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Sales & Use Tax Structure… How Does It Affect You?

The Retailers’ Occupation Tax Act [35 ILCS 120] Section 130 of the Illinois Administrative Code imposes a tax upon persons engaged in the State of Illinois in the business of selling tangible personal property to purchasers for use or consumption. The Sales Tax rules in the State of Illinois are confusing and can vary greatly from jurisdiction to jurisdiction. The more jurisdictions you conduct business in, the more complex the Sales & Use Tax Structure becomes.┬á The end result, you end up overpaying the sales & use tax, and you’re wasting money!

Sales & Use Tax returns for the State of Illinois and its Local (county, city, villages & municipalities) tax authorities are prepared manually or by using a combination of tax software, for just a few state tax returns, and manual intervention for the bulk of remaining tax returns, especially for Local tax returns.

They are very complicated to prepare properly and may involve having to distinguish between as many as a combination of 60 different tax types that must be reported to one or more of, as many as, 3,500+ local tax authorities per State. Each location a business operates from must, not only, comply with the sales/use tax requirements of the State of Illinois, but also with the tax requirements imposed by each local tax authority and district where the business conducts its operations.

The more locations of operations a business has, the more complicated its tax reporting will be. This is a tedious, expensive and often inaccurately reported activity. However, most sales/use tax returns must be completed EVERY MONTH by the taxpayer or their tax preparer. Because of the complexity and time required, businesses and tax preparers, normally, prepare some of the basic State-level tax returns and neglect to do all the other required tax returns for every tax type for the state and the tax returns required by every local taxing authority.

This tax reporting irregularity inadvertently causes the few returns prepared to be treated as frivolous returns by containing material misstatements and incorrect tax calculations. The end result is that the tax reported to the tax authority is not correct.

If the tax return is frivolous and/or the tax amount is overstated, the taxpayer is at a loss. Our PAVLOU SalesTaxPRO® is your answer to all of the above problems.

It gives you the tools necessary to get the job done and get it done right.