UPDATES TO THE TRADE-IN TAX
Changes to Trade-In Credit Illinois for 2022 Explained
Thank you for visiting our MINI dealership’s website. MINI customers who purchase a new vehicle in 2022 will be eligible to claim the Illinois Trade-In credit, that went into effect on January 1, 2022, on the full value of their 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.
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