Automobile Renting Occupation and Use Tax (ART)

• 35 ILCS 155/1, et seq.
  

The Automobile Renting Occupation Tax Act imposes an occupation tax on renting automobiles in Illinois. The Automobile Renting Use Tax Act imposes a use tax on the privilege of using a rented automobile in Illinois. In either instance, the term of the rental agreement must be for a period of one year or less.

The occupation tax is due on the gross receipts received from rental transactions while the use tax is based on the rental price of the automobile.

Yes. Current statutes authorize municipal and county governments to impose, by ordinance or resolution, local automobile renting taxes at a rate not to exceed 1 percent. We administer and enforce the taxes on behalf of the local government that imposes them.

The Regional Transportation Authority (RTA) and the Metro-East Transit District (MED) can also impose automobile renting taxes, but currently have not done so.

To impose an automobile renting tax, local governments must send a certified ordinance to:

The tax will take effect the first day of the second month after the ordinance is received.  For example, if the ordinance is received July 15^th, the tax rate will go into effect September 1^st.

The Automobile Renting Occupation Tax rate is based on the location where the automobile is rented. The Automobile Renting Use Tax rate is based on the location where the automobile is registered. The state tax rate is 5 percent. Many municipal and county governments have imposed a local auto renting tax of 1 percent. Currently neither the RTA or MED has imposed a tax. Beginning October 1, 1992, the Metropolitan Pier and Exposition Authority (MPEA) imposed an additional 6 percent tax on the gross receipts of rentals made from businesses within Cook County. For a complete list of tax rates, see our Tax Rate Database.

Note: Filers who do business from multiple locations must file Form ART-2, which provides for reporting rental receipts based on the tax imposed for that site.

The distributions begin three months after the tax takes effect.  For example, if the tax is imposed effective January 1, the first disbursement will be made to local governments during the following April.  

An administrative fee is retained by the state treasurer to cover the costs we incur in administering taxes imposed by municipalities and counties.

Taxpayers are allowed to take a discount for timely filing and payment of these taxes. Any allowable discount that is taken is reflected in the local government distributions that are made.

If a taxpayer protests a tax liability, those tax dollars will be delayed until the protest is resolved.

Interest earned on these funds is disbursed to municipalities and counties based on each one’s share of the total collections.

Questions?

• Call us at: 1 800 732-8866 or 1 217 782-3336
• Call TDD: 1 800 544-5304
  
• Email LTAD: REV.LocalTax@illinois.gov