Why you might pay more to buy a car in Illinois: a trade-in tax credit cap – Daily Herald

Car buyers are on the hook for an estimated $40 million extra in sales taxes thanks to an Illinois law starting next year that will cap trade-in tax credits for most motor vehicles at $10,000.

Currently, car buyers pay sales tax on the difference between the value of a new car and the value of the car they're trading in. But starting Jan. 1, car buyers will receive sales tax credit on only up to $10,000 of the value of their trade-in.