Illinois Compiled Statutes
Information maintained by the Legislative
Updating the database of the Illinois Compiled Statutes (ILCS) is an ongoing process.
Recent laws may not yet be included in the ILCS database, but they are found on this site as Public
soon after they become law. For information concerning the relationship between statutes and Public Acts, refer to the
Because the statute database is maintained primarily for legislative drafting purposes,
statutory changes are sometimes included in the statute database before they take effect.
If the source note at the end of a Section of the statutes includes a Public Act that has
not yet taken effect, the version of the law that is currently in effect may have already
been removed from the database and you should refer to that Public Act to see the changes
made to the current law.
35 ILCS 105/2
(35 ILCS 105/2)
(from Ch. 120, par. 439.2)
"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 the demonstration
use or interim use of tangible personal property by a retailer before he sells
that tangible personal property. For watercraft or aircraft, if the period of
demonstration use or interim use by the retailer exceeds 18 months,
shall pay on the retailers' original cost price the tax imposed by this 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 (a) which is sold in the regular course of
business or (b) which the person incorporating such ingredient or constituent
therein has undertaken at the time of such 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, a personal watercraft, or
any boat equipped with an inboard motor.
"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.
"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, as incorporated by
reference into Section 12 of this 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.
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
"Selling price" means the consideration for a sale valued in money
whether received in money or otherwise, including cash, credits, property
other than as hereinafter provided, and services, but 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, and 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 this 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. Effective December 1, 1985, "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 Use
Tax Act, and on account of the seller's duty to collect, from the purchaser,
any cigarette tax imposed by a home rule unit.
Notwithstanding any law to the contrary, for any motor vehicle, as defined in Section 1-146 of the Vehicle Code, that is sold on or after January 1, 2015 for the purpose of leasing the vehicle for a defined period that is longer than one year and (1) is a motor vehicle of the second division that: (A) is a self-contained motor vehicle designed or permanently converted to provide living quarters for recreational, camping, or travel use, with direct walk through access to the living quarters from the driver's seat; (B) is of the van configuration designed for the transportation of not less than 7 nor more than 16 passengers; or (C) has a gross vehicle weight rating of 8,000 pounds or less or (2) is a motor vehicle of the first division, "selling price" or "amount of sale" means the consideration received by the lessor pursuant to the lease contract, including amounts due at lease signing and all monthly or other regular payments charged over the term of the lease. Also included in the selling price is any amount received by the lessor from the lessee for the leased vehicle that is not calculated at the time the lease is executed, including, but not limited to, excess mileage charges and charges for excess wear and tear. For sales that occur in Illinois, with respect to any amount received by the lessor from the lessee for the leased vehicle that is not calculated at the time the lease is executed, the lessor who purchased the motor vehicle does not incur the tax imposed by the Use Tax Act on those amounts, and the retailer who makes the retail sale of the motor vehicle to the lessor is not required to collect the tax imposed by this Act or to pay the tax imposed by the Retailers' Occupation Tax Act on those amounts. However, the lessor who purchased the motor vehicle assumes the liability for reporting and paying the tax on those amounts directly to the Department in the same form (Illinois Retailers' Occupation Tax, and local retailers' occupation taxes, if applicable) in which the retailer would have reported and paid such tax if the retailer had accounted for the tax to the Department. For amounts received by the lessor from the lessee that are not calculated at the time the lease is executed, the lessor must file the return and pay the tax to the Department by the due date otherwise required by this Act for returns other than transaction returns. If the retailer is entitled under this Act to a discount for collecting and remitting the tax imposed under this Act to the Department with respect to the sale of the motor vehicle to the lessor, then the right to the discount provided in this Act shall be transferred to the lessor with respect to the tax paid by the lessor for any amount received by the lessor from the lessee for the leased vehicle that is not calculated at the time the lease is executed; provided that the discount is only allowed if the return is timely filed and for amounts timely paid. The "selling price" of a motor vehicle that is sold on or after January 1, 2015 for the purpose of leasing for a defined period of longer than one year shall not be reduced by the value of or credit given for traded-in tangible personal property owned by the lessor, nor shall it be reduced by the value of or credit given for traded-in tangible personal property owned by the lessee, regardless of whether the trade-in value thereof is assigned by the lessee to the lessor. In the case of a motor vehicle that is sold for the purpose of leasing for a defined period of longer than one year, the sale occurs at the time of the delivery of the vehicle, regardless of the due date of any lease payments. A lessor who incurs a Retailers' Occupation Tax liability on the sale of a motor vehicle coming off lease may not take a credit against that liability for the Use Tax the lessor paid upon the purchase of the motor vehicle (or for any tax the lessor paid with respect to any amount received by the lessor from the lessee for the leased vehicle that was not calculated at the time the lease was executed) if the selling price of the motor vehicle at the time of purchase was calculated using the definition of "selling price" as defined in this paragraph. Notwithstanding any other provision of this Act to the contrary, lessors shall file all returns and make all payments required under this paragraph to the Department by electronic means in the manner and form as required by the Department. This paragraph does not apply to leases of motor vehicles for which, at the time the lease is entered into, the term of the lease is not a defined period, including leases with a defined initial period with the option to continue the lease on a month-to-month or other basis beyond the initial defined period.
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 or occasional sale.
"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.
"Retailer" means and includes every person engaged in the business of
making sales at retail as defined in this Section.
A person who holds himself or herself out as being engaged (or who habitually
engages) in selling tangible personal property at retail is a retailer
hereunder 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.
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 (1), 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 (2), 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 school
books and school supplies by schools at retail to students is not
"primarily for the purposes of" the school which does such selling. This
paragraph 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.
A person who is the recipient of a grant or contract under Title VII of
the Older Americans Act of 1965 (P.L. 92-258) 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 this Act with respect to such transactions.
Persons who engage in the business of transferring tangible personal
property upon the redemption of trading stamps are retailers hereunder when
engaged in such business.
The isolated or occasional sale of tangible personal property at retail
by a person who does not hold himself 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
hereunder. However, any person who is engaged in a business which is not
subject to the tax imposed by the "Retailers' Occupation Tax Act" because
of involving the sale of or a contract to sell real estate or a
construction contract to improve real estate, but 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 such nontaxable business, is a
retailer to the extent of the value of the tangible personal property so
transferred. If, in such transaction, a separate charge is made for the
tangible personal property so transferred, the value of such property, for
the purposes of this Act, is the amount so separately charged, but not less
than the cost of such property to the transferor; if no separate charge is
made, the value of such property, for the purposes of this Act, is the cost
to the transferor of such tangible personal property.
"Retailer maintaining a place of business in this State", or any like
term, means and includes any of the following retailers:
1. 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.
1.1. 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. 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 1.1 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 1.1 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.
1.2. Beginning July 1, 2011, a retailer having a
contract with a person located in this State under which:
A. 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
B. 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 1.2 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.
2. A retailer soliciting orders for tangible personal
property by means of a telecommunication or television shopping system (which utilizes toll free numbers) which is intended by the retailer to be broadcast by cable television or other means of broadcasting, to consumers located in this State.
3. A retailer, pursuant to a contract with a
broadcaster or publisher located in this State, soliciting orders for tangible personal property by means of advertising which is disseminated primarily to consumers located in this State and only secondarily to bordering jurisdictions.
4. A retailer soliciting orders for tangible personal
property by mail if the solicitations are substantial and recurring and if the retailer benefits from any banking, financing, debt collection, telecommunication, or marketing activities occurring in this State or benefits from the location in this State of authorized installation, servicing, or repair facilities.
5. A retailer that is owned or controlled by the same
interests that own or control any retailer engaging in business in the same or similar line of business in this State.
6. A retailer having a franchisee or licensee
operating under its trade name if the franchisee or licensee is required to collect the tax under this Section.
7. A retailer, pursuant to a contract with a cable
television operator located in this State, soliciting orders for tangible personal property by means of advertising which is transmitted or distributed over a cable television system in this State.
8. A retailer engaging in activities in Illinois,
which activities in the state in which the retail business engaging in such activities is located would constitute maintaining a place of business in that state.
"Bulk vending machine" means a vending machine,
containing unsorted confections, nuts, toys, or other items designed
primarily to be used or played with by children
which, when a coin or coins of a denomination not larger than $0.50 are inserted, are dispensed in equal portions, at random and
without selection by the customer.
(Source: P.A. 98-628, eff. 1-1-15; 98-1080, eff. 8-26-14; 98-1089, eff. 1-1-15; 99-78, eff. 7-20-15.)