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Exemption Certificates in Illinois and Missouri: Similar Rules Apply

author photo of Silvia Aguirre

During recent travel to NACM education sessions in St. Louis, we were asked about exemption certificates for Illinois and Missouri. It is surprising how similar these states are in the way they deal with sales tax exemption certificates. Both states have a form for resale and general exemptions. In Illinois, they use the CRT-61 Form, which is generally a resale form. In Missouri, they use Form 149, which is also mainly for resale, but can be used for other purposes. Illinois resale forms should be renewed every three years, while the Missouri Form 149 should be renewed every five years.

Things can get a little tricky when you’re dealing with charitable exemptions or state/local government exemptions in either state. In Illinois, they issue a letter from the state that should be presented to the seller. These letters are normally valid for a maximum of five years. Unlike the resale form, it is not from the date a seller receives it, but is a hardcoded date that is on the actual form. Pay close attention to the forms you receive and look for the expiration date. In Missouri, the state will issue a license to exempt customers. These look a little fancier, but are to be utilized just like the Illinois letter. The Missouri license is to be copied and presented to the seller to keep in their files. Again, they are good for five years and a hardcoded expiration date is included on the license. Pay attention to the dates and contact your customers to receive a replacement before their forms expire.

Note: Silvia Aguirre is no longer accepting new comments nor questions. More recent "Exemption Certificate Mgmt" posts by Michael Fleming (of Peisner Johnson) are still active. Also use the Site's SEARCH bar to locate other helpful information.

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Comments

Note: Silvia Aguirre is no longer accepting new comments or questions.  More recent "Exemption Certificate Mgmt" posts by Michael Fleming (of Peisner Johnson) are still active.  Also use the Site's SEARCH bar to locate other helpful information.

13 Responses to Exemption Certificates in Illinois and Missouri: Similar Rules Apply

  • Posted by Author photo of Susan JaegerSusan Jaeger on December 5, 2014 6:57am:

    Thanks for your questions Amy and Debbie! While Silvia Aguirre’s very helpful Exemption Certificate blog information is still available – she is no longer posting new items or responding to new comments or questions.
    However – some good news… Andy Johnson and Michael Fleming of Peisner Johnson & Company have taken over the Exemption Certificate blogging activity. If you would like to post an Exemptions Certificate related question – feel free to submit through the comment section in the newest/latest post(s) listed on this linked page.
    http://www.salestaxsupport.com/blogs/sales-use-tax/author/mikefleming/
    Thanks!
    SalesTaxSupport.com

  • Posted by Debbie on November 14, 2014 8:20pm:

    If Agriculture Inputs are being purchased in Missouri but delivered to another state; does customer need to sign a MO form 149 or should the state the product is being delivered exemption form?
    Thank you.

  • Posted by Amy on November 4, 2014 4:49am:

    We are a not-for-profit company with a sales tax exemption certificate issued in Missouri. We routinely use a hotel in Illinois for different conferences. Do we have to pay Ilinois sales tax?

  • Posted by Elena on May 19, 2014 7:18am:

    If a Missouri tax exempt school is coming to Illinois, do we charge them sales tax because they are from a different state or is their tax exempt status valid in Illinois also?
    Please advise.
    Thank you.

    • Posted by Author photo of Silvia AguirreSilvia Aguirre on May 20, 2014 6:50am:

      Hi Elena, good question. If possession of the goods is in Illinois, they need to pay Illinois tax or show their Illinois exemption. I am afraid the Missouri exemption will not work. However, if the items they are buying are for resale purposes, the Illinois resale form, allows out of state vendors to complete the forms as non-registered vendor. If you are shipping the items to Missouri, then there is no problem because possession will likely take place in Missouri. I hope this helps. Silvia

  • Posted by Kelly on September 5, 2013 7:46am:

    My company uses a MO form 149 for sales/use tax exemption for inventory delivered to us in Missouri, but we recently had inventory drop shipped in Illinois, and the vendor is charging us sales tax. Is there a way to avoid paying sales tax in this situation? Thanks!

    • Posted by Author photo of Silvia AguirreSilvia Aguirre on September 5, 2013 8:19am:

      Hello Kelly, if you are having inventory shipped to Illinois, then you have nexus in Illinois and should have an Illinois sales tax permit. You want to complete the Illinois resale certificate CRT-61 and issue to your vendor. Hope this helps!

  • Posted by Karen on April 3, 2013 1:28am:

    Hello Cindy, We are brokers in IL. The companies that we represent are out of state. I want to know if the product is bought/sold through us do we need to be subjecting our clients to state tax. The products are for in-house usage (plastic pallets, plastic bins).

    • Posted by Author photo of Silvia AguirreSilvia Aguirre on April 4, 2013 2:24am:

      Hello Karen, your question is not a straight yes/no answer. The fact that you are a broker representing other companies might create nexus for those companies. What you have here is a nexus question, and it depends on the contractual agreement with each of the companies you represent. If you are considered an affiliate, and/or take orders for the companies you represent, this in fact will create nexus for them and yes taxes would apply. If you are the invoicing entity and you are just purchasing the products from the companies you represent, then the items would be purchased as inventory and your company would collect taxes based on your nexus exposure. However, I do not know the extent of your contractual agreements and suggest you look into getting a nexus study done. I would be glad to suggest folks that can help you in this area.

      • Posted by Anne on April 30, 2013 1:19am:

        Silvia, one of my projects this year is to get a better handle on all of our exemption certificates and ensuring that we are in compliance with all 50 states we currently do business in. Can you tell me which states have certificates that expire so that I may ensure we have current exemptions on file.

        • Posted by Author photo of Silvia AguirreSilvia Aguirre on May 23, 2013 8:56am:

          Hello Anne,
          The fact of the matter is that most states do not expire when it comes to resale, but it also depends on the forms being used. For example if you were dealing with Iowa, an SST state, if you receive and SST form, then it will never expire so long as you continuously do business with your customer. But if they decide to give you the state form, the form expires in 3 years, as stated in the form itself. So you see, it is difficult to pinpoint every expiration. But here are some states that are not SST and have expirations for resale (only) CO – 2yrs, CT – 3 yrs, ID – 4 yrs, PA – 4 yrs. If your project is a larger project you might want to engage a professional service as it will help in evaluating the exemption forms and apply correct expirations. Also keep in mind, the expirations for exempt forms, rather than resale, also depend on what is being given to you, a lot of the preprinted exempt forms specify the expiration.
          I hope this is helpful.
          Silvia

  • Posted by Cindy on March 6, 2013 1:07am:

    We are a manufacturing business located in Iowa, does the Iowa sales tax exemption certificate allow us to purchase items from Illinois without paying the sales tax if the items are for processing?

    • Posted by Author photo of Silvia AguirreSilvia Aguirre on March 6, 2013 4:20am:

      Hello Cindy, manufacturers are exempt in Iowa, if the items are being delivered to Iowa, you should provide your Iowa cert to the Illinois vendor or any other vendorthat will deliver for you in Iowa.

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