When a peer-to-peer car-sharing platform lets private "Hosts" rent out their own vehicles to "Guests," who owes Illinois's Automobile Renting Tax -- the platform or the Host -- and does that change once the platform's rental volume crosses certain thresholds?

Plain-English summary

A motor-vehicle rental business asked the Illinois Department of Revenue how the state's Automobile Renting Occupation and Use Tax would apply to a new peer-to-peer "Car Rental Facilitation Company" it was considering launching -- essentially a car-sharing app (the ruling gives examples like Turo-style platforms) where private or commercial vehicle owners ("Hosts") list their cars for rent to renters ("Guests") through the platform's website or app, with the platform handling bookings, payment processing, and taking a cut of each rental.

The Department ruled that when such a platform operates a peer-to-peer motor vehicle sharing platform, it is acting as a "marketplace facilitator" under the marketplace facilitator provisions that the Automobile Renting Occupation and Use Tax Act borrows from the Retailers' Occupation Tax Act (35 ILCS 155/3, incorporating 35 ILCS 120/2(c)). That means the platform is treated the same way an online retail marketplace is treated under general sales tax law: "sellers" become "rentors," "purchasers" become "rentees," and "sales" become "automobile rentals of one year or less."

If the platform's own rentals plus its Hosts' rentals to Illinois renters reach $100,000 in gross receipts or 200 separate transactions in a rolling 12-month lookback period, the platform must register with the Department, collect, and remit both the state and any applicable local automobile renting occupation and use taxes on all rentals made through the platform -- including rentals made directly by individual Hosts. The Department will not collect the tax twice on the same transaction from both the platform and the Host, and normally will not audit Hosts for rentals the platform was responsible for remitting tax on. The platform re-checks the thresholds every quarter, so an operator can move in and out of collection obligations over time depending on its rental volume.

The ruling also addresses a related purchase-side question: motor vehicles bought for the purpose of automobile renting are exempt from the Retailers' Occupation Tax and Use Tax, but only if used exclusively for that exempt rental purpose. If a Host substantially uses the vehicle for personal, non-exempt purposes, the exemption does not apply and the Host owes Use Tax on the vehicle.

Because this is a Private Letter Ruling, it is binding on the Department only as to the specific company that requested it and only to the extent the facts it described were accurate and complete -- but it shows exactly how the Department applies the marketplace facilitator framework to car-sharing platforms.

What this means for you

Peer-to-peer car-sharing / car-rental app operators

If you operate (or are building) a platform that lets private individuals or businesses list vehicles for rent to the public, you may be a "marketplace facilitator" for Illinois Automobile Renting Tax purposes, not just a neutral intermediary. Once your combined platform-plus-Host Illinois rental activity crosses $100,000 in gross receipts or 200 transactions in a trailing 12-month period, you are responsible for registering with the Department and collecting/remitting state and local automobile renting occupation and use taxes on all rentals made through your platform -- including rentals arranged directly by your Hosts, not just your own. You must re-test the thresholds every quarter and notify the Department (and your Hosts) if you drop below the thresholds and stop remitting.

Hosts (individual or business vehicle owners renting through a platform)

If you rent out your own vehicle(s) through a car-sharing app more than just occasionally, you may independently be a "rentor" subject to the Automobile Renting Tax -- unless the platform itself has crossed the marketplace-facilitator thresholds and is handling remittance for your rentals. The Department will not collect the tax from both you and the platform on the same rental. Also watch the sales/use tax exemption on your vehicle purchase: it only holds up if the vehicle is used exclusively for taxable automobile renting; substantial personal use can make you liable for Use Tax on the vehicle itself.

Accountants and tax professionals

This ruling is a direct, real-world application of the Retailers' Occupation Tax Act's marketplace facilitator provisions (35 ILCS 120/2(c) and related sections) as incorporated wholesale into the Automobile Renting Occupation and Use Tax Act by 35 ILCS 155/3. Note the ruling flags a rule change effective February 1, 2022: earlier versions of 86 Ill. Adm. Code 131.130(c) excluded titled/registered property (like motor vehicles) from marketplace facilitator treatment, but the rule was amended to remove that exclusion, which is what brought car-sharing platforms squarely within the marketplace facilitator regime.

Local governments and special taxing districts

Municipalities, counties, and special districts (such as the Metropolitan Pier and Exposition Authority) that impose their own local automobile renting occupation and use taxes ride on the same marketplace facilitator framework -- if a car-sharing platform is a marketplace facilitator for state tax purposes, it is also responsible for the local and special-district automobile renting taxes administered by the Department.

Common questions

Q: Does a peer-to-peer car-sharing platform have to collect Illinois Automobile Renting Tax on rentals its Hosts arrange?
A: Yes, once the platform is a "marketplace facilitator" -- which happens once its combined Illinois rental activity (its own plus its Hosts') reaches $100,000 in gross receipts or 200 transactions in a trailing 12-month period. At that point it must register, collect, and remit state and local automobile renting occupation and use taxes on all rentals made through the platform, including Host rentals.

Q: Can the Department collect the tax from both the platform and the Host on the same rental?
A: No. The Department will not collect automobile renting occupation taxes from both the car rental facilitation company and the Host on the same transaction, and it generally will not audit Hosts for rentals where the platform was responsible for remittance.

Q: What if the platform's rental volume later drops back below the thresholds?
A: The platform re-determines its status quarterly based on the preceding 12-month period. If it no longer meets either threshold, it must stop remitting and notify the Department and its Hosts, providing their names, addresses, and FEINs. It remains liable for the tax until that notification is made.

Q: Is a motor vehicle bought for use on a car-sharing platform exempt from Illinois sales/use tax?
A: Only if it is used exclusively for automobile renting as defined in the Act. If the vehicle is also substantially used for personal or other non-exempt purposes, the exemption does not apply and the owner owes Retailers' Occupation Tax or Use Tax on it.

Q: Can any other car-sharing company rely on this specific ruling?
A: No. This is a Private Letter Ruling -- it binds the Department only as to the taxpayer who requested it, and only to the extent the facts described (the specific platform structure, fee arrangement, and Host/Guest relationship) were accurate and complete. Other companies can look to it as an indication of the Department's reasoning but cannot rely on it directly.

Citations and references

• 35 ILCS 155/1 et seq. (Automobile Renting Occupation and Use Tax Act)
• 35 ILCS 155/2 (definitions of "rentor," "rentee," "rental price")
• 35 ILCS 155/3 (imposition of the Occupation Tax; incorporates Retailers' Occupation Tax Act marketplace facilitator provisions)
• 35 ILCS 155/4 (Automobile Renting Use Tax on the rentee, collected by the rentor)
• 35 ILCS 120/2(c) (marketplace facilitator registration and remittance thresholds)
• 35 ILCS 120/2-5(5) (Retailers' Occupation Tax exemption for a motor vehicle used for automobile renting)
• 35 ILCS 105/3-5 (corresponding Use Tax exemption)
• 86 Ill. Adm. Code 180.101, 180.110, 180.115, 180.120, 180.125 (Automobile Renting Occupation Tax rules)
• 86 Ill. Adm. Code 190.101, 190.110, 190.115 (Automobile Renting Use Tax rules)
• 86 Ill. Adm. Code 131.105, 131.130(c), 131.135(a), 131.145, 131.155(b) (Retailers' Occupation Tax marketplace facilitator rules, including the February 1, 2022 amendment covering titled/registered property)
• 86 Ill. Adm. Code 150.332(c) (non-exempt use of tax-free property triggers Use Tax liability)
• 65 ILCS 5/8-11-7; 65 ILCS 5/8-11-8; 55 ILCS 5/5-1032; 55 ILCS 5/5-1033 (municipal/county automobile renting taxes)
• 70 ILCS 210/13; 70 ILCS 3610/5.02; 70 ILCS 3615/4.03.1 (special district automobile renting taxes, e.g. MPEA)
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedures)

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2022.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2022/st22-0002-plr.pdf

Original ruling text

ST-22-0002 02/01/2022 AUTOMOBILE RENTING TAX
When a car rental facilitation company operates a peer-to-peer motor vehicle
sharing platform it is acting as a marketplace facilitator under marketplace
facilitator provisions of the Automobile Renting Occupation and Use Tax Act, as
incorporated from the Retailers’ Occupation Tax Act.
35 ILCS 155/3,
incorporating 35 ICLS 120/2(c) as fully as if set forth therein. (This is PLR.)
February 1, 2022
Dear NAME:
This letter is in response to your letter dated December 3, 2020, in which you
requested information. The Department issues two types of letter rulings. Private Letter
Rulings (“PLRs”) are issued by the Department in response to specific taxpayer
inquiries concerning the application of a tax statute or rule to a particular fact situation.
A PLR is binding on the Department, but only as to the taxpayer who is the subject of
the request for ruling and only to the extent the facts recited in the PLR are correct and
complete. Persons seeking PLRs must comply with the procedures for PLRs found in
the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General
Information Letter (“GIL”) is to direct taxpayers to Department regulations or other
sources of information regarding the topic about which they have inquired. A GIL is not
a statement of Department policy and is not binding on the Department. See 2 Ill. Adm.
Code 1200.120. You may access our website at www.tax.illinois.gov to review
regulations, letter rulings and other types of information relevant to your inquiry.
Review of your request disclosed that all the information described in paragraphs
1 through 8 of Section 1200.110 appears to be contained in your request. This Private
Letter Ruling will bind the Department only with respect to COMPANY1, for the issue or
issues presented in this ruling, and is subject to the provisions of subsection (e) of
Section 1200.110 governing expiration of Private Letter Rulings. Issuance of this ruling
is conditioned upon the understanding that neither COMPANY1, nor a related taxpayer
is currently under audit or involved in litigation concerning the issues that are the subject
of this ruling request. In your letter you have stated and made inquiry as follows:
Please view this letter as a private letter ruling request as to the
application of the Automobile Renting Occupation and Use Tax (“AROT”
and “ARUT”), the Retailers’ Occupation Tax (“ROT”), and Use Tax to a
new peer-to-peer car rental facilitation company being considered by
COMPANY1 (“COMPANY1”). Such a private letter ruling request is
proper under 86 Ill. Admin. Code § 1200.110.
COMPANY1 is headquartered at ADDRESS. COMPANY1 operates a
motor vehicle rental business throughout the State of Illinois at various
locations. COMPANY1 is exploring the opportunity to create a peer-topeer Car Rental Facilitation Company (“Car Rental Facilitation Company”)
that will allow private and commercial owners of motor vehicles to list their
vehicles for rent to others through the Car Rental Facilitation Company’s

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peer-to-peer motor vehicle sharing platform. It is contemplated that the
Car Rental Facilitation Company will operate similar to existing companies
such as COMPANY2, COMPANY3 and COMPANY4.
The person listing the motor vehicle with the Car Rental Facilitation
Company will generally be referred to as a “Host” (or similar designation)
and such Hosts, often in consultation with the Car Rental Facilitation
Company, will set their own daily, weekly or monthly rate. In some cases,
a Host is an individual merely supplying his or her vehicle to the Car
Rental Facilitation Company. In other instances, the Host is an individual
or business owning a fleet of multiple cars supplying the vehicles. A
person wanting to obtain a motor vehicle will do so through the Car Rental
Facilitation Company’s website or app. This person renting the motor
vehicle will generally be called the “Guest” (or similar designation). The
Car Rental Facilitation Company reviews and approves all Hosts and
Guests before a rental can occur. Upon rental, the Host will deliver the
motor vehicle to the Guest.
The Car Rental Facilitation Company may facilitate protection plans that
the Hosts and/or Guest can purchase, which includes insurance protection
for the motor vehicle by a third party insurer. The Car Rental Facilitation
Company and/or the Hosts may charge other fees depending on options
chosen by the Guest. The Car Rental Facilitation Company will maintain a
payment platform to receive and process rental payments from the Guest
and then pay the net revenue to the Host, minus the Car Rental
Facilitation Company’s share. The Car Rental Facilitation Company will
normally receive anywhere from ##% to ##% of the rental payments for its
share and charges.
The purpose of this letter ruling request is to obtain a letter ruling as to the
applicability of the AROT, ARUT, ROT and Use Tax to the Car Rental
Facilitation Company and the Hosts that list the motor vehicles with the
Car Rental Facilitation Company. A power of attorney is enclosed.
No authority exists that is contrary to the positions expressed in this
request for a private letter ruling. Nor are the issues in this request part of
a current audit or litigation matter with the Illinois Department of Revenue
(“IDOR”) concerning COMPANY1 or any related company. There are no
regulations that are clearly dispositive of the issues in this request.
To the best of the knowledge of both COMPANY1 and its representative,
the IDOR has not previously ruled on the same or a similar issue for
COMPANY1 or a predecessor. Neither COMPANY1 nor its representative
has previously submitted the same or a similar issue to the IDOR but

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withdrew it before a letter ruling was issued. And, there are no authorities
that COMPANY1 or its representative are aware of that are contrary to the
ruling request made herein by COMPANY1.
APPLICABLE LAW
The AROT imposes a tax on “persons engaged in this State [Illinois] in the
business of renting automobiles in Illinois at a rate of 5% of the gross
receipts from such business.” 35 ILCS 155/3. A rentor is a person
“engaged in the business of renting or leasing automobiles to users.” 35
ILCS 155/2. Rental price means “the consideration for renting or leasing
an automobile.” Id. The rentor can pass-through the AROT to the rentee
and collect it as a separate charge. 86 Ill. Admin. § 180.125. The ARUT
imposes a corresponding use tax on the rentee but it requires the rentor to
collect from the rentee. 35 ILCS 155/4. A rentee is the “user” of the
vehicle. 35 ILCS 155/2. The AROT and ARUT complement each other,
so only one tax must be remitted to the IDOR for the same transaction. 86
Ill. Admin Code § 190.115.
Counties and municipalities may also impose a local automobile renting
occupation tax on persons engaged in the business of renting automobiles
within the county or municipality, as well as a complementary automobile
renting use tax. 65 ILCS 5/8-11-7; 65 ILCS 5/8-11-8; 55 ILCS 5/5-1032;
65 ILCS 5/5-1033. Likewise, a special district, like the Metropolitan Pier
and Exposition Authority (“MPEA”), can impose an automobile renting
occupation tax on persons engaged in the business of renting automobiles
in the special district area, as well as a complementary automobile renting
use tax. See 70 ILCS 210/13.
The local and special district automobile renting taxes are collected and
enforced by the IDOR along with the Illinois AROT or ARUT. The
definitions, restrictions, conditions, limitations, penalties and modes of
procedures of the Illinois AROT also apply to these local taxes. See e.g.,
65 ILCS 5/8-11-7; 70 ILCS 210/13.
Under IDOR Regulation Section 180.115 a person that “habitually
engages in renting automobiles” or “who in any manner or at any time,
advertises, solicits, offers for rent or holds himself out to the public to be a
rentor of automobiles” is considered “engaged in the business that is
taxed by” the AROT and ARUT. 86 Ill. Admin. Code § 180.115. However,
merely entering into an isolated or occasional rental transaction would not
make a person a rentor subject to the AROT or ARUT. IDOR Reg. §
180.110.

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As to the purchase of such a motor vehicle for rental, “a motor vehicle that
is used for automobile renting,” as defined in the AROT and ARUT, is
exempt from the ROT and Use Tax. 35 ILCS 120/2-5; 35 ILCS 105/3-5.
However, if the motor vehicle is also used for personal or non-exempt
purposes, it is our understanding that it has been the long adopted policy
of the IDOR that if property is purchased free from ROT and Use Tax
under an exemption, the property becomes taxable if the property is put to
a “non-exempt use.” See, e.g., IDOR ST-87-800-PLR (11/2/97); ST-920538-PLR (10/16/92); FY 2002-02 (Sept 2001); 86 Ill. Admin. Code §
150.332(c). All of these IDOR authorities emphasize that if a purchaser or
lessor claims a ROT or Use Tax exemption for property purchased and
then uses the property purchased in a “non-exempt” manner the
purchaser or lessor becomes liable for Illinois ROT or Use Tax on the use
of such property. Id.
RULINGS REQUESTED

1. Is the Car Rental Facilitation Company required to pay or collect the
   Illinois or local AROT or ARUT on the rental of the Hosts’ motor
   vehicles?
2. Are the Hosts required to pay or collect the Illinois and local AROT or
   ARUT on the rental of the Hosts motor vehicles?
3. If either the Car Rental Facilitation Company or the Hosts remits the
   Illinois or AROT or ARUT to the IDOR, does that relieve the other party
   of liability to remit such taxes?
4. Are the Hosts only entitled to a ROT and Use Tax exemption for their
   purchase of motor vehicles that are subject to the AROT and ARUT,
   when such motor vehicles are exclusively used for that exempt
   purpose?
5. Are the Hosts not entitled to a ROT or Use Tax exemption for their
   purchase of motor vehicles that are subject to the AROT or ARUT, if
   the motor vehicles are substantially used for personal or other nonexempt purposes?
   ANALYSIS
   A. AROT AND ARUT
   The AROT applies to persons engaged in the business of renting
   automobiles. 35 ILCS 155/3. Similarly, the ARUT requires a rentor, i.e. a

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person “engaged in the business of renting or leasing automobiles to
users” to collect the tax. It is unclear whether the Car Rental Facilitation
Company is actually renting the automobile (as the AROT and ARUT is
currently worded) to a rentee, so it is unclear whether it is subject to the
AROT and ARUT. Rather, the Car Rental Facilitation Company may only
be a facilitator of the rental. 1 Nevertheless, a Car Rental Facilitation
Company in any event could volunteer or agree to pay the AROT and
ARUT on behalf of their Hosts.
As to the Hosts’ rentals of motor vehicles, the Hosts would appear to be
engaged in the business of renting (i.e. are “rentors”) if they advertise their
rentals on the Car Rental Facilitation Company’s online booking platform
per IDOR Regulation Section 180.115. Moreover, if such Hosts actually
rent such motor vehicles more than just in an isolated or occasional
transaction, the AROT or ARUT should apply. Id. Therefore, assuming a
Host rents its motor vehicles periodically (or more than occasionally)
throughout the year, it would appear that the Host is required to pay or
collect the State and local AROT or ARUT on such transactions 2, unless
the Car Rental Facilitation Company pays or remits the tax on such
transactions. Please confirm if this is correct.
B. ROT and Use Tax
The ROT and Use Tax have an exemption for the purchase of a motor
vehicle “that is used for automobile renting, as defined in the Automobile
Renting Occupation and Use Tax Act.” 35 ILCS 120/2-5. Consequently,
motor vehicles that are subject to the AROT or ARUT are exempt from the
ROT and Use Tax. However, if the motor vehicle is not used exclusively
for rentals subject to the AROT or ARUT, but rather is used substantially
for personal use, then the ROT and Use Tax exemption would not appear
to be available. See, e.g., IDOR ST-87-0800-PLR (11/2/87) (“if you
purchase an item tax free under the exemption certificate, and then put
the item to a non-exempt use, you should pay your tax liability directly to
the Illinois Department of Revenue.”); 86 Ill. Admin. Code § 150.332(c) (if
property “is used in a manner that does not qualify for the exemption or is
used in any other non-exempt manner, the lessor is liable for the
appropriate tax imposed under the Use Tax Act.”). Thus, like other ROT
and Use Tax exemptions, this exemption only applies if the motor vehicle
is used exclusively for exempt purposes and does not apply if the vehicle
is used substantially for personal or other non-exempt purposes. As a
result, please confirm whether a Host still owes ROT or Use Tax if it rents
See, IDOR position on facilitators and hosts under the Hotel Operators Tax. ST 16-0001-PLR 01/13/2016 HOTEL
OPERATORS’ TAX.
2
See, footnote 1.
1

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a motor vehicle subject to the AROT or ARUT, but then continues to
substantially use the motor vehicle for personal use or other non-exempt
use.
Thank you for your time and consideration of this matter. If you have any
questions or concerns or need additional information in order to respond
to this request, please do not hesitate to contact me.
DEPARTMENT’S RESPONSE:
Automobile Renting Occupation and Use Tax
Persons who are engaged in the business of renting automobiles in Illinois under
rental terms of one year or less are subject to the Automobile Renting Occupation Tax
set forth in Section 3 of the Automobile Renting Occupation and Use Tax Act. See 35
ILCS 155/1 et seq.; 86 Ill. Adm. Code 180.101. Section 180.115 of the Department’s
administrative rules for the Automobile Renting Occupation Tax provides that “[a]ny
person who habitually engages in renting automobiles under lease terms of one year or
less, or who, in any manner or at any time, advertises, solicits, offers for rent or holds
himself out to the public to be a rentor of automobiles under lease terms of one year or
less is engaged in the business that is taxed by the Act, provided that such person is
engaged in such business in this State.” See 86 Ill. Adm. Code 180.115. The Act
defines “rentor” as “any person, firm, corporation or association engaged in the
business of renting or leasing automobiles to users.” The Act defines “renting” as “any
transfer of the possession or right to possession of an automobile to a user for a
valuable consideration for a period of one year or less.” See 35 ILCS 155/2. This tax is
imposed at the rate of 5% of the gross receipts from such business. “Gross receipts”
from the renting of tangible personal property or “rent,” means the total rental price or
leasing price. See also, 86 Ill. Adm. Code 180.120 and 180.125.
A corresponding Automobile Renting Use Tax is imposed upon the privilege of
using in Illinois an automobile rented from an automobile rentor under a lease term of
one year or less. See 86 Ill. Adm. Code 190.101(a). The Act defines “rentee” as “any
user to whom the possession, or the right to possession, of an automobile is transferred
for a valuable consideration for a period of one year or less ....” See 35 ILCS 155/2.
The rentor must remit the Automobile Renting Use Tax he collects to the Department,
but first reduces what he must remit in this connection by the Automobile Renting
Occupation Tax (if any) which he is required to pay and does pay to the Department in
connection with the same automobile rental transaction. See 86 Ill. Adm. Code
190.115(b).
In addition to State Automobile Renting Occupation and Use Taxes,
municipalities and counties are authorized to impose automobile renting occupation and

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use taxes that are collected and administered by the Illinois Department of Revenue.
See 65 ILCS 5/8-11-7; 65 ILCS 5/8-11-8; 55 ILCS 5/5-1032; and 55 ICLS 5/5-1033.
Certain special districts are also authorized to impose automobile renting occupation
and use taxes that are collected and administered by the Department. See 70 ILCS
210/13; 70 ILCS 3610/5.02; and 70 ILCS 3615/4.03.1. We note that, currently, the
Metropolitan Pier and Exposition Authority is the only special district imposing such a
tax. These municipal, county, and special district automobile renting occupation and use
taxes are generally subject to the same conditions, restrictions, limitations, penalties
and definitions of terms, and employ the same modes of procedure, as are prescribed in
the Automobile Renting Occupation and Use Tax Act. In addition, municipal, county,
and special district automobile renting occupation tax statutes authorize persons subject
to the tax (i.e., “rentors”) to reimburse themselves for their tax liability by collecting it
from the rentee.
Incorporation of marketplace facilitator provisions from Retailers’ Occupation Tax
Act
Section 3 of the Automobile Renting Occupation and Use Tax Act imposes the
Automobile Renting Occupation Tax and provides that “[i]n the administration of, and
compliance with, this Section, the Department [of Revenue] and persons who are
subject to this Section shall have the same rights, remedies, privileges, immunities,
powers and duties, and be subject to the same conditions, restrictions, limitations,
penalties and definitions of terms, and employ the same modes of procedure, as are
prescribed in Sections 1, 1a, 2 through 2-65 (in respect to all provisions therein other
than the State rate of tax), 2a, 2b, 2c, 3 (except provisions relating to transaction
returns, electronic filing of returns, and quarter monthly payments), 4, 5, 5a, 5b, 5c, 5d,
5e, 5f, 5g, 5i, 5j, 6, 6a, 6b, 6c, 7, 8, 9, 10, 11, 11a, 12 and 13 of the Retailers'
Occupation Tax Act and Section 3-7 of the Uniform Penalty and Interest Act as fully as if
those provisions were set forth herein.” (35 ILCS 155/4) Among other things, these
provisions incorporate the Sections of the Retailers’ Occupation Tax Act related to
marketplace facilitators as fully as if those Sections were set forth in the Automobile
Renting Occupation and Use Tax Act.
As used in the Retailers’ Occupation Tax Act, a marketplace is a physical or
electronic place, forum, platform, application, or other method by which a marketplace
seller sells or offers to sell items. See 35 ILCS 120/1; 86 Ill. Adm. Code 131.105. A
marketplace facilitator is a person who, pursuant to an agreement with an unrelated
third-party marketplace seller, directly or indirectly through one or more affiliates,
facilitates a retail sale by an unrelated third-party marketplace seller by: (i) listing or
advertising for sale, by the marketplace seller in a marketplace, tangible personal
property that is subject to tax under the Retailers' Occupation Tax Act; and (ii) either
directly or indirectly, through agreements or arrangements with third parties, collecting
payment from the customer and transmitting that payment to the marketplace seller
regardless of whether the marketplace facilitator receives compensation or other

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consideration in exchange for its services. See 35 ILCS 120/1; 86 Ill. Adm. Code
131.105. A marketplace seller is a person who makes sales through a marketplace
operated by an unrelated third-party marketplace facilitator. See 35 ILCS 120/1; 86 Ill.
Adm. Code 131.105.
Beginning January 1, 2021, a marketplace facilitator is considered a retailer
engaged in the occupation of selling at retail in Illinois for purposes of the Retailers’
Occupation Tax Act if either of following thresholds is met: (1) the cumulative gross
receipts from sales of tangible personal property to purchasers in Illinois made through
the marketplace by the marketplace facilitator and by marketplace sellers are $100,000
or more; or (2) the marketplace facilitator and marketplace sellers selling through the
marketplace cumulatively enter into 200 or more separate transactions for the sale of
tangible personal property to purchasers in Illinois. See 35 ILCS 120/2(c); 86 Ill. Adm.
Code 131.135(a). Marketplace facilitators meeting either of these thresholds are
required to register with the Department, file returns, and remit all applicable State and
local retailers' occupation taxes administered by the Department for all sales made over
the marketplace to Illinois purchasers, including their own sales and sales made on
behalf of marketplace sellers. See 35 ILCS 120/2(c); 86 Ill. Adm. Code 131.145(a) and
131.145(c). Further, marketplace facilitators are subject to audit on all such sales.
Section 131.145(c). Beginning January 1, 2021, a marketplace facilitator facilitating
sales of tangible personal property that meet or exceed one of the thresholds
established in item (1) or (2) above is deemed to be engaged in the business of selling
at the Illinois location to which the tangible personal property is shipped or delivered or
at which possession is taken by the purchaser when the sale is made by a marketplace
seller on the marketplace facilitator's marketplace. See 35 ILCS 120/2-12(7)); 86 Ill.
Adm. Code 131.155(b).
As incorporated into the Automobile Renting Occupation and Use Tax Act,
“persons engaged in the business of selling tangible personal property at retail” means
“persons engaged in the business of renting automobiles for periods of one year or less
for valuable consideration;” “sales” or “sales at retail” means “automobile rentals under
lease terms of one year or less;” “gross receipts” means “gross receipts” or “rent;”
“sellers” and “retailers” means “automobile rentors;” “marketplace sellers” means
“marketplace rentors;” and “users” or “purchasers” means “rentees.”
Based on the information provided, it is the Department’s opinion that when a car
rental facilitation company operates a peer-to-peer motor vehicle sharing platform it is
acting as a marketplace facilitator under marketplace facilitator provisions of the
Automobile Renting Occupation and Use Tax Act, as incorporated from the Retailers’
Occupation Tax Act. If the car rental facilitation company meets either of the tax
remittance thresholds discussed above (i.e., (1) the cumulative gross receipts from the
rental of automobiles to rentees in Illinois for a period of one year or less made through
the peer-to-peer motor vehicle sharing platform by the car rental facilitation company
and by the hosts are $100,000 or more per year; or (2) the car rental facilitation

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company and hosts cumulatively enter into 200 or more separate transactions per year
for the rental of automobiles to rentees in Illinois for a period of one year or less through
the peer-to-peer motor vehicle sharing platform, then the car rental facilitation company
is required to register with the Department, file returns, and remit all applicable State
and local automobile renting occupation and use taxes administered by the Department
for all rentals of automobiles to rentees in Illinois for a period of one year or less made
over the peer-to-peer motor vehicle sharing platform, including their own rentals and
rentals made on behalf of hosts. 35 ILCS 155/3, incorporating 35 ILCS 120/2 as fully as
if set forth therein.
A corresponding Automobile Renting Use Tax is imposed on the rentee (guest) in
this transaction and the rentor (car rental facilitation company) is required to collect the
Automobile Renting Use Tax from the rentee. 35 ILCS 155/4; 86 Ill. Adm. Code
190.101 and 190.110. The rentor must remit the Automobile Renting Use Tax he
collects to the Department, but first may reduce what he must remit by the Automobile
Renting Occupation Tax (if any) which he is required to pay and does pay to the
Department in connection with the same automobile rental transaction. See 86 Ill. Adm.
Code 190.115.
The car rental facilitation company is also subject to any municipal, county, and
special district Automobile Renting Occupation Tax imposed at the location where the
car rental facilitation company is engaged in the business of renting automobiles and
the car rental facilitation company is authorized to collect a reimbursement of that tax
from the rentee. 55 ILCS 5/5-1032; 65 ILCS 5/8-11-7; and 70 ILCS 210/13,
incorporating 35 ILCS 155/3, which incorporates 35 ILCS 120/2-12(7) as fully as if set
forth therein.
Determination of obligation of car rental facilitation company to remit tax
A car rental facilitation company that is a marketplace facilitator shall determine
on a quarterly basis, ending on the last day of March, June, September, and December,
whether it meets either of the tax remittance thresholds for the preceding 12-month
period. If the marketplace facilitator meets either threshold for a 12-month period, it is
considered a rentor engaged in the business of renting automobiles in Illinois and is
required to remit the Automobile Renting Occupation Tax and all automobile renting
occupation taxes imposed by local taxing jurisdictions in Illinois, provided those local
taxes are administered by the Department, and to file all applicable returns for one year.
A marketplace facilitator shall begin collecting taxes for rental transactions beginning on
the first day of the quarter immediately following the end of the 12-month lookback
period. Taxes so collected shall be remitted to the Department no later than the 20th
day of the calendar month following the month in which they were collected or as
otherwise provided in accordance with Section 3 of the Automobile Renting Occupation
and Use Tax Act.

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At the end of that one-year period, the marketplace facilitator shall determine
whether it met either of the tax remittance thresholds for the preceding 12-month period.
If the marketplace facilitator met either threshold for the preceding 12-month period, it is
considered a rentor engaged in the business of renting automobiles in Illinois and is
required to remit all applicable State and local automobile renting occupation taxes and
file returns for the subsequent year. 35 ILCS 155/3, incorporating 35 ILCS 120/2(c) as
fully as if set forth therein. If, at the end of the one-year collection period, the
marketplace facilitator determines that its rentals to rentees in Illinois did not meet either
of the thresholds above during that year, it must discontinue remitting State and local
automobile renting occupation taxes. If a marketplace facilitator is no longer required to
remit State and local automobile renting occupation taxes, it must notify the Department
and its marketplace rentors of this change. It must also provide the Department with the
name, address and FEIN of all marketplace rentors making rentals of automobiles to
rentees in Illinois for a period of one year or less during the previous one-year period.
Notification to the Department and provision of the information required by this
paragraph shall be made electronically as required by the Department. Until notification
is made, marketplace facilitators remain liable for tax under the Automobile Renting
Occupation and Use Tax Act.
If a marketplace facilitator is no longer required to remit State and local
automobile renting occupation taxes and has discontinued tax remittance, it must
redetermine, on a rolling quarterly basis, whether it is obligated to once more begin
remitting State and local automobile renting occupation taxes. For each quarter ending
on the last day of March, June, September, and December, the marketplace facilitator
must examine its rentals of automobiles to rentees in Illinois for a period of one year or
less for the immediately preceding 12-month period to determine whether it met either
of the thresholds above. If it met either of those thresholds during that 12-month
lookback period, it must remit State and local automobile renting occupation taxes for
the following 12-month period. At the end of that 12-month period, it must examine its
rentals of automobiles to rentees in Illinois for a period of one year or less for the
immediately preceding 12-month period to determine if it must continue to remit tax. 35
ILCS 155/3, incorporating 35 ILCS 120/2 as fully as if set forth therein.
Timing of application of marketplace facilitator provisions to titled and registered
property
With respect to the treatment of titled and registered property, which impacts the
treatment of automobiles under the Automobile Renting Occupation and Use Tax Act,
the administrative rules implementing the marketplace facilitator provisions of the
Retailers’ Occupation Tax Act initially provided that:
c)

Sales of tangible personal property that is required to be titled or
registered with an agency of the State of Illinois, including motor vehicles,
watercraft, aircraft, and trailers, that are made over a marketplace to

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Illinois purchasers are not subject to the provisions of this Part. State and
local uses taxes shall continue to be paid by purchasers as required by
law as a condition of titling or registering these items. (86 Ill. Adm. Code
131.130(c))
As a result of this original interpretation, the marketplace facilitator provisions did not
impact the Automobile Renting Occupation and Use Tax. However, there is no statutory
exception for titled and registered property and these rules have been amended to align
with the statute and provide:
c)

Beginning February 1, 2022, sales of tangible personal property that is
required to be titled or registered with an agency of the State of Illinois,
including motor vehicles, watercraft, aircraft, and trailers, that are made
over a marketplace to purchasers in Illinois are subject to the provisions of
this Part. (86 Ill. Adm. Code 131.130(c) as amended, effective January 26,
2022)

Therefore, effective February 1, 2022, under the Retailers’ Occupation Tax Act,
marketplace facilitators who facilitate the sale of titled and registered property and meet
a tax remittance threshold are required to remit State and local retailers' occupation
taxes administered by the Department on all taxable sales of titled and registered
property made by the marketplace facilitator or facilitated for marketplace sellers to
customers in this State (35 ILCS 120/2(c); 86 Ill. Adm. Code 131.130(c)). And,
consequently, through incorporation of the Retailers’ Occupation Tax Act by reference,
effective February 1, 2022 , under the Automobile Renting Occupation and Use Tax Act,
marketplace facilitators (i.e., car rental facilitation companies) who facilitate the rental of
automobiles to rentees in Illinois for a period of one year or less through peer-to-peer
motor vehicle sharing platforms and who meet a tax remittance threshold are required
to remit State and local automobile renting occupation taxes administered by the
Department on all taxable rentals of automobiles to rentees in Illinois for a period of one
year or less made by the marketplace facilitator (i.e., car rental facilitation company) or
facilitated for marketplace rentors (i.e., hosts). 35 ILCS 155/3, incorporating 35 ILCS
120/2(c) as fully as if set forth therein.
A car rental facilitation company (i.e., marketplace facilitator) that has met a tax
remittance threshold is liable for the remittance of all applicable State automobile
renting occupation taxes and local automobile renting occupation taxes administered by
the Department for the rental of automobiles to rentees in Illinois for a period of one
year or less through the marketplace and is subject to audit on all such rentals. The
Department shall not audit hosts (i.e. marketplace rentors) for their rental of automobiles
to rentees in Illinois for a period of one year or less over the marketplace where the car
rental facilitation company had an obligation to remit the applicable State and local
automobile renting occupation taxes, unless the car rental facilitation company seeks
relief as a result of incorrect information provided to the car rental facilitation company

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February 1, 2022
by a host. The car rental facilitation company shall not be held liable for tax on any
rentals of automobiles to rentees in Illinois for a period of one year or less made by a
host that take place outside of the marketplace and which are not a part of any
agreement between the car rental facilitation company and the host. 35 ILCS 155/3,
incorporating 35 ILCS 120/2(c) as fully as if set forth therein. A car rental facilitation
company required to collect taxes imposed under the Automobile Renting Use Tax (35
ILCS 155/4) on marketplace rentals of automobiles to rentees in Illinois for a period of
one year or less shall be liable to the Department for such taxes, except when the car
rental facilitation company is relieved of the duty to remit such taxes by virtue of having
paid to the Department taxes imposed by the Automobile Renting Occupation Tax (35
ILCS 155/3) upon his or her gross receipts from such rental of automobiles to rentees in
Illinois for a period of one year or less. 35 ILCS 155/3, incorporating 35 ILCS 120/2(g)
as fully as if set forth therein. The Department of Revenue shall not collect automobile
renting occupation taxes from both the car rental facilitation company and host on the
same transaction. 35 ILCS 155/3, incorporating 35 ILCS 120/2(h) as fully as if set forth
therein. If, for any reason, the Department is prohibited from enforcing the car rental
facilitation company’s duty to remit taxes pursuant to the Automobile Renting
Occupation Tax, the duty to remit such taxes remains with the host. 35 ILCS 155/3,
incorporating 35 ILCS 120/2(i) as fully as if set forth therein.
Retailers’ Occupation Tax
The Retailers’ Occupation Tax Act provides an exemption from tax for the sale of
“[a] motor vehicle that is used for automobile renting, as defined in the Automobile
Renting Occupation and Use Tax Act.” See 35 ILCS 120/2-5(5).
It is the Department’s opinion that the exemption from the Retailers’ Occupation
Tax Act for the sale of “[a] motor vehicle that is used for automobile renting, as defined
in the Automobile Renting Occupation and Use Tax Act[ ]” (35 ILCS 120/2-5(5)) is
available for a motor vehicle that will be used exclusively for automobile renting, as
defined in the Automobile Renting Occupation and Use Tax Act.
It is the Department’s opinion that the exemption from the Retailers’ Occupation
Tax Act for the sale of “[a] motor vehicle that is used for automobile renting, as defined
in the Automobile Renting Occupation and Use Tax Act[ ]” (35 ILCS 120/2-5(5)) is not
available for a motor vehicle that will be used substantially for personal or other nonexempt purposes.
The factual representations upon which this ruling is based are subject to review
by the Department during the course of any audit, investigation, or hearing and this
ruling shall bind the Department only if the factual representations recited in this ruling
are correct and complete. This Private Letter Ruling is revoked and will cease to bind
the Department 10 years after the date of this letter under the provisions of 2 Ill. Adm.

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February 1, 2022
Code 1200.110(e) or earlier if there is a pertinent change in statutory law, case law,
rules or in the factual representations recited in this ruling.
I hope this information is helpful. If you have further questions concerning this
Private Letter Ruling, you may contact me at (217) 782-2844. If you have further
questions related to the Illinois sales tax laws, please visit our website at
www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217)
782-3336.
Very truly yours,

Richard S. Wolters
Chairman, Private Letter Ruling Committee
RSW:SJM:rkn