Trade in tax credit being hit by the Pricster?

Dasfinc

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Anyone have the full details on this or when it’s going into effect?

Finding lots of articles saying they were proposing a max credit on $10,000 but the examples were garbage.

Moving to trade the Mustang in on a newer suburban but rather hold out another month or two of the tax isn’t changing until next year.
 

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Dasfinc

Dasfinc

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That article references 2020, didn’t know if it even was signed in yet or not, hard to even keep track of how much they are trying to tax...
 

Thirdgen89GTA

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Well, this ought to incentivize people to sell privately if they can.

Usually you can get more on decent cars with a private sale, its just not always worth the hassle. But if trading the car in is going to cost you X amount more in taxes, might be worth selling privately and then walking in with cash.
 

1MEANGT

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WTF!!! So they plan to tax you when you buy a car, and when you trade it in. How is this even legal???
 
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Dasfinc

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WTF!!! So they plan to tax you when you buy a car, and when you trade it in. How is this even legal???
This is actually a Tax "Credit" that they are limiting/taking away some off.

Ex: If I buy a iPhone, and trade it in for a new one, I still have to pay the full tax for the new phone. This is viewed as perfectly normal.

A bunch of states don't offer it at all to my understanding, it's really an Incentive to Trade-In cars. Sure I can get $1000 more for a car if I sell it privately (and then pay nearly no sales tax if I buy private), but if I pay $1000 less in tax and am getting a new car anyways it could be fiscally more intelligent to just trade it in at a dealer. (This is a Big generalization, but just using it as an example).

But in a time of Weaning auto sales and a state loosing population this is a moronic move among several others.
 

1MEANGT

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This is actually a Tax "Credit" that they are limiting/taking away some off.

Ex: If I buy a iPhone, and trade it in for a new one, I still have to pay the full tax for the new phone. This is viewed as perfectly normal.

A bunch of states don't offer it at all to my understanding, it's really an Incentive to Trade-In cars. Sure I can get $1000 more for a car if I sell it privately (and then pay nearly no sales tax if I buy private), but if I pay $1000 less in tax and am getting a new car anyways it could be fiscally more intelligent to just trade it in at a dealer. (This is a Big generalization, but just using it as an example).

But in a time of Weaning auto sales and a state loosing population this is a moronic move among several others.
Ahhhh...... I got it. It affects the savings on sales tax when you trade a vehicle in.
 

J-LO

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it will hurt the economy. will stop people like me from buying cars yearly lol
 

willizm

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So let me get this straight. You get taxed when you buy the car and then again when you trade it in later. Double taxed on something you already paid tax on. Only in Illinois. :eek:bama:
 

J-LO

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So let me get this straight. You get taxed when you buy the car and then again when you trade it in later. Double taxed on something you already paid tax on. Only in Illinois. :eek:bama:
your not getting taxed on your trade in, they are only allowing you to take 10k of its value off the new cars taxable amount
 

willizm

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your not getting taxed on your trade in, they are only allowing you to take 10k of its value off the new cars taxable amount
But in a way you are paying more tax. The purchase price of the car shouldn't include the value of that vehicle you are trading.
 

Fish

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But in a way you are paying more tax. The purchase price of the car shouldn't include the value of that vehicle you are trading.
From how I am reading it, you are still saving money.

If I am wrong, someone correct me.

This is how the system works now. Your new car cost $20K. Your trade in is worth $15K. You owe tax on $5K of the new car.

The new system will instead bring the taxes owed to $10K instead of $5K due to the $10K limit.

In reality, you arent being double taxed. You are just getting less of a tax credit. You could still trade a car in that is worth less than $10K and nothing would change for you.
 

Fish

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This is actually a Tax "Credit" that they are limiting/taking away some off.

Ex: If I buy a iPhone, and trade it in for a new one, I still have to pay the full tax for the new phone. This is viewed as perfectly normal.

A bunch of states don't offer it at all to my understanding, it's really an Incentive to Trade-In cars. Sure I can get $1000 more for a car if I sell it privately (and then pay nearly no sales tax if I buy private), but if I pay $1000 less in tax and am getting a new car anyways it could be fiscally more intelligent to just trade it in at a dealer. (This is a Big generalization, but just using it as an example).

But in a time of Weaning auto sales and a state loosing population this is a moronic move among several others.
Exactly!! AFAIK you dont get this credit for any other purchase that you can use a trade in with.
 
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Dasfinc

Dasfinc

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Exactly!! AFAIK you dont get this credit for any other purchase that you can use a trade in with.
I started the thread just to confirm it’s not till next year XD, I didn’t realize there was so much confusion on this topic on a car forum :p.

My Mustang is worth well over 10 and I have positive equity in it, but I’ll basically loose another $1,000 if I trade it in next year on top of payments over winter.

I’m days/weeks away from trading it in on something more useful, but didn’t want to rush if I didn’t need to, and the article someone shared confirmed it’s still targeted for 2020.
 

Yaj Yak

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as long as IL doesn't fuck with private party rates


WE GOOD. :rofl:
 
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Dasfinc

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as long as IL doesn't fuck with private party rates


WE GOOD. :rofl:
I'm going to laugh if dealer sales drop because of this, and private sales go up...

Then IL goes "Ohhhhh, That's where we aren't taxing them" And jacks that up too.
 

Yaj Yak

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i wont laugh then. ill be upset.
 

N20GT

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i wont laugh then. ill be upset.
How does IL handle registration/taxes for private party sales at the DMV? Do they have a table so that they'll know if you say you bought a $30k BMW for $10k, you're probably lying?

I've only ever bought cheap vehicles private party, and it's been a while, but from what I've heard Indiana does have some reasonableness checks in there to make sure they get their money on the more expensive transactions. Not sure what they are though
 

dun4791

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How does IL handle registration/taxes for private party sales at the DMV? Do they have a table so that they'll know if you say you bought a $30k BMW for $10k, you're probably lying?

I've only ever bought cheap vehicles private party, and it's been a while, but from what I've heard Indiana does have some reasonableness checks in there to make sure they get their money on the more expensive transactions. Not sure what they are though


Under 15k purchase price and the tax table defaults to vehicle age. Huge incentive to buy private party on expensive newer cars, the most you have to pay is 1500 instead of 6 or 7k.
 

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N20GT

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So you can buy a $100k car used and only pay $1500 in taxes??

No fucking way that stays...i give it 2 years max before the regular sales tax rate applies to all private party transactions and they use KBB or NADA values to determine if you're lying about the purchase price
 

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