Illinois Gas Tax Increase: What You Need to Know

The state's motor fuel tax is doubling to 38 cents per gallon on July 1, its first increase since 1990

Illinois Gov. J.B. Pritzker signed several bills into law Friday, including a $45 billion capital plan, an expansion of gaming across the state and revenue package that include several tax increases to fund the major infrastructure improvements in the capital plan.

One of those tax hikes is an increase in the motor fuel tax. Here's a look at what you need to know about that part of the legislation:

How much is the gas tax increasing?

The motor fuel tax is doubling from 19 cents per gallon to 38 cents per gallon and the diesel fuel tax is increasing by 5 cents to be 45.5 cents total.

When was the last time the gas tax increased in Illinois?

1990, according to Pritzker.

What else is changing about the gas tax?

The motor fuel tax will now be tied to the Consumer Price Index in the future, which means it will automatically continue to increase annually with inflation. 

When does the gas tax hike take effect?

The increase in the gas tax, along with the rest of the legislation Pritzker signed Friday, takes effect July 1. [[510722952, C]]

Who does it impact?

The gas tax increase will impact everyone who buys gas in Illinois, regardless of where they purchase it in the state - it's an increase across the board.

How much money will the gas tax increase generate?

Pritzker estimates the gas tax increase will generate $590 million in Fiscal Year 2020, and more each year based on inflation. 

What is the gas tax increase funding?

The revenue from the gas tax hike will be split between three purposes, Pritzker's office says: 48 percent to construction of state roads and bridges, 32 percent to units of local government and 20 percent to local transit districts.

The increase is part of Pritzker's $45 billion capital plan - which he has branded as "Rebuild Illinois" - to rebuild the state's infrastructure like roads, bridges, mass transit and buildings. Roughly three-quarters of the investment of "Rebuild Illinois" will be dedicated to transportation priorities, according to Pritzker. [[510683022, C]]

What else is being taxed more?

Vehicle registration fees are increasing from $101 to $151 per vehicle beginning with 2021 registrations. Electric car registration fees jump from $34 per vehicle every other year to $251 annually. Truck registration fees increase by $50 for vehicles 8,000 pounds and under, and by $100 for vehicles weighing more than that. The special fuels tax - on diesel fuel, liquefied natural gas or propane used for motor vehicles - increases from 2.5 cents per gallon to 7.5 cents per gallon.

Parking garages will now also be taxed: 6% on daily and hourly garages, and 9% on monthly and annual parking, effective January 1, 2020. Cigarettes will now be taxed at $2.98 per pack, increasing $1 from the current $1.98 per pack tax. E-cigarettes will also be taxed at a 15% rate wholesale, and the tax on video gaming machines increases from 30% to 33% on July 1, then to 34% on July 1, 2020.

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