Taxation of software licenses in Illinois: Is the “click” as mighty as the pen?
By Paul G. Bogdanski & David P. Dorner
State and Local Taxation,
January 2012
In Illinois, the imposition of sales and use tax is statutorily limited to transfers of “ownership of” or “title to” tangible personal property in a retail transaction. Accordingly, unlike most other states, Illinois does not impose sales or use tax on the rental, lease or license of tangible personal property, since these type of transactions do not convey ownership or title to the property being rented, leased or licensed.
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