Section 470.190  Discounts, Penalties and Finance or Interest Charges

a)         When taxpayers allow discounts from gross charges for services under the Act because of prompt payment of accounts, the amounts of the discounts are not included within gross receipts by which tax is computed.

b)         When taxpayers add and collect penalties or interest upon delinquent accounts or upon accounts involving installment payments, the amounts of the penalties or interest need not be included in gross receipts, provided that the amounts are separately itemized and billed to the persons to whom the services are furnished, and separately recorded in the books and records of the taxpayer.  If the amounts of the penalty, interest or finance charges are not separately billed and itemized to the person to whom the services are furnished and separately recorded in the books and records of the taxpayer, the total amount must be included in gross receipts by which the tax is computed.

c)         When a "gross amount" and "net amount" are billed to a customer on the same invoice for services furnished, the "net amount" representing the charge if paid within a stated period of time, the "gross amount" being the charge payable after the stated time has elapsed, the difference between the two amounts is deemed to be a penalty or interest charge separately billed.

(Source:  Amended at 43 Ill. Reg. 7463, effective June 18, 2019)