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2026 Sales Tax Letter Rulings

General Information Letters

Ruling Date Subject Synopsis
ST-26-0001-GIL
 01/09/2026 Manufactured Homes Mobile homes and manufactured homes in mobile home parks must be assessed and taxed as chattel. See 35 ILCS 517/5. The first sale by the mobile home park owner of the manufactured home located in the mobile home park to a purchaser is reported with Retailers’ Occupation Tax paid on Form ST-556, Sales Tax Transaction Return. Each subsequent sale of the manufactured home by the mobile home park owner to another purchaser must also be reported with tax paid on Form ST-556. (This is a GIL).
ST-26-0002-GIL 01/14/2026 Leasing Effective January 1, 2025, persons engaged in the business of leasing tangible personal property at retail (“lessors”) in Illinois are subject to State and local retailers’ occupation tax on the gross receipts from leases of tangible personal property made in the course of business. See 35 ILCS 120/2 as amended by Article 75 of Public Act 103-592. Leases subject to retailers’ occupation taxes are sourced to either the primary property location or the same as other retail sales. See 35 ILCS 120/2-12(5.5) as amended by Article 75 of Public Act 103-592. (This is a GIL).
ST-26-0003-GIL 01/22/2026 Leasing Effective January 1, 2025, persons engaged in the business of leasing tangible personal property at retail (“lessors”) in Illinois are subject to State and local retailers’ occupation tax on the gross receipts from leases of tangible personal property made in the course of business. See 35 ILCS 120/2 as amended by Article 75 of Public Act 103-592. Leases subject to retailers’ occupation taxes are sourced to either the primary property location or the same as other retail sales. See 35 ILCS 120/2-12(5.5) as amended by Article 75 of Public Act 103-592. (This is a GIL).
ST-26-0004-GIL 01/23/2026 Parking Excise Tax Separately stated charges that are not related to or incidental to obtaining the use or privilege of using a parking space in a parking area or garage would not be subject to the tax. 35 ILCS 525; 86 Ill. Adm. Code 195. (This is a GIL).
ST-26-0005-GIL 01/27/2026 Motor Vehicles Recreational vehicles and cargo trailers meeting certain requirements that are sold in Illinois to Indiana residents are eligible for the drive-away permit exemption of the Retailers’ Occupation Tax. (This is a GIL).
ST-26-0006-GIL 02/24/2026 Sales of Service Sales of service, where tangible personal property is transferred incident to the service, are not exempt from taxation. Servicepersons must calculate their tax liability using one of the four methods prescribed in 86 Ill. Adm. Code Part 140. (This is a GIL).
ST-26-0007-GIL 03/24/2026 Medical Appliances A medical appliance is an item that is used to directly substitute for a malfunctioning part of the human body. See 86 Ill. Adm. Code 130.131(e). (This is a GIL).
ST-26-0008-GIL 03/11/2026 Motor Vehicles If the seller is making a goodwill repair at the direction of a manufacturer, and where a manufacturer provides tangible personal property to the seller for the goodwill repair, a service situation exists in which the person making the repairs is the serviceperson and the seller is the service customer. See 86 Ill. Adm. Code 140.141(c)(3)(B). (This is a GIL).
ST-26-0009-GIL 03/26/2026 Computer Software Computer software provided via a cloud-based delivery system, where the software is never downloaded onto a client's computer and is only accessed remotely, is not subject to tax. See 86 Ill. Adm. Code 130.1935(a)(3). Voice Over Internet Protocol ("VoIP") is telecommunications subject to tax within the meaning of "Telecommunications" and "Gross Charges" pursuant to The Telecommunications Excise Tax. 86 Ill. Adm. Code 495.100. (This is a GIL).
ST-26-0010-GIL 04/07/2026 Leasing This letter discusses the application of taxes on lease receipts imposed by a home rule unit of local government. (This is a GIL).
ST-26-0011-GIL 04/10/2026 Retailers' Occupation Tax When tangible personal property is sold at retail along with related service charges, the related service charges are part of the gross receipts subject to the Retailers' occupation Tax if an "inseparable link" exists between the tangible personal property and the service charges. See 86 Ill. Adm. Code 130.415. (This is a GIL.)
ST-26-0012-GIL 04/22/2026 Motor Fuel Tax A legible and conspicuous notice stating "Dyed Diesel Fuel, Non-taxable Use Only, Penalty For Taxable Use" must appear on all bills of lading and invoices accompanying any sale of dyed diesel fuel. 35 ILCS 505/4e. (This is a GIL).
ST-26-0013-GIL 04/28/2026 Cannabis Purchaser Excise Tax Cannabis purchaser excise tax is not part of the seller's gross receipts subject to tax. (This is a GIL.)
ST-26-0014-GIL 04/28/2026 Retailers' Occupation Tax Deal-of-the-Day vouchers are intangible personal property. Therefore, sales of Deal-of-the-Day vouchers are not subject to sales tax. See 86 Ill. Adm. Code 130.2125. (This is a GIL.)
ST-26-0015-GIL 05/01/2026 Books and Records Retailers must maintain all records that are necessary to determine the correct tax liability under the Retailers’ Occupation Tax Act including documentation for exempt and other non-taxable receipts, and those records must be made available to the Department upon request. See 86 Ill. Adm. Code 130.805. (This is a GIL).
ST-26-0016-GIL 05/05/2026 Gross Receipts Gross receipts include all the consideration actually received by the seller, which includes late charges and penalties for late payment. 86 Ill. Adm. Code 130.420. (This is a GIL).
ST-26-0017-GIL 05/06/2026 Leasing If the true object of the transaction is the service and tangible personal property is transferred by lease incident to the sale of service, the transfer of tangible personal property by lease is subject to the Service Occupation Tax Act. See 86 Ill. Adm. Code 130.102. (This is a GIL).
ST-26-0018-GIL 05/08/2026 Service Occupation Tax Generally, a provider of medical services is considered engaged in the business of making sales of services. As a serviceperson, the Service Occupation Tax is imposed upon all tangible personal property transferred as an incident to the sale of such service. Prescription and non-prescription medicines, drugs, and medical appliances are taxed at a reduced State rate of 1%, plus applicable local service taxes based on the location of the sale of the service. See 86 Ill. Adm. Code 140.126. (This is a GIL).
ST-26-0019-GIL 06/03/2026 Remote Retailers Beginning January 1, 2026, the 200-transaction threshold test no longer applies to determine whether a remote retailer is engaged in the occupation of selling tangible personal property at retail in Illinois. See 35 ILCS 120/2(b-1). (This is a GIL).
ST-26-0020-GIL 06/03/2026 Service Occupation Tax Out-of-State servicepersons must determine whether they have physical presence or meet the tax remittance threshold of $100,000 in cumulative gross receipts from annual sales of service. If so, they must calculate whether they are de minimis or not in order to determine their tax registration and remittance obligations. See 86 Ill. Adm. Code 140.105-109. (This is a GIL).
ST-26-0021-GIL 06/03/2026 Farm Machinery & Equipment Real estate improvements and ordinary building equipment to be permanently affixed to real estate do not qualify for the farm machinery and equipment exemption from Illinois sales tax. See 86 Ill. Adm. Code 130.305. (This is a GIL).
ST-26-0022-GIL 06/04/2026 Hotel Operators' Occupation Tax Overnight camps and similar businesses that provide overnight accommodations are subject to Hotel Operators’ Occupation Tax. 86 Ill. Adm. Code 480.101. They may also be subject to Retailers’ Occupation Tax, Use Tax, Service Occupation Tax, or Service Use Tax on transfers of tangible personal property incident to the sale of programmatic services or sales of tangible personal property at retail that are unconnected to sales of programmatic services. 86 Ill. Adm. Code 140.129. (This is a GIL).
ST-26-0023-GIL 06/10/2026 Leasing Persons engaged in the business of leasing tangible personal property at retail in Illinois are subject to State and local retailers’ occupation tax on the gross receipts from leases of tangible personal property made in the course of business. (This is a GIL).
ST-26-0024-GIL 06/12/2026 Miscellaneous When a donor possesses or has the ability to exercise control over tangible personal property in Illinois and gives the property away for free, the donor has made use of the property in Illinois and is subject to Use Tax on the cost price of the property. See 86 Ill. Adm. Code 150.305(c). When tax is properly due and paid in another state on tangible personal property shipped into Illinois and tax is also due in Illinois, the taxpayer may credit the amount of the tax paid in the other state on its return in determining its Illinois Use Tax liability. See 86 Ill. Adm. Code 150.310(a)(3). Remote retailers who maintain inventory at the location of a marketplace facilitator in Illinois that is only used to fulfill sales through a marketplace that meets the tax remittance threshold do not have physical presence nexus based on that inventory being in Illinois. See 86 Ill. Adm. Code 131.105. (This is a GIL).
ST-26-0025-GIL 06/26/2026 Rolling Stock Repair and replacement parts for tangible personal property that qualifies as rolling stock includes items such as oil, grease and other internal parts that become a physical component part of the qualifying rolling stock. See 86 Ill. Adm. Code 130.340(b). (This is a GIL).
ST-26-0026-GIL 07/01/2026 Computer Software Software as a Service is generally not subject to Illinois sales tax. When customers download software from a provider of software as a service separate from their subscription and free of charge, and the provider, as well as its website or servers, are located outside Illinois, the free download is not a retail transaction and is not subject to Illinois Use Tax. Information or data that is transferred electronically is the transfer of intangible personal property and is not subject to Illinois Retailers’ Occupation Tax or Use Tax. See 86 Ill. Adm. Code 130.2105(a)(3). (This is a GIL).
ST-26-0027-GIL 07/14/2026 Computer Software If a provider transfers to a customer a web application to enable the customer to access the provider’s network and services, the subscriber is receiving computer software that is subject to tax. However, if an Illinois customer downloads computer software for free, such as an app, from an out-of-State serviceperson’s website or server that is also located out-of-State, the serviceperson, even though it is donating tangible personal property to the customer, has exercised no power or control over the property in Illinois, and the donor would not have made any taxable use of the property in Illinois. See 86 Ill. Adm. Code Parts 130 and 140. (This is a GIL).
ST-26-0028-GIL 07/20/2026 Sale for Resale Purchasers, such as automobile repairmen or body shops, must provide Certificates of Resale to their suppliers if they are purchasing tangible personal property to be resold to their customers. See Ill. Adm. Code 130.1405. (This is a GIL).
ST-26-0029-GIL 07/27/2026 Leasing The tax on leases and rentals of tangible personal property does not extend to real property. For instance, room rentals, locker rentals, and storage facility rentals would not be taxed under the Retailers' Occupation Tax Act. (This is a GIL.)
ST-26-0030-GIL 07/29/2026 Miscellaneous This letter responds to an annual survey. (This is a GIL.)
ST-26-0031-GIL 07/29/2026 Medical Appliance A medical appliance is an item used to directly substitute for a malfunctioning part of the human body. Sterile band-aids, dressings, bandages, and gauze qualify for the low rate because they serve as a substitute for skin. See 86 Ill. Adm. Code 130.311(e)(3). (This is a GIL).
ST-26-0032-GIL 08/03/2026 Gross Receipts Federal taxes on gasoline are not deductible from gross receipts when computing retailers’ occupation tax liability because the legal incidence of these taxes is not on the consumer. See 86 Ill. Adm. Code 130.445. (This is a GIL).
ST-26-0035-GIL 08/18/2026 Gross Receipts If the true object of a transaction is the rental of a room or space and if food or beverages are provided incidental to the rental of the room or space, no tax is incurred on the charges for the rental of the room or space. If no separate charge is made under the rental contract for the incidental amount of food or beverages provided, the rentor is considered the end-user of the food or beverages and incurs Use Tax on its cost price of the food or beverages transferred incident to the rental of the room or space. However, if separate charges are made for any food and beverages transferred incident to the rental of the room or space, the rentor incurs Retailers’ Occupation Tax on the selling price of the food or beverages only. See 86 Ill. Adm. Code 130.2145(e-f); see also 86 Ill. Adm. Code 130.102(a)(4). (This is a GIL)

Private Letter Rulings

There are no 2026 Private Letter Rulings available at this time. New rulings will be posted here as they become available.