Illinois Administrative Code
Title 86 - REVENUE
Part 150 - USE TAX
Subpart D - COLLECTION OF THE USE TAX FROM USERS BY RETAILERS
Section 150.525 - Methods for Calculating Tax on Sales of Items Subject to Differing Tax Rates
Current through Register Vol. 48, No. 12, March 22, 2024
a) The tax on a transaction involving the sale of several items which are subject to two different tax rates may be determined for the purpose of stating the tax total to the customer by use of either of the following methods if the retailer uses a cash register which cannot calculate dual tax rates:
b) For the purpose of filing returns, retailers will be permitted to use the following method to determine the amount of food and drug sales and non-food and drug sales to allocate tax collected to each type of sale which is taxed at different rates when the exact total taxable receipts and exact total tax collected are known. The following four formulas will provide a retailer with the amount of food sales; non-food sales may be determined by subtracting food sales from total taxable sales.
A) |
Tax Collected |
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(High Rate of Tax - Low Rate of Tax) |
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B) |
Total Sales |
x |
Smaller Rate |
(High Rate of Tax - Low Rate of Tax) |
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C) |
Non-Food Sales = a - b |
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D) |
Food Sales = Total Sales - Non-Food Sales |
c) The use of these methods require exact sales and tax figures for taxable sales. The Department reserves the right to audit and correct, if necessary, tax collection figures and taxable sales figures.
d) EXAMPLE: A retailer selling foods and non-foods in a jurisdiction where the respective rates are 4% and 6% would determine the proper amount of tax as follows:
Assume gross sales of food and non-food items of |
$163.00 |
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deduct food stamps |
-20.00 |
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bottle deposits |
-3.00 |
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$140.00 net taxable |
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sales |
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7.40 tax collected |
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at 6% and |
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$140 x 3 = $420 |
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$7.40 x 50 = $370 |
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$420 - $370 = $50 |
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$140.00 |
net taxable sales |
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-50.00 |
food sales |
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$ 90.00 |
non-food sales |
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$50 x 4% = $2.00 tax on food sales |
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$90 x 6% = $5.40 tax on non-food sales |