86 Ill. Adm. Code 125.100
Nature of the Tax
Section 125.100 Nature of
the Tax
a) The Rental Purchase Agreement Occupation
and Use Tax Act [35 ILCS 180] ("Act") contains two taxes.
1) The
Rental Purchase
Agreement Occupation Tax
imposes a tax upon persons engaged in this State
in the business of renting merchandise under a rental-purchase agreement in
Illinois at the rate of 6.25% of the gross receipts received from the
business. [35 ILCS 180/10]
2) The Rental Purchase Agreement Use Tax
imposes a tax
upon the privilege of
using, in this State, merchandise which is rented from a merchant at the rate
of 6.25% of the rental price paid to the merchant under any rental purchase
agreement. [35 ILCS 180/15]
b) The Department has full power to administer
and enforce the Rental Purchase Agreement Occupation Tax and the Rental
Purchase Agreement Use Tax, to collect all taxes and penalties due thereunder,
to dispose of taxes and penalties so collected in the manner provided in the
Acts and this Part, and to determine all rights to credit memoranda, arising on
account of the erroneous payment of tax or penalty under the Acts. [35 ILCS
180/10 and 15]
c) Relation of Rental Purchase Agreement
Occupation Tax to the Rental Purchase Agreement Use Tax
1) The Rental Purchase Agreement Occupation
Tax is an occupation tax, the legal incidence of which is on the merchant
rather than on the consumer. The Rental Purchase Agreement Use Tax is a use
tax, the legal incidence of which is on the consumer rather than the merchant.
2) The merchant becomes a tax collector under
the Rental Purchase Agreement Use Tax and is required to collect that tax from
consumers. In making that collection, merchants may rely on the tax collection
schedules prescribed in the Department's Use Tax Regulations for the collection
of the Rental Purchase Agreement Use Tax by merchants from consumers.
Consequently, the tax collection schedules set out in 86 Ill. Adm. Code
150.Table A are applicable when collecting Use Tax from the consumer.