When any of the following words or terms are used in this chapter, whether or not capitalized and whether or not used in a conjunctive or connective form, they shall have the meaning or construction ascribed to them in this section:
A. [Reserved]
B. "City" means the City of Chicago.
C. "Computer" means, but not by way of limitation, a device that accepts, processes, stores, retrieves or outputs data including, but not limited to, storage and telecommunication devices or other computer hardware connected to or used with computers.
D. "Computer program" or "program" means, but not by way of limitation, a series of coded instructions or statements in a form acceptable to a computer and intended for execution on a computer, either directly or indirectly, to bring about a certain result, such as causing the computer to process data and supply the results of the data processing.
E. "Computer software" or "software" means, but not by way of limitation, data and information that are associated with the hardware of a computer such as a collection of computer programs, routines, compilers, assemblers, translators, manuals, circuit diagrams and operation procedures.
F. "Data" or "database" means, but not by way of limitation, a representation of information, knowledge, facts, concepts or instructions, including program documentation, which is prepared in a formalized manner and is stored or processed in or transmitted by a computer. Data may be in any form including, but not limited to, reports, printouts, magnetic or optical storage media, punch cards or data stored internally in the memory of the computer.
G. "Department" means the Department of Finance of the City.
H. [Reserved]
I. "Lease" or "rental" means any transfer of the possession or use of personal property, but not title or ownership, to a user for consideration, whether or not designated as a lease, rental, license or by some other term, and includes a "nonpossessory lease".
The term "nonpossessory lease" means a lease or rental wherein use but not possession of the personal property is transferred and includes, but is not limited to, leased time on or use of any and all personal property not otherwise itself rented, such as leased time on or for the use of addressing machines, billboards, calculators, computers, computer software, copying equipment or data processing equipment, whether the time is fully or partially utilized, and specifically includes a "nonpossessory computer lease".
The term "nonpossessory computer lease" means a nonpossessory lease in which the customer obtains access to the provider's computer and uses the computer and its software to input, modify or retrieve data or information, in each case without the intervention (other than de minimis intervention) of personnel acting on behalf of the provider. The term "nonpossessory computer lease" includes, but is not limited to, time sharing or time or other use of a computer with other users. In the case of a nonpossessory computer lease, the location of the terminal or other device by which a user accesses the computer shall be deemed to be the place of lease or rental and the place of use of the computer for purposes of the tax imposed by this chapter.
In the case of a nonpossessory computer lease where the user accesses the provider's computer from a mobile device, the rules set forth in the Illinois Mobile Telecommunications Sourcing Conformity Act ("Act"), 35 ILCS 638, as amended, may be utilized for the purpose of determining which customers and charges are subject to the tax imposed by this chapter. If those rules indicate that the tax applies, it shall be presumed that the tax does, apply unless the contrary is established by books, records or other documentary evidence.
The words "lease" or "rental" shall not be construed to include an agreement which constitutes a bona fide conditional sale of personal property. The primary consideration in determining whether an agreement is a conditional sale rather than a lease or rental is whether the lessee under the agreement both is required to make payments the sum of which is at least equal to the lessor's cost of the personal property and, under the terms of the agreement, has the option of taking title to or ownership of the personal property for nominal or no consideration after all payments required under the agreement have been made.
The words "lease" or "rental" shall not be construed to include an agreement which grants certain rights to a person, or the person's agent, to install, remove, operate, improve and maintain, and collect fees from, certain designated parking meters pursuant to a concession agreement.
The words "lease" or "rental" shall include a transfer of the use of software within the meaning of this chapter only if, for purposes of the Illinois Retailers' Occupation Tax and Illinois Use Tax, the software is not "custom" software and the transfer is what has sometimes been referred to as an exempt license of software, but which is more accurately described as a license by which the possession or use of software is transferred, but not title or ownership.
J. "Lease or rental payment period" means the length of time or period of use that is covered by a single lease or rental payment as agreed to under the terms of the lease or rental agreement.
K. "Lease price" or "rental price" means the consideration for the lease or rental of personal property, valued in money, whether received in money or otherwise, including cash, credits, property and services, determined without any deduction for costs or expenses whatsoever. The term "lease price" or "rental price" includes any and all charges that the lessee pays incidental to obtaining the lease or rental of personal property, including but not limited to any and all related markups, service fees, convenience fees, facilitation fees, cancellation fees, late return fees, late payment fees and other such charges, regardless of terminology. The term "lease price" or "rental price" does not include charges that are added to the price by a lessor on account of the tax imposed by this chapter or on account of any other tax imposed on the lessee for the lease or rental of personal property. The term "lease price" or "rental price" shall exclude separately stated optional charges not for the use of personal property and annual membership fees paid to the operator of the bike share program created and owned by the Chicago Department of Transportation. The fact that the lessee could have avoided the charge by obtaining the lease or rental from or through a different lessor, pursuant to different terms, or through a course of performance that would have avoided the obligation to pay the charge, does not make the charge "optional".
The "lease price" or "rental price", in the case of a nonpossessory computer lease, includes all charges for the use of the computer's hardware, computer software, computer programs and databases for any purpose whether or not the charge for use is measured by the actual amount of time used or by some other measure.
A transfer of the use or ownership of personal property, or a provision of a service, that is ancillary to a nonpossessory computer lease shall be deemed a separate transaction for purposes of determining whether the charge for the transfer or the service is includible in the lease or rental price of the nonpossessory computer lease only if the transfer or service is optional. The charge for a transfer or service that is not optional shall be included in the lease or rental price of the underlying nonpossessory computer lease, even if a separate charge for the transfer or service is stated in a contract or invoice. A transfer or service shall be considered optional for this purpose only if the lessee could have obtained the same nonpossessory computer lease from the same lessor without the transfer or service.
L. "Lessee" means any person who leases or rents personal property from another, whether the lease or rental price is paid by the lessee or by another person.
M. "Lessor" means any person, including the assignee of any lease or rental agreement, who leases or rents personal property to users or who, directly or through an agreement or arrangement with another party, collects the consideration for the lease or rental of personal property. The term includes, but is not limited to, persons engaged in the business of facilitating the lease or rental of personal property for consideration, whether on-line, in person or otherwise. The term does not include banks, credit card companies, payment processors or other persons whose involvement is limited to performing functions similar to those performed by such entities.
N. "Membership organization" means a corporation or other person that is organized on a membership basis. A person that is wholly owned by members of a membership organization, and that is operated primarily to furnish goods, services or facilities to members of the organization, shall be deemed a membership organization, its owners shall be deemed its members, and the membership organization and the deemed membership organization shall be treated as a member of the other. A person having trading privileges on an exchange that either is a membership organization, or is directly or indirectly owned 100 percent by a membership organization, shall be treated as a member of the membership organization. The term "membership organization" does not include an organization whose primary purpose is to sell or lease personal property to persons who do not manage the organization, have the right to elect management, or have trading privileges on the organization.
O. [Reserved]
P. "Person" means any individual, receiver, administrator, executor, conservator, trust, estate, partnership, joint venture, club, joint stock company, business trust, corporation, association, limited liability company, membership organization, syndicate, society, or any group of individuals acting as a unit, whether mutual, cooperative, fraternal, nonprofit, or otherwise, or the State of Illinois or any political subdivision thereof, or the United States or any instrumentality thereof.
Q. "Personal property" means any and all property other than real property.
R. "Use" means the exercise of any right to or power over personal property by a lessee incident to the lease or rental of that property including, but not limited to, the permanent or temporary storage, stationing or garaging of personal property by the lessee. "Use" by a lessee includes not only the use of personal property directly by the lessee but also the use of personal property by the lessee's agents, representatives or other authorized designees.
(Added Coun. J. 12-15-92, p. 27387; Amend Coun. J. 11-10-94, p. 59125, § 4.3, effective 7-1-95; Amend Coun. J. 2-8-06, p. 68737, § 1; Amend Coun. J. 12-4-08, p. 50506, § 7; Amend Coun. J. 11-16-11, p. 13798, Art. I, § 3; Amend Coun. J. 11-19-14, p. 98063, § 3; Amend Coun. J. 10-28-15, p. 12062, Art. I, § 1; Amend Coun. J. 11-16-16, p. 38042, Art. III, § 2; Amend Coun. J. 11-21-17, p. 61858, Art. II, § 3; Amend Coun. J. 10-27-21, p. 40504, Art. VI, § 2)