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What amounts in a rental purchase agreement are considered part of the rental price and are subject to Rental Purchase Agreement Occupation Tax?

Answer #583 -- ( Published 02/22/2018 02:30 PM | Updated 02/22/2018 3:10 PM )

What amounts in a rental purchase agreement are considered part of the rental price and are subject to Rental Purchase Agreement Occupation Tax?

“Rental price” means the consideration for renting merchandise valued in money, whether received in money or otherwise, including cash, credits, property, and services. Rental price shall be determined without any deduction on account of the cost of the property rented, the cost of materials used, labor or service cost, or any other expense whatsoever.

Rental price does not include the following:

  • charges added by a merchant on account of the merchant’s tax liability under the Rental Purchase Agreement Occupation and Use Tax Act or on account of the merchant’s duty to collect from the consumer the Rental Purchase Agreement Use Tax imposed by the Act;
  • compensation paid to a merchant by a consumer in consideration of the merchant’s waiver of any right of action or claim against the consumer for loss or damage to the merchandise rented;
  • separately stated charges for insurance; or
  • other separately stated charges that are not for the use of tangible personal property, including charges for Chicago’s Personal Property Lease Transaction Tax.

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