Illinois Administrative Code › Title 86 - REVENUE › Part 195 - PARKING EXCISE TAX › Section 195.115 - Exemption from Tax

Current through Register Vol. 48, No. 28, July 12, 2024
The tax imposed by the Act shall not apply to:
a)
Parking in a parking area or
			 garage operated by the federal government or its instrumentalities that has
			 been issued an active tax exemption number by the Department under Section 1g
			 of the Retailers' Occupation Tax Act
[35 ILCS 120
			 ]
. For this exemption to apply, the parking area or garage must be
			 operated by the federal government or its instrumentalities. The exemption
			 under this
subsection (a)
does not apply if the parking area
			 or garage is operated by a third party, whether under a lease or other
			 contractual arrangement, or held in any other manner whatsoever
(Section 10-20(1) of the Act).
b)
Parking in a parking area or garage operated by the State, a State
			 university created by statute, or a unit of local government
(e.g.,
			 counties, municipalities, townships, and special districts)
that has
			 been issued an active tax exemption number by the Department under Section 1g
			 of the Retailers' Occupation Tax Act; for this exemption to apply, the parking
			 area or garage must be operated by the State, State university, or unit of
			 local government; the exemption under this subsection does not apply if the
			 parking area or garage is operated by a third party, whether under a lease or
			 other contractual arrangement, or held in any other manner, unless the parking
			 area or garage is exempt under
subsection (k) (Section 10-20(6) of the
			 Act).
c)
Residential
			 off-street parking for home or apartment tenants or condominium occupants, if
			 the arrangement for that parking is provided in the home or apartment lease or
			 in a separate writing between the landlord and tenant, or in a condominium
			 agreement between the condominium association and the owner, occupant, or guest
			 of a unit, whether the parking charge is payable to the landlord, condominium
			 association, or the operator of the parking spaces
(Section 10-20(2)
			 of the Act). The landlord, association or operator must maintain supporting
			 documentation to substantiate the claim. A list of residents or occupants
			 claiming the exemption maintained by the operator that has been reviewed and
			 approved by the landlord or association qualifies as supporting documentation.
EXAMPLE 1: A person enters into a residential lease agreement
				with a landlord that requires the landlord to provide 2 parking spaces to the
				tenant for $100 per month. The landlord has made arrangements with an operator
				of a parking garage to make available 2 parking spaces to the tenant. The lease
				requires the tenant to pay the $100 per month directly to the operator of the
				garage. The operator is not required to collect tax from the tenant on the use
				of the 2 parking spaces. The operator should obtain a copy of the lease and
				maintain it in its books and records.
EXAMPLE 2: A tenant has a residential lease agreement that
				requires the landlord, or a condominium owner is required by condominium bylaws
				or documents, to provide parking spaces to the tenant or owner. The
				tenant/owner is told by his or her landlord or condominium association that the
				landlord or condominium association has an arrangement with a parking garage
				operator to provide parking to the tenants/owners that desire parking. Based on
				this arrangement, the tenant/owner enters into an agreement for parking with
				the designated operator. The landlord or condominium association provides a
				list of tenants/owners to the operator to verify their residency. The operator
				can rely on that list to exempt the tenant/owner from paying the tax and the
				operator from remitting the tax.
d)
Parking by hospital employees in a
			 parking space that is owned and operated by a public, private, or non-public
			 hospital for which they work
(Section 10-20(3) of the Act). The
			 exemption under this subsection (d) does not apply if the parking area or
			 garage is operated by a third party, whether under a lease or other contractual
			 arrangement, or held in any other manner whatsoever.
e)
Parking in a parking area or
			 garage where 3 or fewer motor vehicles are stored, housed, or parked for hire,
			 charge, fee or other valuable consideration, if the operator of the parking
			 area or garage does not act as the operator of more than a total of 3 parking
			 spaces located in the State. If any operator of parking areas or garages,
			 including any facilitator or aggregator, acts as an operator of more than 3
			 parking spaces in total that are located in the State, then this exemption
			 shall not apply to any of those spaces
(Section 10-20(4) of the Act).
EXAMPLE 1: Every year a carnival comes to a town. The owners of
				property near the carnival sell parking spaces on their property for $10 per
				day. If an owner of property makes available for use more than 3 parking
				spaces, the owner is liable for collecting and remitting the tax.
EXAMPLE 2: A company near a baseball stadium contracts with
				residents near the stadium to rent space in their driveways during game days.
				Each resident enters into an agreement with the company to make available 3 or
				fewer parking spaces. As a result of the agreements with the residents, the
				company in, the aggregate, has 20 parking spaces to rent on game days. The
				company charges a purchaser $30 for the rental of a parking space. The company
				must register and remit tax at the rate of 6% of the $30 purchase price
				received for the rental of a parking space. The company pays the residents $25
				for each parking space that is rented by the company. Because the residents
				rent 3 or fewer parking spaces, the residents are not required to register and
				remit tax on the consideration received from the company.
EXAMPLE 3: The same facts as Example 2, except one resident
				enters into an agreement with the company to make 4 parking spaces available
				for rent. Because the resident is providing more than 3 parking spaces, the
				resident is required to register and remit tax on the consideration received
				from the rental of all 4 of the parking spaces. Because the resident does not
				bill the company for the parking spaces and separately state and collect tax on
				the $25, the company may not take a credit for the tax paid by the
				resident.
f)
Parking
			 in a parking area or garage owned and operated by a person engaged in the
			 business of renting real estate if the parking area or garage is used by the
			 lessee to park motor vehicles, recreational vehicles, or self-propelled
			 vehicles for the lessee's own use and not for the purpose of subleasing parking
			 spaces for consideration
(Section 10-20(7) of the Act). This person is
			 not engaged in the business of operating a parking area or garage.
EXAMPLE 1: A car dealership leases real estate from a person to
				park the dealership's excess inventory. The lessor is not engaged in the
				business of operating a parking area or garage.
EXAMPLE 2: A car dealership leases real estate from a person to
				park motor vehicles for the purpose of making retail sales of the motor
				vehicles. The lessor is not engaged in the business of operating a parking area
				or garage.
EXAMPLE 3: A railroad company leases real estate to a
				municipality. The municipality makes improvements on the property to permit
				commuters to park their motor vehicles on the real estate. The railroad company
				is not engaged in the business of operating a parking area or
				garage.
g) A person that
			 makes
isolated or occasional sales of parking spaces subject to tax
			 under the Act and who does not hold himself or herself out as being engaged (or
			 who does not habitually engage) in selling of parking spaces
(Section
			 10-5 of the Act).
EXAMPLE: A local promoter intends to hold a large concert on a
				farm and requires plenty of parking spaces for the attendees. The promoter
				leases a large field from a local farmer to park cars during the event. The
				farmer has never leased his field in the past. The farmer is exempt from
				collecting and remitting tax on the rental of his field to the
				promoter.
h)
Any
			 transaction in interstate commerce, to the extent that the transaction may not,
			 under the Constitution and statutes of the United States, be made the subject
			 of taxation by this State
(Section 10-10(e) of the Act).
i)
The purchase of a parking space by
			 the State, a State university created by statute, or a unit of local
			 government
(e.g., counties, municipalities, townships, and special
			 districts)
that has been issued an active tax exemption number by the
			 Department under Section 1g of the Retailers' Occupation Tax Act, for use by
			 employees of the State, State university, or unit of local government, provided
			 that the purchase price is paid directly by the governmental entity
(Section 10-20(8) of the Act)
.
j)
Parking in a parking space leased
			 to a governmental entity that is exempt pursuant to
subsection (a) or
			 (b)
when the exempt entity rents or leases the parking spaces in the
			 parking area or garage to the public; the purchase price must be paid by the
			 governmental entity; the exempt governmental entity is exempt from collecting
			 tax subject to the provisions of
subsections (a) or (b)
, as
			 applicable, when renting or leasing the parking spaces to the public
(Section 10-20(9) of the Act). The purchase price must be paid by the
			 governmental entity (i.e., by check, debit card, credit card, or electronic
			 payment).
k)
For the
			 duration of the Illinois State Fair or the DuQuoin State Fair, parking in a
			 parking area or garage operated for the use of attendees, vendors, or employees
			 of the State Fair and not otherwise subject to taxation under this Act in the
			 ordinary course of business
(Section 10-20(5) of the Act).