Illinois Vehicle Sales Tax Overview

Illinois charges 6.25% sales tax on vehicle purchases from dealerships. This rate applies to the purchase price minus any trade-in value, and local jurisdictions may add additional taxes in some areas.

Dealer vs Private Sale Tax Treatment

Illinois treats dealer and private sales differently:

  • Dealer sales: 6.25% sales tax collected by dealer at purchase
  • Private sales: No sales tax collected; buyer may owe use tax

Trade-In Vehicle Deduction

Illinois law allows trade-in value to reduce the taxable purchase price at dealerships. This can save hundreds or thousands of dollars depending on your trade-in value.

Example: $35,000 car with $10,000 trade-in = ($35,000 - $10,000) × 6.25% = $1,562 tax instead of $2,187.

Use Tax for Private Sales

When buying from a private party, Illinois does not require sales tax collection at the time of sale. However, if you purchased the vehicle for use in Illinois, you may need to self-report use tax to the Illinois Department of Revenue.

Out-of-State Purchases

If you buy a vehicle outside Illinois and register it in Illinois, you typically owe use tax at the 6.25% rate on the purchase price. Credit may be given for taxes paid to another state.

Additional Illinois Fees

Vehicle purchases include:

  • Title fee: $150 (includes transfer)
  • Registration: $101 for first year (varies after)
  • Plate fee: $20-30
  • Tax: 6.25% minus trade-in value

Conclusion

Illinois's 6.25% dealer sales tax is straightforward. Trade-in deductions significantly reduce the tax burden. Private sale buyers should understand use tax obligations and self-report if required.