In the wake of recent litigation in Illinois accusing wineries of failing to pay the sales tax on shipping charges for wine being shipped directly to consumers in the state, we have updated the tax information on our website with the following information:
- The taxability of shipping charges in Illinois is not clear. However, there is a general consensus that, after the Kean decision and despite the unchanged language of the Illinois Department of Revenue’s Regulations, such charges on Internet purchases are being treated as taxable by the Department.
- Generally, shipments to this region require a sales tax of 6.25% on both onsite and offsite sales of wine, to be paid within 1 year after every year starting January 1, but depending on the member’s specific facts, some onsite sales may trigger additional local taxes.
- Members of the Wine Institute that have not collected Illinois sales tax on shipping charges and have not been served with a Complaint of a False Claims Act matter should consider whether to file a Voluntary Disclosure Application with the Illinois Department of Revenue.
Note: Wine Institute has been working with attorneys from our Associate Member firm Reed Smith LLP in Chicago who have extensive experience with both Illinois Taxation and False Claims Act matters such as those raised in the recent litigation. They have offered to discuss collection options and other legal options, including a Voluntary Disclosure Application with any Wine Institute member. WI members should contact Annie Bones in the State Relations Department for further information (415) 356-7530.