Section 130.1970  Hatcheries

a)         When Liable for Tax

1)         Sales of baby chicks that are purchased for the buyer's consumption and are consumed by such buyer and not subsequently resold on the market, constitute retail sales, the receipts from which are subject to the Retailers' Occupation Tax.

2)         Hatchery operators also incur retailers' occupation tax liability when selling brooders, water troughs, and other poultry-raising equipment to purchasers for use or consumption unless the item qualifies for the farm machinery and equipment exemption.  See 86 Ill. Adm. Code 130.305.

b)         When Not Liable for Tax

1)         Persons selling baby chicks to purchasers for resale on the market as poultry and not to be consumed by such purchaser, or for the production of eggs for sale, are deemed to be sales for purposes of resale by the hatchery operator.  The hatchery operator is not liable for tax with respect to the receipts from such sales of baby chicks for resale.

2)         Persons engaged in the business of operating incubators or hatcheries, who hatch baby chicks for other persons from eggs belonging to such persons (i.e., custom hatching), are deemed to render service with respect to such transactions, and they are not required to remit retailers' occupation tax measured by their gross receipts from their rendering of such service.

c)         Records of Sales of Baby Chicks

If a seller of baby chicks has adequate records to establish which sales of baby chicks are at retail and which sales are for resale, such records will control.  See 86 Ill. Adm. Code 130.805, 130.810, and 130.1415 regarding what constitutes minimum records.  

(Source:  Amended at 49 Ill. Reg. 2107, effective February 5, 2025)