Peter Sander, president of the Illinois Automobile Dealers Association, couldn`t estimate how much leasing would increase in Illinois because of the new tax law, but he said it would encourage more consumers to rent if revenue from vehicle sales and sales tax increased. A rented vehicle is counted in the same way as a vehicle sold and is registered in the name of the renter, just like a purchased vehicle. There are also no tax savings for rentals in Illinois, even if the car you`re trading in hasn`t been rented. The only way to achieve tax savings on an exchange is money, finances or the choice of the owner. For more information on how much money these new rental laws can save you on a new Subaru, come, call or click here to see our inventory of new cars today! Rent or borrow? The pros and cons of car financing represent a saving of $1419 compared to the previous lease option. Be careful when receiving quotes from dealers, sometimes add financing numbers in the same area where they provide a breakdown of selling prices for your lease, which could cause confusion. Since there are special rules for dealing with gross trade-in value (i.e. regardless of an existing loan balance) when you rent the car or buy or finance it directly, it can still save you money when you buy or rent. Our goal isn`t for people to rent – it`s about people knowing if it makes sense to rent. So please enter your numbers in the calculator to see what leads to the lowest tax burden. When I signed my lease, the amount of tax was added to the capping costs and so the payments were increased by the tax allowance over 36 months, but also by a minimal financing fee on the tax itself.

This amount is not easy $monthly*tax_rate, as you also technically finance the payment of the tax. Another new wrinkle in Illinois for 2015 is that trading in a vehicle no longer affects sales tax on a lease. Since an exchange reduces capitalized costs, it also reduces the applicable sales tax. This provision ends with the new legislation because cap costs are no longer imposed. The 1. In January, Illinois law was changed so that sales tax only applies to the customer`s down payment and monthly rental payment. For a $30,000 vehicle with a down payment of $2,000, taxes would be $165. If the payment were $300 per month, the monthly taxable sales tax would be $24.75. Source: Chicago Tribune //www.chicagotribune.com/classified/automotive/ct-rides-1225-illinois-autolease-tax-20141222-story.html For example: A 36-month lease for $400/MB before tax in a Cook County suburb would be $400 * 8.25% = $33/MB ~ Total sales tax = $1188 (add this to your initial cap costs) I`m trying to understand the Illinois rental tax. From 01.01.2015, the tax should only be levied on the rental fee (previously on the entire purchase price). Currently, Illinois taxes the entire capitalized cost of the vehicle (the “price” negotiated in the lease) – even if it is a long-term lease rather than a purchase. For a resident of a Cook County suburb who rents a $30,000 car, the 8.25% auto sales tax would be $2,475.

The tax can be paid in advance or included in the monthly rental payment. In the event of illness, the sum of the basic payments is taxed. All taxable items capped in the lease are included in the basic payment. So if the base payment is $300 and the sales tax rate is 9.5%, then the payment is sales tax. With the changes in Illinois, Texas will be the only state that still taxes the capitalized cost of a leased vehicle. In other states, only monthly lease payments are generally taxed, as in the new Illinois law. Illinois taxes you on discounts and cap cost reductions (for example. B money and transactions) plus your monthly payment. If you`re in Chicago, it`s 9.5% (this is separate from Chicago rental tax). So in your scenario, you have about $200 in sales tax on trade and $30 per month for payment. So your total payment is $335/month (200/36 + 30 + 300). Vehicle purchases are among the largest current sales in Illinois, which means they can result in a high sales tax bill.

This page covers the most important aspects of Illinois sales tax related to the purchase of vehicles. .