: Need some help on car buying rules.. Michigan to Illinois

12-19-2009, 11:14 AM
I have a question and I don't have a lot of time to do research and am not quite sure how to definitively find this out (the surprise would be expensive)

Here is the deal -

My Father in law and brother in law are out buying a car in Michigan for my Brother in law - A new car from a dealership (who incidentally doesn't know how this works either) ...

There is some incentive for Chrysler owners in Michigan they get an additonal $1,000 off the purchase of a new car.... So his Dad is going to cosign for the car - but the car has to be registered in Michigan for the rebate.

If they purchase the car in Michigan and title it there - then My bro in law transfers it out to Ill (he just graduated college and moved here recently) ..

Would they get hit with sales tax a second time for Illinois?

I seem to remember Ill having some law about if you buy a car in Indiana and transfer it within x time period (i cant remember what x is) you have to pay the sales tax in Ill.. If I remember correctly it was put in because people would buy cars in low tax indianaland and then register them over in cheap plates illinoisland..

I have to run Wife has an appt - but I figured there would be someone on here who knew the answer to this one.. I'll be checking with my iphone from the road.

Thanks in advance

12-19-2009, 11:18 AM
Titled or registered items (these forms are not available on-line)
Registered Illinois dealers who sell vehicles, watercraft, aircraft, trailers, and mobile homes must file Form ST-556, Sales Tax Transaction Return, within 20 days of the delivery date.

Individuals who purchase items that must be titled or registered in Illinois from an out-of-state retailer (i.e., dealer, lending institution, leasing company selling at retail, or leasing company leasing items to Illinois residents) must file Form RUT-25, Vehicle Use Tax Transaction Return, on the date the Illinois title and registration is applied for, but not more than 30 days after the date the item is brought into Illinois.

Individuals who purchase (or acquire by gift or transfer) motor vehicles that must be titled or registered from another individual or private party must file Form RUT-50, Private Party Vehicle Tax Transaction Return, within 30 days from the date the vehicle is purchased or acquired. (See “Vehicle Use Tax”) Individuals who acquire (by gift, donation, transfer, or non-retail purchase) aircraft or watercraft that must be registered must file Form RUT-75, Aircraft/Watercraft Use Tax Transaction Return, no later than 30 days from the date the item was acquired or the date the item was brought into Illinois, whichever is later. (See “Aircraft Use Tax” and “Watercraft Use Tax”.)

from: http://www.revenue.state.il.us/businesses/taxinformation/sales/rot.htm

12-19-2009, 05:14 PM
I'd put BOTH names on the title, and then title it in Michigan. In a year or so, transfer title to Illinois, tell them that you moved into the state. You'll pay the title fee $68 + plates, but since there was no sale, you should not have to pay taxes.