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What must I keep in my books and records?

Answer #170 -- ( Published 08/09/2005 01:03 PM | Updated 07/12/2017 10:40 AM )

What must I keep in my books and records?

If you sell tangible personal property at retail in Illinois, you must keep:

  • books and records of all sales and purchases you make;
  • documents about inventory changes, shipments, or other transactions;
  • accounts receivable records;
  • accounts payable records;
  • summaries or ledger accounts;
  • records or working papers that are used in the preparation of your tax returns; and
  • a copy of the tax returns you file.

With regard to sales and purchases you make, at a minimum, you also must keep:

  • cash register tapes and other data that provide a daily record of your gross sales;
  • records of merchandise purchased, such as vendor's invoices or purchase orders; and
  • a yearly inventory of the value of your stock on hand.

These records must distinguish taxable from nontaxable sales. You must keep these records for all sales, regardless of whether you believe they are taxable.

In order to support any deductions claimed for nontaxable sales, your records must include:

  • the purchaser's name and address;
  • the character of each transaction (e.g., a sale for resale or sale to an exempt organization);
  • the transaction date;
  • the amount of receipts from each transaction; and
  • any other information that establishes the nontaxable nature of the transaction.

You do not need to maintain paper records, as long as your electronic record system includes a method to produce legible and readable records necessary to verify liability. In general, you must keep books and records that document receipts for the reporting period covered by your return for three and one half years after you have filed an original or amended return. If a Notice of Tax Liability or Final Notice of Tax Due has been issued, you must keep books and records that document receipts for the reporting period for which the notice was issued. Keep these records until the liability has been finalized or discharged.

Your books and records must be:

  • available for inspection by the Illinois Department of Revenue during normal business hours;
  • written in English; and
  • maintained in Illinois unless you have received written permission from the Department to keep them in another location.

See Illinois Administrative Code, Title 86, Sections 130.801 through 130.825.

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