The New 2020 Illinois Trade-In Tax at Genesis of Schaumburg

 
THE NEW 2020 ILLINOIS TRADE-IN TAX LAW IS HERE!
WHAT IS THE NEW TRADE-IN TAX?
The new Illinois trade-in tax law became effective as of January 1st, 2020. This new trade-in tax eliminates the tax benefit of trading in your vehicle.

WHAT DOES THIS MEAN?
Before January 1st, 2020, Illinois collected no sales tax on the car's trade-in value. Before, your car acted as an untaxed credit towards your new vehicle purchase. Starting on January 1st 2020, sales tax will be charged on any trade-in valued over $10,000.

Before January 1st, 2020
After January 1st, 2020

 New Car Price $65,000 New Car Price $65,000
 Your Current Vehicle Value $38,000 Your Current Vehicle Value $38,000
 Trade-In Tax Credit $38,000 Trade-In Tax Credit $10,000
 Taxable Amount $27,000 Taxable Amount $55,000
 Tax Paid $2,430 Tax Paid $4,950
 Total Cost $29,430 Total Cost $31,950
 
For instance, if you are trading-in a vehicle valued at $38,000, before January 1st 2020, for a new vehicle valued $65,000, you would receive a credit worth your current vehicle value, and only be taxed on the difference.

Starting January 1st, 2020, you will only receive a trade-in credit of $10,000, instead of the value of your vehicle, making the taxable amount of your vehicle $28,000. Plus you will still be paying tax on the cost of your trade ($27,000), making the total taxable amount $55,000.


You can get the best estimated value for your vehicle right now at Genesis of Schaumburg.


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