In Colorado, you can reduce the gross sales price of new equipment by the value of any trade-in when calculating the amount subject to sales taxes as long as the traded-in property will be sold at retail. This means that, in theory, if you sold a customer a car, you could still get the reduction even if you took a tractor as a trade-in.
However, in Illinois, you can only reduce the sales price if the trade-in is similar to the property purchased So, if you're selling cars, your customer is going to have to trade in a car, not a tractor, to get this reduction.
Many states, such as Michigan, do not allow any trade-in deduction from the purchase amount subject to sales tax (although many of these states make exceptions for vehicles.) If you take trade-ins as part of your business, you should contact your state's taxing authority in order to find out what their requirements are for reducing the sales amount by the value of a trade-in. (Looking to do business internationally? See our article on differences between VAT and sales tax.)