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Several tax hikes begin in Illinois July 1, including for gasoline | Illinois


(The Center Square) – An annual rite of summer in Illinois is approaching soon with another increase in the state’s gas tax along with a slew of other tax increases.

In total, Illinois will see $1.1 billion in tax hikes over the next year. They will support a record-high $53.1 billion state budget.

Taxes for gasoline will be 47 cents per gallon and 54 cents per gallon for diesel. The gas tax hike means Illinois drivers will have to pay an average of $184 more per year on gas than they did in 2019.

The increase is part of the Rebuild Illinois capital plan. In 2019, lawmakers voted to double the gas tax from 19 cents per gallon to 38 cents per gallon with annual increases tied to inflation. Illinois is one of just a few states that also assesses its sales tax on top of the gas tax.

“When you add up what people pay in gas taxes at the federal, state and local level, Illinois pays the second most in gas taxes in the nation to only California and obviously the highest in the Midwest by far,” said Dylan Sharkey, an editor with Illinois Policy Institute.  

By comparison, Missouri is also raising the motor fuel tax on July 1 to 27 cents per gallon, according to the Missouri Department of Revenue. 

Also on July 1, electric vehicle owners in Illinois will be charged a $100 yearly fee to make up for lost tax revenue, on top of the annual registration fee.

Video game taxes will increase by 1 percentage point, to 35%, and the sports wagering tax will rise for sportsbook operators. The tax will move from a 15% flat rate to a progressive rate of up to 35%.

Sharkey said Illinois is near the top of many lists for the wrong reasons.

“It would be one thing if we had just had the second highest gas tax in the country, but we also have the second highest corporate income tax rate and the second highest property tax rate, so it is one thing to be atop of one ranking, but Illinois being constantly near the top for all of them goes to show you that people are losing out in multiple ways,” said Sharkey. 

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Caleb Alexander

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