Illinois Appellate Court - Retailers can assign rights to sales tax refunds

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November 2016

Overview

On November 2, 2016, the Illinois Appellate Court, First Judicial District, held that under the Retailers’ Occupational Tax Act (ROTA), retailers could assign the right to receive sales tax refunds attributable to uncollected debt to a third-party financing company. The financing company remitted tax to retailers that, in turn, paid the tax to the Illinois Department of Revenue.  The financing company could receive bad debt sales tax refunds even though it did not remit the taxes directly to the Illinois Department of Revenue.

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