by: Diane Benjamin
For decades, when buying a car from a dealer, the finance manager pulled out a pre-numbered Sales Tax form, filled in the information and had the customer sign it. The dealer then had 20 days to submit the form and taxes to the State. Illinois was the only state I know of that used pre-numbered forms and also provided them to the dealers. I’m familiar with around 10 other states-all use un-numbered forms. Some states allow dealers to download a master copy from their website and just make copies. It did cost the state a lot of money, but they didn’t need to use the expensive forms and then send auditors to dealers to make sure every number was accounted for.
Illinois is now requiring dealers to submit tax forms on-line where the money is immediately taken from their account. How does that screw the dealer? If you finance the vehicle, the loan holder may not get a check to the dealer for days or even a week. The dealer is forced to pay the taxes out of their bank account and wait to be reimbursed. If you buy a $30,000 vehicle, that is at least $1800 the dealer has taken from them long before they get paid. The tax rate varies from county to county, so the amount can be a lot more. What if they sell 4 cars that day? Illinois gets at least $7200 at the expense of dealers. Even if you bring in a check, the dealer probably won’t deposit the check until that night.
The vehicles can’t be licensed without the Sales Tax form number the dealer will get when the Sales Tax is paid, it has to be entered on the required Title & Registration form.
It gets worse. The state’s computer system is incredibly slow. One dealer told me it can take 3 seconds to tab to the next field. Of course, there are a lot of fields. The state is not only taking their share of the money before the dealer gets his, but they are also wasting their time.
Even worse, the dealers have been charged $100 a year for a business license, it’s now up to $1,000 per year. Is this helping the state’s finances? The Illinois Policy Institute estimates the backlog of unpaid bills will be $9,000,000,000 by December. http://www.illinoispolicy.org/policy_posts/illinois-temporary-tax-hike-18-billion-later/
Do you understand yet there is NEVER enough money for government?