If you want to be exempt from Illinois' new sales tax exemption when trading in a vehicle, buy a truck.
Illinois will now no longer give a full exemption on the trade-in value of a car. Instead, Illinois’ sales tax will apply to any trade-in vehicle worth more than $10,000. That means trading in a $30,000 car for one worth $60,000 will cost the customer an extra $1,200 in additional sales taxes.
Illinois Department of Revenue spokesman Sam Salustro said the new tax won’t affect most trade-ins.
“A majority of trade-ins are valued under $10,000,” he said. “This should not affect the majority of people.”
The sales tax will also apply to RVs, ATVs and boats valued at more than $10,000. State officials expect the new tax to bring in $60 million annually.
Exemptions include one of the more popular forms of transportation in rural Illinois.
“There’s a broad amount of exemptions,” Salustro said. “For example, pickup trucks or other hauling vehicles.”
Trading in a car in another state won't exempt the purchase from Illinois' sales taxes because the taxes are levied based on the registration address.