Illinois DOR Issues General Information Letter on Taxability of Open-Source Software

The Illinois Department of Revenue (DOR) issued a general information letter on the taxability of open-source software. The taxpayer inquired about how sales and use tax applies to maintenance fees for open-source software. In its response, the DOR determined that if the updates included in a maintenance agreement consist solely of software distributed under open-source licenses at no charge, then no retailers’ occupation tax or use tax is owed because the taxable base in such cases is zero. [Ill. Dep’t of Revenue, General Information Letter ST-25-0028-GIL, 04/15/25]

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