Sales Tax and Other State and Local Use Tax Guidelines

• Sales Tax Exemption – Illinois
• Sales Tax Exemption – Out of State Purchases
• Other State and Local Taxes
• Items Sold for Resale
• University Sales – Taxable Sales

Sales Tax Defined

Sales tax is defined as the combination of “occupation” taxes that are imposed on a sellers’ receipts and “use” taxes that are imposed on amounts paid by purchasers. Sellers owe the occupation tax to the Illinois Department of Revenue (IDOR) but may reimburse themselves for this liability by collecting use tax from the buyers.

Sales tax is imposed on a seller’s receipts from sales of tangible personal property for use or consumption. This can include apparel, food and beverage items, books, and more. Tangible personal property does not include real estate, stocks, bonds, or other “paper” assets.

All University departments and student organizations are liable for the collection of sales and use tax on the sales of tangible personal property.

University Purchases

A.  Sales Tax Exemption – Illinois 

Loyola University Chicago is a 501(c)(3) entity under the Internal Revenue Code and is exempt from federal income tax as an educational institution. Many states also recognize our 501(c)(3) status and offer a sales-tax exemption for goods purchased in that state.

Qualified organizations, as determined by IDOR, may be exempt from paying sales taxes on items purchased and consumed by the organization. The two characteristics that qualify an organization from sales tax exemption in Illinois are:

• The organization must be a not-for-profit, and
• The organization must be organized and operated exclusively for charitable, religious, educational, or governmental purposes.

Loyola University of Chicago has applied for and obtained an Illinois sales tax exemption from the IDOR. The exemption letter should be provided to any suppliers when the University is purchasing tangible personal property for organizational use. Once provided, sales tax should not be assessed on the qualified purchase.

A copy of the Loyola University’s sales tax exemption certificate can be provided by Accounts Payables (payables@luc.edu) or requested from Alyssa Beneventi (agerdes1@luc.edu). Please include a description of the purchase and what the item will be used for with the request.

The University’s sales tax exemption should be used exclusively for purchases by Loyola University Chicago. Faculty, staff, or students of the University cannot use the sales tax exemption, unless the purchase is in the course of University business. Misuse of the University’s tax exemption can jeopardize our tax-exempt status.

B.  Sales Tax Exemption - Out of State Purchases 

Loyola University Chicago has been granted an exemption from sales and use tax in other states where the University may make purchases or consume goods in that state. For example, the University may hold Athletic events, special events, or student programming. Vendors located in other states may require state specific tax exemption forms.

Currently the University may have an active sales tax exemption in the following states or the state has no sales tax. Please contact the vendor in advance to determine what the University may need to provide to be granted an exemption of sales tax.

Alaska	Hawaii	Minnesota	Ohio
Arkansas	Illinois	Missouri	Oregon
Colorado	Indiana	Montana	Texas
Connecticut	Kansas	New Hampshire	Virginia
Delaware	Massachusetts	New Jersey	Wisconsin
Florida	Michigan	New York

C.  Other State and Local Taxes 

The Illinois sales tax exemption does not apply to the following other state and local taxes:

• City of Chicago Amusement Tax
• City of Chicago A/V Equipment Tax
• Hotel Operator’s Occupation Tax (Illinois, Chicago, & Cook County Hotel Tax)
• Motor Fuel Tax (Illinois, Chicago, & Cook County Gasoline & Diesel Tax)
• Parking Excise Tax (Illinois, Chicago, & Cook County Parking Tax)

D.  Items for Resale

LUC’s Illinois sales tax exemption letter should only be used for items that the University will use and/or consume. If any department plans to buy goods with the intention of reselling them, then the Illinois Certificate of Resale should be used. The certificate is provided to the business making the sale so that the sale can be made tax-free. For more information on using a resale certificate, please contact Alyssa Beneventi (agerdes1@luc.edu).

University Sales

Taxable Sales

Loyola’s sales tax exemption only exempts the University from qualified purchases. The sales tax exemption does not exempt the University from sales made by departments and student organizations on tangible personal property.

Tax Rate

Generally, tangible personal property sold in Chicago is subject to the Illinois sales tax rate of 10.25%. This rate is as of January 2023. This rate can vary depending on the type of item sold and the location of the sale. Please review the Sales Tax Reporting Template for additional information on tax rates by location. Please contact Alyssa Beneventi (agerdes1@luc.ed) if you have additional questions.

Examples of sales subject to IL sales tax:

• Clothing and accessories (ex. T-shirts, sweatshirts, mugs, jewelry)
• Books, notebooks, and supplies
• Passport photos
• Food and beverages, snacks (ex. Event tickets that include food and beverage in the ticket price)

Examples of sales exempt from IL sales tax:

• Newspapers and/or magazines if it meets IDOR qualifications.
• Sales made to exempt organizations (must provide IL sales tax exemption certificate)
• Sales made to resellers

If your department or student organization plans to conduct sales of tangible personal property, please contact Alyssa Beneventi (agerdes1@luc.edu) with the following information 30 days prior to the sale:

• Description of the activity
• Date of proposed sale
• Type of items to be sold
• Location of sale

Tax & Financial Compliance will determine the sales tax consequences and appropriate sales tax rate to charge on sales. Non-compliance of Illinois sales tax regulations will put the University at risk and the department will be responsible for any interest or penalties that arise from non-compliance. 

Reporting Sales to Tax & Financial Compliance

Illinois sales tax reporting and payment is due to the Illinois Department of Revenue (IDOR) by the 20^th day of the following month of the sale. (ie. August sales reporting is due September 20^th) To ensure accurate reporting to the IDOR, please deposit the taxable sales in the department’s accounting unit and sales revenue account (4070). The sales tax collected should be deposited to the department’s sales tax liability account (2031).

By the 10^th day of the following month of the sale, please complete and return a copy of the Sales Tax Reporting Template to Alyssa Beneventi (agerdes1@luc.edu) that details the sales period, AU and account number deposits are made into, items sold, revenue received, and sales tax collected. This should be completed for each month there is a sale.

Other Applicable Taxes

The University may also be responsible for the collection of the following taxes:

Tax Type	Applicable to:	Campus Location
Hotel Operator’s Occupation Tax	Illinois businesses that are in the occupation of renting, leasing, or letting rooms to the public for living quarters for periods of less than 30 days Examples: Paid lodging provided to persons (not including students) at a retreat center or dormitory for less than 30 consecutive days Exemptions: Permanent Residents: person who has the right to occupy ay room in the hotel for at least 30 consecutive stays Loyola students: A school is not subject to hotel tax on receipts from renting rooms to its students for use as living quarters, or for sleeping or housekeeping accommodations, because these are not rentals to the public Tax Rates: State of Illinois: 6% (outside of Chicago limits) or 11.9% (inside Chicago limits) Cook County: 1% City of Chicago: 4.5%	All
Parking Excise Tax	Operators of parking areas, spaces, and garages in Illinois are required to collect and remit the Parking Excise Tax based on the purchase price paid by the purchaser to park in a parking area, space, or garageExamples: Daily parking passes sold to the public for athletic events Monthly parking passes sold for parking spaces at retail establishments Exemptions: Residential off-street parking for home, apartment tenants, or condominium occupants Tax Rates: State of Illinois: 6% (daily or weekly) or 9% (monthly) Cook County: 6% (daily) or 9% (weekly or monthly) City of Chicago: 22%	All
Chicago Restaurant Tax	The Restaurant Tax is imposed on each place for eating located in the City of Chicago. The tax is imposed on the selling price of all food and beverages sold at retail by the place for eating. A place for eating means any place at which a business (a) is engaged in the sale at retail of “food prepared for immediate consumption” and (b) provides for on-premises consumption of the food it sells Examples: Any food sales at a restaurant or food establishment. This does not include food sales made to students in a cafeteria setting  Exemptions: Sales exempt from the Illinois Retailers’ Occupation Tax Tax Rate: 0.5%	LSC & WTC
Chicago Rental Tax	The Personal Property Lease Transaction Tax applies to businesses or individuals that either are a lessor or lessee of personal property used in Chicago. Examples: Bike rentals A university leases a computer for curriculum and general university purposes but also sublets computer time to a service bureau. The tax is applicable to the sublease. Exemptions: Leases of personal property by an institution organized and operated exclusively for charitable, educational or religious purposes for use in its exempt activity Tax Rate: 9%	LSC & WTC
Illinois Soft Drink Tax	The Chicago Home Rule Municipal Soft Drink Occupation Tax is imposed on persons who sell canned or bottled soft drinks at retail in Chicago. (ex. Soda, sport or energy drinks, sweetened tea, sweetened or flavored waters, more) Examples: Soft drinks offered at athletic game concessions Exemptions: Soft drinks do not include beverages that contain milk or milk products, soy, rice or similar milk substitutes, or greater than 50% of vegetable or fruit juice by volume. Tax Rate: 3%	All
Chicago Amusement Tax	Owners, managers, operators of amusements or places where amusements are conducted, and ticket resellers shall collect tax from patrons for witnessing or participating in amusements. Amusements include (1) various exhibitions, performances, presentations or shows that a person may witness or view, (2) various entertainment or recreational activities in which a person may participate, and (3) paid television programming. Examples: Payment for a University-hired performer (comedian, musician, etc.) to perform for the students as entertainment for the school semester. If the event exceeded the two day limit of exempt events for the year, then amusement tax would apply Exemptions: Certain live cultural performances; also certain amusements sponsored by religious, charitable, and not-for-profit organizations for fund raising purposes are exempt, but are restricted to two events per calendar year not exceeding a total of 14 calendar days. Tax Rate: 9%	LSC & WTC

Prior to your department engaging in the collection of revenue for any of the applicable items above, please reach out to the Tax Department.

Tax & Financial Compliance Contacts:

Maria Araque, Asst. Vice President – maraque@luc.edu

Alyssa Beneventi, Tax Manager – agerdes1@luc.edu

Last Revision Date: June 2023