illinois tax issue on rv trade in for car?
Hi guys, I live in illinois and just traded my rv for a subaru. I was shocked when the dealer told me that they cannot offer me a tax break on the value of the rv. I'm not so sure I believe them and c...
Forum Discussion
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.
Bottom line for IL folks: IL is BROKE (ranked #50 out of 50 states for debt). Many think CA is worse, but they bring in cash that IL doesn't. IDNR changed the rules w/o notifying anyone...its wrong and hopefully will be fixed.
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.
Bottom line for IL folks: IL is BROKE (ranked #50 out of 50 states for debt). Many think CA is worse, but they bring in cash that IL doesn't. IDNR changed the rules w/o notifying anyone...its wrong and hopefully will be fixed.
