Use Tax for Non-Titled Personal Property (8402B, 8402CO, 8402IN, 8403)

 

Municipal Code Reference: 3-27
CAPS Code Reference: 1002920058402
Tax Return Form Code: Form 8402B (Business)
Form 8402IN (individual)
Form 8402CO (contractor)
Form 8403 (Retailer)
Procedure:

The Use Tax for Non-Titled Personal Property imposes a tax on the purchase of non-titled tangible personal property for use in Chicago from a retailer located outside Chicago.

NOTE: The city does not require retailers to collect and remit the use tax. However, retailers can voluntarily collect and remit the tax (using form 8403), and retain a commission equal to 5% of any tax remitted. Note that purchasers will still be required to pay the use tax directly to the Department of Revenue.
Tax Base: 1% of taxable purchases (first $2,500.00 of purchases each year are exempt)
Exemptions, Deductions and Credits:

Use means a person exercising right to or power over tangible personal property as an owner. It does not include sale of property, use of property for demonstration purposes, interim use by a retailer before sold, physical incorporation of tangible personal property, as an ingredient into other tangible personal property transported out of the City. Also everything that is stated in the Illinois Use Tax Act as exempt is also exempted.

The chapter differentiates between exempt property and exempt uses.

The following are the three classifications of exempt property:

  1. Items of property which are exempted under the provisions of the Illinois Use Tax Act.
  2. Food for Human Consumption consumed off premises (except soft drinks, alcohol and food prepared for immediate consumption).
  3. Prescription and Non Prescription medicines, drugs, medical appliances and insulin, urine testing materials, syringes and needles used by diabetics, for human use.

The following are Exempt Uses:

  1. Property acquired outside and brought in by a nonresident natural individual for their own use temporarily in the city.
  2. Rolling stock moving in interstate commerce.
  3. Property utilized interstate carriers for hire as rolling stock.
  4. Temporary storage in the city of property that will be used outside the city
  5. Property delivered outside the city by a common carrier.
  6. Property used at least 3 months outside the city before its use in the city. If a business relocates to the city, this exemption would apply only if it never had a city location
  7. Property that is to be incorporated into real estate pursuant to a contract which was executed prior to January 1, 1992.
  8. Purchases made by Insurance Companies are exempt.
Rulings and Procedures:

Non-Titled Use Tax Regulations

November 2015 Information Bulletin - Nontitled Use Tax as it relates to construction contractors

Businesses registered for Use Tax for Non-Titled Personal Property Tax with the Chicago Department of Finance.