Illinois – Recently Enacted Exemptions and Amended Seller Registration Requirements

SALT Report 2927 – Recently enacted legislation in Illinois amends certain sales and use tax laws applicable to electricity, natural or artificial gas, and water.  In addition the rules for applying for a certificate of registration for a publicly traded corporation has been amended.

Exemption for Electricity, Natural or Artificial Gas, and Water

The legislation provides that transactions involving the following are exempt from retailers’ occupation tax, use tax, service occupation tax, and service use tax:

  • Electricity delivered to customers by wire,
  • Natural or artificial gas that is delivered to customers through pipes, pipelines, or mains, and
  • Water that is delivered to customers through pipes, pipelines, or mains

In addition, the exemption from sales and use tax for machinery and equipment does not apply to machinery and equipment, repair and replacement parts, or in-house manufactured machinery and equipment that is used in:

  • The generation of electricity for wholesale or retail sale,
  • The generation or treatment of natural or artificial gas for wholesale or retail sale that is delivered to customers through pipes, pipelines, or mains, or
  • The treatment of water for wholesale or retail sale that is delivered to customers through pipes, pipelines, or mains

Lastly, the legislation amends the definition of taxable “computer software” to include any software necessary to operate machinery and equipment that is used in:

  • The generation of electricity for wholesale or retail sale,
  • The generation or treatment of natural or artificial gas for wholesale or retail sale that is delivered to customers through pipes, pipelines, or mains, or
  • The treatment of water for wholesale or retail sale that is delivered to customers through pipes, pipelines, or mains

Certificate of Registration

Any publicly traded corporation that applies for a certificate of registration to engage in the business of selling tangible personal property at retail must include the name, the title, and the last four digits of the Social Security numbers the Corporation’s Chief Financial Officer, Chief Operating Officer, or any other officer or employee who will be responsible for preparing sales and use tax returns.

These provisions take effect on June 1, 2014.

For Further Information

Illinois General Assembly – Senate Bill 2243, Laws 2013