Illinois ST-556 Form: Vehicle Sales Tax Exemption

The Illinois Form RUT-50, Private Party Vehicle Use Tax Transaction Return, is used to calculate and report the vehicle use tax when a vehicle is transferred between two private parties. This form is necessary for the new owner to legally title and register the vehicle. It serves as official documentation for the Illinois Secretary of State and the Department of Revenue, ensuring the correct tax is paid.

Determining if the RUT-50 Form is Required

Form RUT-50 is required for all vehicle transactions between private parties where no licensed dealer is involved. The amount of tax due depends on the specifics of the transfer. For a standard sale, the tax is based on the vehicle’s age or the purchase price.

The form is also used for transfers that have special tax rules, such as a transfer between immediate family members. Qualifying relationships include spouses, parents, children, stepparents, stepchildren, and siblings. When a vehicle is transferred between these relatives, the new owner pays a reduced tax of $15.

Another situation is the transfer of a vehicle as a gift to someone who is not an immediate family member. In this case, where no money is exchanged, the use tax is calculated based on the vehicle’s fair market value.

The form is also applicable when an individual transfers a vehicle into a revocable living trust of which they are the primary beneficiary. This is often done for estate planning purposes and is not a taxable sale. The RUT-50 form documents that the transfer is a change in the form of ownership rather than beneficial ownership.

Information and Documentation for Form RUT-50

For the buyer, you will need their full legal name, complete address, and either a Social Security Number (SSN) or a Federal Employer Identification Number (FEIN) for businesses or trusts. The same information—name and address—is required for the seller who is transferring the vehicle.

You will need the 17-digit Vehicle Identification Number (VIN), which must be transcribed exactly as it appears on the vehicle’s title and chassis. You will also need the vehicle’s year, make, and model, as well as the date it was acquired. The form requires the purchase price for a sale or the vehicle’s fair market value if it was a gift to a non-relative.

The official, fillable version of Form RUT-50 is available through the Illinois Department of Revenue or the Secretary of State’s office. It is important to use the most current version of the document to ensure compliance.

The VIN, make, model, and year must match the existing title document perfectly to avoid processing delays.

You must declare the nature of the transaction, as this determines the tax calculation, by checking the box that corresponds to the transaction type, such as a sale, gift, or transfer to an immediate family member. Both the buyer and seller must sign and date the form, certifying that the information provided is true and correct.

Submitting the Completed Form RUT-50

The completed Form RUT-50 is part of a package of documents required for titling and registration. It must be presented to the Illinois Secretary of State (SOS) at a local Driver and Vehicle Services facility, the agency that handles all vehicle title and registration applications.

The completed RUT-50 is submitted along with the Application for Vehicle Transaction(s) (Form VSD 190), which is the primary document for applying for a new title and registration in the state. The original vehicle title, properly signed over by the seller, must also be included. These documents work together: the signed title proves legal transfer of ownership, the VSD 190 requests a new title and plates, and the RUT-50 calculates the use tax due on the transaction.

When you present this package at an SOS facility, staff will review all documents for completeness and accuracy. If the paperwork is in order, they will process the application. The new owner then pays the applicable title and registration fees, along with the use tax calculated on the RUT-50 form.

Following submission and payment, the SOS will issue a new registration and license plates. The new title is typically mailed to the new owner within a few weeks. It is advisable to keep a copy of the submitted RUT-50 form with your vehicle records as proof of the tax paid.