State Tax Day - Current, S.11, Illinois—Sales and Use Tax: River Tug Boat Repair and Replacement Parts Not Taxable, (Sep 29, 2026)

Illinois issued a general information letter discussing the taxation of sales of engine oil, gear box lube oil and grease for river tug boats. Illinois sales tax does not apply to sales of tangible personal property, including repair and replacement parts, used by interstate carriers for hire as rolling stock moving in interstate commerce. The rolling stock exemption applies to equipment or parts only if they become a component part of qualifying rolling stock and to equipment that, though not physically incorporated, is dedicated to a particular qualifying item or items of rolling stock and participates directly in the transportation process. Items including oil, grease, parts, belts, lights, transmission fluids, paint, filters, hoses, and seats generally qualify for the exemption since these products become a physical component part of the qualifying rolling stock. To claim the exemption for watercraft or repair and replacement parts for watercraft, retailers and service providers must obtain a properly executed exemption certificate at the time of sale and retain the certificate in their books and records. A retailer can claim a credit or refund for sales tax paid in error if it first unconditionally refunds the tax to the purchaser.

General Information Letter ST 26-0025-GIL, Illinois Department of Revenue, June 26, 2026, released September 8, 2026, ¶404-286