Do you have questions about the change in Illinois law that affects the price of your next new Hyundai? If you’ve been waiting to trade in your used model, then you may want to consider doing so before the year ends. Learn how these new tax laws may affect you. Then, take a look at our new Hyundai models in Peoria. You can contact our team at Mike Miller Hyundai with any questions or concerns.
What Is the New Tax Law in Illinois?
Currently, the state of Illinois doesn’t charge a sales tax when you trade in a vehicle. Instead, your trade-in amount turns into a credit on the purchase of your new car. According to the existing law, you’ll only pay sales tax on the difference between the value of your trade-in and the new Hyundai purchase price.
However, on January 1, 2020, you will be charged state and local taxes on any trade-in that is worth more than $10,000. You’ll also pay an additional 6.25 percent in Illinois state sales tax. If your local municipalities have a sales tax, then you may pay an extra 1-3 percent in local taxes. This change may result in you owing $1,000 more than you will right now.
To help you get a better understanding of how this new law works, here’s how these numbers break down for a car buyer purchasing a new Hyundai for $45,000 and trading in a $25,000 vehicle:
- 2019: Right now, you’ll pay sales tax on the difference, which is $20,000. So you’ll be charged 6.25 percent plus your municipal taxes on that amount.
- 2020: After January 1, you’ll pay 6.25 percent on the value of your trade-in above $10,000, which is $15,000. Plus, you’ll also get taxed on the difference, which is $20,000.
Save on a new Hyundai by scheduling a test drive at Mike Miller Hyundai in Peoria before the year ends.