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Thread: New Law or Tax

  1. #1

    New Law or Tax

    Starting Jan 1 2020. If you sell your car in Illinois you will pay a 6.25 sales tax on the value of the car above 10,000. So if you sell your car for 20,000 you will pay a sales tax of 625.00

  2. #2
    Forum All Star GE Fan's Avatar
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    Can we just sell them in Indiana?

  3. #3
    Forum All Star middlein87's Avatar
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    So are they going to keep charging the buyer sales tax too?? That's a rhetorical question, I have a pretty good idea what the answer is.


    BTW, when you purchase a used car and you go to transfer title to your name, the SOS has you fill out a Dept of Revenue form for the purchase. The state then sends you, the buyer, a tax bill for it. Invariably the State will claim that the car you paid XXXX thousand dollars for is actually worth twice that. They will tell you owe way more tax than you expected, and they will withhold any future State income tax refunds until you pay them. You have to fight them to prove that no, the car is not worth what they think it is. I've bought two old cars and it has happened both times. Word to the wise - get a bill of sale with any car purchase, especially between private parties. The state will try to screw you if you don't. Every person I know in the hobby who buys an antique car has had this happen to them. Some have had to badger their State rep to get on the horn to the Dept. of Revenue to get the matter settled.

    In related news - Illinois sucks.

  4. #4
    Forum Demi-god Cliché's Avatar
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    Quote Originally Posted by middlein87 View Post
    In related news - Illinois sucks.
    Plus 1

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    Forum All Star GESince1958's Avatar
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    So, wait... The seller pays sales tax, and then the buyer also pays sales tax on the same car? This is messed up.

  6. #6
    Forum Hall of Famer DTM's Avatar
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    Quote Originally Posted by GESince1958 View Post
    So, wait... The seller pays sales tax, and then the buyer also pays sales tax on the same car? This is messed up.
    The seller doesn't pay tax.

  7. #7
    Forum Hall of Famer DTM's Avatar
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    as I understand it, here is an example:

    Old method:

    New Car price: 25,000
    trade in car price: 15,000

    Sales tax is calculated on the difference, so: 25,000 - 15,000 = 10,000 X 6.25%= $625

    New method:

    New Car price: 25,000
    trade in car price: 15,000 -> capped at 10,000 for sales tax purposes

    Sales tax is calculated on the difference, so: 25,000 - 10,000 = 15,000 X 6.25%= $937.5

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