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Springfield maneuverings mixed bag for dealers, whammy for drivers

June 14, 2019
Illinois’s session-ending legislative blitz proved to be a mixed bag for dealerships but a multi-whammy for drivers. The General Assembly’s spring session concluded June 1 after a whirlwind final week spilled into overtime. It produced a budget, more gambling, legalized marijuana use, protections for abortion, a state construction plan and billions of dollars in tax increases to fund it.
Senate Bill 690, which awaits Gov. J.B. Pritzker’s signature, would limit the tax credit available on traded-in vehicles to $10,000, a ceiling that would impact both consumers and Illinois dealers. However, the bill also would raise to $300 the maximum documentary service fee that can be charged in a vehicle sale.
If Pritzker approves it, all the contents of SB 690 would take effect Jan. 1, 2020. The CATA will spend the coming months trying to amend the trade-in cap.
Under a $45 billion state capital infrastructure plan, which also awaits Pritzker’s signature, Illinoisans would see the state’s gas tax double to 38 cents from 19 cents per gallon, a tax rate that has not changed since 1990. 
An Illinois Policy Institute analysis found the typical Illinois driver will pay $100 more on gasoline each year under a doubled gas tax.
Both increases would take effect July 1, the start of the state’s fiscal year.
The state-level gas tax hike is estimated to generate an additional $1.2 billion — split between the state ($560 million) and local governments ($650 million).
Also, annual vehicle registration fees spike to $151 from $101. Owners of electric vehicles, meanwhile, would register for $248 annually, up from $35 every two years, under Pritzker’s plan.
Lobbyists for the CATA and for retailers managed to deflect suggestions for the $40 billion state budget, which takes effect July 1, to limit Illinois businesses to $1,000 a month through the vendor collection allowance. The allowance currently permits them to keep 1.75 percent of all retail sales taxes collected each month.
Deputy Gov. Dan Hynes, the former state comptroller who served as Pritzker’s point man on the budget, estimated that 95 percent of Illinois businesses are too small to feel the impact of the proposed change because they collect less than $57,143 a month in sales taxes (the point at which their deduction would begin to exceed $1,000).
But larger dealerships can accrue millions of dollars a month through the vendor collection allowance.
 
 

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