Section 130.103  Leases or Rentals of Trailers other than Semitrailers and Items that are Titled but not Registered

a)         The provisions of Article 75 of Public Act 103-592 that apply the Retailers' Occupation Tax to persons engaged in the business of leasing tangible personal property at retail do not extend to motor vehicles, watercraft, aircraft, and semitrailers, as defined in Section 1-187 of the Illinois Vehicle Code, that are required to be registered with an agency of this State. The taxation of these items shall continue in effect as prior to the enactment of Public Act 103-592 (i.e. dealers owe retailers' occupation tax, lessors owe use tax, and lessees are not subject to retailers' occupation or use tax). [35 ILCS 120/2]  See, however, Section 130.454 regarding the definition of "selling price" when certain motor vehicles are purchased for lease.

b)         The lease or rental of trailers, other than semitrailers as defined in Section 1-187 of the Illinois Vehicle Code, however, is subject to the provisions of Article 75 of Public Act 103-592 that apply the Retailers' Occupation Tax to persons engaged in the business of leasing tangible personal property at retail.  In addition, the lease or rental of the kinds of items that are required to be titled with an agency of this State but that are not required to be registered with an agency of this State, such as all-terrain vehicles (ATVs) and off-road motorcycles, is subject to the provisions of Article 75 of Public Act 103-592 that apply the Retailers' Occupation Tax to persons engaged in the business of leasing tangible personal property at retail.  As such, the lease or rental of these items is subject to the parameters set forth in Section 130.102.

c)         Items identified in subsection (b) that are purchased for lease and that are subject to tax on lease receipts may be purchased tax-free for resale.  Lessors of such items must remit, for each tax return period, only the tax applicable to that part of the selling price (i.e., the lease payment) actually received during such tax return period. [35 ILCS 120/2]

(Source:  Added at 50 Ill. Reg. 1119, effective January 8, 2026)