The Illinois Department of Revenue issued a private letter ruling determining that for purposes of the Retailers’ Occupation Tax (ROT) and the Services Occupation Tax (SOT), a taxpayer that procured marketing materials on behalf of its clients properly sourced these sales to the location of the product manager, the employee responsible for procuring the materials. At audit, the auditor determined that the taxpayer was required to source the sales to the taxpayer’s headquarters. In issuing the PLR, the Department disagreed with the auditor’s conclusions determining that for purposes of the ROT most of the primary selling activities, which determine how a sale is sourced, occurred at the location of the product manager and not necessary the taxpayer’s headquarters. For purposes of the SOT, the taxpayer was unable to determine the location of its subcontractors so the sales of its services were properly sourced to the location of the product manager. At the time of the PLR, the taxpayer had a matter pending at the Informal Conference Board (ICB); however, the Department’s ruling was applicable to prospective sales of tangible personal property and services only.
