Frequently Asked Questions CONCERNING ILLINOIS SALES TAX

Vets First Choice is a new venture and we understand there are several questions about how this program works and how it will affect your business operations, especially in the area of sales tax related concerns. After extensive research, including discussions with the Illinois Department of Revenue staff and revenue auditors, we conclude:

There are two options for taxation of veterinarians conducting business in the state of Illinois: (1) Veterinarians can be designated “servicemen” and therefore subject to the Service Occupation Tax or (2) Veterinarians can be considered “retailers” and subject to the Retailers’ Occupation Tax. A veterinarian can be conducting business under both categories.

  1. Service Occupation Tax (SOT) – When licensed veterinarians transfer tangible personal property to their clients as a result of the practice of veterinary medicine, a service transaction occurs that results in liability under the Service Occupation Tax Act. A service transaction occurs when medicines, drugs and other products are directly applied or administered by a licensed veterinarian during a veterinary examination in which a client-patient relationship is established. If retail sales are not made, the veterinarian would pay sales tax directly to the supplier. The supplier would then remit the tax directly to the State of Illinois. In the case of Vets First Choice, the supplier would be PVP and we would remit the sales tax directly to the state.
  2. Retailers’ Occupation Tax (ROT) – If registered as a Retailer, the veterinarian would need to charge sales tax on all retail sales and remit the sales tax to the State of Illinois. Retail items include products that are also available over-the-counter at pet supply retail outlets, such as pet food, pet collars, leashes, toys, etc.

Are internet sales considered retail sales?

It is our understanding that in many situations internet sales are considered to be retail sales in the State of Illinois. PVP is billing the client on behalf of the veterinarian; the veterinarian is receiving the payment from the client.

Will Vets First Choice charge my clients sales tax?

Yes. Vets First Choice will charge your clients sales tax based on Illinois law.

Will Vets First Choice charge me (the veterinarian) sales tax?

Vets First Choice will not charge sales tax to the veterinarian as long as we have a properly completed Resale Certificate on file. A copy of the Certificate of Resale that we need to have on file to exempt your purchases is included.

Will I need to be registered as a retailer to provide a Resale Certificate?

Yes. It is our understanding that you will need to be registered as a retailer in the State of Illinois to be able to provide PVP a Resale Certificate and purchase products from PVP under the Vets First Choice program on a tax-free basis.

Who will be responsible for remitting the sales tax?

The clinic will be responsible for remitting the sales tax charged to their clients to the State of Illinois.

How will I know how much tax to remit to the state for my Vets First Choice business?

At the end of every month you will simply log into your administrative page on the Vets First Choice web site and access a report that will reflect your taxable sales and non-taxable sales and to which state, city, county and district you need to remit tax.

How do I remit the sales tax to the State of Illinois?

In order to remit the sales tax to the State of Illinois you will need to be registered as a retailer with the State of Illinois. The sales tax collected from your clients will need to be remitted on a sales tax return that you will file with the state.

Why should I participate in this program if I need to file sales tax returns and remit tax?

This is an extension of your business and gives you the opportunity to earn profits that you are not currently making. You will be selling directly to your clients and keeping the profits earned on those sales. We have attempted to make the taxation process as easy as possible. All you will need to do is file a sales tax return and remit the tax collected.

What do I do now?

You will need to decide what type of business you are conducting. Please be aware this is your business. Your clients will be visiting your website and purchasing products from you. PVP is selling to you, and you are selling to your clients. We believe that most of these transactions would be considered "resale" under Illinois law. Therefore, we recommend that you be registered as a "retailer" and carry the responsibility of filing sales tax. Choosing to operate without a "retailer" designation will not compromise your relationship with Vets First Choice; nor can PVP be held liable for your decision. 

This FAQ sheet is only a guideline based on our understanding of Illinois law. We encourage you to contact the Illinois Department of Revenue or your accountant for advice on your particular business situation.

Where can I get more information?

Learn more about Vets First Choice:

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