Illinois Tax Rules on Goodwill Auto Repairs by Dealers for Manufacturers

• Illinois said goodwill repairs by auto dealers can be taxable depending on who directs and supplies the repair.
• If a dealer does the repair on its own, the dealer is the end user and owes use tax on the parts cost.
• If a manufacturer directs the repair and provides the parts, the transaction is a taxable service.
• In that case, the dealer is the service provider and the manufacturer is the service customer.
• A de minimis dealer registered for Illinois sales tax generally owes tax on the parts transferred, while the manufacturer owes use tax collected by the dealer.

Source: vitallaw.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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