Illinois – Prepaid Calling Arrangements Subject to Tax

SALT Report 3183– Prepaid calling arrangement constitute taxable tangible property…”beginning January 1, 2001…and are subject to the tax imposed under the Retailer’s Occupation Tax Act, regardless of the form in which those arrangements may be embodied, transmitted, or fixed by any method now known or hereafter developed. 35 ILCS 120/2.”

A prepaid telephone calling arrangement is defined as “the right to exclusively purchase telephone or telecommunications services that must be paid for in advance and enable the origination of one or more telephone calls or other telecommunications using an access number, an authorization code, or both, whether manually or electronically dialed, for which payment to a retailer must be made in advanced, provided that, unless recharged, no further service is provided once that prepaid amount of service has been consumed.”

The GIL goes on to discuss the nuances and implications of Telecommunications Tax and the Retailer’s Occupation Tax.

For Further Information:              

ST 13-0053-GIL 09/11/2013 MISCELLANEOUS