Each summer, Illinois’ gas tax is adjusted by the state’s government, and the date for that change is rapidly approaching.
Under provisions of a law passed early in the tenure of Gov. J.B. Pritzker, the state’s gas tax goes up each summer using a specific formula, with that money specifically earmarked for road maintenance and new construction.
Here’s what you need to know.
What is Illinois’ current gas tax?
During Fiscal Year 2025, stretching from July 1, 2024 to June 30, 2025, the gas tax in the state of Illinois is set at $0.47 per gallon on unleaded fuel, with the diesel fuel tax set at $0.545 per gallon, according to the state’s Department of Revenue.
What determines the Illinois gas tax?
Under provisions of the bill passed in 2019, the state’s gas tax is tied to the Consumer Price Index, a measure of inflation’s impact on the price of goods in the U.S. economy.
The bill uses the CPI as the jumping off point for the calculations, and the number of the proposed increase is included in the state’s budget proposal.
When will the next increase go into effect?
The gas tax adjustment takes effect on July 1 each summer.
How much could the gas tax rate go up this year?
The gas tax rate has not yet been locked in, as it’s part of ongoing budget negotiations in Springfield as lawmakers in the General Assembly mull the 2026 fiscal year budget.
In the proposed budget submitted by Pritzker, the gas tax would go up by approximately 2.69% in FY 2026, or by 1.3 cents per gallon, raising the tax rate to $0.483 cents per gallon.
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 how the state taxes fuel?
A note in the proposed FY 2026 budget indicates that state officials are anticipating further declines in the amount of fuel used by state motorists, potentially linked to improved fuel efficiency and greater use of electric and hybrid vehicles.
As a result, there is a potential the state could explore alternative revenue generators as fuel tax collections start to level out and potentially even decline.
Under one bill proposed by State Sen. Ram Villivalam, drivers would be charged for each mile they drive, with a select group of drivers participating in a pilot program to determine the viability of such a measure.
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 remains in committee in Springfield, and it’s unclear whether it will be debated before the end of this legislative session.
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