Illinois Removes Trade In Value from Selling Price Definition

Effective January 1, 2022, the definition of selling price in Illinois will no longer include:

• the value or credit given for traded-in tangible personal property where the item that is traded-in is of like kind and character as what is being sold
• the portion of the value or credit given for traded-in first division motor vehicles that exceeds $10,000.

The updates to the statute will require the full value of all trade ins to be excluded from the tax basis for retail sales, removing previous changes to the definition that came into effect on January 1, 2020 and provided separate rules for trade ins of motor vehicles. Illinois P.A. 102-0353 (S.B. 58), Laws 2021, effective January 1, 2022.