Selling Your Car? Buying a Car from Someone? You Will Owe Taxes

Taxes…When Selling Your Car

Reporting a wrong purchase price is FRAUD. Saying a “SALE” is a “GIFT” is FRAUD.

  1. When you sell your car, you must declare the actual selling/ purchase price. No exceptions.
    • If you sell a 2017 Mercedes and claim a sale price of $15,000 or less, you will have to pay tax on the $15,000 (or less) valuation.
    • However, there WILL be an audit by the Illinois Department of Revenue that shows the fair market value is $60,000.
    • Tax will then be due on THAT amount PLUS penalties.
  2. If you claim that the sale is a “gift,” you or the purchaser will still be charged taxes for the Fair Market Value of the vehicle. Calling it a gift does not make it a gift!
  3. If you are an International Student and fail to pay the proper amount of tax by falsely declaring the sale amount
    • it will likely be regarded as TAX FRAUD that can result in
    • Exclusion from re-entry into the United States and
    • could result in Deportation/Removal if you are formally charged and convicted

What should you do?

  1. Check the Kelley Blue Book, or NADA Guides for fair market value pricing.
  2. Download Form RUT-50, Private Party Vehicle Use Tax Chart
  3. Pay the correct tax

Information Pamphlets

Vehicle and Title Registration (VSD-293)
Buying or Selling a Used Vehicle (DOP-143)


Seller’s Report of Sale (VSD-703) (“Notice of Sale” form mentioned in “Buying or Selling a Used Vehicle
Application for Vehicle Transactions (VSC-190)
Private Party Vehicle Use Tax (RUT-50)


Illinois Department of Revenue
Illinois Secretary of State
Student Legal Service
Driver Services Facility Finder