Currently, Illinois does not charge sales tax regarding vehicle trade-in value. However, this is about to change. A new Illinois law goes into effect on January 1st, 2020, in which state and local sales tax will be applied to any vehicle trade-in value above $10,000.

How Will the Illinois Car Trade-In Tax Affect You?

If your vehicle trade-in value is $10,000 or more, sales tax will be applied, which essentially means you lose out on money, and it may prove more difficult to get a new car since you're not receiving as much money back from your trade-in. The state sales tax rate for Illinois is 6.25%. Northbrook, IL, has a sales tax rate of 9.5%.


BEFORE JAN 1, 2020

New Car Price 

$35,000

Trade-in Tax Credit 

$20,000

Taxable Amount 

$15,000

Sales Tax (9.5%)

$1,425 

AFTER JAN 1, 2020

New Car Price 

$35,000

Trade-in Tax Credit

$10,000

Taxable Amount

$25,000

Sales Tax (9.5%)

$2,375 


Difference 

+$950 

What You Should Do to Prepare for the Illinois Car Trade-In Tax

If you have any questions or need more information about this new Illinois trade-in tax, please contact Northbrook Toyota in Northbrook, IL, at (847) 272-0808 and we'll be able to help you.

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