place of business in this State and is required to collect and

remit

use tax

and file returns for the subsequent year.

If, at the end of a one-year

period, a retailer

or marketplace facilitator

that was required to

collect and remit the

use tax

determines that

it

did not meet the

threshold in either

criteria

during the preceding 12-month period, the

retailer

or marketplace facilitator

shall subsequently determine on a

quarterly basis, ending on the last day of March, June, September, and

December, whether

it

meets the threshold of either

criteria

for

the preceding 12-month period.

[35 ILCS 105/2(9) and 35 ILCS 105/2d]

NOTE:  Beginning January 1, 2021,

retailers without physical presence in this State and marketplace facilitators

meeting either tax remittance threshold as set out in 86 Ill. Adm. Code

131.115(a) and 131.135(a), respectively, are liable for all applicable State

and locally imposed retailers' occupation taxes administered by the Department

of Revenue on all sales made to Illinois purchasers and are no longer only

mandatory Use Tax collectors.  (See 86 Ill. Adm. Code 131.115 and 131.135)

lace facilitators

meeting either tax remittance threshold as set out in 86 Ill. Adm. Code

131.115(a) and 131.135(a), respectively, are liable for all applicable State

and locally imposed retailers' occupation taxes administered by the Department

of Revenue on all sales made to Illinois purchasers and are no longer only

mandatory Use Tax collectors.  (See 86 Ill. Adm. Code 131.115 and 131.135).

"Sale at retail"

means any transfer of the ownership of or title to tangible personal property

to a purchaser, for the purpose of use, and not 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, for a valuable consideration:  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 by-product 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 by-product of manufacturing.

"Sale at retail"

includes any such transfer made for resale unless made in compliance with

Section 2c of the Retailers' Occupation Tax Act

[35 ILCS 120]

, as

incorporated by reference into Section 12 of

the Act

.  Transactions

whereby the possession of the property is transferred but the seller retains

the title as security for payment of the selling price are sales.

"Sale at retail"

shall also be construed to include any Illinois florist's sales transaction in

which the purchase order is received in Illinois by a florist and the sale is

for use or consumption, but the Illinois florist has a florist in another state

deliver the property to the purchaser or the purchaser's donee in such other

state

le as security for payment of the selling price are sales.

"Sale at retail"

shall also be construed to include any Illinois florist's sales transaction in

which the purchase order is received in Illinois by a florist and the sale is

for use or consumption, but the Illinois florist has a florist in another state

deliver the property to the purchaser or the purchaser's donee in such other

state.

Nonreusable tangible personal

property that is used by persons engaged in the business of operating a

restaurant, cafeteria, or drive-in is a sale for resale when it is transferred

to customers in the ordinary course of business as part of the sale of food or

beverages and is used to deliver, package, or consume food or beverages,

regardless of where consumption of the food or beverages occurs.  Examples of

those items include but are not limited to nonreusable, paper and plastic cups,

plates, baskets, boxes, sleeves, buckets or other containers, utensils, straws,

placemats, napkins, doggie bags, and wrapping or packaging materials that are

transferred to customers as part of the sale of food or beverages in the

ordinary course of business.

The purchase, employment and

transfer of such tangible personal property as newsprint and ink for the

primary purpose of conveying news (with or without other information) is not a

purchase, use or sale of tangible personal property.

"Selling price" means

the consideration for a sale valued in money whether received in money or otherwise,

including cash, credits, property other than as provided

in this

definition,

and services, but, prior to January 1, 2020 and beginning again

on January 1, 2022, not including the value of or credit given for traded-in

tangible personal property where the item that is traded-in is of like kind and

character as that which is being sold; beginning January 1, 2020 and until

January 1, 2022, "selling price" includes the portion of the value of

or credit given for traded-in motor vehicles of the First Division as defined

in Section

in

on January 1, 2022, not including the value of or credit given for traded-in

tangible personal property where the item that is traded-in is of like kind and

character as that which is being sold; beginning January 1, 2020 and until

January 1, 2022, "selling price" includes the portion of the value of

or credit given for traded-in motor vehicles of the First Division as defined

in Section 1-146 of the Illinois Vehicle Code

[625 ILCS 5]

of like kind

and character as that which is being sold that exceeds $10,000.  "Selling

price" shall be determined without any deduction on account of the cost of

the property sold, the cost of materials used, labor or service cost or any

other expense whatsoever, but does not include interest or finance charges

which appear as separate items on the bill of sale or sales contract nor

charges that are added to prices by sellers on account of the seller's tax

liability under the Retailers' Occupation Tax Act, or on account of the

seller's duty to collect, from the purchaser, the tax that is imposed by

the Act,

or, except as otherwise provided with respect to any cigarette tax

imposed by a home rule unit, on account of the seller's tax liability under any

local occupation tax administered by the Department, or, except as otherwise

provided with respect to any cigarette tax imposed by a home rule unit, on

account of the seller's duty to collect, from the purchasers, the tax that is

imposed under any local use tax administered by the Department.  "Selling

price" shall include charges that are added to prices by sellers on

account of the seller's tax liability under the Cigarette Tax Act, on account

of the seller's duty to collect, from the purchaser, the tax imposed under the

Cigarette Tax Act, and on account of the seller's duty to collect, from the

purchaser, any cigarette tax imposed by a home rule unit

nistered by the Department.  "Selling

price" shall include charges that are added to prices by sellers on

account of the seller's tax liability under the Cigarette Tax Act, on account

of the seller's duty to collect, from the purchaser, the tax imposed under the

Cigarette Tax Act, and on account of the seller's duty to collect, from the

purchaser, any cigarette tax imposed by a home rule unit.

The phrase "like kind and

character" shall be liberally construed (including but not limited to any

form of motor vehicle for any form of motor vehicle, or any kind of farm or

agricultural implement for any other kind of farm or agricultural implement),

while not including a kind of item which, if sold at retail by that retailer,

would be exempt from retailers' occupation tax and use tax as an isolated sale.

"Use" means the

exercise by any person of any right or power over tangible personal property

incident to the ownership of that property, except that it does not include the

sale of such property in any form as tangible personal property in the regular

course of business to the extent that such property is not first subjected to a

use for which it was purchased, and does not include the use of such property

by its owner for demonstration purposes:  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 by-product of manufacturing.  "Use" does not mean

demonstration use or interim use of tangible personal property by a retailer

before

the retailer

sells that tangible personal property.  For

watercraft or aircraft, if the period of demonstration use or interim use by

the retailer exceeds 18 months, the retailer shall pay on the

retailer's

original cost price the tax imposed by

the Act

, and no credit for that

tax is permitted if the watercraft or aircraft is subsequently sold by the retailer

nal property by a retailer

before

the retailer

sells that tangible personal property.  For

watercraft or aircraft, if the period of demonstration use or interim use by

the retailer exceeds 18 months, the retailer shall pay on the

retailer's

original cost price the tax imposed by

the Act

, and no credit for that

tax is permitted if the watercraft or aircraft is subsequently sold by the retailer.

"Use" does not mean the physical incorporation of tangible personal

property, to the extent not first subjected to a use for which it was

purchased, as an ingredient or constituent, into other tangible personal

property

which is sold in the regular

course of business or

which the person incorporating

such ingredient or constituent therein has undertaken at the time of purchase

to cause to be transported in interstate commerce to destinations outside the

State of Illinois:  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

by-product of manufacturing.

"Watercraft" means a

Class 2, Class 3, or Class 4 watercraft as defined in Section 3-2 of the Boat

Registration and Safety Act

[625 ILCS 45]

, a personal watercraft, or any

boat equipped with an inboard motor.

[35 ILCS 105/2]