By: Diane Benjamin
DON’T buy a vehicle now if your trade-in is worth more than $10,000.
Update to this 2019 story: https://blnnews.com/2019/07/19/new-illinois-vehicle-tax-is-class-warfare/
As of January 1, 2020 most vehicles traded in worth more than $10,000 didn’t get to use the entire trade value to reduces sales tax on the purchased vehicle. On January 1, 2022 common sense returns to Illinois because the limitation goes away.
If you buy a $30,000 car before 1/1/22 and received a trade allowance of $15,000 – you will pay Sales Tax on $30,000 – $10,000 = $20,000 instead of applying the entire trade and only paying tax on $15,000. ($30,000-$15,000)
That $5000 penalty at 6.25% Sales Tax cost you $312.50, not including any additional county and local sales tax charged.
Buyers already paid sales tax when they bought the trade-in, this ridiculousness was classic Illinois fleece the rich. New car dealers won’t like it, but buying after January 1st will save you money.
The states around Illinois did not do this. The extra tax applied even if you bought a vehicle outside of Illinois.