Current through Register Vol. 48, No. 38, September 20, 2024
a) "Act"
means the Service Occupation Tax [35 ILCS 115].
b)
"Cost price" means the
consideration paid by the serviceman for a purchase valued in money, whether
paid in money or otherwise, including cash, credits and services and shall be
determined without any deduction on account of the supplier's cost of the
property sold or on account of any other expense incurred by the
supplier; but does not include charges which are added to prices by
suppliers on account of the purchaser's tax liability under the Act or the
Service Use Tax Act [35 ILCS 110]. Except as provided in Section
140.145(a),
when a serviceman contracts out part or all of the services required in
his sale of service, it shall be presumed that the cost price to the serviceman
of the property transferred to him by his subcontractor is equal to 50% of the
subcontractor's charges to the serviceman in the absence of proof of the
consideration paid by the subcontractor for the purchase of such
property. (Section 2 of the Act)
c) "De minimis serviceman" means a serviceman
whose annual aggregate cost price of tangible personal property transferred
incident to sales of service is less than 35% (75% in the case of servicemen
transferring prescription drugs or servicemen engaged in graphic arts
production) of the aggregate annual total gross receipts from all sales of
service. See Section 140.105 for the method used to
determine de minimis status.
d)
"Department" means the Illinois Department of Revenue.
e)
"Person" means any natural
individual, firm, partnership, association, joint stock company, limited
liability company, joint venture, public or private corporation, and any
receiver, executor, trustee, conservator or other representative appointed by
order of any court. (Section 2 of the Act)
f) "Sale at Retail" means "sale at retail" as
defined in Section 1 of the Retailers' Occupation Tax Act [35 ILCS
120].
g)
"Sale of Service"
means any transaction except:
1)
a retail sale of tangible personal property taxable under the
Retailers' Occupation Tax Act or under the Use Tax Act (Section 2(a)
of the Act);
2)
a sale of
tangible personal property for the purpose of resale made in compliance with
Section 2c of the Retailers' Occupation Tax Act (Section 2(b) of the
Act);
3)
a sale or transfer
of tangible personal property as an incident to the rendering of service for or
by any governmental body or for or by any corporation, society, association,
foundation or institution organized and operated exclusively for charitable,
religious or educational purposes or for or by any not-for-profit corporation,
society, association, foundation, institution or organization which has no
compensated officers and employees and which is organized and operated
primarily for the recreation of persons 55 years of age or older. A limited
liability company may qualify for the exemption under the Act only if the
limited liability company is organized and operated exclusively for educational
purposes. (Section 2(c) of the Act) Effective July 1, 1987,
this exception will not apply unless the entities noted above have an active
exemption identification number issued by the Department (Section 2 of
the Act);
4)
a sale or
transfer of tangible personal property as an incident to the rendering of
service for owners, lessors or shippers of tangible personal property which is
utilized by interstate carriers for hire for use as rolling stock moving in
interstate commerce, and equipment operated by a telecommunications provider,
licensed as a common carrier by the Federal Communications Commission, which is
permanently installed in or affixed to aircraft moving in interstate
commerce. This exemption is administeredin accordance with the
provisions of 86 Ill. Adm. Code
130.340 (Section 2(d-1) and
Section 2d of the Act);
5)
a sale or transfer of machinery and equipment used primarily in the
process of manufacturing or assembling, either in an existing, an expanded or a
new manufacturing facility, of tangible personal property for wholesale or
retail sale or lease, whether such sale or lease is made directly by the
manufacturer or by some other person, whether the materials used in the process
are owned by the manufacturer or some other person, or whether such sale or
lease is made apart from or as an incident to the seller's engaging in a
service occupation and the applicable tax is a Service Occupation Tax or
Service Use Tax, rather than Retailers' Occupation Tax or Use Tax in
accordance with the provisions of 86 Ill. Adm. Code
130.330 (Section 2(e) of the
Act);
6)
at the election of
any serviceman not required to be otherwise registered as a retailer under
Section 2a of the Retailers' Occupation Tax Act, made for each fiscal year
sales of service in which the aggregate annual cost price of tangible personal
property transferred as an incident to the sales of service is less than 35%
(75% in the case of servicemen transferring prescription drugs or servicemen
engaged in graphic arts production) of the aggregate annual total gross
receipts from all sales of service. The purchase of such tangible personal
property by the serviceman shall be subject to tax under the Retailers'
Occupation Tax Act and the Use Tax Act (Section 2(g) of the
Act);
7)
the repairing,
reconditioning or remodeling, for a common carrier by rail, of tangible
personal property which belongs to such carrier for hire, and as to which such
carrier receives the physical possession of the repaired, reconditioned or
remodeled item of tangible personal property in Illinois, and which such
carrier transports, or shares with another common carrier in the transportation
of such property, out of Illinois on a standard uniform bill of lading showing
the person who repaired, reconditioned or remodeled the property as the shipper
or consignor of such property to a destination outside Illinois, for use
outside Illinois (Section 2(d-2) of the Act);
8)
a sale or transfer of tangible
personal property which is produced by the seller thereof on special order in
such a way as to have made the applicable tax the Service Occupation Tax or the
Service Use Tax, rather than the Retailers' Occupation Tax or the Use Tax, for
an interstate carrier by rail which receives the physical possession of such
property in Illinois, and which transports such property, or shares with
another common carrier in the transportation of such property, out of Illinois
on a standard uniform bill of lading showing the seller of the property as the
shipper or consignor of such property to a destination outside Illinois, for
use outside Illinois (Section 2(d-3) of the Act).
h) "Selling price" means the consideration
for a sale valued in money, whether received in money, or otherwise, including
cash, credits and service, and shall be determined without any deduction on
account of the serviceman's 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 that 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 duty to collect, from the purchaser, the tax that is
imposed by the Act. For purposes of calculating the serviceman's tax base, the
selling price shall not be less than the cost price to the serviceman of the
tangible personal property transferred to the service customer.
i)
"Serviceman" means any person who
is engaged in the occupation of making sales of service. (Section 2 of
the Act)
j)
"Supplier"
means any person who makes sales of tangible personal property to servicemen
for the purpose of resale as an incident to a sale of service.
(Section 2 of the Act)
