Illinois Self Storage Association

Illinois Parking Excise Tax Act

On June 2nd 2019, the Illinois General Assembly passed a series of bills authorizing a state operating budget and capital development plan, which included the new Illinois Parking Excise Tax Act to be utilized for the payment of "vertical construction" throughout the state.

Although appearing to be focused on taxing traditional parking lots and garages, the scope of definition language may be broader:

  • "Parking area or garage" means any real estate, building, structure, premises, enclosure or other place, whether enclosed or not, except a public way, within the State, where motor vehicles, recreational vehicles, or other self-propelled vehicles, are stored, housed or parked for hire, charge, fee or other valuable consideration in a condition ready for use, or where rent or compensation is paid to the owner, manager, operator or lessee of the premises for the housing, storing, sheltering, keeping or maintaining motor vehicles, recreational vehicles, or other self-propelled vehicles. "Parking area or garage" includes any parking area or garage, whether the vehicle is parked by the owner of the vehicle or by the operator or an attendant. (Senate Bill 690 (enrolled) page 8, line 21 through page 9, line 7)

The operating budget was signed into law by the Governor on June 5th, and the capital development bills were signed on June 28th. Before signing the budget bills, the Governor addressed reported loopholes in the language stating he was not interested in making any amendatory changes to the package of bills negotiated to completion at the end of the legislative session.

With the beginning of the fiscal year on July 1, 2019 and imposition of the privilege tax beginning January 1, 2020, the Illinois Department of Revenue has been engaged directly for clarification and avoidance of unintended consequences. Advocacy to legislative and executive offices can also reinforce the association's position.

Illinois Parking Excise Tax Act (SB 690 enrolled pages 7-20).pdf

In the City of Chicago, their parking tax "applies to businesses that operate parking lots or garages, which must collect the tax from customers and remit to the City of Chicago. The tax also applies to valet operators."

In prior Illinois revenue studies focused on potential new sales taxes, the North American Industry Classification System (NAICS) Code for parking appears to be 81293, which generally states that "This industry comprises establishments primarily engaged in providing parking space for motor vehicles, usually on an hourly, daily, or monthly basis and/or valet parking services," click here.

Other states with parking facility taxes use varying degrees of specificity in their laws but generally define parking regardless of whether the charges are hourly, weekly, or monthly:

On November 15, 2019, the Illinois Department of Revenue filed its "first notice" for proposed administrative rules to implement the Illinois Parking Excise Tax Act, effective January 1, 2020; click here for the relevant pages from the Illinois Register.

After review of the proposed administrative rules, the Self-Storage Association filed the following response and requests for clarification with the Department of Revenue in order to protect the interests of the self-storage industry in Illinois:

  • Is there an intention to exclude the parking of “airplanes, boats and watercraft” from the parking excise tax. Regarding relevant language, Proposed Admin Rule Section 195.100(a) applies the tax to parking “motor vehicles, recreational vehicles, or other self-propelled vehicles,” which mirrors Section 10-10(a) of the Act; the Admin Rule Section 195.105 definition of self-propelled vehicle then includes “a vehicle propelled by its own engine or motor” but not “airplanes, boats and watercraft.”
  • Is apportioning a self-storage unit size or rental amount necessary when a unit is used to store both a vehicle and other property? In Proposed Admin Rule Section 195.110(h), there is concern regarding the difficulty of apportioning the unit size or rental amount when a unit is used to store both a vehicle and other property; when a vehicle is stored in an enclosed self-storage unit, it is common for the unit to contain other items. Can clarification be provided such as adding the word “exclusively” after the word “used” in the fourth line of Section 195.110(h) and again after the word “used” in the fifth line from the bottom?
  • Is there an intention for the tax to be charged only if the motor vehicle, recreational vehicle, or other self-propelled vehicle is “in a condition ready for use”? The quoted language comes from the definition of “parking area or garage” in Proposed Admin Rule Section 195.100.
  • At the end of the definition of “parking area or garage” in Proposed Admin Rule Section 195.105, it states that “a self-storage unit capable of storing a motor vehicle, recreational vehicle or self-propelled vehicle when the lessor of the storage unit has knowledge of the contents of the storage unit at the time the storage unit is leased.” It is requested that the Department modify this language to align with Proposed Admin Rule Section 195.110(h), and as a result, have the Proposed Admin Rule Section 195.105 definition of “parking area or garage” state instead that “a self-storage unit capable of storing a motor vehicle, recreational vehicle or self-propelled vehicle when the lessor of the storage unit knows at the time the lease is agreed upon or executed that the storage unit will be used for parking a motor vehicle, recreational vehicle or self-propelled vehicle.” (note: italicized language highlights modifications being requested)
  • The definition of “purchase price” excludes “the isolated or occasional sale of parking spaces subject to tax under this Act by a person who does not hold himself out as being engaged (or who does not habitually engage) in selling of parking spaces[.]” This exclusion also appears in Proposed Admin Rule Section 195.115(g). This exclusion would appear to apply to many self-storage businesses that have enclosed storage units. In many cases, the enclosed storage units are neither regularly used for nor are they advertised for the parking of vehicles. Can clarification be provided as to when this exclusion may be used by self-storage businesses?
  • How, if at all, is the tax to be applied to storage units (whether enclosed or outdoor) that were leased prior to January 1, 2020 and are used for storage of a vehicle as of January 1, 2020? Given the difficulties of auditing every storage unit, can the final regulations reflect that the tax applies only to leases first entered on or after January 1, 2020?
  • Are self-storage businesses required to register and file returns even before they have a taxable transaction? For example, the storage business does not have any outdoor parking spaces and does not have any enclosed units where vehicles are parked as of January 1, 2020. Is that business required to register and file returns because it could hypothetically have a taxable transaction in the future? Can clarification be provided as to when such a business is required to register and file returns?
  • Proposed Admin Rule Section 195.130 refers to keeping records and books. Current administrative rules and related Department guidance recommends retention for three and one-half years, subject to exceptions for tax liability reviews initiated by the Department, see 86 IAC 130.815(c). Do businesses subject to Proposed Admin Rule Section 195.130 need to retain records and books in a similar manner, as currently addressed in 86 IAC 130.815?


Pursuant to Illinois law, the Illinois Department of Revenue must accept public comments to the proposed regulations through December 30th, but the Department's review of public comments are expected to begin upon their receipt. The next administrative rule committee meetings are December 2nd and 17th, with the parking tax rules not yet on their agenda; click here for Joint Committee on Administrative Rules agendas.

Implementation of the Illinois Parking Excise Tax Act is still expected to start January 1st pursuant to the statute, but work will likely continue on needed clarifications given the final rush for the state agency to put this new law into effect.