illinois tax issue on rv trade in for car?

Thanks guys I think I understand it. I bought from Bill Jacobs Subaru in Joliet, If they owned a Bill Jacobs rv dealer then I should get the tax break but since they don't I lose out on that break. That really sucks because that would of been worth about $1000 but I'm happy with my new car and won't miss the old rv so much.

manualman wrote:
Hey, cut it out you guys. We gotta keep how bad it is here a secret. If word gets out too widely or property values will collapse and we'll be stuck here forever! SHHHH!

Sorry, too late, property values all ready collapsed.

Sold one for half value last year.

Listing current home for $150k less than I paid for it tomorrow. Anyone wanna "good deal" give me a call!!!

mleekamp wrote:
If I understand your issue, you expected the trade in value of the RV to lower the price of the car, right? To be taxed on the difference? RV or not, Illinois no longer allows that.

The IL Dept of Rev has changed the way they tax, without IL legislature making the change. I've experienced this as well.

Here's how it works: IL taxes your new vehicle (or used) on the value deemed fair market value by the IDNR. In other words, if the Subaru was new, it was taxed on the MSRP...NOT what you paid...trade in or no, if it cost 30,000 MSRP, and you paid 28,000, you are taxed on 30,000.

Case in point: I bought a 1967 Camaro for 11,500. IDNR says its worth 25,000 (without ever seeing it or asking to see it). They wanted to tax me 1,000 plus penalties because I mis-represented the value. WRONG. It was rusty, non-restored, but they taxed it as if it was a showroom new car. Took a year to fight it. I won.

I can't speak for the specific situation you went through with the Camaro, but as far as dealership and trade-in experience is concerned, there appears to be some misinformation here.

1) Illinois DOES allow a deduction from the value of the trade-in for tax purposes. I just traded a car in last month and the trade-in value was deducted from my taxable amount.

2) Buying a new car, you will NOT be taxed for MSRP. You are taxed for the sell price (again, minus trade-in value).

3) Private party tax rate--there is a schedule that they stick to based on year and value of the vehicle (whether it's worth more than $15,000, or less than 15,000). I believe that is where your story comes into play. You bought your vehicle for $11,500, and were following the sub-15,000 tax schedule. Illinois DOR reviewed and determined that you should have followed the +$15,000 schedule. Kudos to you for winning that battle.

Romer1 may have the best explanation, but OP should contact the Secretary of State's office for a definitive answer.

manualman wrote:
Hey, cut it out you guys. We gotta keep how bad it is here a secret. If word gets out too widely or property values will collapse and we'll be stuck here forever! SHHHH!

X2!!!

Hey, cut it out you guys. We gotta keep how bad it is here a secret. If word gets out too widely or property values will collapse and we'll be stuck here forever! SHHHH!

Born, raised, and retired from Illinois. Five kids and 12 grandkids still there. We just became Florida residents.

The State is broke, property taxes are through the roof and going higher, folks are moving out every day.

The Chicago bosses run the whole state and they have finally run it into the ground!

Hey folks don't knock IL.

How many states you know of that have the X governors making the license plates :B

Chicago is in Illinois and Chicago is the most crooked city in the USA, and Chicago runs Illinois. Cannot expect them to pass up a chsnce to put another dollar in the till. Grew up in illinois and escsped. My family still lives there. Been that was for a long timre

westernrvparkowner wrote:

dodge guy wrote:
A trade in is a trade in! the amount is deducted from the sale price.

That is not true in most states. If you were to trade a refrigerator or your dog you would not get any tax consideration. In many states, the trade must be licensed as a motor vehicle to qualify for tax treatment. That would leave out things like boats, travel trailers etc. In other states, how the vehicle was titled is key. It would have to have been titled in your name to qualify. This was a big issue in Texas since leased vehicles are registered in the lessor's name. You couldn't legally trade a leased vehicle in and pay taxes only on the difference unless you traded it for another vehicle leased through the same bank. Tax law is always more complicated than it seems. Why do you think there are hundreds of thousands of people working for the IRS and state departments of revenue and an equal number of tax accountants, tax preparers, tax attorneys and the like?

I should clarify that the trade in tax allowance is deducted from the tax on the new car. At least that's how it is/was in IL.

This is why I buy used from a private party. Depending on the year, no matter the selling price you pay a tax by the year of the car. I do believe that newer cars will go by the selling price.

C-Bears wrote:
First off I thought IDNR was the Illinois Department of Natural Resources, which would have to do with conservation wouldn't it? The DMV in Illinois that handles title transfers and such is still the Secretary of State's Office isn't it, you know Jesse White?

Yes, I meant IDR ... IL Dept of Revenue. I've got IDNR on my mind as I prep for camping this weekend!!!