Chicago: Lease Tax expanded to include perpetual software licenses

September 2013


The Chicago Department of Finance revised guidance to provide that sales and use of perpetual software licenses should be subject to tax starting September 1, 2013. Taxpayers should be reminded that Ruling #5 is the city’s interpretation of the Lease Transaction Tax ordinance. It is unknown whether a court would agree that a perpetual lease, which could be interpreted as tantamount to a sale, would satisfy the definition of a taxable 'lease' as set forth under the Lease Transaction Tax.

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Peter Michalowski
National SALT Practice Leader
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