ILLINOIS VEHICLE TAX
Illinois car sales tax: start at 6.25%, then check local rules.
Illinois taxes dealer vehicle sales under retail sales rules, with a 6.25% state rate and possible local taxes. A documented trade-in can reduce the taxable amount; private-party vehicle use tax follows a different schedule.
Illinois dealer-purchase formula
(Vehicle selling price − documented trade-in credit + taxable charges) × applicable state and local rate
$40,000 Illinois example
At the 6.25% state rate alone, estimated tax on $40,000 is $2,500. With a $10,000 documented trade-in credit, the state-rate estimate is $1,875—a $625 difference. Local tax can raise the total.
Private-party purchases use different math
When a vehicle is bought from an individual rather than a registered dealer, Illinois generally uses Form RUT-50 and a vehicle-use-tax chart. For many vehicles under $15,000, age—not a simple percentage—helps determine the tax.
What to verify
- The dealer shows the trade-in credit on the bill of sale.
- The local tax rate matches the transaction's sourcing rules.
- A private-party purchase is not estimated with the dealer-sale formula.
Official Illinois sources
Review the Department of Revenue's ST-556 dealer-sale instructions, private-party vehicle tax page, and vehicle tax FAQ.
Educational estimate reviewed September 3, 2026. Locality, private-party schedules, leases, exemptions, and transaction structure can change the result.