The Illinois Departments of Labor and of Revenue published draft rules to implement the changes to the Day and Temporary Labor Services Act and the new Tangible Personal Property Lease Tax.

• The proposed Tangible Personal Property Lease Tax can be found here, beginning at page 24 and running through page 216. (The most important information can be found on pages 44-52.)
• The proposed Day & Temporary Labor Services rules can be found here, beginning at page 135 and running through page 164.

The General Assembly passed the lease tax on tangible personal property in Public Act 103-592 (Article 75) in May 2024, imposing the new lease tax starting January 1, 2025. The proposed rules seek to clarify when the new lease tax applies and when it does not (e.g. the difference between a sale of service and the lease of tangible personal property).

The General Assembly revised the Day and Temporary Labor Service Act in Public Act 103-437, imposing new wage and reporting requirements on staffing agencies. In response to a lawsuit, lawmakers revisited Public Act 103-437 and made some clarifying changes in Public Act 103-1030. The Department of Labor withdrew its initial proposed rulemaking to implement Public Act 103-437, which NFIB Illinois contended lacked clarity and went beyond the scope of the act.

The purpose of administrative rules is to provide clarity to statutory requirements. They should not impose additional burdens on impacted individuals and businesses.

During first notice, agencies must accept comments from the public during the initial rulemaking process. After completing the public commenting period, agencies file a second notice and submit the rules to the Joint Committee on Administrative Rules (JCAR) for review. If JCAR offers no objection, the proposed rules will be published in the administrative code and become binding.

Impacted small businesses should review the proposed rules and can share concerns and questions with NFIB Illinois State Director, Noah Finley, at noah.finley@nfib.org or 217-504-8868.