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Lawemakers adjourn without acting on vehicle lease tax bill

June 7, 2013
The Illinois General Assembly on May 31 ended its spring session several hours before its scheduled conclusion and without acting on many bills, including one to change tax calculations on leased vehicles. Pension reform, marriage equality and other headline-making legislation also were left hoping to advance when the General Assembly reconvenes for a brief session this fall.
House Speaker Michael Madigan did not call House Bill 2317 for a vote. Final action was required in that chamber because the leased vehicle language was inserted as a Senate amendment to an otherwise innocuous measure to allow Illinois homeowners to receive property tax bills via email.
But the bill was not returned from the Senate until May 31, and it is believed House members did not have enough time to consider the amendment before adjourning.
The Chicago Automobile Trade Association and the Illinois Automobile Dealers Association have made several runs at the taxation change on long-term leases (more than one year), but revenue officials always focused on near-term shortfalls in tax collection over long-term gains. Immediate gains would be seen in the current structure, under which dealers could not offer advance trade-in credits to their lease customers.
The changes are projected to increase state revenues $14 million to $28 million annually, based on forecasts of increased leasing activity. Lease transactions in Illinois currently are about half the number in nearby states. The revenue department’s position on the bill is “neutral.”
The bill calls for the tax collection change to take effect July 1, 2014, a date that could remain feasible if the bill is signed this fall. Lobbyists for the CATA will continue to work with House officials over the summer, to try to move the bill in the fall session.