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Replacement Vehicle Taxes


The Illinois Municipal Code authorizes Illinois municipalities to impose a replacement vehicle tax of $50 on any passenger car purchased within the municipality by or on behalf of an insurance company to replace a passenger car of an insured person in settlement of a total loss claim. The Counties Code allows Illinois counties to impose a $50 replacement vehicle tax on any passenger car purchased within the county (but outside any incorporated municipality imposing a replacement vehicle tax) by or on behalf of an insurance company to replace a passenger car of an insured person in settlement of a total loss claim. Funds are distributed monthly after subtracting administrative fees of 1.6 percent of the total amount collected for municipalities and 2 percent of total amount collected for counties.