Chicago Extends Voluntary Disclosure Offer to July 1, 2016

The city issued Personal Property Lease Transaction Tax Ruling Number 12 on June 9, 2015, with an original effective date of July 1, 2015. The ruling was immediately challenged by business and taxpayer organizations, which had concerns regarding compliance with the ruling. The city met with these organizations and discussed the implications of Ruling #12. As a result, the City Council enacted certain amendments to the Lease Tax Ordinance on October 28, 2015, thereby creating a small business exemption and instituting a reduced rate of tax of 5.25% for certain cloud transactions.

The City Department of Finance issued an Information Bulletin for nonpossessory computer leases in November of 2015. The bulletin provides clarifications of certain provisions of the amended ordinance, an explanation of the city's new interpretation of transactions previously covered by Exemption 11, and frequently asked questions and answers. The bulletin also specifically mentions that certain "cloud" products such as PaaS, IaaS, and SaaS will be subject to the new reduced rate of 5.25%.

In addition, the bulletin provides different voluntary disclosure offers as follows:

1. As to charges for nonpossessory computer leases that previously qualified for Exemption 11 prior to Ruling #12, no liability for tax, interest, or penalties for periods ending prior to January 1, 2106.
2. As to charges for "other" nonpossessory computer leases, payment of tax is due for the calendar year 2015; however, there is no liability for interest and penalties.
3. As to any other lease taxes owed, the standard voluntary disclosure program will apply, which means that a four-year look-back period will be applied for taxes and interest; however, all penalties will be waived.

This is a very specific Chicago tax, so if you think you may be affected, please contact one of our technical contacts based in Chicago.

About Ryan
Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the seventh largest corporate tax practice in the United States. With global headquarters in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a five-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 2,100 professionals and associates serves over 12,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at ryan.com.  

Logo - http://photos.prnewswire.com/prnh/20160125/325377LOGO

TECHNICAL INFORMATION CONTACTS:

Jim Kranjc
Principal
Ryan
630.874.0412
[email protected]

Brian Browdy
Director
Ryan
847.942.7318
[email protected]

Available Topic Expert(s): For information on the listed expert(s), click appropriate link.
Jim Kranjc
https://profnet.prnewswire.com/Subscriber/ExpertProfile.aspx?ei=112141

SOURCE Ryan

Related Links

http://www.ryan.com