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Compliance Alert

Breeding Services In Illinois

A breeding service of animals rather it's large or small animals is considered to be a self- employed business. As owners of an LLC, "Doggy Daycare" and "Breeding Service", we have some of the same responsibilities and rights as other LLC, businesses that are ran in the State of Illinois. Therefore, we must comply with the laws, rules and regulations in order for our doors to remain open for business and to avoid any penalties.

Many breeders have not complied with the laws of the State of Illinois, and have had their breeding service doors closed with paying penalties. While on the other-hand other breeders are unaware of the laws that were passed by the State of Illinois concerning the breeding of dogs.

Hopefully by posting this page to our website, we will help educate other breeders in the State of Illinois as well as educating our clients of the laws for breeding and selling animals.

Compliance Problem

  • The Illinois Department of Revenue (IDOR) has found that a number of pet breeders are unaware that they must collect and remit sales tax (Retailers’ Occupation Tax and Use Tax) when they sell animals as pets.

Solution

  • Breeders who sell animals as pets must register with the Illinois Department of Revenue. Those that are required must collect tax on the sale of the animals and remit the tax to the department. Pet breeders who sell animals for resale must register as a re-seller with the Department of Revenue.
  • Tax is due when the animal is sold to a purchaser who will keep it as a pet.
  • Tax is due if an animal is picked up at the breeder’s Illinois facility, even if it will be immediately taken out of state.
  • However, tax is not due if the seller is obligated, under the terms of an agreement with the purchaser, to make physical delivery of the animal from a point in Illinois to a point outside Illinois, not to be returned to Illinois, provided that the delivery is actually made.
  • Tax is not due if the sale is to another pet breeder who is in the business of breeding animals that he will sell because the transaction is considered a sale for resale. However, the breeder, must document this tax-free transaction by obtaining a properly completed Certificate of Resale from the pet breeder who purchases the animal. For an example of a resale certificate, visit  www.tax.illinois.gov and review Form CRT-61.

Background

  • The department’s Bureau of Criminal Investigation has found that pet breeders are not collecting sales tax because they do not understand their tax responsibilities.
  • The department will routinely identify non-compliance and enforce the tax laws. This publication is an attempt to educate taxpayers about the law so that they can avoid additional penalties and interest.

CA-2011-10 (N-05/11)

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