Chicago personal property lease transaction tax is not ad valorem or local sales tax
An Illinois Court of Appeals ruled that a lease agreement requiring the lessor to pay ad valorem tax and local sales tax on the lease of vehicles and equipment did not obligate the lessor to collect and pay the Chicago personal property lease transaction tax (“lease tax”). In determining that the lease tax is not an ad valorem tax, the court found that an ad valorem tax is imposed on the value of something, as determined by a third-party assessment or appraisal, while the lease tax is proportional to the contract price, not value. Neither is the lease tax a local sales tax, since the lease tax is concerned with leases and rentals, and not the sale of tangible personal property. (RN Acquisition, LLC v. Paccar Leasing Company, Ill. Ct. App., 1st Dist., Dkt. No. 1-21-1314, 11/09/2022.)
Chicago personal property lease transaction tax is not ad valorem or local sales tax
