House Sponsors: TURNER,ART-BRUNSVOLD-KUBIK-GRANBERG-MOORE,ANDREA, SMITH,MICHAEL, HOLBROOK, BOLAND. Senate Sponsors: PETERSON-FITZGERALD-SEVERNS-COLLINS Short description: TAX-CAR LEASING Synopsis of Bill as introduced: Creates the Automobile Leasing Occupation and Use Tax Act to impose a tax at the rate of 6.25% on the leasing of automobiles for a period of more than one year. Provides that tax proceeds shall be deposited into the Local Government Tax Fund and the County and Mass Transit District Fund. Amends the Use Tax Act and the Retailers' Occupation Tax Act to exempt the leasing of automobiles and the use of leased automobiles from taxation under those Acts. Provides that lessors who claim not to be engaged in the auto leasing business for purposes of collecting the Automobile Leasing Occupation and Use Tax may not claim an exemption under the Retailers' Occupation Tax Act unless they register with the Department and pay tax under the Automobile Leasing Occupation and Use Tax. Amends the State Finance Act to provide for distribution of money in the Local Government Tax Fund and the County and Mass Transit District Fund from the Automobile Leasing Occupation and Use Tax to local governments where the lease transactions occurred. STATE MANDATES FISCAL NOTE HB601 fails to create a State mandate. FISCAL NOTE (Dept. of Revenue) Estimated negative fiscal impact will be $288.4 M cumulative the first three years and $67 M in each subsequent year. HOUSE AMENDMENT NO. 2. Deletes reference to: 35 ILCS 105/3-5 35 ILCS 120/2-5 Adds reference to: 30 ILCS 105/5.449 new 30 ILCS 105/6z-42 new Deletes everything. Creates the Automobile Leasing Occupation and Use Tax Act to impose a use tax on the leasing of automobiles leased for a period of more than one year. Provides that the tax shall be imposed (1) at a rate equal to the sum of 1.25%, plus a rate equal to the rate of any additional occupation or use tax imposed by a unit of local government that is authorized to and does impose an additional occupation or use tax, of the capitalized cost, to be paid in a lump sum at the start of the lease term, and (2) at the rate of 5% of the monthly leasing price paid to lessor under the lease agreement. Imposes a retailers' occupation tax (1) at a rate equal to the sum of 1.25%, plus a rate equal to the rate of any additional occupation or use tax imposed by a unit of local government that is authorized to and does impose an additional occupation or use tax, of the capitalized cost, to be paid in a lump sum payment at the start of the lease term, (2) at the rate of 5% of the monthly gross receipts received from the business, and (3) at the rate of 5% of the value of the automobile at the time a lessee exercises an option to purchase a leased vehicle. Provides that the 1.25% tax plus any additional occupation or use tax imposed by a unit of local government that is authorized to impose and does impose an additional occupation or use tax shall be deposited into the Automobile Leasing Occupation and Use Tax Distribution Fund for distribution by the Department of Revenue. Provides that of the 1.25% tax, 1% shall be deposited into the Local Government Tax Fund and .25% shall be deposited into the County and Mass Transit District Fund of the unit of local government where the vehicle was removed from the retailers' inventory or, in the case of out-of-State leases, of the unit of local government where the vehicle is titled. Provides that any moneys received from the additional rate imposed as an equivalent of any additional occupation or use tax shall be distributed to the unit of local government imposing the tax. Amends the State Finance Act to provide for distribution of money in the Local Government Tax Fund and the County and Mass Transit District Fund from the Automobile Leasing Occupation and Use Tax to local governments where the lease transactions occurred. Creates the Automobile Leasing Occupation and Use Tax Distribution Fund. HOUSE AMENDMENT NO. 3. Adds reference to: 35 ILCS 105/3-5 from Ch. 120, par. 439.3-5 35 ILCS 120/2-5 from Ch. 120, par. 441-5 Corrects references. Provides for administration. Restores exemptions to the Use Tax Act and the Retailers' Occupation Tax Act. STATE MANDATES FISCAL NOTE, H-AM 2 No change from previous mandates note. FISCAL NOTE, H-AMS 2 & 3 (Dept. of Revenue) Negative fiscal impact of $231 M for the first 3 years and $53.6 M in each subsequent year thereafter, the revenue loss from State tax receipts, as the locals will continue to receive current tax allocations based upon the two tier tax structure. Last action on Bill: TOTAL VETO STANDS Last action date: 97-10-30 Location: House Amendments to Bill: AMENDMENTS ADOPTED: HOUSE - 2 SENATE - 0 END OF INQUIRY Full Text Bill Status