MARSHALL, ILL. (WTWO/WAWV) _ The state of Illinois currently does not charge state taxes for the value of a car when an owner trades it in to help purchase a new one, but that is set to change at the beginning of 2020.
“The state of Illinois is going to tax citizens of Illinois an additional tax on top of any vehicle that’s worth more than $10,000 dollars,” said Brian Dorsett, Dorsett Automotive.
Senate Bill 690 that was signed by Governor J.B. Pritzker this summer is expected to generate several millions of dollars which will be used for the state’s infrastructure, but Dorsett says that comes at the cost of consumers.
“It’s long been in effect that you’re just paying sales tax on the difference of money only, not on the value of your trade-in in addition to the difference in money. So there’s a double taxation standard here,” Dorsett said.
If Illinois residents are looking to trade-in their car in neighboring states to avoid the tax, Dorsett says it’s not that simple.
“it’s just against the Illinois citizen themselves so they’ll have to pay it when they go title the vehicle,” Dorsett said.
So what is the best option for those looking to trade-in a vehicle in the near future?
“The key would be if you want to avoid this kind of tax is to go ahead and trade your car in now before January 1st, 2020,” Dorsett said.
A spokesperson from Governor Pritzker’s office had this to say to about the upcoming tax:
“Illinois had gone nearly a decade without a comprehensive plan to repair the roads and bridges we all rely on and Governor Pritzker was proud to lead the bipartisan effort to pass “Rebuild Illinois”, a plan that will make roads in every corner of the state safer. A variety of revenue sources will be solely dedicated to fixing our crumbling infrastructure, putting over half a million people to work and revitalizing communities across Illinois.”
State Representative Ryan Spain has authored a bill that could potentially repeal and replace this tax.