35 ILCS 155/ Automobile Renting Occupation and Use Tax Act.

(35 ILCS 155/1) (from Ch. 120, par. 1701)

Sec. 1. This Act shall be known and may be cited as the "Automobile Renting Occupation and Use Tax Act".

(Source: P.A. 82-703.)

(35 ILCS 155/2) (from Ch. 120, par. 1702)

Sec. 2. Definitions.

"Renting" means any transfer of the possession or right to possession of an automobile to a user for a valuable consideration for a period of one year or less.

"Renting" does not include making a charge for the use of an automobile where the rentor, either himself or through an agent, furnishes a service of operating an automobile so that the rentor remains in possession of the automobile, because this does not constitute a transfer of possession or right to possession of the automobile.

"Renting" does not include the making of a charge by an automobile dealer for the use of an automobile as a demonstrator in connection with the dealer's business of selling, where the charge is merely made to recover the costs of operating the automobile as a demonstrator and is not intended as a rental or leasing charge in the ordinary sense.

"Renting" does not include peer-to-peer car sharing, as defined in Section 5 of the Car-Sharing Program Act, if tax due on the automobile under the Retailers' Occupation Tax Act or Use Tax Act was paid upon the purchase of the automobile or when the automobile was brought into Illinois. The car-sharing program shall ask a shared vehicle owner if the shared vehicle owner paid applicable taxes at the time of purchase. Notwithstanding any law to the contrary, the car-sharing program shall have the right to rely on the shared vehicle owner's response and to be held legally harmless for such reliance.

"Automobile" means (1) any motor vehicle of the first division, or (2) a motor vehicle of the second division which: (A) is a self-contained motor vehicle designed or permanently converted to provide living quarters for recreational, camping or travel use, with direct walk through access to the living quarters from the driver's seat; (B) is of the van configuration designed for the transportation of not less than 7 nor more than 16 passengers, as defined in Section 1-146 of the Illinois Vehicle Code; or (C) has a Gross Vehicle Weight Rating, as defined in Section 1-124.5 of the Illinois Vehicle Code, of 8,000 pounds or less.

"Department" means the Department of Revenue.

"Person" means any natural individual, firm, partnership, association, joint stock company, joint adventure, public or private corporation, limited liability company, or a receiver, executor, trustee, conservator or other representative appointed by order of any court.

"Rentor" means any person, firm, corporation or association engaged in the business of renting or leasing automobiles to users. For this purpose, the objective of making a profit is not necessary to make the renting activity a business.

"Rentor" does not include a car-sharing program or a shared-vehicle owner, as defined in Section 5 of the Car-Sharing Program Act, if tax due on the automobile under the Retailers' Occupation Tax Act or Use Tax Act was paid upon the purchase of the automobile or when the automobile was brought into Illinois. The car-sharing program shall ask a shared vehicle owner if the shared vehicle owner paid applicable taxes at the time of purchase. Notwithstanding any law to the contrary, the car-sharing program shall have the right to rely on the shared vehicle owner's response and to be held legally harmless for such reliance.

"Rentee" means any user to whom the possession, or the right to possession, of an automobile is transferred for a valuable consideration for a period of one year or less, whether paid for by the "rentee" or by someone else.

"Rentee" does not include a shared-vehicle driver, as defined in Section 5 of the Car-Sharing Program Act, if tax due on the automobile under the Retailers' Occupation Tax Act or Use Tax Act was paid upon the purchase of the automobile or when the automobile was brought into Illinois. The car-sharing program shall ask a shared vehicle owner if the shared vehicle owner paid applicable taxes at the time of purchase. Notwithstanding any law to the contrary, the car-sharing program shall have the right to rely on the shared vehicle owner's response and to be held legally harmless for such reliance.

"Gross receipts" from the renting of tangible personal property or "rent" means the total rental price or leasing price. In the case of rental transactions in which the consideration is paid to the rentor on an installment basis, the amounts of such payments shall be included by the rentor in gross receipts or rent only as and when payments are received by the rentor.

"Gross receipts" does not include receipts received by an automobile dealer from a manufacturer or service contract provider for the use of an automobile by a person while that person's automobile is being repaired by that automobile dealer and the repair is made pursuant to a manufacturer's warranty or a service contract where a manufacturer or service contract provider reimburses that automobile dealer pursuant to a manufacturer's warranty or a service contract and the reimbursement is merely made to recover the costs of operating the automobile as a loaner vehicle.

"Rental price" means the consideration for renting or leasing an automobile valued in money, whether received in money or otherwise, including cash credits, property and services, and shall be determined without any deduction on account of the cost of the property rented, the cost of materials used, labor or service cost, or any other expense whatsoever, but does not include charges that are added by a rentor on account of the rentor's tax liability under this Act or on account of the rentor's duty to collect, from the rentee, the tax that is imposed by Section 4 of this Act. The phrase "rental price" does not include compensation paid to a rentor by a rentee in consideration of the waiver by the rentor of any right of action or claim against the rentee for loss or damage to the automobile rented and also does not include a separately stated charge for insurance or recovery of refueling costs or other separately stated charges that are not for the use of tangible personal property.

"Rental price" does not include consideration paid for peer-to-peer car sharing to a shared-vehicle owner or a car-sharing program, as those terms are defined in Section 5 of the Car-Sharing Program Act, if tax due on the automobile under the Retailers' Occupation Tax Act or Use Tax Act was paid upon the purchase of the automobile or when the automobile was brought into Illinois. The car-sharing program shall ask a shared vehicle owner if the shared vehicle owner paid applicable taxes at the time of purchase. Notwithstanding any law to the contrary, the car-sharing program shall have the right to rely on the shared vehicle owner's response and to be held legally harmless for such reliance.

(Source: P.A. 103-520, eff. 8-11-23.)

(35 ILCS 155/3) (from Ch. 120, par. 1703)

Sec. 3. A tax is imposed upon persons engaged in this State in the business of renting automobiles in Illinois at the rate of 5% of the gross receipts received from such business. The tax herein imposed does not apply to the renting of automobiles to any governmental body, nor to any corporation, society, association, foundation or institution organized and operated exclusively for charitable, religious or educational purposes, nor to any not for profit corporation, society, association, foundation, institution or organization which has no compensated officers or employees and which is organized and operated primarily for the recreation of persons 55 years of age or older. Every person engaged in this State in the business of renting automobiles shall apply to the Department (upon a form prescribed and furnished by the Department) for a certificate of registration under this Act. The certificate of registration which is issued by the Department to a retailer under the Retailers' Occupation Tax Act shall permit such rentor to engage in a business which is taxable under this Section without registering separately with the Department.

The Department shall have full power to administer and enforce this Section, to collect all taxes and penalties due hereunder, to dispose of taxes and penalties so collected in the manner hereinafter provided, and to determine all rights to credit memoranda, arising on account of the erroneous payment of tax or penalty hereunder. In the administration of, and compliance with, this Section, the Department and persons who are subject to this Section shall have the same rights, remedies, privileges, immunities, powers and duties, and be subject to the same conditions, restrictions, limitations, penalties and definitions of terms, and employ the same modes of procedure, as are prescribed in Sections 1, 1a, 2 through 2-65 (in respect to all provisions therein other than the State rate of tax), 2a, 2b, 2c, 3 (except provisions relating to transaction returns, electronic filing of returns, and quarter monthly payments), 4, 5, 5a, 5b, 5c, 5d, 5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12 and 13 of the Retailers' Occupation Tax Act and Section 3-7 of the Uniform Penalty and Interest Act as fully as if those provisions were set forth herein.

(Source: P.A. 100-303, eff. 8-24-17.)

(35 ILCS 155/4) (from Ch. 120, par. 1704)

Sec. 4. A tax is imposed upon the privilege of using, in this State, an automobile which is rented from a rentor. Such tax is at the rate of 4% of the rental price of such automobile prior to July 1, 1985 and at the rate of 5% of the rental price of such automobile on and after July 1, 1985 paid to the rentor under any rental agreement. The tax herein imposed shall not apply to any governmental body, nor to any corporation, society, association, foundation or institution, organized and operated exclusively for charitable, religious or educational purposes, nor to any not for profit corporation, society, association, foundation, institution or organization which has no compensated officers or employees and which is organized and operated primarily for the recreation of persons 55 years of age or older, when using tangible personal property as a rentee.

The tax hereby imposed shall be collected from the rentee by a rentor maintaining a place of business in this State and remitted to the Department.

The tax hereby imposed and not paid to a rentor pursuant to the preceding paragraph of this Section shall be paid to the Department directly by any person using such automobile within this State.

Rentors shall collect the tax from rentees by adding the tax to the rental price of the automobile, when rented for use, in the manner prescribed by the Department. The Department shall have the power to adopt and promulgate reasonable rules and regulations for the adding of such tax by rentors to rental prices by prescribing bracket systems for the purpose of enabling such rentors to add and collect, as far as practicable, the amount of such tax.

The tax imposed by this Section shall, when collected, be stated as a distinct item separate and apart from the rental price of the automobile.

The Department shall have full power to administer and enforce this Section; to collect all taxes, penalties and interest due hereunder; to dispose of taxes, penalties and interest so collected in the manner hereinafter provided, and to determine all rights to credit memoranda or refunds arising on account of the erroneous payment of tax, penalty or interest hereunder. In the administration of, and compliance with, this Section, the Department and persons who are subject to this Section shall have the same rights, remedies, privileges, immunities, powers and duties, and be subject to the same conditions, restrictions, limitations, penalties and definitions of terms, and employ the same modes of procedure, as are prescribed in Sections 2, 3 through 3-80, 4, 6, 7, 8, 9 (except provisions relating to transaction returns, electronic filing of returns, and quarter monthly payments), 10, 11, 12, 12a, 12b, 13, 14, 15, 19, 20, 21 and 22 of the Use Tax Act, and are not inconsistent with this Section, as fully as if those provisions were set forth herein.

(Source: P.A. 100-303, eff. 8-24-17.)

(35 ILCS 155/5)

Sec. 5. Sunset of exemptions, credits, and deductions. The application of every exemption, credit, and deduction against tax imposed by this Act that becomes law after the effective date of this amendatory Act of 1994 shall be limited by a reasonable and appropriate sunset date. A taxpayer is not entitled to take the exemption, credit, or deduction beginning on the sunset date and thereafter. If a reasonable and appropriate sunset date is not specified in the Public Act that creates the exemption, credit, or deduction, a taxpayer shall not be entitled to take the exemption, credit, or deduction beginning 5 years after the effective date of the Public Act creating the exemption, credit, or deduction and thereafter.

(Source: P.A. 88-660, eff. 9-16-94.)

(35 ILCS 155/6)

Sec. 6. Applicability. The taxes imposed by Sections 3 and 4 of this Act do not apply to any amounts paid or received for peer-to-peer car sharing, as defined in Section 5 of the Car-Sharing Program Act, or the privilege of sharing a shared vehicle through a car-sharing program, as defined in Section 5 of the Car-Sharing Program Act, if the shared vehicle owner paid applicable taxes upon the purchase of the automobile.

As used in this Section, "applicable taxes" means, with respect to vehicles purchased in Illinois, the retailers' occupation tax levied under the Retailers' Occupation Tax Act or the use tax levied under the Use Tax Act. "Applicable taxes", with respect to vehicles not purchased in Illinois, refers to the sales, use, excise, or other generally applicable tax that is due upon the purchase of a vehicle in the jurisdiction in which the vehicle was purchased.

Notwithstanding any law to the contrary, the car-sharing program shall have the right to rely on the shared vehicle owner's response and to be held legally harmless for such reliance.

(Source: P.A. 103-520, eff. 8-11-23.)