Does Illinois's new Parking Excise Tax apply to parking spaces at self-storage facilities, and is it in addition to local parking taxes?

Plain-English summary

This is a short General Information Letter (GIL) answering a business's question about Illinois's brand-new Parking Excise Tax. The business — which appears to operate self-storage facilities with parking spaces — had contacted the Department directly and was told to submit its question in writing. It asked two things: would parking spaces at self-storage facilities be subject to the new tax, and would the new state tax be on top of the parking taxes it already collected and remitted to its county, city, and village.

At the time of this letter (January 2020), the Parking Excise Tax Act rules were still proposed, not final. The Department told the taxpayer that it had filed proposed rules with the Illinois Secretary of State to implement the Act (86 Ill. Adm. Code 195), published at 43 Ill. Reg. 13242 (Nov. 15, 2019), and that storage units specifically are addressed in proposed Section 195.110(h). The letter does not quote what that section says, so it does not resolve whether self-storage parking spaces are taxable — it simply points the taxpayer to where the answer would be found once the rule was finalized.

On the second question, the Department was direct: the state parking tax is in addition to all locally-imposed parking taxes, so the new tax would stack on top of any county, city, or village parking tax the business already collects.

As a GIL, this letter is not binding on the Department and does not carry the force of a Private Letter Ruling — it only directs the taxpayer to the relevant (at the time, still-proposed) regulations.

What this means for you

Self-storage and parking-facility operators

If you operate parking spaces — including at a self-storage facility — expect the state Parking Excise Tax to apply in addition to any local parking taxes you already collect. This letter does not itself tell you whether self-storage parking is taxed; it points to 86 Ill. Adm. Code 195.110(h) (as proposed at the time) as the specific provision addressing storage units. Because the rule was only proposed when this letter issued, you should check the current, finalized version of 86 Ill. Adm. Code 195 for the operative rule.

Businesses that already collect local parking taxes

Do not assume the new state tax replaces or offsets your existing county, city, or village parking tax obligations. The Department confirmed the state tax is layered on top of local taxes, not a substitute for them.

Accountants and tax professionals

Because this is a GIL, it is informational only — it is not a statement of Department policy and cannot be relied on the way a Private Letter Ruling can. For a definitive, binding answer on how the Parking Excise Tax applies to a specific facility's parking spaces, a client would need to seek a PLR under 2 Ill. Adm. Code 1200.110 or consult the final, adopted text of 86 Ill. Adm. Code 195.

Common questions

Q: Does the Parking Excise Tax apply to parking spaces at self-storage facilities?
A: The letter does not say directly. It tells the taxpayer that storage units are addressed in proposed Section 195.110(h) of 86 Ill. Adm. Code 195, but it does not quote or summarize that provision's substance.

Q: Is the new state Parking Excise Tax on top of local parking taxes, or does it replace them?
A: It is in addition to. The Department states plainly that "the State parking tax is in addition to all locally-imposed parking taxes."

Q: Is this letter a binding ruling I can rely on?
A: No. It is a General Information Letter (GIL), which the Department says merely directs a taxpayer to relevant regulations and is not a statement of Department policy or binding on the Department. Only a Private Letter Ruling (PLR), obtained under the procedures in 2 Ill. Adm. Code 1200.110, is binding — and only for the taxpayer who requested it.

Q: Were the Parking Excise Tax rules finalized when this letter was issued?
A: No. As of this January 17, 2020 letter, the Department had only filed proposed rules (86 Ill. Adm. Code 195) with the Illinois Secretary of State, published at 43 Ill. Reg. 13242 (Nov. 15, 2019). Readers should check the current adopted rule text rather than rely on the proposed version referenced here.

Citations and references

Statutes and rules:

• 86 Ill. Adm. Code 195 (proposed Parking Excise Tax Act rules)
• 86 Ill. Adm. Code 195.110(h) (proposed rule addressing storage units)
• 43 Ill. Reg. 13242 (Nov. 15, 2019) (publication of proposed rules)
• 2 Ill. Adm. Code 1200.110 (Private Letter Ruling procedures)
• 2 Ill. Adm. Code 1200.120 (General Information Letters)

Subject

Parking Excise Tax

Source

• Landing page: https://taxarchive.illinois.gov/research/legal/letter-rulings/sales-tax/2020.html
• Original PDF: https://tax.illinois.gov/content/dam/soi/en/web/taxarchive/research/legal/letter-rulings/sales-tax/2020/st20-0001-gil.pdf

Original ruling text

ST 20-0001 01/17/2020 PARKING EXCISE TAX
This letter discusses the Parking Excise Tax. See 86 Ill. Adm. Code 196. (This is a GIL.)
January 17, 2020
Dear Xxxx:
This letter is in response to your letter dated December 24, 2019, in which you requested
information. The Department issues two types of letter rulings. Private Letter Rulings (“PLRs”) are
issued by the Department in response to specific taxpayer inquiries concerning the application of a tax
statute or rule to a particular fact situation. A PLR is binding on the Department, but only as to the
taxpayer who is the subject of the request for ruling and only to the extent the facts recited in the PLR
are correct and complete. Persons seeking PLRs must comply with the procedures for PLRs found in
the Department’s regulations at 2 Ill. Adm. Code 1200.110. The purpose of a General Information
Letter (“GIL”) is to direct taxpayers to Department regulations or other sources of information regarding
the topic about which they have inquired. A GIL is not a statement of Department policy and is not
binding on the Department. See 2 Ill. Adm. Code 1200.120. You may access our website at
www.tax.illinois.gov to review regulations, letter rulings and other types of information relevant to your
inquiry.
The nature of your inquiry and the information you have provided require that we respond with
a GIL. In your letter you have stated and made inquiry as follows:
On DATE BUSINESS contacted the Illinois Department of Revenue for clarification on the new
Parking Excise Tax and was instructed to write to the DEPARTMENT. We would like clarification
on the new tax. Specifically, will parking spaces at self-storage facilities be included? Also, will
this new tax be in addition to the current taxes we collect and remit to COUNTY, CITY and
VILLAGE? Any information you can provide would be beneficial.
Thank you for your attention to this matter.
DEPARTMENT’S RESPONSE:
The Department has filed proposed rules with the Illinois Secretary of State to implement the
Parking Excise Tax Act. 86 Ill. Adm. Code 195. See 43 Ill. Reg. 13242 (Nov. 15, 2019). The proposed
rules can also be found on the Department’s website. Storage units are addressed in Section
195.110(h).
The State parking tax is in addition to all locally-imposed parking taxes.
I hope this information is helpful. If you require additional information, please visit our website
at www.tax.illinois.gov or contact the Department’s Taxpayer Information Division at (217) 782-3336.

Very truly yours,
Richard S Wolters
Associate Counsel

RSW:rkn