Illinois taxes leased vehicles differently than most states. When vehicles are leased for a term longer than one year, tax is due up-front on the full selling price of the vehicle. The lessor is the owner and is the one who must pay the tax. The lessor generally passes this tax liability on to the lessee, however. If the lessee chooses to purchase the vehicle at the end of the lease term, the lessee then becomes the owner and must pay tax on the purchase price at that time. See Illinois Administrative Code,
Section 130.2010 and
130.2013.
