LSE-2, Motor Vehicle Original Lease Information Instructions

You must complete Form LSE-2, Original Motor Vehicle Lease Information, when you file Form LSE-1, Tax Return for Vehicle Leasing Companies, or Form LSE-1-X, Amended Tax Return for Vehicle Leasing Companies if you offer for lease for a period of longer than one year a qualifying motor vehicle, titled or registered in Illinois, and under this lease the customer pays additional reportable amounts that were not included in the original selling price of the motor vehicle at the start of the lease.

Qualifying motor vehicles are:

• all first division motor vehicles, including motorcycles; and
• the following second division motor vehicles:
  • those with a gross vehicle weight rating of 8,000 pounds or less;
  • those of a van configuration designed to transport not less than 7 or more than 16 passengers; and
  • those which are self-contained and designed or permanently converted to provide living quarters for recreational, camping, or travel use and have direct walk-through access to the living quarters from the driver’s seat.

Illinois law provides that when a qualifying motor vehicle is sold for lease and will be titled or registered in Illinois, in addition to amounts reported on the original Form RUT-25-LSE or Form ST-556-LSE, the selling price of the vehicle includes any amount received by the lessor from the lessee that is not calculated at the time the lease is executed, including, but not limited to, excess mileage charges and charges for excess wear and tear. This amount also includes monthly lease payments if these payments were not included in the original selling price (e.g., lease payments made when the lease is extended beyond its original term). The law also provides that the lessor assumes the responsibility of the retailer for reporting and paying the tax due on this additional amount.

You must identify the original transaction return filed by either the lease customer (Form RUT-25-LSE, Use Tax Return for Lease Transactions) or the selling dealer (Form ST-556-LSE, Transaction Return for Leases). If you did not receive any additional reportable amounts from a lease customer for a given month, you do not need to include any information from that lease transaction on Form LSE-2 for that month. Use the search feature described in the specific instructions below to find the original transaction return, or manually enter all required information from the original transaction return. Follow the specific instructions below to calculate your tax due for each lease transaction.

Form LSE-2 is due when you file Form LSE-1 or Form LSE-1-X. Form LSE-1, along with any payment you owe, is due on or before the 20th day of the month following the month in which the lease customer paid additional reportable amounts that were not included in the original selling price of the vehicle. If you did not receive any additional reportable amounts from your lease customers for a given month, you do not need to file Form LSE-1 for that month.

Note: If the due date falls on a weekend or holiday, your return and payment are due the next business day.

The period for which you can claim a credit for an overpayment depends on when you file your Form LSE-1-X. If you file this amended return between January 1 and June 30 of this year, you may file a claim for credit for the amounts you overpaid during the current year and previous 36 months. Beginning July 1, you may file a claim for the amounts you overpaid during the current year and the previous 30 months.

For any period included in a claim for credit or refund for which the statute of limitations for issuing a notice of tax liability under the Retailers’ Occupation Tax Act will expire less than six months after the date a taxpayer files the claim for credit or refund, the statute of limitations for issuing a notice of tax liability is automatically extended for six months from the date it would have otherwise expired.

Note: There is no deadline for making additional payments; however, the longer you wait to pay, the more interest and, when applicable, penalty you will owe. For more information about penalties and interest, see Publication 103, Penalties and Interest for Illinois Taxes, available on our website at tax.illinois.gov.

You can use MyTax Illinois at mytax.illinois.gov to file your Forms LSE-1 and LSE-2 electronically and make an electronic payment of any tax due.

If you need help, visit our Taxpayer Answer Center, available at tax.illinois.gov.

If you cannot find the answer to your question, you can email IDOR from the Taxpayer Answer Center.

You can also call weekdays between 8:00 a.m. and 5:00 p.m. at 1 800 732-8866 or 217 782-3336 or 1 800 544-5304 (TTY).

Language assistance services are available upon request and are free of charge.

Search by Tax Return Number or Vehicle Identification Number

Enter either the tax return number or the Vehicle Identification Number (VIN) from the Form RUT-25-LSE reporting the original lease transaction, and click the search button. Select the correct transaction from the list. Verify that the information displaying in Steps 1, 2, and 3 is from the correct transaction. If your first search does not yield the correct result, try searching again using the other identifying number. If you cannot locate the correct transaction using the search feature, you must manually enter all required information in Steps 1, 2, and 3.

If you are able to find the correct lease transaction using the search feature, continue to Step 3 to indicate whether the original lease has expired.

Step 1: Identify the original tax return information

Line 1: Enter the tax return number from the original Form RUT-25-LSE.

Lines 2 and 3: You must enter both the original purchase date of the item that was leased and the date the item was brought into Illinois, even if they are the same date.

Step 2: Enter the name and address of the lease customer

Lines 1 and 2: Enter the lease customer’s name and address from the original Form RUT-25-LSE.

Line 3: Check the appropriate box to indicate whether the address on Line 3 is in an unincorporated or rural area of the county.

Line 4: Enter the name of the Illinois county where the lessee will register the item.

Line 5: If you entered St. Clair or Madison County on Line 4, enter the name of the lease customer’s township.

Line 6: Enter the lease customer’s Federal Employer Identification Number (FEIN) or Social Security Number (SSN).

Step 3: Describe the vehicle that was leased

Lines 1 through 4: Enter the year, make, model, and vehicle identification number (VIN) of the item that was leased.

Line 5: Indicate whether the original lease term has expired. If so, enter the expiration date.

Step 4: Figure tax

Line 1: Enter the additional reportable amounts paid by the lease customer that were not included in the original selling price of the motor vehicle at the start of the lease and not reported on the original Form RUT-25-LSE.

If the original transaction reported on Form RUT-25-LSE was tax-exempt, check the box to indicate the exemption.

Line 2: The tax rate used to calculate the tax due should be the same used on the original Form RUT-25-LSE. Multiply Step 4, Line 1, by this rate. This is your total tax due for this lease transaction for this reporting period.

Search by Tax Return Number or Vehicle Identification Number

Enter either the tax return number or the Vehicle Identification Number (VIN) from the Form ST-556-LSE reporting the original lease transaction, and click the search button. Select the correct transaction from the list. Verify that the information displaying in Steps 1, 2, and 3 is from the correct transaction. If your first search does not yield the correct result, try searching again using the other identifying number. If you cannot locate the correct transaction using the search feature, you must manually enter all required information in Steps 1, 2, and 3.

If you are able to find the correct lease transaction using the search feature, continue to Step 3 to indicate whether the original lease has expired.

Step 1: Identify the original tax return information

Line 1: Enter the tax return number from the original Form ST-556-LSE.

Line 2: Enter date of delivery reported on the original Form ST-556-LSE.

Line 3: If you were unable to verify the sales location address in Step 2, select the taxable location name reported on the original Form ST-556-LSE.

Search Sales Location Address by Selling Dealer’s Sales Tax Account Number, if available and if the address is still required

If the sales location address in Step 2 has not been populated and is still showing required, you can search for this address by entering the Sales Tax Account Number of the selling dealer from the Form ST-556-LSE reporting the original lease transaction. Enter the address, and click the search button. Select the correct address from the list.

Step 2: Enter the name and address of the selling dealer

Lines 1 and 2: Enter the selling dealer’s name and address from the original Form ST-556-LSE.

Step 3: Describe the vehicle that was leased

Lines 1 through 4: Enter the year, make, model, and vehicle identification number (VIN) of the item that was leased.

Line 5: Indicate whether the original lease term has expired. If so, enter the expiration date.

Step 4: Figure tax

Line 1: Enter the additional reportable amounts required to be paid by the lease customer that were not included in the original selling price of the motor vehicle at the start of the lease and not reported on the original Form ST-556-LSE.

If the original transaction reported on Form ST-556-LSE was tax-exempt, check the box to indicate the exemption.

Line 2: The tax rate used to calculate the tax due should be the same used on the original Form ST-556-LSE. Multiply Step 4, Line 1, by this rate. This is your total tax due for this lease transaction for this reporting period.

LSE-2 Instructions (R-12/24)