Free Car Rental Agreement Template for Illinois

Renting out vehicles in Illinois

Illinois taxes short-term automobile rentals through the Automobile Renting Occupation and Use Tax, which applies to rentals of a year or less and covers cars, pickups, SUVs, motorcycles and qualifying motorhomes and vans. Local governments can add their own percentage on top.

What is specific to Illinois

• The Illinois Automobile Renting Occupation Tax rate is 5% of rental charges for rentals of one year or less, administered by the Illinois Department of Revenue.
• Illinois local governments are authorized to impose an additional automobile renting tax of up to 1%.
• Peer-to-peer car sharing is treated differently: the tax does not apply to peer-to-peer car sharing amounts if the shared vehicle owner paid tax on the vehicle purchase.

Checklist for your Illinois agreement

• The tax applies to rentals of one year or less; longer arrangements are treated differently.
• Check your municipality for the up-to-1% local add-on before quoting totals.
• Motorcycles, qualifying motorhomes and vans fall under the same renting tax; classify your fleet correctly.
• Document condition with dated photos and the damage diagram at pickup and return.

This page is general information for rental operators, not legal or tax advice. Rates and rules change; verify against the official sources below and consult a professional for your situation.