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For Immediate Release
October 22, 2007
Illinois DOR Takes the Air Out of Some Taxpayer’s Tires When They
Eliminate Certain Rental Vehicle Exemptions
A recent law was enacted in Illinois that
eliminates the IL Retailers’ Occupation Tax (ROT) exemption for vehicles
sold to be rented for a period of 1 year or less, beginning with vehicles
delivered on or after September 1, 2007.
As a result of this change, vehicle
retailers will be liable for sales tax on the selling price of the
vehicle, and may no longer check the Exemption 5E box (Sold for Rental
Use) on Form ST-556.
Although retailers are not authorized to
collect tax from the buyer, they have the option of seeking reimbursement
of the tax liability from the buyer by separately stating the amount as
“reimbursement” on the sales invoice or other contract agreement.
This law does not change the way renters are
required to file Form ART-1, Automobile Renting Occupation and Use Tax
Return.
If you would like additional
information on this topic or have any questions,
please contact the taxdesk@thesaltgroup.com
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