New Illinois Trade-In Tax
In the future, we may look back on the pre-2020 years as a golden age for vehicle trade-ins. The ability to do so tax free, a luxury we’ve so far taken for granted, may never be the case again. Is the state of Illinois actually implementing a trade-in tax on used vehicles?
Yes, beginning on January 1st, 2020, all vehicle trade-ins valued over $10,000 will be subject to sales tax. This will often result in hundreds more dollars being spent by the customer. In lieu of this, Continental Honda is encouraging drivers to trade-in their vehicles before the end of 2019.
The trade-in tax is expected to cost Illinois residents $60 million dollars each year. The income is slated to go to vertical infrastructure, such as state buildings and renovations.
How much will the sales tax on trade-ins be?
The sales tax rate in Illinois is 6.25%. However, many regions add their own local rate on top of this. The average total sales tax statewide is 8.74%. In Chicago, those numbers stretch up to a total of 10.25%.
Can the trade-in tax be avoided by buying out-of-state?
Unlike the Illinois gas tax, which can be dodged by filling up across the border, the trade-in tax applies to all out-of-state sales as well as in-state. That means that it cannot be avoided by trading in your vehicle out-of-state.
How can I avoid the Illinois trade-in tax?
To avoid the new Illinois trade-in tax, trade-in your vehicle today! Starting the process early will give you plenty of time to peruse your options for a new vehicle and find the one that works best for you before the January 2020 deadline. We at Continental Honda would be happy to help you find your perfect new ride. Thanks for reading, and we hope to see you soon!