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I am current living in Illinois and will move to Massachusetts next month. I already have a valid lease with MA address but my driver license is still the IL one. My IL sales tax is 8.25% and MA sales tax is 6.25%.

My car suddenly broke days before our move and I need a new car for the move. I told the dealers about my situation.

One dealer said they can do 6.25% sales tax for me with a copy of my lease, and register my car in MA. I only need to visit MA DMV to get a license plate when I arrive.

But another dealer said they can register my car in MA but they still need to charge me the IL 8.25% tax. He said “because your ID is the IL one we have to do this”. He also implies that the other dealer is cheating on me, saying “they(the other dealer) charge 6.25% here, but you will be charged again with 8.25% when you arrive at MA. You will be taxed twice”.

I am now not sure who is telling me the truth, and what is my best tax option? Thank you for the help!

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    MA just wants to make sure you didn't buy the car recently in a state with lower taxes just to avoid MA sales tax. If memory serves, you only have to pay sales tax on the car if you have owned it for less than 6 months, and didn't pay at least 6.25% in the first state. Otherwise, you would only owe the difference between the lower-tax state and 6.25% (For example, if you bought the car in PA, where tax is 6%, you'd owe an additional 0.25% tax to register in MA. (If you bought the car in Philadelphia, where there's an additional 1% sales tax, you wouldn't owe anything in MA.)
    – chepner
    Jul 19, 2021 at 17:57
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    NH has no sales tax, so lots of people would find it worthwhile to drive across state lines to buy their car if they could register it tax-free as soon as they got home.
    – chepner
    Jul 19, 2021 at 17:59
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    Which is to say, if you at least had proof that you paid 8.25% sales tax to some state, MA wouldn't try to collect anything else.
    – chepner
    Jul 19, 2021 at 18:02

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I would be very cautious here.

I would tend to go with the first dealer making sure I kept the paper work showing that they collected the sales tax for MA. The last thing you want is to report to MA, register the vehicle and owe sales tax to both IL and MA. For that reason the second dealer would be out for me.

It may have to do with the first dealer being more of a national chain, or they could be lying to you. Once you get in the finance office, the switch happens to something you were not expecting or fail to notice.

If I woke up in your shoes I would do one of the following:

  • Rent a car until you need to move.
  • Repair the existing car
  • Buy very basic transportation where it would not really matter if paid double income tax (like less than $1,000).
  • Fly to MA, buy a car there and drive it back to IL.

When you lease a car, though, you tend to pay sales tax on a per month basis. So even if you paid double tax for one month it would not be that large of a hit financially. The month you moved from IL you should pay the 8.25% rate, with the next month at the MA rate.

How much will it cost to repair the car? What is broken on it? That is typically the lowest cost option.

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    Thank you for the comment! My car is like 10 years old and it had a faulty transmission. The mech said they can only replace it with a new transmission and charge me 5K for it. That’s too much for a 10 year old car. Cheaper alternatives like finding a used transmission takes time. So I decide to park it in my friend’s yard and deal with it later.
    – Harper
    Jul 19, 2021 at 17:54
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    If you're gonna use my name, you have to use manual transmissions ;) :) :) Those are cheap to change, and they don't fail in the first place. Go watch Youtube videos on how the two types of transmissions work - manuals are straightforward, but automatics basically prove JK Rowling was right: there is a Wizarding World!
    – Harper - Reinstate Monica
    Jul 20, 2021 at 1:35

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