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How does Illinois tax items that must be titled or registered with an Illinois agency?

Answer #153 -- ( Published 08/09/2005 12:39 PM | Updated 07/12/2017 10:39 AM )

How does Illinois tax items that must be titled or registered with an Illinois agency?

Items that must be titled or registered with an Illinois agency include, without limitation, motor vehicles (e.g., cars, trucks, vans, buses, etc.), motorcycles, watercraft, aircraft (e.g., airplanes, helicopters, hot air balloons, gliders, etc.), trailers, motor homes, mobile homes, snowmobiles, and all terrain vehicles (ATVs). Generally, any applicable taxes must be paid before the item can be registered or titled.

Vehicles purchased from a dealer or retailer that is registered and licensed with the Illinois Department of Revenue to collect and remit the vehicle sales tax are reported on Form ST-556, Sales Tax Transaction Return. This form is used to report a sale of any of the above-listed vehicles. This form also can be filed by registered out-of-state leasing companies selling to Illinois residents, as well as registered leasing companies that also sell at retail.

If you sell items at retail in Illinois and, as part of the same transaction, the items are simultaneously leased and those items are of the type that must be titled or registered by an agency of Illinois state government (i.e., vehicles, watercraft, aircraft, trailers, and mobile homes), you must report these sales for lease on Form ST 556-LSE, Transaction Return for Leases. Note: If you are a leasing company selling such an item at the end of a lease, do not file Form ST-556-LSE. Instead, use Form ST-556, Sales Tax Transaction Return.

You must complete Form RUT-25, Vehicle Use Tax Transaction Return, if you own a motor vehicle, watercraft, aircraft, trailer, mobile home, snowmobile, or ATV and you purchased it from an unregistered out-of-state dealer, lending institution, leasing company selling at retail, or retailer and will title or register the item in Illinois.

You must complete Form RUT-25-LSE, Use Tax Return for Lease Transactions, if you are titling or registering in Illinois a motor vehicle, watercraft, aircraft, trailer, mobile home, snowmobile, or all-terrain vehicle (ATV) that you leased through an unregistered out-of-state dealer or retailer. Do not use Form RUT-25-LSE for non-leased items purchased from an unregistered out-of-state dealer or retailer. Instead, use Form RUT-25, Vehicle Use Tax Transaction Return. Also, do not use Form RUT-25-LSE if you leased an item through an Illinois dealer. Instead, the dealer must complete Form ST-556-LSE, Transaction Return for Leases.

You must file Form RUT-50, Private Party Vehicle Use Tax Transaction, if you purchased or acquired a motor vehicle by gift, donation, or transfer from a private party.

If you acquire an aircraft or watercraft by gift, donation, transfer, or non-retail purchase, you must file Form RUT-75, Aircraft/Watercraft Use Tax Transaction Return. For purposes of Form RUT-75, "aircraft" includes airplanes, helicopters, hot-air balloons, ultra lights, gliders, blimps, dirigibles, seaplanes, and anything else defined as an "aircraft" in Section 3 of the Illinois Aeronautics Act. "Watercraft" includes Class 2, Class 3, and Class 4 watercraft as defined in Section 3-2 of the Boat Registration and Safety Act; and personal watercraft (e.g., jet skis, wave runners, etc.) as defined in Section 1-2 of the Boat Registration and Safety Act. This definition does not include canoes or kayaks.

See Illinois Tax Requirements for Cars, Trucks, Vans, Motorcycles, ATVs, Trailers, and Mobile Homes and STS-76, Illinois Vehicle Tax Information Guide.

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