Illinois Golfers Hit with Surprise New Tax

As spring ushers in warmer weather, golf enthusiasts will head to the course to enjoy a round of golf. However, State Senator Dave Syverson is warning that they will notice a new change this year – a sales tax on rentals, including golf carts and clubs.

Effective January 1, 2025, Illinois added a new sales tax to the rental of tangible personal property, impacting a wide range of items, from golf carts to water softeners, modems, wheelchairs, and oxygen tanks. This tax applies to all leases and rentals of tangible personal property, which means it’s not limited to just golf but extends to many everyday items people rent or lease.

“For many, this new tax may seem like an unexpected burden,” said Syverson. “While renters may not have noticed the additional charge immediately, as it is built into rental bills, golf course goers are the first to feel the pinch as the tax affects their regular golf cart rentals.”

The tax was added to the General Assembly’s legislation in 2024 and began taking effect this year, though many residents may not have been aware of the change. According to Syverson, most people have assumed the increase in rental prices is just part of the rising costs they regularly face. But the golf community, in particular, began noticing this increase immediately upon their first outings of the season.

Syverson is vocal in his opposition to this new tax, which he claims unfairly targets people who are renting items for temporary use. He questioned, “Why should you have to pay tax on something you are not buying?”

The new tax legislation, under Public Act 103-592, not only affects golfers but anyone who rents tangible personal property in Illinois. It covers businesses and individuals who rent items such as tools, furniture, and even healthcare equipment. Businesses that rent tangible personal property must now register as retailers with the Illinois Department of Revenue and collect the sales tax from customers.

While this tax will not apply to the rental or lease of titled items like motor vehicles, watercraft, aircraft, or semitrailers, it will affect a broad array of other rentals. Items that many may not realize are affected include computer software, which is subject to the tax when leased or rented.

For Illinois residents renting equipment for personal or business use, this new tax could add up over time, especially as leases and rentals span several months. For example, a golf cart rental that was previously a flat, pre-tax cost could now see a new charge reflected on receipts, with tax rates varying depending on the property’s location.

However, Democrats are standing by the new sales tax on the rental of tangible personal property as a necessary and equitable adjustment to the state’s tax structure. Democratic leaders argue that this change aligns Illinois with other states that tax lease streams rather than taxing lessors at the time of purchase.

Senator Elgie Sims, a key budget negotiator, emphasized that the new tax structure is designed to be fair and balanced, targeting specific sectors without imposing undue burdens on everyday taxpayers. The legislation includes provisions to mitigate the impact on consumers and businesses, such as allowing businesses to use Form CRT-61, Certificate for Resale, to claim an exemption from Sales and Use Tax on purchases of merchandise that will be leased or rented.

The new tax structure does not apply to leases of motor vehicles, watercraft, aircraft, and semitrailers, which are required to be titled or registered with an agency of the State of Illinois. Democrats argue that these exemptions help prevent the tax from disproportionately affecting families and businesses that rely on these types of property.

While the new tax has faced criticism from some quarters, including Republicans like Senator Dave Syverson, who argue that it adds financial strain on consumers, Democrats maintain that the reform is a necessary step toward modernizing the state’s tax system and ensuring a more equitable distribution of tax responsibilities. They point to the elimination of the grocery sales tax by 2026 and the introduction of a new child tax credit for low-income families as evidence of their commitment to providing relief to everyday Illinoisans.

As the new tax structure rolls into effect, Illinois Democrats continue to advocate for its benefits, asserting that it represents a fair and balanced approach to revenue generation that will support the state’s fiscal health without disproportionately impacting its residents. For golf course owners, this means recalculating rental prices to include the new tax, which may also affect park districts and other local amenities that rent recreational equipment.

Senator Syverson, however, continues to express concern. “As temperatures rise, this tax will only add another obstacle for families and individuals enjoying their time in Illinois,” said Syverson. “I will continue working to eliminate this tax and protect Illinois residents from unnecessary financial burdens.”

While this new tax has already taken effect for 2025, residents and businesses will need to prepare for its full implementation by ensuring they are registered and compliant with Illinois’ updated Sales and Use Tax laws. As the new tax reaches full implementation, Illinoisans can expect to see these extra charges across a wide range of rented goods and services.