Illinois Department of Revenue

                                                                                                      September 2022
Publication 114

Automobile Renting Occupation and Use Tax

The information in this publication 
                                         About this publication
is current as of the date of the 
                                         Knowing how Illinois tax laws apply to your business can save you time, trouble, 
publication. Please visit our website at 
                                         and money. The information included in this publication supplies you with general 
tax.illinois.gov to verify you have the  tax information involving the rental of items that are subject to Automobile Renting 
most current revision.                   Occupation and Use Tax to help you collect the proper amount of tax due and to help 
This publication is written in the plain you file your returns correctly. 
English style so the tax information is  As a business renting motor vehicles, you are responsible for
easier to understand. As a result, we     collecting the correct amount of tax on every rental you make,
do not directly quote Illinois statutes   properly documenting the tax-exempt rentals you make,
or the Illinois Administrative Code.      sending the tax you have collected and any tax you owe with your properly completed 
                                         Form ART‑1, Automobile Renting Occupation and Use Tax Return, by the due 
The contents of this publication are 
                                         date, to the Illinois Department of Revenue, and
informational only and do not take 
                                          keeping complete and accurate books and records for all rentals and purchases. 
the place of statutes, rules, or court 
decisions. For many topics covered 
in this publication, we have provided 
a reference to the applicable section 
or part of the Illinois Administrative 
Code for further clarification or more 
detail. All of the sections and parts 
referenced can be found in Title 86 of 
the Illinois Administrative Code. 

Taxpayer Bill of Rights
You have the right to call the Department of Revenue for help in resolving tax problems.
You have the right to privacy and confidentiality under most tax laws.
You have the right to respond, within specified time periods, to Department notices by asking questions, paying the amount due, 
or providing proof to refute the Department’s findings.
You have the right to appeal Department decisions, in many instances, within specified time periods, by asking for Department 
review, by filing a petition with the Illinois Independent Tax Tribunal, or by filing a complaint in circuit court.
If you have overpaid your taxes, you have the right to a credit (or, in some cases, a refund) of that overpayment.
For more information about these rights and other Department procedures, you may write us at the following address:
Problems Resolution Office
Illinois Department of Revenue
PO Box 19014
Springfield, IL 62794-9014

Get Illinois Department of Revenue forms and information at tax.illinois.gov

                                                            Automobile Renting Occupation and Use Tax

Contents

Registering Your Business
 Who must register for Automobile Renting Occupation and Use Tax?                   4
 How do I register?                                                                 4
 How do I activate a MyTax Illinois account?                                        4
 How will I know that I have successfully registered?                               4
 Will I need to renew my certificate?                                               4
 What if my certificate is lost, damaged, or destroyed?                             4
 What if I change the location of my business or one of my sites?                   5
 What if I discontinue my business or one of my business locations, change my
 business structure, or sell any or all of my business?                             5
 Who do I contact if I have questions about registration?                           5

Requirements for Businesses That Rent Motor Vehicles and File Form ART-1
 On what rentals must I collect and pay the Automobile Renting Occupation and Use Tax?  6
 What form must I use to report Automobile Renting Occupation and Use Tax?          6
 What are some common types of transactions that are exempt from this tax?          6
 Are other fees related to renting a motor vehicle subject to Automobile Renting
 Occupation and Use Tax?                                                            6
 What factors determine the tax rates that apply to the rental transactions I make? 6
 How are my tax rates determined?                                                   7
 How can I find out what tax rates I should be collecting?                          7 
 When does someone owe Automobile Renting Use Tax, and how is it reported?          7
 How do I show Automobile Renting Occupation and Use Tax on my rental contracts?    7
 Must I file Form ART-1 even if I have no rental receipts to report?                7
 When is my return and tax payment due?                                             7
 Is there an incentive for paying the tax I have collected on time?                 7
 How do I file my return?                                                           7
 What if I do not file and pay by the due date?                                     7
 What if I make a mistake on my return?                                             7

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                                                          Automobile Renting Occupation and Use Tax

Keeping Complete and Accurate Books and Records and Miscellaneous Information
 What books and records must I keep?                                                  8
 What records must I keep about the rental transactions I make?                       8
 What records are required to support a deduction taken on my tax return for an exempt
 transaction?                                                                         8
 Must I maintain my books and records on paper?                                       8
 How long must I keep books and records?                                              8
 Are there any other requirements?                                                    8
 Is tax due on a vehicle I sell from my rental inventory?                             8

Office locations                                                                      9

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                                                                          Automobile Renting Occupation and Use Tax

Registering Your Business

Who must register for Automobile Renting                       How do I activate a MyTax Illinois account?  
Occupation and Use Tax?                                        Once your business is registered with IDOR or IDES, you can 
(See 86 Illinois Administrative Code Parts 180 and 190.)       activate your MyTax Illinois account. Please allow 24 hours 
You should register for Automobile Renting Occupation and      from your registration confirmation email before activating a 
Use Tax if you rent automobiles, pickup trucks, sport utility  logon for MyTax Illinois. To activate an account for business, 
vehicles (SUVs), motorcycles and motor-driven cycles,          you can use one of the following options:         
qualifying motor homes or recreational vehicles, or qualifying •   Owner/Officer or Responsible Party Social Security 
vans for periods of one year or less.                          Number
Note: If you are a marketplace facilitator (e.g., peer-to-peer •  PIN previously issued by the Department (used for certain 
car sharing platform) who rents these items for periods of one electronic filing methods, such as Webfile and third-party 
year or less and meets a tax remittance threshold, you must    tax software, separate from MyTax Illinois)       
register for Automobile Renting Occupation and Use Tax.        •   Account Activity validation  
See Private Letter Ruling ST-22-0002-PLR (2/1/2022).
                                                               This activation process is to help ensure only individuals 
How do I register?                                             who are authorized by their organization gain access to a 
Register with the Department electronically using              business’s tax information.

MyTax Illinois:                                                How will I know that I have successfully 
If you have not previously registered for any Illinois taxes,  registered?
select “Register a New Business (Form REG-1)” and complete 
                                                               We will issue you a certificate of registration. This certificate 
the registration application. After you receive an email that 
                                                               is your permit to engage in the business of renting items 
your business is registered with the Illinois Department 
                                                               subject to Automobile Renting Occupation and Use Tax. 
of Revenue (IDOR) or Illinois Department of Employment 
                                                               It lists your Illinois Account ID, business name, address, 
Security (IDES), you can activate your MyTax Illinois account. 
                                                               effective date, the tax for which you are registered, and the 
Please allow 24 hours from your registration confirmation 
                                                               date the certificate will expire.
email before activating a logon for MyTax Illinois. To create 
                                                               You must display your certificate in the place of business for 
a MyTax Illinois account, return to MyTax Illinois, select the 
                                                               which it was issued and where it can be easily viewed by the 
“Sign up” button, and then submit the requested information.
                                                               public.
If you are a Corporation, S-Corp, Partnership, or LLC 
                                                               If your company has more than one rental outlet within 
organization type and are registered for other tax accounts, 
                                                               Illinois, we will supply a certificate of registration for each site 
and have a MyTax Illinois account, you can register for new 
                                                               from which you make rentals. The individual site address will 
tax types by simply logging into your existing MyTax Illinois 
                                                               be on each certificate so that you can display the appropriate 
account, selecting “More…” and then selecting “Register for 
                                                               certificate in the place of business for which it was issued.
New Tax Accounts” to complete registration.
Sole proprietorships can only register for new tax accounts    Will I need to renew my certificate? 
by selecting “Register a New Business (Form REG-1)” and        Your certificate of registration expires after one years. Unless 
completing Form REG-1, the Illinois Business registration      we notify you otherwise, we will automatically renew your 
application.                                                   certificate of registration.
If you choose to register using the paper application, 
                                                               What if my certificate is lost, damaged, or 
complete and sign Form REG-1, Illinois Business Registration 
Application, allow 6-8 weeks for processing and mail or fax it destroyed?
to:                                                            If your certificate is lost, damaged, or destroyed, you can print 
  CENTRAL REGISTRATION DIVISION 3‑222                          a replacement using MyTax Illinois, available at MyTax Illinois. 
  ILLINOIS DEPARTMENT OF REVENUE                               You can also contact our Central Registration Division to 
  PO BOX 19030                                                 request a new certificate. 
  SPRINGFIELD IL 62794‑9030
    Fax: 217 785‑6013

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                                                                             Automobile Renting Occupation and Use Tax

What if I change the location of my business or                  Who do I contact if I have questions about 
one of my sites?                                                 registration?
If you change the location of your business or, for multiple     For registration questions, see our Taxpayer Answer Center, 
site filers, change the location of one of your sites, you       available on our website at tax.illinois.gov. If you cannot find 
can update your registered locations using MyTax Illinois,       an answer, you can email the Department from the Taxpayer 
available at MyTax Illinois. You can also contact our Central    Answer Center. You also can call our Central Registration 
Registration Division. It is important for you to keep this      Division at 217 785‑3707. 
information up to date to ensure you are filing using the 
correct tax rate. This is also important to the Department 
to ensure that we issue local tax allocations to the proper 
jurisdiction.

What if I discontinue my business or one of 
my business locations, change my business 
structure, or sell any or all of my business? 
If you discontinue your business, you must destroy all 
certificates related to that business. If you discontinue one of 
your sites, you must destroy the certificate for that site. 
If you change the structure of your business, (for example, 
changing from a sole proprietor to a corporation) you must
  tell us to discontinue the old business entity, and
  register the new business entity by completing a new 
Form REG-1, Illinois Business Registration Application.
Note: Certificates of registration cannot be transferred.
In addition, you must update your registration information with 
the Department. MyTax Illinois, available at MyTax Illinois, 
allows you to close your existing business and register a 
new one or to maintain your registered locations. You can 
also contact our Central Registration Division so that we can 
update our records. It is very important for you to notify us 
when you go out of business or discontinue a location.
You must complete and file Form CBS-1, Notice of Sale, 
Purchase, or Transfer of Business Assets, if, outside your 
usual course of business, you sell or transfer
  the major part of the stock of goods that you are in the 
business of renting,
  the furniture or fixtures of your business,
  the machinery and equipment of your business, or
  the real property of your business.

PUB-114 (R-09/22)                                                                                            Page  5 of 9

                                                                             Automobile Renting Occupation and Use Tax

Requirements for Businesses That Rent Motor 

Vehicles and File Form ART-1 

On what rentals must I collect and pay the                      Are other fees related to renting a motor vehicle 
Automobile Renting Occupation and Use Tax?                      subject to Automobile Renting Occupation and 
(See 86 Illinois Administrative Code Parts 180 and 190.)        Use Tax?
You must collect and pay Automobile Renting Occupation          Separately stated fees are not subject to tax. Such separately 
Tax if you rent or lease automobiles, pickup trucks, sport      stated items may include: 
utility vehicles (SUVs), motorcycles and motor-driven             additional insurance coverage, 
cycles, qualifying motor homes and recreational vehicles,         the cost of refueling a rented automobile, or 
and qualifying vans within Illinois for a period of one year or 
                                                                  a waiver from the rental business that explains it does 
less. See 86 Illinois Administrative Code Section 180.101(b). 
                                                                    not have the right to take action or to make a claim 
The Automobile Renting Occupation Tax rate on automobile 
                                                                    against the party renting the motor vehicle for any loss or 
rentals is 5 percent (.05). See 86 Illinois Administrative Code 
                                                                    damage to the automobile that was rented. 
Section 180.101(a).
                                                                Fees that are not separately stated may be subject to tax.
In addition, if you are an out-of-state business that rents 
these items to Illinois persons, corporations, firms, or        What factors determine the tax rates that apply 
associations, you are required to collect and pay Automobile    to the rental transactions I make?
Renting Use Tax on the receipts you have collected. The         Generally, it is the location of your Illinois business or, if you 
Automobile Renting Use Tax rate is 5 percent (.05). See 86      are a multiple location filer, each of your Illinois sites that 
Illinois Administrative Code Section 190.101(a). See “How       determine the rate of tax. 
can I find out what tax rates I should be collecting?” on the   The rate of tax that applies to rental transactions made within 
next page for additional information.                           Illinois depends on the location where the rental is made.
What form must I use to report Automobile                       For out‑of‑state rental businesses, if the automobile being 
Renting Occupation and Use Tax?                                 rented to someone in Illinois is delivered from an out-of-
                                                                state location, the Illinois Automobile Renting Use Tax 
You must file Form ART-1, Automobile Renting Occupation 
                                                                rate is 5 percent (.05). If the automobile being rented is 
and Use Tax Return, for each reporting period and pay the 
                                                                delivered from an Illinois warehouse or distribution center, 
tax collected from your rentals.
                                                                the transaction is subject to Automobile Renting Occupation 
If you make rental transactions from more than one location, 
                                                                Tax rather than Automobile Renting Use Tax, and the Illinois 
you also must complete and file Form ART-2, Multiple Site 
                                                                location from which the product is delivered determines the 
Form, to report specific tax information for each site.
                                                                rate of tax. 
What are some common types of transactions                      Note to marketplace facilitators: The Automobile Renting 
that are exempt from this tax?                                  Occupation and Use Tax Act incorporates the Sections of 
(See 86 Illinois Administrative Code Section 180.130 for a      the Retailers’ Occupation Tax Act related to marketplace 
comprehensive list of exemptions.)                              facilitators. See 35 ILCS 155/3 and 4. An automobile rental 
Some common exemptions from this tax are:                       company operating a peer-to-peer motor vehicle sharing 
  vehicles rented by organizations that have been issued        platform is acting as a marketplace facilitator subject to 
an active Illinois exemption number by the Department,          the same provisions and requirements as a marketplace 
and                                                             facilitator under the Retailers’ Occupation Tax Act. See Illinois 
                                                                Private Ruling Letter ST-22-0002-PLR (2/1/2022).
  receipts received by automobile dealers from 
manufacturers or service contract providers for the use 
of “loaner” vehicles while dealers make warranty or 
service contract repairs on customers’ vehicles.
Note: Sales of vehicles that will be rented for terms of 
more than one year are subject to Retailers’ Occupation 
Tax or Use Tax. See Publication 113, Retailer’s Overview of 
Sales and Use Tax and Prepaid Wireless E911 Surcharge.

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                                                                               Automobile Renting Occupation and Use Tax

How are my tax rates determined?                                Is there an incentive for paying the tax I have 
The following are the tax rates that could apply to your rental collected on time?
transactions:                                                   Yes. If you file your return and pay the tax on time, you are 
  The state tax rate for automobile renting is 5 percent        allowed to take a discount of 1.75 percent (.0175) of the state 
(.05).                                                          portion of the tax you collected on receipts from rentals. 

  Local governments are authorized to impose tax of up to       How do I file my return?
1 percent (.01). 
                                                                You can file Forms ART-1 and ART-2 using MyTax Illinois, 
  The Metro-East Mass Transit District (MED) is authorized      available at MyTax Illinois. These forms are also available on 
to impose tax of up to 1 percent (.01) in those counties        our website at tax.illinois.gov and can be printed and mailed 
comprising the MED District.                                    to the following address:
  The Regional Transportation Authority (RTA) is                ILLINOIS DEPARTMENT OF REVENUE
authorized to impose tax of up to 1 percent (.01) in Cook       PO BOX 19037
County and up to 0.25 percent (.0025) in DuPage, Kane,          SPRINGFIELD IL 62794‑9037
Lake, McHenry, and Will counties.
                                                                If you are unable to use MyTax Illinois and cannot 
  The Metropolitan Pier and Exposition Authority (MPEA)         obtain the forms from our website, please contact us by 
imposes a 6 percent (.06) tax on automobile rental              email at REV.OrderTaxForms@illinois.gov or call us at 
receipts within Cook County. Taxi and livery services are       1 800 732-8866 or 217 782-3336 to request paper forms be 
excluded from the MPEA tax.                                     mailed to you.
Each tax listed above is separately calculated on the return.   Do not mail Form ART-1 in the same envelope with any other 
How can I find out what tax rates I should be                   type of return. Also, do not submit a paper form if you have 
collecting?                                                     already sent your return using MyTax Illinois.

To verify your tax rates go to the MyTax Illinois Tax Rate      What if I do not file and pay by the due date?
Finder at mytax.illinois.gov. If you file your return using     If you do not file your return and pay the tax due by the 
MyTax Illinois, your rates will be populated for you for each   due date, we will assess you for any tax due (including any 
registered location.                                            portion of disallowed timely filing discount) plus penalty and 
When does someone owe Automobile Renting                        interest. For detailed information about penalties and interest, 
                                                                see Publication 103, Penalties and Interest for Illinois Taxes. 
Use Tax, and how is it reported? 
Illinois law requires you to pay Automobile Renting Use Tax     What if I make a mistake on my return?
when you rent a motor vehicle and you did not pay Illinois      If you made a mistake on your original Form ART-1, you must 
Automobile Renting Use Tax to a rental business. You must       file Form ART-1-X, Amended Automobile Renting Occupation 
report use tax on Form ART-1.                                   and Use Tax Return. If the mistake occurred on your original 
How do I show Automobile Renting Occupation                     Form ART-2, you must also file Form ART-2-X, Amended 
and Use Tax on my rental contracts?                             Multiple Site Form. If you filed your return using MyTax 
                                                                Illinois, you can amend your return using that system. MyTax 
State the tax collected separately from the rental price on the 
                                                                Illinois is available at MyTax Illinois. Amended forms also are 
receipts you give your customers.
                                                                available on our website.  
Must I file Form ART-1 even if I have no rental 
receipts to report? 
Yes. You must file a processable (i.e., signed) Form ART-1 
for each reporting period regardless of whether you have 
receipts to report. 
When is my return and tax payment due?
You must file your Form ART-1 and pay any tax due on or 
before the 20th day of the month following the end of the 
reporting period.   
You must file Form ART-1 on a monthly basis, unless we 
notify you otherwise. 
Note: If the due date falls on a weekend or state holiday, your 
return and payment is due the next business day.

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                                                                               Automobile Renting Occupation and Use Tax

Keeping Complete and Accurate Books and 

Records and Miscellaneous Information

What books and records must I keep?                           Must I maintain my books and records on 
(See 86 Illinois Administrative Code Section 130.801 through  paper? 
130.825.)                                                     (See 86 Illinois Administrative Code Section 130.805.)
You must keep                                                 No. You can also maintain books and records on electronic 
  books and records of all your rental receipts;              media. In general, these records are acceptable as long 
  documents about inventory changes, shipments, or other      as they are authentic, accessible, readable, and able to be 
transactions;                                                 reproduced. 

  accounts receivable records;                                How long must I keep books and records? 
  accounts payable records;                                   (See 86 Illinois Administrative Code Section 130.815.)
  summaries or ledger accounts;                               In general, you must keep books and records that document 
  records or working papers that are used in the              receipts for the tax period covered by your return for three 
preparation of your tax returns; and                          and one-half years after you have filed an original or 
  copies of the tax returns you file.                         amended return.
                                                              If a Notice of Tax Liability or Notice of Assessment has been 
What records must I keep about the rental 
                                                              issued, you must keep books and records that document 
transactions I make?                                          receipts for the tax period for which the notice was issued. 
At minimum, you must keep                                     Keep these records until the liability has been finalized or 
  the cash register tapes and other data that provide a       discharged.
daily record of the gross amount of rental transactions; 
and                                                           Are there any other requirements? 
  a yearly inventory of the value of the stock on hand.       Your books and records must 
These records must distinguish taxable from nontaxable          be available for inspection by the Illinois Department of 
transactions. You must keep these records for all rental      Revenue during normal business hours;
transactions, regardless of whether you believe they are        be kept in the English language;
taxable.                                                        be kept in Illinois unless you have received written 
                                                              permission from us to keep them in another location; and
What records are required to support a 
                                                                contain information regarding the deductions you claim.
deduction taken on my tax return for an exempt 
transaction?                                                  Is tax due on a vehicle I sell from my rental 
(See 86 Illinois Administrative Code Section 130.810.)        inventory?
In order to support each deduction, your records must include Yes. You should collect Retailers’ Occupation Tax when you 
                                                              sell a vehicle that has been in your rental inventory. The sales 
  the name and address of the rental business;
                                                              transaction should be reported on Form ST-556, Sales Tax 
  the character of each transaction (e.g., a rental to an 
                                                              Transaction Return.
exempt organization);
  the date of each transaction;
  the amount of receipts from each transaction; and
  any other information that establishes the nontaxable 
nature of the transaction. 

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                                                                       Automobile Renting Occupation and Use Tax

Office Locations

                                     Suburban North Regional Building
                                     9511 Harrison Street FA 203
                                     Des Plaines, Illinois 60016-1563

200 South Wyman Street
Rockford, Illinois 61101-1237                                                                    555 West Monroe Street
                                                                                                 Suite 1100
                                                                                                 Chicago, Illinois 60661

                                                                                                 Willard Ice Building
                                                                                                 101 West Jefferson
                                                                                                 Springfield, Illinois 62702-5145

15 Executive Drive
Business Center One, Suite 2
Fairview Heights, Illinois 62208-1331

                    2309 W. Main, Suite 114
                    Marion, Illinois 62959-1196

Contact Information Visit our website at tax.illinois.gov. For specific phone number and email contacts see our 
                         Contact Us page. 
                    Call us at 1 800 732‑8866 or 217 782‑3336.
                    Call our TDD (telecommunications device for the deaf) at 1 800 544‑5304.
                    Write us at Illinois Department of Revenue, PO Box 19001, Springfield, IL 62794-9001.
                    Call our 24-hour Forms Order Line at 1 800 356‑6302. 

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