Illinois Administrative Code
Title 86 - REVENUE
Part 130 - RETAILERS' OCCUPATION TAX
Subpart S - SPECIFIC APPLICATIONS
Section 130.2155 - Tax Liability of Sign Vendors
Universal Citation: 86 IL Admin Code ยง 130.2155
Current through Register Vol. 48, No. 12, March 22, 2024
a) Persons who sell signs may incur a Retailers' Occupation Tax, Service Occupation Tax or Use Tax liability, depending upon the circumstances of the sale.
b) When Liable for Retailers' Occupation Tax
1) Persons who engage in
selling signs at retail incur Retailers' Occupation Tax liability
notwithstanding the fact that the signs have use or value (other than salvage
value) only to the purchaser, if such signs are not produced on special order
for the purchaser. Persons who engage in selling, at retail, signs which have
commercial value (i.e., value to persons other than the purchasers thereof)
incur Retailers' Occupation Tax liability when making such sales, even if such
signs are produced on special order for the purchaser.
2) Examples
A) Signs that spell out "parking",
"conference room", "real estate", and the like, but do not spell out the name
of the purchaser nor the brand name of the purchaser's product and that are not
otherwise similarly individualized have commercial value within the meaning of
this Section. Signs that spell out "conference room" that also have the room
number specific to a particular building do not have commercial value within
the meaning of this Section.
B)
Computerized signs that can be programmed to spell out anything that the
purchaser inputs have commercial value unless the casing of the sign has been
individualized with the name of the purchaser, the brand name of the
purchaser's product, or otherwise individualized in a similar manner. For
example, computerized banner signs that can be programmed to spell out messages
and that also permanently spell out a store's name on the casing surrounding
the computerized portion of the sign have no commercial value.
c) When Not Liable for Retailers' Occupation Tax But Liable for Service Occupation Tax
1) A sign vendor does not incur Retailers'
Occupation Tax liability, even though selling the sign at retail, if he
produces such sign on the special order of a particular purchaser and if the
sign has use or value (other than salvage value) only to such purchaser. Sign
vendors who produce special order signs that have value only to the purchaser
of such sign incur a Service Occupation Tax liability. For information
concerning the application of the Service Occupation Tax to the purchases of
materials by sign makers for incorporation into signs that they sell to users
as an incident to engaging in a service occupation so as to be exempt from the
Retailers' Occupation Tax, see the Service Occupation Tax Regulations at 86
Ill. Adm. Code 140.
2) An example
of the kind of sign contemplated by this subsection is a sign that is produced
on special order for the purchaser and that spells out the name of the
purchaser or the brand name of the purchaser's product, with or without other
material. This exemption from the tax extends to persons who act for customers
in obtaining specially produced, personalized signs from sign
vendors.
d) When Not Liable for Retailers' Occupation Tax But Liable for Use Tax
1) The analysis of tax liability in
subsections (a) and (b) of this Section is based upon the assumption that the
signs remain tangible personal property after installation. If the signs are
permanently affixed to real estate, then the tax consequences attributable to
construction contractors apply. Construction contractors are the end users of
tangible personal property they affix to realty. As the end user, the
construction contractor incurs Illinois Use and local Retailers' Occupation Tax
reimbursement liabilities when the tangible personal property that will be
converted to real estate is purchased. For information concerning construction
contractor situations, see Sections
130.1940
and
130.2075
of this Part.
2) Examples
A) A sign is permanently affixed to real
estate when it is bolted or otherwise permanently affixed to the building or is
hardwired into the building's general wiring system.
B) A sign is permanently affixed to real
estate when a permanent concrete foundation is made for the sign and the sign
is affixed to its foundation or hardwired into an electrical system.
C) A sign is permanently affixed to real
estate when it is affixed to a pole that is placed in the ground.
Disclaimer: These regulations may not be the most recent version. Illinois may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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