Sales Tax Laws on Classics

[RzeroB]

As if there aren't enough reasons to not live in Illinois....
We get nicked $1400 on any used car "classic" or not if it's over 7 years old and sold for over $14,000. And in recent years the secretary of state has gotten real hard nosed about older car sales. So you buy a tired '68 AMC ambassador for $3500, and then pay a modest title fee and license it.  A few months later you get a letter from the state basically accusing you of being a crook because you paid over $14,000 for a car and lied about what you paid, and therefore owe the difference, plus a penalty of course.  You really have to document to the hilt what you paid for a car to prevail.  And they even contact the seller to verify what you paid.
It gets worse, as I found out the hard way in 2010 when I bought my 71 V code Challenger at a Mecum auction.  On dealer sales, new or used car, you pay a straight % sales tax.  A few weeks after buying my car, I received the title in the mail.  I grabbed my checkbook and headed to the secretary of states office not happy about the prospect of having to cough up another $1400 to complete the purchase of the second biggest value purchase, after my house, in my life.  I get there and go to a table with forms to fill out and see 2 for used cars.  One for purchases from private owners, and one for purchases from dealers.  My title was assigned, so I had to use the purchase from dealer form.  I fill it out and calculate the tax from the charts, and find I owe over $4000! So I end up paying sales tax on this car almost identical to what it sold for new 40 years earlier!  You can't make this stuff up.

  No she-ite!? I live in the greater St Louis area - but on the Illinois side of the river!

Just another reason to "love" the Land of Lincoln"        

[cwestra]

As if there aren't enough reasons to not live in Illinois....
We get nicked $1400 on any used car "classic" or not if it's over 7 years old and sold for over $14,000. And in recent years the secretary of state has gotten real hard nosed about older car sales. So you buy a tired '68 AMC ambassador for $3500, and then pay a modest title fee and license it.  A few months later you get a letter from the state basically accusing you of being a crook because you paid over $14,000 for a car and lied about what you paid, and therefore owe the difference, plus a penalty of course.  You really have to document to the hilt what you paid for a car to prevail.  And they even contact the seller to verify what you paid.
It gets worse, as I found out the hard way in 2010 when I bought my 71 V code Challenger at a Mecum auction.  On dealer sales, new or used car, you pay a straight % sales tax.  A few weeks after buying my car, I received the title in the mail.  I grabbed my checkbook and headed to the secretary of states office not happy about the prospect of having to cough up another $1400 to complete the purchase of the second biggest value purchase, after my house, in my life.  I get there and go to a table with forms to fill out and see 2 for used cars.  One for purchases from private owners, and one for purchases from dealers.  My title was assigned, so I had to use the purchase from dealer form.  I fill it out and calculate the tax from the charts, and find I owe over $4000! So I end up paying sales tax on this car almost identical to what it sold for new 40 years earlier!  You can't make this stuff up.
Imagine buying a hemi cuda convertible if you lived in IL.  The difference in tax between a dealer sale and a private owner would be 6 figures vs $1400!
I can't wait to move from this crooked state, when I cross the Illinois border I'll never look back.

It seems to me that if you live in Illinois you are much better off than most states if you buy through a private party.  You mention above that for cars over 7 years old with a selling price of $14,000 or more you pay a flat tax of $1,400 through private party sale, if I read correctly.  But in reading the Illinois tax law RUT-50 it seems like the tax would be substantially less on private party sales for prices less than $15,000, and not too bad for vehicles up to $24,999.99, according to the chart (see attached RUT-50).  So for your example of the '68 AMC for $3,500 you should only have to pay $25 in tax.  And for those high priced muscle cars above $30,000 the tax is capped at $1,500.  So on a $50,000 Cuda you'd be paying only 3% tax.  I live in neighboring Indiana and wish I had a break like that.  Here it is 7% regardless.

[JH27N0B]

Thanks for clarifying that Corey.  My recollection was $1400 on a higher priced older car, my memory might be off or they might have raised it since I got my car in 2010.  Also around that time a local buddy of mine bought a roadrunner vert from a private owner and I seem to recall him griping about paying $1400 to the state.
I paid 7-1/2 % on my 71 as the title was assigned to a dealer. I get nailed further as I live in Cook "crook" county and got hit with an additional 3/4% tax. The county has since raised that to 1%.  I'm not aware of any other counties in IL that have an additional sales tax on cars.
As I look into states for me to possibly flee to, Indiana was high on the list and I'm sorry to hear about that 7% tax on all used car sales.  That definitely makes me less inclined to move to Indiana!
But talking about IL private owner car sales tax, I have to repeat what I said before.  If you buy a vintage car from a private party that isn't very expensive, you are almost guaranteed you'll be hearing from the state shortly afterwards accusing you of underreporting your purchase price and billing you for what additional they claim you owe plus penalties for your alleged deceit.  You are guilty unless you can prove yourself innocent.  I hear these stories all the time locally at cruises and shows.  I have no idea where the state determines these high values.  I did hear about a guy who bought a 4 door AMC for around $3000 and the state said it was worth over $14K.  A friend of mine bought a driver quality '78 Corvette for $4500 and got the same harassment from the state on allegedly underreporting the purchase price.  It sounds like the are doing this on every private owner used car sale over a certain age, and it's pretty unreasonable as we all know that just because a car is over 25 or 30 years old doesn't mean it's worth over 14 grand, which is what the state's policy seems to be!

[cwestra]

Thanks for clarifying that Corey.  My recollection was $1400 on a higher priced older car, my memory might be off or they might have raised it since I got my car in 2010.  Also around that time a local buddy of mine bought a roadrunner vert from a private owner and I seem to recall him griping about paying $1400 to the state.
I paid 7-1/2 % on my 71 as the title was assigned to a dealer. I get nailed further as I live in Cook "crook" county and got hit with an additional 3/4% tax. The county has since raised that to 1%.  I'm not aware of any other counties in IL that have an additional sales tax on cars.
As I look into states for me to possibly flee to, Indiana was high on the list and I'm sorry to hear about that 7% tax on all used car sales.  That definitely makes me less inclined to move to Indiana!
But talking about IL private owner car sales tax, I have to repeat what I said before.  If you buy a vintage car from a private party that isn't very expensive, you are almost guaranteed you'll be hearing from the state shortly afterwards accusing you of underreporting your purchase price and billing you for what additional they claim you owe plus penalties for your alleged deceit.  You are guilty unless you can prove yourself innocent.  I hear these stories all the time locally at cruises and shows.  I have no idea where the state determines these high values.  I did hear about a guy who bought a 4 door AMC for around $3000 and the state said it was worth over $14K.  A friend of mine bought a driver quality '78 Corvette for $4500 and got the same harassment from the state on allegedly underreporting the purchase price.  It sounds like the are doing this on every private owner used car sale over a certain age, and it's pretty unreasonable as we all know that just because a car is over 25 or 30 years old doesn't mean it's worth over 14 grand, which is what the state's policy seems to be!

As I look at the heading on the RUT-50 document, it does say Vehicle Use Tax and not Sales Tax, which are different.  So it looks like I may be wrong in my reference to this law.  You're probably correct in your recollection.

[JH27N0B]

No, you have the right form for IL:
http://tax.illinois.gov/businesses/taxinformation/sales/vehicle.htm
It would be cool if someone set up a website detailing the state taxes and fees for owning cars in each of the 50 states.  It would be helpful for car enthusiasts to be able to easily research that when contemplating moving.
Having got nailed here several times for no front license plate, I'd like to know which states don't require them.  I'd like to know the costs of antique plates and restrictions on their use too. Rules on being able to use YOM plates if you have antique plates, etc. I often find myself wondering what states are most "car friendly"!

[dodj]

13% in Ontario? I thought Ontario only paid the PST not the GST on used car sales? I have bought and sold lots of used cars here in Alberta - no tax whatsoever. I bought my cuda in Ontario in 2010 and the guy wanted to mark down the bill of sale 20 grand so I didn't have to pay as much tax - no worries I said - we don't pay tax in Alberta on used cars. Onterrible sucks. 

You pay them both here. 8% PST on the car sale, 5% GST on the value of the car when you get your license plate. Net result 13%.