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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:

As of 1/1/2015:

9% of receipts or charges

Prior to 1/1/2015:

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 certain 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.
  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 (e.g., 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:

NOTE:  In response to numerous requests from providers and customers, the Department is extending the effective date of Lease Tax Ruling #12 from September 1, 2015 to January 1, 2016. The extension will allow businesses additional time to have questions answered and to make any necessary changes to their billing systems or other procedures. The City will use the additional time to complete its consideration of possible ordinance changes designed to address some of the concerns that have been raised by various Chicago businesses about the effect of the lease tax on their operations. Any such changes would require City Council approval and would likely coincide with the new effective date of the ruling. In addition, the Department may issue an information bulletin providing further guidance as to specific questions that have been asked since the publication of Ruling #12.

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
Personal Property Lease Transaction Tax Ruling 12

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