How Much Is Sales Tax on a Car in Illinois

How Much Is Sales Tax on a Car in Illinois: Everything You Need to Know

When purchasing a car in Illinois, it is essential to understand the sales tax implications to accurately calculate the overall cost of your new vehicle. Sales tax rates can vary from state to state, and even within different regions of the same state. In this article, we will explore the sales tax rates on cars in Illinois, along with some frequently asked questions to help you navigate through the process.

Sales Tax Rates on Cars in Illinois

In Illinois, the sales tax rate for cars is currently 6.25%. However, it is important to note that additional local taxes may apply, which can increase the overall sales tax rate. These additional local taxes vary depending on the city or county where the vehicle is purchased. The maximum total sales tax rate in Illinois, including state and local taxes, is 11%.

For example, if you purchase a car in a city with a local tax rate of 1.25%, the total sales tax rate would be 7.5% (6.25% state tax + 1.25% local tax). This means that for a car with a purchase price of $20,000, you would pay $1,500 in sales tax.

To determine the exact sales tax rate for your location, it is recommended to check with the Illinois Department of Revenue or consult with a local tax professional.

Frequently Asked Questions (FAQs):

1. How is the sales tax on a car in Illinois calculated?
The sales tax on a car in Illinois is calculated based on the purchase price of the vehicle multiplied by the applicable sales tax rate. This rate includes the state tax rate of 6.25% and any additional local taxes.

2. Are there any exemptions from sales tax on cars in Illinois?
Yes, there are some exemptions available for certain individuals, such as members of the military and qualified nonresidents. Additionally, if you trade-in a vehicle when purchasing a new one, the trade-in value is deducted from the purchase price before calculating the sales tax.

3. Can I finance the sales tax on a car in Illinois?
Yes, you have the option to finance the sales tax along with the rest of the vehicle’s price. This is commonly done when purchasing a car through a dealership or with the help of a financial institution.

4. Do I have to pay sales tax if I buy a car from a private seller in Illinois?
Yes, sales tax must be paid even when purchasing a car from a private seller in Illinois. The tax is based on the purchase price of the vehicle, and it is the buyer’s responsibility to report and pay the tax.

5. Are there any additional fees or charges associated with buying a car in Illinois?
In addition to the sales tax, there may be other fees and charges, such as registration fees, title fees, and documentation fees. These fees vary and should be discussed with the seller or the Illinois Secretary of State’s office.

6. Can I get a refund on the sales tax if I cancel the purchase of a car in Illinois?
Yes, you may be eligible for a refund on the sales tax if the purchase is canceled within a specific timeframe. You should contact the Illinois Department of Revenue for further information and to initiate the refund process.