State Tax Day - Current, S.17, Illinois—Sales and Use Tax: Taxation of Medical Infusion Therapy Services Discussed, (Jun 10, 2026)

Illinois issued a general information letter discussing the taxation of medical services involving infusion therapies for blood disorders, rheumatoid arthritis, immuno deficiency disorder, and bipolar disorder. Illinois imposes sales tax on all tangible personal property transferred as an incident to the sale of a service. Prescription and non-prescription medicines, drugs, and medical appliances, are subject to taxation at a reduced state rate of 1%, plus applicable local service taxes based on the location of the sale of the service. A medicine or drug that qualifies for the reduced state rate includes any pill, powder, potion, salve, or other preparation for human use that, on the label, purports to have medicinal qualities. A written claim on the label that a product is intended to cure or treat disease, illness, injury, or pain, or to mitigate the symptoms of the disease, illness, injury, or pain, is a medicinal claim. The service provider can calculate their tax liability based on: the separately-stated selling price of the tangible personal property transferred incident to the sales of the service; 50% of the service provider’s entire bill; or the cost price if the service provider is a de minimis service provider. Service providers can qualify as de minimis if their annual aggregate cost price of tangible personal property transferred incident to the sale of services is less than 35% of total annual gross receipts from service transactions. The annual gross receipts threshold is 75% or less for service providers transferring prescription drugs. Service providers do not have the option to determine whether the de minimis status is met on a transaction-by-transaction basis. Registered de minimis service providers must provide their suppliers with a resale certificate and pay state and local sales tax based on the cost price of the tangible personal property transferred incident to the sale of their service. This method also results in the customer incurring use tax liability.

General Information Letter ST 26-0018-GIL, Illinois Department of Revenue, May 8, 2026, ¶404-257