Illinois Lease Tax Change May Result in Higher Costs, Double Taxation Concerns for Businesses

• Illinois now applies sales tax to lease payments on equipment starting January 1, 2025, in addition to the original tax paid when the equipment was purchased.
• Businesses with older leases may end up paying tax twice: once upfront and again on ongoing lease payments.
• The Illinois Department of Revenue states this is not double taxation legally, as the taxes apply to different transactions.
• No credits or relief are available for taxes already paid before 2025, and contract provisions to recover upfront tax still apply.
• Businesses are advised to review their lease agreements, as the new rule may increase the overall cost of leasing.

Source: salestaxinstitute.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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