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| Legislative Watch | 
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Illinois |
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4/24/03 - Illinois officials are considering
instituting a usage tax on trucks.
A trucker purchasing a new tractor for $100,000 would face a tax bill from the state of more than $6,200 under the proposal. A new trailer would add to the tax bill.
Currently, truck purchases in the state are exempt from any sales or usage taxes.
Mike Klemens, a spokesman for the revenue department, and Jerilynn Gorden and Terry Charlton, two state lawyers who Klemens said might help write the new rules, told Land Line the proposal envisions a usage tax, rather than a straight sales tax. That means if a trucker who lives in Illinois purchased a truck in another state, he would have to pay the tax when he returned to Illinois to register the truck.
It also means that truck owners who move to Illinois would also have to pay the tax. They would be given credit for depreciation – using a formula that will have to be worked out as the bill is written – and for taxes paid in other states. But if the trucker came from a state with no sales or usage tax, he or she would pay the full 6.25 percent tax on the depreciated value of the truck.
The tax would have to be paid before the truck could be registered, but it would be a one-time tax.
Gorden said the tax would be applied to “basically any tangible personal property purchased by an interstate carrier for hire that’s used to transport people or goods interstate.” The truck would have to be used for at least 15 trips in a 12-month period.
That would include the tractor, the trailer, any auxiliary equipment attached to the truck and replacement parts, Gorden added.
The proposal has not been formally put before legislators yet, Klemens said.
“ It has not been reduced to a bill or legislation and there probably remain some questions to be worked out as to exactly how it will be constructed,” he said. “We’re still at a concept stage.”
A trucker purchasing a new tractor for $100,000 would face a tax bill from the state of more than $6,200 under the proposal. A new trailer would add to the tax bill.
Currently, truck purchases in the state are exempt from any sales or usage taxes.
Mike Klemens, a spokesman for the revenue department, and Jerilynn Gorden and Terry Charlton, two state lawyers who Klemens said might help write the new rules, told Land Line the proposal envisions a usage tax, rather than a straight sales tax. That means if a trucker who lives in Illinois purchased a truck in another state, he would have to pay the tax when he returned to Illinois to register the truck.
It also means that truck owners who move to Illinois would also have to pay the tax. They would be given credit for depreciation – using a formula that will have to be worked out as the bill is written – and for taxes paid in other states. But if the trucker came from a state with no sales or usage tax, he or she would pay the full 6.25 percent tax on the depreciated value of the truck.
The tax would have to be paid before the truck could be registered, but it would be a one-time tax.
Gorden said the tax would be applied to “basically any tangible personal property purchased by an interstate carrier for hire that’s used to transport people or goods interstate.” The truck would have to be used for at least 15 trips in a 12-month period.
That would include the tractor, the trailer, any auxiliary equipment attached to the truck and replacement parts, Gorden added.
The proposal has not been formally put before legislators yet, Klemens said.
“ It has not been reduced to a bill or legislation and there probably remain some questions to be worked out as to exactly how it will be constructed,” he said. “We’re still at a concept stage.”