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More on sales tax staus of vehicles headed to Canada

November 16, 2010

An article in the May 19 edition of this newsletter generated several calls from dealers who questioned the allowance for Illinois dealers to issue drive-away permits for vehicles destined for Canada. The Illinois Revenue Department’s Form ST-556, at a quick glance, does not appear to permit that.

The instructions for completing the form’s Section 5, Box A state that "If you issued a drive-away permit, write the drive-away permit number and the two-letter state abbreviation of the buyer’s state of residence in the space provided."

But drive-aways also can be issued for vehicles destined for Canada because the Illinois Revenue Department expands the definition of a "state" to include Canada and Puerto Rico. See Section 1-195 of the Illinois Vehicle Code.

Adds the department's Susie Lonzerotti: "We (also) have been been allowing drive-away permits to Mexico on advice of our legal staff. I am trying to get that issue resolved so we can have that in writing."