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Author Topic: You've got to be kidding me - Tax This !!!  (Read 565 times)

« on: July 09, 2008, 09:45:13 AM »

This was on the IHHA web site


Illinois Department of Revenue Rules re :Certain Sales Taxes

The following attempts to explain the position of the Illinois Department of Revenue as it relates to responsibility of trainers and owners regarding sales taxes due on certain purchases. 

Use Tax on Purchases from Out-of-State Suppliers:  The Illinois Department of Revenue does require that sales/use tax on purchases of equipment and supplies from out-of-state vendors be remitted to the State   This would include purchases of harnesses, sulkies and other similar equipment used by trainers in the course of training horses. In accordance with federal laws, out-of-state companies that merely solicit Illinois customers via direct mail, via telephone solicitation (telemarketing) or via the internet and utilize the US postal service, a parcel delivery service, or a common carrier to deliver merchandise to their customers technically are not required to collect Illinois sales/use taxes. However, the fact that a seller is not required to collect tax on a particular sale does not relieve the Illinois buyer from owing use tax on the purchase. By Illinois law, businesses and individuals owe Illinois Use Tax on purchases of tangible personal property made from out-of-state sellers even though those suppliers are not liable for collecting Illinois taxes.  The Illinois Use Tax rate is 6.25% on the purchase price of items purchased from out-of-state vendors.  The tax base does not include freight or other services provided in conjunction with selling tangible personal property.                                               

Tax on Purchases of Feed and Medicines from Illinois Suppliers : The Illinois Department of Revenue does require payment of taxes on purchases of feed and medicines provided to and administered to racing horses. The Illinois Department of Revenue has taken the position that feed and medicines for horses is not covered by the exemption for such items that are provided to or administered to other types of livestock that are raised for  food or the products of such are sold for food, such as cows, swine, chickens, etc.. 

However, the exemption would apply to feed and medicines provided to or administered to horses used exclusively as breeding stock.

Similar to the above situation, the Illinois Use Tax is due even when an Illinois supplier mistakenly fails to charge and collect Illinois sales taxes on feed for racing horses. The tax base and rate (6.25%) are also calculated the same.   

 Voluntary Disclosure of Liability:  IHHA members that want to assess their tax exposure and voluntarily report the resulting tax liability relating to these issues can do so by filing a Voluntary Disclosure petition with the Department of Revenue’s Board of Appeals.  Information regarding the benefits of voluntary disclosure can be found at section 210.126 of Chapter 86 of the department’s regulations.

The above is provided for information purposes only and is not to be considered as advice regarding any particular situation. Please check with your tax advisor regarding proper compliance with all rules and regulations.

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