READ: New Trade In Vehicle Tax Coming in Illinois

READ: New Trade In Vehicle Tax Coming in Illinois

July 12th, 2019 – Beginning in 2020, a new law signed by Gov. J.B. Pritzker will apply Illinois’ sales tax to any traded-in vehicle’s worth over $10,000. That means an Illinoisan trading in a car worth $30,000 for a car worth $60,000 would pay an extra $1,200 in sales taxes after the first of the year. Pete Sander, president of the Illinois Automobile Dealers Association, said it could mean Illinois residents put off getting a new car or won’t be able to afford as much car as before.“There’s no question that it could have a large impact on the industry,” he said, adding that a tax on the trade-in value of a car amounts to taxing the vehicle twice because it was taxed once at the original purchase. Some Illinoisans may look to buy a car in another state, but Sander said it’s not something they can bypass at an out-of-state dealer. “According to the tax code, there’s a provision that the state can collect that in [the registration change] and you’d be required to pay that tax but that might happen thirty or sixty days after the sale,” he said. The association hopes to negotiate a better deal with lawmakers in the coming veto session.