Illinois Car Trade-In Tax Changes
Illinois will impose a car trade-in tax on January 1, 2020. The state currently collects no sales tax on your car's trade-in value, which has acted as credit towards a new vehicle purchase. Sales tax only applies to the difference between the determined trade-in value and the new vehicle purchase price. However, starting January 1st, state and local sales tax will be applied to any trade-in value above $10,000. You can save hundreds and thousands by trading in your car this year instead of waiting until 2020!
How is the Illinois Trade-In Sales Tax Law Changing in 2020?
For example, you are an Illinois resident looking to purchase a new vehicle at a $35,000 sale price and your car is valued at $20,000. In 2019, you would only pay sales tax on the $15,000 difference. Combining state and local taxes this is around 8.75%. Before January 1st, this total would be $1,311. Shift to 2020, the trade-in tax credit of $10,000 will also be taxed plus the $15,000 difference. This results in 8.75% of $25,000 being taxed in this transaction at a total of $2,185. This is $874 more you will have to pay in 2020 for the same purchase.
Before January 1
2020 Nissan Rogue SL w/ Premium Package
Sales Tax: $1,311
After January 1
2020 Nissan Rogue SL w/ Premium Package
Sales Tax: $2,185
For more details, contact our team and learn about how much we can save you before 2020. Looking for an online trade-in appraisal? Value your trade with our team from the comfort of your home now. Our team is available at 866-800-1100 or visit our dealership in Skokie, IL today.