Illinois Administrative Code
Title 86 - REVENUE
Part 180 - AUTOMOBILE RENTING OCCUPATION TAX
Subpart B - GROSS RECEIPTS, AUTHORIZED DEDUCTIONS AND NON-TAXABLE TRANSACTIONS
Section 180.125 - Authorized Deductions from Gross Receipts
Universal Citation: 86 IL Admin Code ยง 180.125
Current through Register Vol. 48, No. 38, September 20, 2024
a) "Gross receipts" on which the Automobile Renting Occupation Tax must be computed do not include receipts from the following separately stated charges added to rentees' billings:
1) charges added on account of the rentor's
duty to collect the Automobile Renting Use Tax from rentees or passed on
because of the rentor's liability under the Automobile Renting Occupation Tax
or passed on because of the rentor's liability under Municipal, County,
Regional Transportation Authority or Metro East Mass Transit District
Automobile Renting Occupation Taxes;
2) receipts from rentees in consideration of
waivers of claims for loss or damage to automobiles rented;
3) receipts from separately stated charges
for insurance;
4) receipts from
separately stated charges for recovery of refueling costs;
5) receipts from any other separately stated
charges which are not for the use of tangible personal property.
b) Effective July 20, 1999, "gross receipts" does not include receipts received by an automobile dealer from a manufacturer or service contract provider for the use of an automobile by a person while that person's automobile is being repaired by that automobile dealer and the repair is made pursuant to a manufacturer's warranty or a service contract where a manufacturer or service contract provider reimburses that automobile dealer pursuant to a manufacturer's warranty or a service contract and the reimbursement is merely made to recover the costs of operating the automobile as a loaner vehicle. [35 ILCS 155/2]
1) For
example, an automobile dealer makes repairs for an automobile owner under the
terms of a manufacturer's warranty. The manufacturer's warranty provides that
the manufacturer will provide the owner with another automobile to drive while
the owner's automobile is being repaired. Pursuant to the terms of an agreement
between the manufacturer and the dealer, the dealer provides the owner with a
replacement automobile either from its sales inventory or from its rental
inventory. In exchange, the manufacturer compensates the dealer for that
replacement automobile. However, under the terms of the agreement between the
manufacturer and the dealer, that compensation is limited to an amount intended
only to reimburse the dealer for the dealer's costs of operating the
replacement automobile as a loaner vehicle. Compensation paid to a dealer by a
manufacturer or service contract provider under these circumstances that merely
reimburses the dealer for his cost of operating the replacement automobile as a
loaner vehicle is not subject to the tax. However, if the dealer charges a
customer amounts that exceed the compensation paid to him by the manufacturer
or service contract provider as reimbursement for the cost of operating the
replacement vehicle as a loaner vehicle, the excess receipts are subject to the
tax.
A) Costs of operating the replacement
automobile as a loaner vehicle may include the cost of paperwork to issue the
loaner vehicle or to receive reimbursement from the manufacturer; time needed
by the dealership employee to fill out the paperwork; preparing the loaner;
giving keys to the customer; instructing the customer on use and when to return
the loaner; depreciation of the loaner vehicle; cost of insurance on the loaner
vehicle; needed time and materials used to clean the loaner vehicle when
returned; and fueling and servicing the loaner vehicle.
B) In order to exclude receipts from a
manufacturer or service contract provider that merely reimburse him for his
costs of operating the replacement automobile as a loaner vehicle, a dealer
must maintain books and records documenting such costs.
2) Sometimes, the dealer does not provide the
owner with a replacement automobile from its own inventory. Rather, the
automobile dealer rents an automobile from a separate automobile rentor and
then provides that automobile to the owner whose automobile is being repaired
pursuant to the manufacturer's warranty. In this situation, the dealer's rental
from the automobile rentor is a non-taxable rental so long as all the
requirements of Section
180.135 of
this Part are satisfied. The dealer's subsequent provision of an automobile to
the owner is non-taxable so long as the requirements of this subsection (b) are
satisfied.
3) If an owner rents an
automobile from an automobile rentor that is not the dealer making the repairs
to his automobile, the exclusion set out in this subsection (b) is not
available. In addition:
A) The exclusion does
not apply even though the dealer reimburses the owner for the rental.
B) The exclusion does not apply even though
the automobile rentor is a separate entity related to the automobile dealer.
For example, if one person operates an automobile dealership as one corporation
and an automobile rental business as a separate corporation, the procedure set
out in subsection (b)(2) must be followed in order for the exclusion to
apply.
Disclaimer: These regulations may not be the most recent version. Illinois may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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