On January 1st, 2020, the state is implementing a sales tax [on all trade-ins]. Until then, trade-in values remain tax free.
COUNTRYSIDE, Ill. (PRWEB) November 27, 2019
Continental Mitsubishi, a dealership serving Chicago and the surrounding area, is encouraging Illinois drivers planning to trade-in their vehicle to do so before next year. On January 1st, 2020, the state is implementing a sales tax on all vehicle trade-ins. Until then, trade-in values remain tax free.
The current sales tax rate in Illinois is 6.25%, but many regions add their own sales tax on top of that. For example, total tax in Chicago is 10.25%. Throughout the state, the average sales tax stands at 8.74%. Unlike the Illinois gas tax, the tax on trade-ins cannot be avoided by crossing state borders. It also applies to out-of-state purchases.
To demonstrate the cost of the new tax, the dealership uses the example of an individual who trades in their vehicle valued at $20,000 to get a new car valued at $35,000. Previously, the buyer would only be taxed on the remaining price after the trade-in; in this case, $15,000. Using Illinois average sales tax, the cost would come out to $1,311.
However, under the new law, the buyer would be taxed for everything over $10,000. Thus, they would end up paying taxes on $25,000, resulting in a sales tax of $2,185. That’s $874 more.
The implementation of the tax on trade-ins is expected to cost Illinois residents $60 million per year. The money is earmarked towards vertical infrastructure, which likely means the constructing and renovating of state buildings.
Taking the above information into account, Continental Mitsubishi encourages drivers to begin the trade-in process as soon as possible. Beginning early will give shoppers time to peruse available vehicles and prices and find the right fit for them.
Those interested in trading in their vehicle with Continental Mitsubishi are encouraged to head to the dealership website at http://www.continentalmitsubishi.com. Individuals may also make a phone call to 708-669-0701. The final option is to head to the dealership location itself at 5901 S. La Grange Road, Countryside.