Immediate Action is Crucial
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.
Example of Revocation
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.
Legal Reference
See Section 2a of the Retailers’ Occupation Tax Act (ROTA) (35 ILCS 120/1 et seq.), which provides in part:
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
Burden of Proof
Section 5 of the ROTA provides that the Department’s determination regarding a tax liability is prima 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.
Relevant Cases:
- Mel-Park Drugs, Inc. v. Department of Revenue, 218 Ill.App.3d 203, 217 (1st Dist. 1991)
- Lakeland Construction Co., Inc. v. Department of Revenue, 62 Ill.App.3d 1036, 1039 (2nd Dist. 1978)
Legal Assistance Available
If your business has had its Illinois sales tax certification of registration revoked, our attorneys can assist you in getting it back.
Frequently Asked Questions
What is a Sales Tax Certificate of Registration in Illinois?
A Sales Tax Certificate of Registration is a legal authorization issued by the Illinois Department of Revenue allowing a business to sell tangible personal property at retail in the state. Without this certificate, operating a retail business in Illinois is unlawful.
Why would my Sales Tax Certificate of Registration be revoked?
Revocations often occur when a business fails to comply with tax laws, such as failing to report sales within the required timeframe or transferring business assets without proper notice to the Department of Revenue. Other reasons may include tax defaults or unresolved liabilities with the State of Illinois.
What happens if my certificate is revoked by the Illinois Department of Revenue?
If your certificate is revoked, your business must cease retail sales immediately. Operating without a valid certificate can lead to severe legal and financial consequences. To protect your business, it is crucial to seek legal assistance right away to address the revocation.
Can my application for a certificate be rejected?
Yes, the Department of Revenue may reject applications if the applicant is in default for taxes owed under Illinois law or other applicable tax ordinances. Applications are thoroughly reviewed to ensure the applicant is in good standing before approval.
How can an attorney help if my certificate is revoked?
An experienced attorney can help you challenge the revocation, provide the necessary documentation to dispute the Department’s findings, and represent you in hearings or negotiations. Legal representation significantly improves the chances of reinstating your certificate and keeping your business open.