Buying a car in Illinois can be costly – slightly higher than the national average. But other than the sticker price, you also need to make a budget for the car’s titling, registration, and plates. An important cost you shouldn’t forget is the sales tax. So, how high is the Illinois car sales tax?
In addition to the statewide rate, you must consider the county and local taxes. So based on the area you live in, it can go higher. But there are always trade-ins and incentives that can reduce the overall tax you pay. Well, our article will give you a detailed look into the sales tax rates in the state.
What is the sales tax on cars in Illinois?
The statewide Illinois car sales tax is 6.25%, irrespective of whether you’re buying a new or secondhand car. The total tax rate also depends on the county or local tax rates.
The rate averages around 8.154% among the state’s 112 local tax jurisdictions. Cook County, Harvey, has the highest total sales tax rate, with an 11.5% rate. Crawford, Putnam, Henderson, and Marshall counties have the lowest sales tax rate, with 7.25%.
Does trading in a car reduce sales tax in the state?
Many dealers will let you trade in your current or old car for credit for purchasing a new car. The tax only applies to the final price of your car; the value of your trade-in doesn’t get taxed. So, if your dealer offers a $5,000 credit against the cost of a $15,000 new car, your out-of-pocket cost will be only $10,000.
How are rebates and incentives taxed?
Some dealers also offer cash incentives and manufacturer discounts on the car’s sticker price. For instance, they may offer a $1,000 rebate on your new car worth $15,000. The state taxes car purchases before applying rebates or incentives to the original price. So, the customer will pay taxes on the car as if the price is $15,000.
Does Illinois have a sales tax on used cars?
Yes. Illinois sales tax on used cars is 6.25%. However, the total tax rate can vary depending on the location.
Does Illinois collect sales tax on out-of-state car purchases?
Yes. You must pay the sales tax if you bought a car from an out-of-state dealer or private party and want to register it in the state. Then you must provide the original title to the Illinois Secretary of State.
Know about car insurance quotes in Illinois
Do you pay sales tax on a leased car in Illinois?
Yes. Whether leasing a new or used car, you must pay the state tax rate.
Who pays sales tax when selling a car privately in Illinois?
So, if you’re the buyer, you must pay a transfer tax while buying a car from a private seller. The tax rate will be lower than you pay when buying a car from a dealer. The tax is then paid directly to the Illinois Revenue Department.
What other fees must you pay while buying a car in the state?
As we mentioned earlier, you must consider some other costs. The following are some extra costs associated with your car purchase.
The documentation fee is the dealership’s cost of filing the sales tax documents, contracts, etc. Since Because dealerships fix this fee rather than the government, they might differ from one dealership to another or even between car models.
Do you have to pay taxes on a gifted car in Illinois?
No. You needn’t pay taxes on a car you received as a gift. You only have to finish the documentation process and pay the transfer costs.
How do I avoid sales tax on a car in the state ?
You can avoid paying the tax if you fulfill one of the following conditions.
- The vehicle you own is a ready-mix concrete truck that qualifies for the exemption for manufacturing machinery and equipment.
- You own a non-profit organization.
- You are an out-of-state resident and used the car for at least three months outside of Illinois.
- The vehicle you use is mainly for agriculture purposes.
- You use the vehicle for rolling stock.
- The vehicle comes under ‘estate gift’ to a surviving spouse.
How much is the car sales tax in Chicago?
The total tax rate you pay for buying a car in Chicago is 10.25%.
How much is the sales tax on a car in Naperville, Illinois?
The tax rate you must pay is 7.75%.
What is the sales tax on a car in McHenry County, Illinois?
The combined tax rate in McHenry County is 8%.
What is the sales tax on a car in Lake County, Illinois?
Lake County has a combined sales tax rate of 7%.
What is the sales tax on a car in DuPage County, Illinois?
The combined tax rate you must pay in the county is 8%.
What is the sales tax on a car in Kane County, Illinois?
The combined tax rate you must pay in Kane County is 7%.
What is the sales tax on a car in Springfield, Illinois?
The combined tax rate you must pay in Springfield is 9.75%.
What is the sales tax on a used car in Cook County, Illinois?
The combined sales tax rate in Cook County is 11.5%.
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