By: Diane Benjamin
See this previous story: https://blnnews.com/2019/07/19/new-illinois-vehicle-tax-is-class-warfare/
This law goes into effect on January 1st. It is one of those brilliant government plans that was slipped into a bill before anybody could protest. It is also one citizens won’t notice until it hits them.
The law limits the amount of vehicle trade-in credit allowed for sales tax calculations to $10,000. If you buy in surrounding states Illinois will bill you when you try to title the vehicle here. This law is just another way for the State to take your money.
Since this affects my programming business I’ve called numerous State agencies to get details. The Illinois Department of Revenue told me the law only applies to Illinois purchases. Of course that makes no sense, so I kept trying. I was finally referred to the Illinois Auto Dealers Association.
They actually know what they are talking about! They are also attempting to get this law reversed before it goes into effect. Since it was “slipped” into a much bigger bill and makes Illinois even more tax oppressive, the IADA has been receiving support from some legislators to get rid of it.
In case you missed this – Kiplinger just awarded Illinois the honor of being the least tax-friendly state: https://www.kiplinger.com/slideshow/taxes/T006-S001-10-least-tax-friendly-states-in-the-u-s-2019/index.html?fbclid=IwAR37uTJNKqeaFxoN-OSZqhMjZOhBLifhQzACu6pcGAlZilRVX_O6ASdMHZw
You can help the IADA get this law reversed by contacting the governor and legislators. IADA has a link on their website: https://illinoisdealers.com/
.
.
.
.
.
I know of another state, N C, that makes people moving there repay sales tax on already taxed vehicles. A close friend of mine had to pony up for three when he changed States I D and registration. On a spur of the moment, after paying it, he then asked the clerk for the Illinois tax refund form, so he could get the difference in taxes back. The clerk stammered and stuttered before saying they would have to call the State Capital to find out. Just as the clerk was saying hello and started asking the question, my friend winked at the man behind him and quietly left, with a grin on his face.
Possible remedy – negotiate price down by the amount the trade in value exceeds 10k. This will work for most people’s situation. Example:. A trade is worth 17k and you want to buy 30k vehicle. Magically your trade is 10k and you purchase the vehicle for 23k. You and dealer are both whole and Illinois is the only loser.
There is some ability to play, that much might cause an audit.