The Illinois Department of Revenue recently released a general newsletter ST-21-0025-GIL, providing that the provision by an online retailer of tangible personal property to its subscribers for sampling before deciding whether or not to buy was not a taxable transaction, while any purchase of the property was taxable . The taxpayer, based outside Illinois, operates an e-commerce website that offers a monthly subscription program that, in exchange for the subscription fee, allows subscribers to try the taxpayer’s before deciding to l ‘to buy. The Department determined that the subscription receipts were not subject to sales tax because there had been no transfer of ownership of the property. The Department also determined that the subscription receipts were not subject to the Illinois “Lease-to-Purchase Occupancy and Use Tax” which imposes a tax on the rental of merchandise under the Department. ” an initial lease-to-own agreement of less than four months, because a subscription model with a separate purchase option, such as that of the taxpayer, was different from the “option-to-purchase lease resellers” contemplated by the occupancy tax of the rental purchase agreement. Finally, the Department determined that the taxpayer was not making taxable use of the sample merchandise in the State since the demonstration exemption would apply.



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