Sales Tax Revocation

By: Mansoor Ansari, Chicago Tax Attorney

If the Illinois Department of Revenue has revoked your sales tax certificate of registration, call our law firm right away.  This problem will not go away without the help of an attorney and will close the doors of your business overnight. A typical example of a revocation is when a vendor fails to report a sale within the specified period of time. Under 35 ILCS 120/5j, the Act specifies as follows:

If any taxpayer, outside the course of his business, sells or transfers the major part of any one or more of,

(A) The stock of goods which he is engaged in the business of selling, or

(B) The furniture or fixtures,

(C) The machinery and equipment, or

(D) The real property, of any business that is subject to the provisions of this Act, the purchaser or transferee of such asset shall, no later than 10 days after the sale or transfer, file a notice of sale or transfer of business assets with the Chicago office of the Department…

If the purchaser or transferee fails to file the above described notice of sale with the Department within the prescribed time, the purchaser or transferee shall be personally liable for the amount owed hereunder by the seller or transferor to the Department up to the amount of the reasonable value of the property acquired by the purchaser or transferee… (emphasis added).

Rejection of application:

In certain circumstances, a retailer’s application for a sales tax certificate of registration may also be rejected.  See Section 2a of the Retailers’ Occupation Tax Act (“ROTA”) (35 ILCS 120/1 et seq.) provides in part as follows:

It is unlawful for any person to engage in the business of selling tangible personal property at retail in this State without a certificate of registration from the Department. * * * No certificate of registration shall be issued to any person who is in default to the State of Illinois for moneys due under this Act or under any other State tax law or municipal or county tax ordinance or resolution under which the certificate of registration that is issued to the applicant under this Act will permit the applicant to engage in business without registering separately under such other law, ordinance or resolution. 35 ILCS 120/2a. Section 5 of the ROTA provides that the Department’s determination regarding a tax liability isprima facie correct. 35 ILCS 120/5.Once the Department has established its prima facie case, the burden shifts to the taxpayer to prove by sufficient documentary evidence that the Department’s determination is incorrect. Mel-Park Drugs, Inc. v. Department of Revenue, 218 Ill.App.3d 203, 217 (1st Dist. 1991); Lakeland ConstructionCo., Inc. v. Department of Revenue, 62 Ill.App.3d 1036, 1039 (2nd Dist. 1978).

If your business has had its Illinois sales tax certification of registration revoked, our attorneys can assist you in getting it back.