Trading a car out of state and taxes

[Tight Lines]

I have talked to a couple of people and I am getting conflicting information. Here is what I may do:

I am going to an out of state dealer to trade cars straight up (example 25k for 25k). They won’t transfer the tittle or plates so when I come back and register here in Illinois will I have to pay any taxes? Dealer will give me a Bill of Sale.

I have a loan on my car that I will pay off with another loan through my credit union if this matters at all as far as the taxes.

Is there anything else I may need to take care of before I go to do the trade?

I hope my question makes sense.

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[Knowklew]

I believe you will owe taxes in Illinois in whichever county/city that you register the vehicle in based on what the Bill of Sale declares as the sale price.

 

[Tight Lines]

Even though I paid taxes on the vehicle I’m trading in?

I hear people say it’s sometimes better to trade in a vehicle because you get the tax credit/savings, isn’t that what I am doing?

Not combating what you are saying just trying to understand as I do appreciate the response.

 

[10thSVT_03]

Bill of Sale price won’t matter. Illlinois uses a book value not declared etc. Example you could buy a car for 500.00 but their book value shows 15,000.00 You will Pay the tax rate on their value. Make sure to take the slip off your title of the vehicle you are selling or trading and send it to the Secretary of State.

May be different if you’re not buying outright since you have a trade of equal value. Check with the Secretary of State for sure.

 

[Mr. SBF]

If it were me I would just list barter as the amount paid as no money is actually changing hands and you already paid taxes on that value... I have done this before without issue but it was a private party trade with no loans involved nor was it for that kind of money. Plus I am in WI so it could be a totally different situation with you being in the Crooked Land of Illinois...

 

[Chester Copperpot]

When I got the Duramax, my Raptor was worth more so I owed zero on taxes and it was traded in in Wisconsin. I didn't pay any taxes when I titled the new truck in IL. As long as the vehicle you're "trading in" is equal to or greater than in value compared to the "new" vehicle, you shouldn't owe anything to IL.

Mind you, this was McHenry county, not sure how Crook county likes to fuck you but I'm sure it feels nice.

 

[Tight Lines]

Bill of Sale price won’t matter. Illlinois uses a book value not declared etc. Example you could buy a car for 500.00 but their book value shows 15,000.00 You will Pay the tax rate on their value. Make sure to take the slip off your title of the vehicle you are selling or trading and send it to the Secretary of State.

May be different if you’re not buying outright since you have a trade of equal value. Check with the Secretary of State for sure.

What slip off my title are you speaking of? Thanks.

When I got the Duramax, my Raptor was worth more so I owed zero on taxes and it was traded in in Wisconsin. I didn't pay any taxes when I titled the new truck in IL. As long as the vehicle you're "trading in" is equal to or greater than in value compared to the "new" vehicle, you shouldn't owe anything to IL.

Mind you, this was McHenry county, not sure how Crook county likes to fuck you but I'm sure it feels nice.

I am in Will County so hope this is the same case for me. What did you bring to the Secratary of State to register your Duramax? Did your BIll of Sale show $0 changing hands? Even if ther was $1000 changing hands, I thought that’s the only amount of money you pay taxes on.

 

[Chester Copperpot]

Brought the dealer bill of sale that showed there was positive equity from truck to truck and the guy said “oh that’s nice, you don’t owe IL any taxes” and I said “damn straight!”

Granted, this was also from a dealer not a private individual so having a dealer bill of sale may hold more weight than a private transaction bill of sale in regards to value but that didn’t seem like it was an issue for me at all but I have heard of value horror stories by IL SOS.

 

[Tight Lines]

Brought the dealer bill of sale that showed there was positive equity from truck to truck and the guy said “oh that’s nice, you don’t owe IL any taxes” and I said “damn straight!”

Granted, this was also from a dealer not a private individual so having a dealer bill of sale may hold more weight than a private transaction bill of sale in regards to value but that didn’t seem like it was an issue for me at all but I have heard of value horror stories by IL SOS.

Thanks Chester. I am dealing with a dealer so hopefully that will hold true on my end.