Illinois Administrative Code › Title 86 - REVENUE › Part 180 - AUTOMOBILE RENTING OCCUPATION TAX › Subpart A - NATURE OF THE TAX › Section 180.101 - Character And Rate Of The Tax

Current through Register Vol. 48, No. 28, July 12, 2024
a) The
				Automobile Renting Occupation and Use Tax Act [35 ILCS 155 ] (the Act) imposes
				a tax upon persons engaged in this State in the business of renting automobiles
				in Illinois under lease terms of one year or less at the rate of 5% of the
				gross receipts from such business. (Section 3 of the Act)
b) "Automobile" means any motor vehicle of
				the first division that is used for automobile renting, as defined in the Act,
				or a motor vehicle of the second division that is used for automobile renting,
				as defined in the Act, and which 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; 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 [625 ILCS
				5/1-146 ] ; or, beginning January 1, 2014, has a Gross
				Vehicle Weight Rating, as defined in Section 1-124.5 of the Illinois Vehicle
				Code, of 8,000 pounds or less. (Section 2 of the Act) This includes motorcycles
				and motor driven cycles.
1) Under Section
				1-146 of the Illinois Vehicle Code, a motor vehicle is defined as every vehicle
				which is self-propelled and every vehicle which is propelled by electric power
				obtained from overhead trolley wires, but not operated upon rails, except for
				vehicles moved solely by human power and motorized wheelchairs. [625 ILCS 5/1-146
				]
2) Under Section 1-146 of the
				Illinois Vehicle Code, motor vehicles are classified as either first or second
				division motor vehicles. The manner in which a vehicle is classified generally
				reflects the purpose for which it is primarily used. As a result of this
				classification, a motor vehicle will be registered as either a first or second
				division vehicle, and will receive a plate reflecting such registration. The
				following examples are illustrative:
A) Under
				Section 1-146 of the Illinois Vehicle Code, first division motor vehicles are
				defined as motor vehicles which are designed for carrying not more than 10
				persons. [625 ILCS 5/1-146] Under Section 2 of the Act, all motor vehicles
				registered with the Secretary of State as first division motor vehicles qualify
				as automobiles subject to tax under the Act. Consequently, passenger cars and
				motorcycles are "automobiles" subject to tax under the Act.
B) Second division motor vehicles generally
				include motor vehicles serving purposes other than or in addition to serving as
				passenger cars. Second division vehicles include motor vehicles designed for
				pulling or carrying freight, cargo or implements of husbandry; motor vehicles
				designed for carrying more than 10 persons; motor vehicles designed or used for
				living quarters; and motor vehicles of the first division remodeled for use and
				used as motor vehicles of the second division. [625 ILCS 5/1-146] A pick-up
				truck is a second division vehicle because it is designed for pulling or
				carrying freight. Section 2 of the Act provides that the only types of second
				division vehicles subject to tax include:
i)
				self-contained motor vehicles 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;
ii) motor vehicles which are of the van
				configuration designed for the transportation of not less than 7 nor more than
				16 passengers; and
iii) beginning
				January 1, 2014, a motor vehicle that has a Gross Vehicle Weight Rating, as
				defined in Section 1-124.5 of the Illinois Vehicle Code, of 8,000 pounds or
				less.
C) Pick-up Trucks
i) Until December 31, 2013, pick-up trucks
				are not subject to tax under the Act because they are not one of the types of
				second division motor vehicles specified as automobiles under the terms of the
				Act.
ii) Beginning January 1, 2014,
				pick-up trucks are subject to tax under the Act only if they are one of the
				types of second division motor vehicles specified as automobiles under
				subsection (b)(2)(B)(iii).
D) SUVs
i)
				Multipurpose passenger vehicles, commonly referred to as "sport utility
				vehicles (SUVs)", may be registered as either first or second division motor
				vehicles. If an SUV is registered as a first division motor vehicle, it is an
				automobile subject to tax under the Act. Until December 31, 2013, if an SUV is
				registered as a second division motor vehicle, it is not an automobile subject
				to tax under the Act because it is not one of the types of second division
				motor vehicles specified as automobiles under the terms of the Act.
ii) Beginning January 1, 2014, if an SUV is
				registered as a second division motor vehicle, it is an automobile subject to
				tax only if it is one of the types of second division motor vehicles specified
				as automobiles under subsection (b)(2)(B)(iii).
3) Lessors engaged in the business of leasing
				motor vehicles that are not subject to tax under the Act generally incur a Use
				Tax liability on the cost price of motor vehicles purchased for leasing
				purposes. For more information on the liability of lessors, see the provisions
				of 86 Ill. Adm. Code
				130.220
				and
				130.2010.