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Lease tax bill sent to governor

March 14, 2014
Illinois legislation that would base sales tax owed on leased new vehicles on the monthly payment instead of the vehicle’s selling price cleared the state’s House of Representatives March 4 and was sent to the governor March 6.
The 111-0 House vote follows a unanimous Senate vote last May. 
Gov. Pat Quinn, who has said he supports the measure, has until about May 5 to consider House Bill 2317. If he signs it, the change would take effect Jan. 1, 2015.
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."