Illinois DOR Clarifies Tax on Dumpster Leasing in Waste Disposal Services

The Illinois Department of Revenue (DOR) issued a general information letter regarding the tax treatment of leasing dumpsters as part of a waste disposal service. The Department held that if the true object of the transaction is the waste disposal service and the dumpsters are leased merely incidental to providing that service, then the transaction is subject to the Service Occupation Tax Act rather than the Retailers’ Occupation Tax on leases. As an unregistered de minimis serviceman, the taxpayer should pay use tax to suppliers when purchasing the dumpsters, but does not charge tax to its service customers. [Il. Dep’t ...