86 Ill. Adm. Code 130.210 — Sales of Tangible Personal Property to Purchasers for Resale

# Sales of Tangible Personal Property to Purchasers for Resale

ADMINISTRATIVE CODE

TITLE 86: REVENUECHAPTER I: DEPARTMENT OF REVENUEPART 130 RETAILERS' OCCUPATION TAXSECTION 130.210 SALES OF TANGIBLE PERSONAL PROPERTY TO PURCHASERS FOR RESALE

Section 130.210 Sales of Tangible Personal Property to Purchasers for Resale a) The sale of tangible personal property to a purchaser for the purpose of resale in any form as tangible personal property, to the extent not first subjected to a use for which it was purchased, is not subject to the Retailers' Occupation Tax Act ("Act").

b) Sales of tangible personal property, which property, to the extent not first subjected to a use for which it was purchased, as an ingredient or constituent, goes into and forms a part of tangible personal property subsequently the subject of a "sale at retail", are not sales at retail as defined in the Act, provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing. For this purpose, slag produced as an incident to manufacturing pig iron or steel and sold is considered to be an intentionally produced byproduct of manufacturing.

c) However, such sales for resale cannot be made tax-free unless the purchaser (except in the case of an out-of-State purchaser who will always resell and deliver the property to its customers outside Illinois) has an active registration number or active resale number from the Department and gives such number to suppliers in connection with certifying to any supplier that any sale to such purchaser is nontaxable because of being a sale for resale. Failure to present an active registration number or resale number and a certification to the seller that a sale is for resale creates a presumption that a sale is not for resale. This presumption may be rebutted by other evidence that all of the seller's sales are sales for resale, or that a particular sale is a sale for resale.

d) Divisible Type of Sale. There can also be a divisible type of sale where the tangible personal property is bought partly for "use" and partly for "resale" in the first place. For examples, see Sections 86 Ill. Adm. Code 130.215 and 130.330(h).

e) On and after January 1, 2025, a sale to a lessor of tangible personal property who is subject to the tax on leases implemented by Public Act 103-592 for the purpose of leasing that property, shall be made tax-free on the ground of being a sale for resale, provided the other provisions of this Section are met. [35 ILCS 120/2c] (Source: Amended at 50 Ill. Reg. 1119, effective January 8, 2026)

Section 130.210 Sales of Tangible Personal Property to Purchasers for Resale

a) The sale of tangible personal property to a purchaser for the purpose of resale in any form as tangible personal property, to the extent not first subjected to a use for which it was purchased, is not subject to the Retailers' Occupation Tax Act ("Act").

b) Sales of tangible personal property, which property, to the extent not first subjected to a use for which it was purchased, as an ingredient or constituent, goes into and forms a part of tangible personal property subsequently the subject of a "sale at retail", are not sales at retail as defined in the Act, provided that the property purchased is deemed to be purchased for the purpose of resale, despite first being used, to the extent to which it is resold as an ingredient of an intentionally produced product or byproduct of manufacturing. For this purpose, slag produced as an incident to manufacturing pig iron or steel and sold is considered to be an intentionally produced byproduct of manufacturing.

c) However, such sales for resale cannot be made tax-free unless the purchaser (except in the case of an out-of-State purchaser who will always resell and deliver the property to its customers outside Illinois) has an active registration number or active resale number from the Department and gives such number to suppliers in connection with certifying to any supplier that any sale to such purchaser is nontaxable because of being a sale for resale. Failure to present an active registration number or resale number and a certification to the seller that a sale is for resale creates a presumption that a sale is not for resale. This presumption may be rebutted by other evidence that all of the seller's sales are sales for resale, or that a particular sale is a sale for resale.

d) Divisible Type of Sale. There can also be a divisible type of sale where the tangible personal property is bought partly for "use" and partly for "resale" in the first place. For examples, see Sections 86 Ill. Adm. Code 130.215 and 130.330(h).

e) On and after January 1, 2025, a sale to a lessor of tangible personal property who is subject to the tax on leases implemented by Public Act 103-592 for the purpose of leasing that property, shall be made tax-free on the ground of being a sale for resale, provided the other provisions of this Section are met. [35 ILCS 120/2c]

(Source: Amended at 50 Ill. Reg. 1119, effective January 8, 2026)