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Personal Property Lease Transaction Tax (7550)

 

 

 

Municipal Code Reference: 3-32
CAPS Code Reference: 1002920051802
Tax Return Form Code: Form 7550
Procedure: The Personal Property Lease Transaction Tax applies to businesses or individuals that either are a lessor or lessee of personal property used in Chicago.
Tax Base: 8% of receipts or charges
Exemptions, Deductions and Credits: The ordinance differentiates between exempt lessees and exempt leases, rentals and uses. The classes of exempt lessees are:
  1. Lessees that are governmental bodies
  2. Charitable, Educational, and Religious Organizations
  3. Insurance Companies
There are twelve types of exempt leases. They include:
  1. Property leased outside the city that is primarily used outside the city (50%)
  2. Property that is leased from a party subject to the city's occupation taxes
  3. Leases of "rolling stock" in interstate commerce by an interstate carrier for hire
  4. Leases of property where the rental price is paid by inserting one or more coins or bills of U.S. currency into an attached mechanism
  5. Leases of medical equipment or appliances for the purpose of correcting or treating parts of his or her own body
  6. The lease of a ground transportation vehicle if the lessor is subject to the ground transportation tax
  7. Leases of property where the lessor and lessee are members of the same related group. "Related" means companies under a parent corporation/person that owns 100% of the voting stock of subsidiaries either directly or indirectly.
  8. Leases by a membership organization to a member of such membership organization. This includes the trading companies on the stock exchange. This is similar to related parties in that the member must be directly or indirectly owned by a member of the Membership Organization.
  9. The nonpossessory lease of a computer used in execution, clearing, processing, matching or recording of a trade on a board of trade designated as a contract market by the Commodity Futures Trading Commission, or on a securities exchange registered with the Securities and Exchange Commission, or any other trade of any security or any comparable security with respect to commodities, whether or not the parties to the lease also are parties to the trade. Nonpossessory Leases of computers involving clearing of stock transactions are exempt.
  10. The nonpossessory lease of a computer used to deposit, withdraw, transfer, or lend money or securities (i.e., ATM machines, banking transactions).
  11. The nonpossessory computer lease in which the customer’s use or control of the computer is de minimis and the related charge is predominantly for information transferred (i.e., the nonpossessory lease of a computer to receive current price quotations)
  12. Lease of motion picture film by theaters is exempt. (Motion picture films are subject to the Amusement Tax.)
Rulings and Procedures:

Personal Property Lease Transaction Tax Ruling 01
Personal Property Lease Transaction Tax Ruling 02
Personal Property Lease Transaction Tax Ruling 03
Personal Property Lease Transaction Tax Ruling 04
Personal Property Lease Transaction Tax Ruling 05 effective 9-1-2013
Personal Property Lease Transaction Tax Ruling 06
Personal Property Lease Transaction Tax Ruling 07
Personal Property Lease Transaction Tax Ruling 08
Personal Property Lease Transaction Tax Ruling 09
Personal Property Lease Transaction Tax Ruling 10
Personal Property Lease Transaction Tax Ruling 11

April 2006 Information Bulletin - Cab Owners and Leasing of Space
October 2003 Information Bulletin - Clarification of the Personal Property Lease Transaction Tax
May 1997 Information Bulletin - Personal Property