Chicago Cuts a Break for Taxpayers Just in Time for the Holidays

 
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Considering a Chicago VDA? Why it pays to act now.

Taxpayers considering disclosing unpaid lease tax liability are incentivized to act fast. Any lessee or lessor filing a lease tax voluntary disclosure application (“VDA”) with the City of Chicago by January 1, 2016 will be eligible for special benefits under the city’s limited amnesty program. The program mostly benefits lessors and lessees with significant usage of remotely-accessed hardware or software.

VDA Offer Terms

  1. No liability for tax, interest, or penalties related to charges for nonpossessory computer leases that qualified for Exemption 11 prior to the Department’s issuance of Ruling #12. Specifically, this relates to remotely-accessed software where charges are predominantly for information transferred.
  2. A limited one-year lookback period for taxable cloud software (e.g., “nonpossessory computer leases”) and complete abatement of penalty and interest charges for this period.
  3. The terms of the City’s standard voluntary disclosure program will apply for all other leases (e.g., possessory leases). In other words, for standard VDAs, up to a four-year lookback period for tax and interest liability and waiver of penalty applies.

Eligible Participants

Any provider or customer who is eligible for participation in the city’s standard VDA program is eligible for Chicago’s limited time amnesty program. For example, a taxpayer wishing to participate in the City’s VDA program cannot have received from the Chicago Department of Revenue any prior written notice of tax audit or tax investigation.

How we can Help

True Partners Consulting’s sales and use tax experts can assist taxpayers to quantify and
disclose any unpaid liability.

Download this article.

Please Contact:

Rebecca Perryman
Manager
(312) 588-3425
Rebecca.Perryman @TPCtax.com

Katie Callison
Senior Tax Consultant
(312) 235-3342
Katie.Callison@TPCtax.com

 

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