Illinois Supreme Court invalidates local sales sourcing regulations on a prospective basis, taxpayer allowed to rely on flawed rule
The Illinois Supreme Court found invalid Illinois regulations providing that the situs of local sales tax occurs at the place where purchase orders are accepted. However, under the Illinois Taxpayers’ Bill of Rights, the Department is bound by its flawed interpretation of the law in effect at the time. Therefore, the court ruled in favor of the taxpayer, which followed the guidance provided in the Department's regulations. This decision raises many unanswered questions for taxpayers going forward.