Because of the Chicago Lease Tax
A Lease Tax is like a sales tax, but instead of applying to items you purchase like clothes and electronics, the Lease Tax applies to your use of software that is accessed through cloud services. As of January 1, 2016, The City of Chicago has imposed a Lease Tax on Chicago customers who use cloud-based software.
Do I have to pay this tax?
All City of Chicago customers are required to pay this tax.
How does PlanHero determine if I am a City of Chicago customer?
We use Chicago-area billing zip codes to determine who should be charged the tax.
How does PlanHero calculate this tax?
PlanHero is using the City of Chicago required rate of 5.25% to calculate the tax. So, if your monthly invoice is for $5, the tax is ($5 × .0525) or $0.26. So the total due is ($5 + 0.26) = $5.26.
What should I do if I think I should be exempt from this tax?
The City of Chicago has provided this information bulletin which may help you determine if you should apply for an exemption. The legal ruling cites the specific code sections. There is a small business application for exemptions. If you believe you should be exempt, please contact our support team.
Do other companies charge this tax?
Yes, all cloud-based software companies with customers in Chicago are be required to collect this tax from their customers.
What does PlanHero do with the tax it collects?
PlanHero remits all of the taxes it collects directly to the City of Chicago.