Illinois' gas tax goes up this week. Here's what you need to know

Illinois motorists will notice a slight price change at the pump this week, as the state’s gas tax is set to rise.

Under provisions of a law passed in 2019, the state’s gasoline tax rises each year based on the Consumer Price Index, a measure of inflation’s impact on the price of goods in the U.S. economy.

That increase takes effect on July 1, the same day that the new fiscal year begins in the state, according to state officials.

So how much is the tax going up?

For motorists whose vehicles run on gasoline, the tax is increasing to $0.483 per gallon, an increase of 2.77% over Fiscal Year 2025.

For diesel fuel, the tax is increasing to $0.558 per gallon, an increase of 2.39%, according to the state’s Department of Revenue.

Where does that tax rate rank Illinois?

Those tax rates do not include other levies, including sales taxes, excise taxes, federal fuel taxes and additional fees wholesalers put on fuel. When those are figured in, Illinois has one of the highest fuel tax rates in the nation, according to research by the Tax Foundation.

Indiana also ranks in the top five, according to the group.

What do gas taxes pay for?

According to the Illinois Road and Transportation Builders Association, fuel taxes go toward maintaining and building infrastructure in the state of Illinois

Under provisions of the Illinois Transportation Taxes and Fees Lockbox Amendment, lawmakers are prohibited from using those transportation funds for anything other than their intended use, according to Ballotpedia.

Could changes be coming?

There is growing concern nationwide that gasoline taxes are not keeping pace with the need for infrastructure repairs and construction, and as a result some states are taking steps to find other sources of revenue.

Those shortfalls are occurring largely because vehicles are more fuel efficient, or in the case of electric vehicles, because they don’t use any fuel at all while still causing wear and tear on roadways and bridges.

One source of revenue some states have explored is using a tax on each mile driven by a motorist, with states like Oregon initiating such programs. Illinois has mulled such a proposal, but that legislation was not brought up for a vote before the end of the spring legislative session.

Indiana has also sought additional revenue streams, recently passing legislation that would permit any interstate highway within the state to be converted into a toll road with federal approval.

According to the Reason Foundation, the measure is the first to be passed in the U.S.

from NBC Chicago https://ift.tt/dFQBjqH