Section 1.7020  Taxes, Licenses, Assessments and Royalties

a)         The contractor shall pay all current and applicable city, county, State and federal taxes, licenses or assessments, including federal excise taxes, due on the performance of any contract, including, without limiting the foregoing, those required by the Federal Insurance Contribution Act (26 USC 3101 et seq.), the Federal Unemployment Tax Act (26 USC 3301 et seq.) and the State Unemployment Insurance Act [820 ILCS 405], together with all royalties due for any proprietary items.  The contractor is exclusively liable for the payment of taxes to the respective governments. In the event the taxes, licenses, assessments or royalties, or any part thereof, are in the first instance charged to the State agency, the contractor shall, upon timely demand of the State agency, pay the State agency the amount of the tax, license, assessment or royalty due, plus all penalties that may have accrued.

b)         The State agency is exempted by Section 3-5 of the Use Tax Act [35 ILCS 105/3-5] from paying any of the taxes imposed by that Act, and sales to the State agency are exempt by Section 2-5(11) of the Retailers' Occupation Tax Act [35 ILCS 120/2-5(11)] from any of the taxes imposed by that Act.  The Illinois Department of Revenue, under 86 Ill. Adm. Code 130.2075(d), has declared that sale of materials to construction contractors for conversion into real estate for schools or charities are not taxable retail sales.  A State agency making purchases of tangible personal property must provide its exemption numbers to vendors in order to receive an exemption from tax.  Contractors making purchases from vendors of tangible personal property that will be incorporated into real estate owned by a State agency must present vendors with the State agency's exemption number and other required documentation in order to receive an exemption from tax.

c)         Federal Excise Tax.  Bidders must not include in their prices any allowance for payment under Federal Excise Tax if the State agency is exempt from those taxes.  If an order or contract is awarded for the purchase of an item that is subject to the Federal Excise Tax, the State agency will furnish the vendor with an exemption certificate upon request.

(Source:  Amended at 36 Ill. Reg. 10729, effective August 6, 2012)