UPDATES TO THE TRADE-IN TAX
CHANGES TO TRADE-IN CREDIT ILLINOIS FOR 2022 EXPLAINED
Thank you for visiting our Land Rover dealership’s website. At Land Rover Hinsdale we want our customers to enjoy the full benefits of owning a new Land Rover vehicle. Below we summarize how car buyers who purchase a new vehicle in 2022, can take advantage of changes to the Illinois Trade-In credit that went into effect on January 1, 2022. All car purchases in 2022 will be eligible to receive the full credit on the trade-in. In 2019 the Retailers’ Occupation Tax Act and the Use Tax Act was amended to provide that the “selling price” included the value of or credit given for the trade-in that exceeds $10,000. Effective January 1st, 2022, the $10,000 trade-in credit limit no longer applies.
ILLINOIS REMOVES TRADE-IN VALUE FROM SELLING PRICE DEFINITION
The amendment that was made to the Illinois Trade-In tax credit changed the definition of “selling price” for vehicles sold in Illinois. The definition of “selling price” in Illinois will no longer include:
- The value or credit given for traded-in vehicles
- The portion of the value or credit for traded-in vehicles that exceeds $10,000
The updates to this statute will require the full value of all trade ins to be excluded from the tax for retail sales.
FULL TRADE-IN TAX CREDIT IS BACK
This change gives car-buyers the ability to save thousands on their trade-in. Prior to 2022, trade-in credits were capped at $10,000. The change made to the Retailers’ Occupation Tax Act and the Use Tax Act gives car-buyers the ability to use the full trade-in amount when calculating the overall Illinois sales tax that is due at the time of purchase.
