2020 Illinois Trade-In Tax at Genesis of Schaumburg in IL
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 traded-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.
Dealership Info
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