How does sales tax work on an out of state vehicle purchase?

[Noland]

Recently I have found a couple of used trucks that I would like to buy that were at dealerships in Illinois. If I bought one would I have to pay IL 10% sales tax and then pay 7% again when I register it in IN?

 

[hotrodtba]

No you will only pay IN sales tax when you register it here.

 

[SouthernIndy]

Thats correct

 

[Noland]

Good news. Thanks guys.

 

[HDSilvrStreak]

That's not entirely true.

The dealer will charge IL sales tax at the time of sale. However, you can get it back. From the DMV web:

"Indiana residents who purchase a vehicle from another state and pay more than seven percent (7%) sales tax will receive credit from Indiana for taxes paid in that other state. If you paid less than seven percent (7%) sales tax when you purchased your vehicle in another state, you will need to pay the difference to Indiana. New Indiana residents who have titled their vehicles in another state do not have to pay sales tax when they title their vehicles in Indiana."

If the out of state sales tax is less than 7%, you would have to pay the difference.

If you buy from an individual instead of a dealer, you will owe the 7% at the time you apply for IN title/plates.

 

[3gunshooter]

I bought my BMW in that state payed the Indiana sales tax there. They gave me a form to show the BMV it was payed. Believe me I looked at every way possible to get out of it but not much of a choice when you get it from a dealer.

 

[Drunken Yak inc]

Bought a car in Iowa this year, paid the IN sales tax here, but I paid cash so maybe thats why I paid it here and not there? And remember you have to take the vehicle with you to the DMV or have a cop come to your place to check the vin.

 

[LockStocksAndBarrel]

Illinois and Indiana are reciprocal states. The Illinois dealer collects Illinois sales tax from you on the sale and the state of Illinois reimburses Indiana the tax they collect from the Illinois dealer.

If the Illinois tax collected is more than the Indiana tax, Indiana will refund you the difference when you register the vehicle at your local Indiana DMV office (they are almost painless these days, BTW).

If Illinois collects less than the Indiana tax, you get to make up the difference when you register it

This all happens insantaneously on paper when you buy the vehicle so you can buy the car, drive aross the state line and immediately register it in Indiana.

Just don't take your gun to the peoples republic when you go buy the car.

 

[Titanium Man]

Illinois and Indiana are reciprocal states. The Illinois dealer collects Illinois sales tax from you on the sale and the state of Illinois reimburses Indiana the tax they collect from the Illinois dealer.

If the Illinois tax collected is more than the Indiana tax, Indiana will refund you the difference when you register the vehicle at your local Indiana DMV office (they are almost painless these days, BTW).

If Illinois collects less than the Indiana tax, you get to make up the difference when you register it

This all happens insantaneously on paper when you buy the vehicle so you can buy the car, drive aross the state line and immediately register it in Indiana.

Just don't take your gun to the peoples republic when you go buy the car.

Wow, that's news to me. I never realized IN or IL was reciprocating on anything. I know a friend of mine went to IL to buy a 4 wheeler, so he could escape paying sales tax and the state knowing he ever had a 4 wheeler for property tax. He used it on his farm until he sold it, or did he lose it in a boating accident.

 

[femurphy77]

Don't worry, one way or another they'll get theirs! Never heard of plating a trailer till I moved to Indian, WTF?