2020 Tax and Fee Changes

2020 Trade-In Tax Cap:

Who does this tax affect? 
It affects everyone trading in a Class 1 vehicle towards the purchase of a new or pre-owned vehicle.

What has changed? 
Under current law, your trade allowance (vehicle value) reduces the overall amount of sales tax you pay on the vehicle purchase. However, under new law your trade allowance is capped at $10,000.

How much will this new law cost me? 
In 2019, there was no sales tax on your car's trade value since the allowance reduces your overall taxable amount. As of January 1, 2020, your vehicle trade allowance over $10,000 will not count as a credit and you will be taxed on the purchase price minus $10,000. Examples are below.

 

Current Tax Credit

New Tax Credit

Vehicle Sale Price

$60,000

Vehicle Sale Price

$60,000

Trade-In Allowance

$35,000

Trade-In Allowance

$35,000

Trade-In Tax Credit

$35,000

Trade-In Tax Credit

$10,000

Taxable Amount

$25,000

Taxable Amount

$50,000

Tax Paid

$1,812

Tax Paid

$3,625

 

Car registration: 
The fee for vehicle registration has increased from $101 to $151 

 

Dealer documentation fee: 

This fee has increased from $174.94 to $300. The Secretary of State sets the limit for this fee every year.


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Napleton Mazda

515 William Latham Drive
Directions Bourbonnais, IL 60914

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