This week, Illinois Governor Bruce Rauner signed the Rental Purchase Agreement Occupation and Use Tax Act into law. The bill, sponsored by State Senator Tom Cullerton, potentially could save Illinois rental dealers millions of dollars in use tax obligations.
The new law, which takes effect on January 1, 2018, means that rental dealers will no longer pay a use tax on wholesale purchases, which aligns with other states where consumers pay a sales tax on rental payments. It shifts the manner in which rental property is taxed, helping to reduce the final taxation and saving RTO dealers money.
Illinois rental dealers have been trying to get this issue addressed for two decades, but faced continuous hurdles, both in the political arena and from the Illinois Department of Revenue. “I told the IRDA board that passage of this bill was 25 percent to 30 percent at the outset of the spring session,” says Michael Houlihan, the association’s lobbyist. He observes that the effort succeeded this time because of IRDA’s grassroots efforts, which helped generate a good bipartisan push for the bill among the leadership and rank-and-file members in the legislature.
The effort also required explaining the nuances of the bill, as many lawmakers thought that it increased taxes. “This particular bill is tricky to explain in an elevator pitch,” Houlihan adds.
“This was a challenging yet exhilarating effort,” says Casey Pristou, president of the Illinois Rental Dealers Association. “We’ve been trying to help pass this bill for years; now that it will finally become law, it’s a very rewarding feeling. I want to thank all of our IRDA members for uniting in this team effort.”
“I remember working with [then] lobbyist Herman Bodewes [on this issue] 20 years ago, and him saying it will never happen,” says Rent One’s Larry Carrico, a longtime IRDA member. “But we finally got it done.”
There are more than 200 rent-to-own stores in Illinois representing, an estimated $200 million dollars in annual revenue.
Mike Lewis
Mike Lewis is a Premier Rental Purchase franchisee with multiple stores and currently serves as Vice President of Operations. With 33 years of experience in the rent-to-own industry, he has spent the past 20 years working closely with franchisee owners and previously spent 12 years in Corporate RTO, gaining a strong foundation in the business.
For the past five years, Mike has been sharing his knowledge by teaching managers and franchisees at the company’s Training Center.
Outside of work, he enjoys time with his family, kids, and grandkids, and appreciates the simple things in life – especially riding his Harley Davidson with the sun on his face. If you know, you know!
