Illinois – Stepchild Qualifies for the Private Vehicle Use Tax Rate

SALT Report 1899 – The Illinois Department of Revenue issued a General Information Letter regarding a Taxpayer’s transfer of a motor vehicle to his stepson.  Upon transfer of the vehicle the Taxpayer was denied the family use tax exemption provided in 625 ILCS 5/3-1001. The regulation, which is commonly referred to as the Private Vehicle Use Tax, imposes tax on the privilege of using a motor vehicle in the State if it is acquired by gift, transfer, or purchase.

Under the following circumstances the tax is limited to $15:

  • If the transferee or purchaser of the motor vehicle is the spouse, mother, father, brother, sister or child of the transferor,
  • If the transfer is a gift to a beneficiary in the administration of an estate and the beneficiary is not a surviving spouse, or
  • If the motor vehicle has once been subjected to the Illinois Retailers’ Occupation Tax or Use Tax and is transferred in connection with the organization, reorganization, dissolution or partial liquidation of an incorporated or unincorporated business wherein the beneficial ownership is not changed

The Taxpayer requested guidance regarding the statutory language of the words, parent and/or child.

The Department’s response was that in order for a transaction to qualify for the tax rate under subsection (1) the Taxpayer must be able to certify a family relationship. The certificate must be executed by the transferee and submitted at the time of filing the return and must detail the family relationship. The Department notes that although the statute limits the persons entitled to the $15 tax rate in subsection (1), the statute does extend to any step children of the transferor.

For Further Information:

Illinois Department of Revenue – General Information Letter ST 12-0054-GIL