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.
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