Operating a small business involves understanding how different taxes apply to you based on the products or services you sell. If you charge your customers sales tax, your income is not affected by passing the amount to the state. The gross receipts tax, on the other hand, is based on your total revenue and directly impacts the profits you earn.
The Illinois Department of Revenue’s administrative rules now incorporate the Illinois Supreme Court’s holding in Kean v. Wal-Mart Stores, Inc., 235 Ill. 2d 351 (2009). The revised rules clarify when transportation and delivery charges are considered “gross receipts” subject to Retailers’ Occupation Tax or Use Tax. The amended rules also clarify that persons who have computed their tax liability for transportation and delivery charges according to the provisions of either the old rule or the amended rule for periods between the Kean decision (November 19, 2009) and April 1, 2016 (the effective date of the new rules) shall be considered to have properly collected and remitted tax on those charges.
Delivery charges Illinois sales tax on gross receipts
Mansoor Ansari J.D., LL.M. (TAX)