The CATA wants to make you aware of a potential change in the retailers’ sales tax collection allowance. There are currently several legislative proposals, as well as a provision in the governor’s FY 2025 budget, to cap the retailers’ collection allowance at $1,000. As of now, vendors may retain 1.75% of state sales tax collected as partial reimbursement for acting as the state’s tax collector.

In 2022, franchised new-car dealers collected $2.9 billion in sales tax for the state of Illinois. New-car dealers are currently required to submit a separate sales tax form for every vehicle sold or leased, making sales tax collection a very labor-intensive process.

The current collection allowance already falls well short of the actual work required to collect the taxes. If the reimbursement amount were to be capped at $1,000, a typical dealer would lose $60,000 per year in administrative costs. For comparison, the Illinois Department of Revenue collects a 2.17% discount on 24 different taxes it collects.

We urge you to contact your state legislator via SoftEdge (highlighted in the article above) and make them aware of this potential detrimental change to the reimbursement amount and urge them to vote NO to any proposal that could cap the current 1.75% retailers’ collection allowance .