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Leasing Industry Overview
Copyright © Sales Tax Institute 1997-2018
Leasing
• Transfer of possession without transfer of title - not a conditional sale
• Generally treated same as sales transaction for exemptions• IL & ME don’t include rental/lease in definition of sale
• Chicago taxes leases of personal property (tangible and intangible)
Copyright © Sales Tax Institute 1997-20182
Leasing
• Option in some states to pay tax up-front & no tax on payments
• Additional charges and fees generally exempt • Flow through type of use exemptions
Copyright © Sales Tax Institute 1997-20183
Other Leasing Issues
• Operating lease or financing lease • Tracking movable property• Lease with operator - service rather than lease• Lessor exemption documentation• Nexus• Lessee use tax when lessor pays tax up front
Copyright © Sales Tax Institute 1997-20184
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Copyright © Sales Tax Institute 1997-20185
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