Illinois – Unconditional Payment Requirement for Refunds

SALT Report 1767 – The Illinois Department of Revenue issued a general information letter regarding the procedures a retailer must follow when seeking a sales tax credit or refund.   86 Ill. Adm. Code 130.1501 allows a taxpayer to request a claim for credit or refund when the taxpayer can demonstrate that they mistakenly paid tax to the Department.

However, the Department will not approve any claims for credit unless the applicant can first demonstrate that they have unconditionally repaid the tax to the person from whom tax was collected.  To meet the unconditional repayment requirement, the retailer must provide the purchaser with documentation that allows the purchaser to demand the recovered tax if the Department allows the claim.  The Department recommends that the retailer provide its purchaser with either the retailer’s provision of unconditional promissory note or irrevocable credit memoranda.

For Further Information:

Illinois Department of Revenue – General Information Letter ST 12-0028-GIL

ST-6  Claim for Sales and Use Tax Overpayment