The Illinois legislature slipped a little-known provision into House Amendment 3 of Senate Bill 690 (part of the “Leveling the Playing Field for Illinois Retail Act) that would establish a parking excise tax. Beginning January 1, 2020, the Parking Excise Tax Act would impose a state excise tax on the privilege of using a parking space in a parking garage or area at the rate of 6% for hourly, daily, or weekly parking and 9% for parking paid on a monthly or annual basis. The tax would be collected by the “operator” of any parking area or garage, as defined in the proposed legislation. The bill (which also includes changes to the internet sales tax, gaming expansion, and increases to the gas and cigarette taxes, among other provisions) has been approved by the Illinois legislature and has been sent to the Governor.
The question many local governments have asked is whether parking spaces in a parking garage or lot operated by a municipality or other unit of local government (including a commuter parking lot or garage) would be subject to this new tax.
The answer to that question may turn on the definitions of “operator” and “person” under the proposed legislation.
“Operator” is defined as any person who engages in the business of operating a parking area or garage…”
“Person” is defined as “any natural individual, firm, trust, estate, partnership, association, joint stock company, joint venture, corporation, limited liability company, or a receiver, trustee, guardian, or other representative appointed by order of any court.”
It is relevant that the definition of person in the proposed legislation does not include any reference to municipalities or other units of local government. Where the state legislature has enacted an excise tax and has defined “person” for purposes of interpreting that tax, it has expressly included in the definition of person a reference to governmental entities where applicable. For example, the Motor Fuel Tax Act includes in the definition of person the following “or any city, town, county, or other political subdivision in this State.” Similar language is also included in the Simplified Municipal Telecommunications Tax Act, the Electricity Excise Tax, and other excise tax statutes. Here, no such language is included, which suggests that the legislature did not intend the tax to apply to parking garages or lots operated by municipalities or other units of local government. Perhaps it would have been clearer if the legislature had expressly exempted municipal and other local government parking areas and garages from the tax as the legislature did for the federal government.
We have reached out to various organizations and agencies to confirm our interpretation, and will update our readers when we have more information. We certainly hope to have more information prior to the proposed legislation being enacted.