Reciprocal Agreement on Exchange of Information

What is a reciprocal agreement on exchange of information?

A Reciprocal Agreement on Exchange of Information is an agreement between a municipality or county and the Illinois Department of Revenue (IDOR) to share financial information that was obtained pursuant to the Illinois Retailers’ Occupation Tax Act, the Service Occupation Tax Act, the Use Tax Act, and the Service Use Tax Act or the Simplified Municipal Telecommunications Tax Act on taxpayers or telecommunications providers doing business within their taxing jurisdiction.

The financial information is limited to the net revenue distributed to the requesting municipality or county that is directly related to their local share of tax received under the Simplified Municipal Telecommunications Tax Act (if applicable), the Use Tax Act, the Service Use Tax Act, the Service Occupation Tax Act, the Retailers’ Occupation Tax Act, and, if applicable, any locally-imposed retailers’ occupation tax or service occupation tax that IDOR administers.

Who is eligible to enter into an agreement?

All municipalities in the state are eligible to enter into an agreement with IDOR to request confidential information on retail sales made within their taxing jurisdictions. Municipalities that impose a Simplified Municipal Telecommunications Tax are eligible to enter into a reciprocal agreement on exchange of information with IDOR to allow them to request confidential information on telecommunications providers doing business within their taxing jurisdictions.

How does a municipality or county enter into an agreement?

The Reciprocal Agreement on Exchange of Information for Sales Tax and the Reciprocal Agreement on Exchange of Information for Simplified Municipal Telecommunications Tax are available on IDOR's website at tax.illinois.gov. The reciprocal agreement, along with Attachment A, Minimum Standards Required to Safeguard Information, must be signed by the chief executive officer of the municipality or county. The chief executive officer must provide a list of names and official titles of persons designated by him or her as persons exclusively authorized to request, view, or receive sales tax financial information on his or her behalf. The list must be restricted to only persons who are directly involved in the financial operations of the municipality or county, including municipal or county employees, and persons, such as attorneys or accountants, retained by the municipality or county. The list cannot include those who are compensated by the municipality or county for services rendered on a contingent basis or any other similar method that may impair that person’s independence or the perception of that person’s independence. Each person authorized to request, view, or receive financial information will be required to complete and sign Attachment B, Acknowledgement of Restrictions on Use and Disclosure of Confidential Financial Information.

Agreements for sales tax must be mailed to IDOR’s Local Tax Allocation Division (LTAD). The submission must include (i) the original Agreement, (ii) Attachment A, (iii) the list of authorized persons, and (iv) a signed Attachment B for each person included on the authorized list.

Agreements for telecommunications tax must be mailed to IDOR’s Local Tax Allocation Division. The submission must include (i) the original Agreement, (ii) Attachment A, and (iii) the list of authorized persons.

In order to be granted Authorized access In MyLocalTax, the individual must currently be listed on your local government's Reciprocal Agreement for Exchange of Confidential Information for both Sales Tax and Telecommunications Tax (if applicable) with IDOR. 

What information can a municipality or county request and receive under the agreement?

The sales tax agreement entitles a municipality or county to request information regarding the amount of sales tax they received from a taxpayer registered to report sales tax within the municipality’s or county’s taxing jurisdiction.

The telecommunications tax agreement entitles a municipality to request information regarding the amount of telecommunications tax they received from a telecommunications provider registered to report telecommunications tax within the municipality’s taxing jurisdiction.

The most common type of request is for the remittance reports for sales tax and telecommunications tax.

How does a municipality or county request information under the agreement?

Allocation remittance reports can only be accessed through MyLocalTax. Through MyLocalTax, users can request allocation remittance reports for one, three, or twelve-month ranges.  You'll receive reports for each tax that you impose.  Users will receive the file(s) in their MyLocalTax account in 1-2 business days, and the file(s) can be downloaded straight to the user's device. 

Requests for confidential information, other than allocation remittance reports, must (i) be submitted on the municipality’s or county’s letterhead, (ii) indicate that the information is being requested under the reciprocal agreement, (iii) indicate the time period for the requested information, (iv) indicate the tax type, (v) include the list of authorized persons designated by the chief executive officer, and (vi) be signed by an authorized person. The requests can be sent electronically through MyLocalTax as a meesage, mailed, faxed, or sent by email as an attachment to LTAD.

What is the responsibility of the municipality or county to keep the information confidential?

The information received by the municipality or county under the agreement is confidential and shall only be shared with authorized persons designated by the chief executive officer of the municipality or county. Confidential information must be kept in a locked storage facility or be password protected if stored in an electronic format. The municipality or county must inform IDOR if either of the following occur:

  • An authorized person leaves employment of the municipality or county or otherwise is no longer authorized by statute or by the municipality or county to receive the information.
  • There is a suspected breach of confidentiality of the information.

The chief executive officer must annually re-certify the list of persons and their official titles who will be authorized to request, receive, or view financial information on his or her behalf on the municipality's or county's letterhead.  Failure to make the annual re-certification of the list will result in revocation of the municipality's or county's ability to request confidential information.  

Where do you send agreements, requests, and questions?

The original reciprocal agreement on exchange of information must be mailed to IDOR and can be sent to the address below. Once IDOR receives and processes the agreement, requests for confidential information, as well as questions concerning the agreement and the confidential requests, can be made electronically through MyLocalTax or using the contact information below:

Local Tax Allocation Division (3-500)
Illinois Department of Revenue
101 W Jefferson St
Springfield IL 62702

Email: rev.localtax@illinois.gov
Phone: 217 785-6518
Fax: 217 785-6527

Statutory references:
35 ILCS 120/11
55 ILCS 5/2-1001 et seq. (identifies the types of chief executives of counties)
65 ILCS 5/3.1-15-10 (chief executive officer defined)