Illinois Dept. of Revenue Files New Sales Tax Allocation Rules

April 2, 2014

On January 22, the Illinois Department of Revenue (IDOR) filed emergency rules and proposed permanent rules relating to tax sourcing and how Illinois businesses should allocate local sales taxes collected from their customers.

The new rules and proposed rules are a direct result of the Illinois Supreme Court's decision in Hartney Fuel Oil Co. v. Hamer 2013 IL 115130 (November 21, 2013), in which the court adopted the position that Heyl Royster advocated on behalf of our client the Regional Transportation Authority (RTA) in regard to how sales should be sourced for sales tax purposes.

The emergency rules are effective immediately and will remain in effect for 150 days, unless they are suspended by the Joint Committee on Administrative Rules (JCAR). The permanent rules may replace the emergency rules following the JCAR review process.

A full list of the emergency rules, proposed rules, and the IDOR press release, as well as the letter from the IDOR to the JCAR requesting review can be found on the Illinois Department of Revenue website.

If you have any questions on these new rules, please feel free to contact the firm's Business and Commercial Litigation Practice.