IL Lease Tax, taxed on depreciation?

Ask the Hackrs
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1

Just wanted to confirm something that caught me off guard, I had always assumed the tax was on the down + monthly payment.

But after seeing dealers numbers, it looks like what you’re taxed on is MSRP - Residual value.

For example, 300 payment with 0 down I’d assume at 7.5% tax rate, tax of 22.5 on the monthly.
But the dealer calculator shows a 55k MSRP with 53% residual (24mo EV6), the car depreciate 25, 850 and that x 1.075 is $1938/24 = $46 per month.

I spoke to the manager, finance guy and looked and all the numbers broken down myself. Just shocked I’ve missed this before, but maybe my payments and residual were always so close it didn’t matter. This car is getting close to 20k off with rebates and depreciates like a rock.

2

IL taxes like NY, so on the total lease cost, which includes depreciation.

Unless youre in Chicago, then just bend over.

3

Nope. Illinois taxes the sum of the base payments. Below are a few references. The second one was written by me.

Illinois Lease Sales Tax.pdf (305.3 KB)

Illinois Sales Tax Calculations.pdf (1.2 MB)

??? Let me know.

1 Like
4

Does IL tax rebates? That’s what you may be missing.

5

As a former resident of Illinois (Lake county) can confirm this is true

6

I believe they do

8

This could definitely be it, majority of the discount is in the form of an 18k rebate.

9

IL taxes you on the rebates

10

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