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Lease tax bill to get final House vote

February 28, 2014
Illinois legislation that would base sales tax owed on leased new vehicles on the monthly payment instead of the vehicle’s selling price moved out of committee Feb. 27 and to the floor of the House of Representatives for a final vote.
House Bill 2317 won unanimous Senate approval last May, but the General Assembly’s spring session concluded without a House vote. Dealers should encourage their state representative to support the bill. The vote could be imminent. 
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."
Gov. Pat Quinn has signaled support for the bill, which could take effect July 1.