As drivers prepare for summer, many motorists have eyes on the annual Illinois gas tax increase, which looms in coming months.
Under provisions of a law passed early in the tenure of Gov. J.B. Pritzker, the state’s gas tax goes up each year using a specific formula, with that money earmarked for road improvement projects.
Here’s what you need to know.
What is Illinois’ current gas tax?
Beginning on July 1, 2024, Illinois’ gas tax increased to $0.47 per gallon on unleaded gas, with the diesel fuel tax set at $0.545 per gallon.
That tax rate on unleaded fuel represented an increase of approximately 1.5 cents per gallon over the previous rate.
Why does the gas tax go up?
Under provisions of a law passed by the General Assembly, the gas tax rate is tied to the Consumer Price Index, which measures inflation. Previously, the rate had remained unchanged for decades at $0.19 per gallon, but under the new bill it doubled to $0.38 per gallon in 2019 and has gone up each year since.
When will the next increase go into effect?
The next increase is set to go into effect on July 1, but the Department of Revenue has not yet announced what that increase will be.
Where does that rank among states?
According to data from the Tax Foundation, the state of Illinois ultimately assesses a total of $0.665 per gallon in taxes and other fees on fuel, the second-highest rate of any state in the country.
That number includes the state’s gas tax, along with sales taxes and a variety of taxes and fees assessed to wholesalers and retailers that is then passed on to consumers, according to the foundation.
Indiana is fifth in the country at $0.517 per gallon.
Are any changes being considered to the state’s tax rate?
There are multiple proposed changes being mulled by lawmakers in the state, including a bill introduced by State Sen. Ram Villivalam that would potentially charge drivers per mile instead of relying on gas taxes to help maintain roads.
Under provisions of his bill, a pilot program would be established to charge drivers a per-mile rate, similar to other pilots in states like California.
Such programs are being mulled as vehicles become more fuel efficient, with state officials concerned that drivers of hybrid vehicles and all-electric vehicles are using roadways and creating need for repairs and maintenance while not contributing funding to those projects via gasoline taxes.
The bill would implement the pilot program by Jan. 1, with a select group of drivers participating in the program.
Another bill introduced by State Rep. Anthony DeLuca would allow non-home-rule communities to implement their own fuel taxes for revenue purposes.
Under state law, only home-rule municipalities located in a county with more than three million residents can implement such taxes, which means only Cook County communities can do so.
Both bills remain in committees in Springfield, according to the General Assembly’s website.
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