Because… Madigan!
Tuesday, Dec 17, 2019 - Posted by Rich Miller
* I leased a Cadillac through this dealership maybe five or six years ago, so that’s why I’m on this email list…
News Update regarding the New 2020 Illinois Trade-In Tax from Patrick Cadillac/Volvo.
Why are you receiving this email? Patrick Cadillac and Patrick Volvo Cars is working hard to communicate with their customers and we want to keep you up to date. If your considering to trade your vehicle in for New, Certified Pre-Owned or Pre-Owned vehicle with us now is the time to take action.
WHAT IS THE NEW TRADE-IN TAX? A new Illinois law becomes effective on January 1st, 2020 that eliminates the tax benefit of trading in your vehicle.
WHAT DOES THIS MEAN? Illinois currently collects no sales tax on the car’s trade-in value. Your car will currently act as an untaxed credit towards your new vehicle purchase. Starting January 1st 2020, sales tax will be charged on trade-in value over $10,000.
To learn more or see an example of how this would affect your trade-in option at Patrick Cadillac click here
To learn more or see an example of how this would affect your trade-in option at Patrick Volvo Cars click here
Update to the New Law below
LAWMAKERS END VETO SESSION - FAIL TO REPEAL $10,000 TRADE-IN CAP
Illinois lawmakers adjourned the Fall Veto Session without calling [the Illinois Automobile Dealers Association’s] legislative proposal to repeal the $10,000 cap on the motor vehicle trade-in credit that is scheduled to take effect on January 1, 2020.
Despite having strong, bipartisan support in the General Assembly, the Speaker of the House refused to have IADA’s amendment to repeal the trade-in cap called for a vote during the Veto Session. Over the past several months, IADA met with many legislators and staff from the legislature and Governor’s Office, virtually all of whom were receptive to IADA’s proposal to restore the trade-in credit. We extend our thanks to our many dealer-members who met with their legislators and who generated over 4,000 letters to legislators and the Governor to urge a repeal of the $10,000 trade-in cap.
We hope to start fresh in the Spring Legislative Session to try to reverse the cap before it causes too much harm.
Strong bipartisan support? A small handful of members signed on as co-sponsors.
- Captain Obvious - Tuesday, Dec 17, 19 @ 3:02 pm:
This tax is going to hurt all the way around. If you regularly trade vehicles every 2 or 3 years you are now going to pay $1500 average more due to this tax, especially if you live in a high sales tax city like Springfield or Chicago. Will be a drag on dealer sales as well. Thanks Mike!
- Roman - Tuesday, Dec 17, 19 @ 3:20 pm:
I could have missed it, but I don’t remember the auto dealers raising much of a stink about this when it surfaced in the spring as an idea to fund vertical projects. That was the time to kill it.
Maybe there will be a ground swell of public opposition next year once car buyers see the effective value of their trade-ins drop and political pressure will build to rescind it. But with gaming expansion off to an extremely slow start and a Chicago casino still very much in doubt, there’s not a lot of revenue coming in to back bonds for vertical capital. So, I’m not sure legislators will be quick to throw this aside.
- Lucky Pierre - Tuesday, Dec 17, 19 @ 3:28 pm:
Remember middle class car buyers JB and the Democrats are promising a .05 % income tax cut
And you thought car dealers were the only ones who used the old bait and switch.
- Bruce (no not him) - Tuesday, Dec 17, 19 @ 3:30 pm:
Ha Ha I win. I keep my cars till they are worth less than $10,000
No new tax for me.
- Donnie Elgin - Tuesday, Dec 17, 19 @ 3:33 pm:
with the $10,000 trade in threshold it will hit folks who buy expensive cars and trade em. This one really could be called the Cadillac Tax.
- Moe Berg - Tuesday, Dec 17, 19 @ 3:33 pm:
Congrats, IADA. You played yourself.
Also, maybe your choice of legislative sponsor wasn’t the best selection.
- northsider (the original) - Tuesday, Dec 17, 19 @ 3:39 pm:
If we don’t fund vertical projects drivers will spend more than the trade in credit fixing bent rims and broken vehicle frames from our road conditions.
- Name Withheld - Tuesday, Dec 17, 19 @ 3:45 pm:
I’ve owned my current vehicle since 2004, so I’m pretty it falls under that $10,000 threshold
- SSL - Tuesday, Dec 17, 19 @ 3:58 pm:
I’ll never understand why people pay large amounts for rapidly depreciating assets. Buy a reliable and safe car, take good care of it and drive it until things start falling off or your teeth start to rattle.
Then you won’t need to worry about the cap.
- Steve Polite - Tuesday, Dec 17, 19 @ 4:32 pm:
I also buy and keep vehicles as long as I can. I agree with SSL. This tax is voluntary and easily avoidable. Trade in a vehicle only when it’s value is under the cap.
- JoeMaddon - Tuesday, Dec 17, 19 @ 4:41 pm:
**This tax is going to hurt all the way around. If you regularly trade vehicles every 2 or 3 years you are now going to pay $1500 average more due to this tax, especially if you live in a high sales tax city like Springfield or Chicago.**
Show your work please.
- Captain Obvious - Tuesday, Dec 17, 19 @ 5:12 pm:
If your trade in is valued at $25000 and you live in Springfield you pay $1312.50 more for your new car after January 1st. Think it won’t affect many people? Have you seen how many pickup trucks are on the road? Have you priced them? Most 2 year old vehicles still are worth $25000 or more given the high initial price. It has always been smarter to keep vehicles a long time to get the most for your money, but many people do not do this.
- Boone's is Back - Tuesday, Dec 17, 19 @ 5:17 pm:
I remember that car. A great car she was.
- TheInvisibleMan - Tuesday, Dec 17, 19 @ 5:45 pm:
If you can afford to trade in a vehicle every two years, you can afford the tax.
This is one of the most easily avoidable taxes, and the complaints against it at this point just seem like a pavlovian response to anything that has the word tax in it.
“It has always been smarter to keep vehicles a long time to get the most for your money, but many people do not do this.”
So basically, the people who are dumb with their money, are complaining about the consequences of being dumb with their money.
Great group to hitch your wagon to.
- Pelonski - Tuesday, Dec 17, 19 @ 6:06 pm:
The standard sales tax rate does not apply to vehicles. For most cities the rate is 6.25%. It can go as high as 7.25% in some areas, but that is much less than the standard sales tax rate in those areas. If the local government imposes a use tax that is affected by the change, that will raise the tax a bit. In Springfield, the combine rate would be 7.25% and would add another $1,088 is state and local taxes on a $25,000 trade-in.
The impact on pickup truck owners would be $0 since Revenue says the law only applies to first division motor vehicles. The impact on the corporation trading in their $10,000,000 dollar jet would also be $0. The original proposal would have applied to all trade-ins, but the corporate interests were able to change it at the last minute so that it would only apply to first division vehicles.
- Lucky - Tuesday, Dec 17, 19 @ 8:37 pm:
What are First Division Vehicles? Please explain. Sounds key.
- ANON - Tuesday, Dec 17, 19 @ 9:28 pm:
why is this not double taxation? So you pay sales tax on the entire vehicle when you buy it–then again when you trade it in–understand its two transactions but its the same tangible property . Doubling the gas tax wasnt enough? this tax voted will be tied to all of the pork projects when the list comes out–really dumb idea by GA
- {Sigh} - Tuesday, Dec 17, 19 @ 9:51 pm:
Can someone communicate with Patrick Cadillac and Patrick Volvo Cars and explain to them that passing a newly filed bill in veto session is almost impossible? {Sigh} even IADA knows that passing a bill in veto means you have to amend a bill in the opposite chamber.