Home gas tax Illinois Gas tax jumps to 3rd highest in the nation

Illinois Gas tax jumps to 3rd highest in the nation

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Illinois’ gas tax jumps to third highest in America

FILE - Gas station, fuel tax, infrastructure

This summer’s gas tax hike has sent Illinois’ rate to nearly the highest in America.

An analysis by the Tax Foundation of American Petroleum Institute figures as of July 1 show Illinois, at 54.98 cents per gallon, has the third-highest state and local motor fuel tax in the nation. Before lawmakers voted to double the state’s share to 38 cents per gallon, Illinois was 21st in the nation.

“Thirty-eight of those cents are the state excise tax right now,” Tax Foundation analyst Janelle Cammenga said. “And then they have 16.98 cents which are attributed to other state taxes and fees.”

The American Petroleum Institute figures calculate local gas taxes by an average that’s weighted by the population in each area. Illinois’ local municipalities can enact their own local gas taxes on top of the state rates after legislation that was enacted in June.

The stark difference between Illinois’ rate and that of Iowa and Missouri is likely to push people across the Mississippi to get gas, Cammenga said.

“People aren’t stupid,” she said. “They’re going to buy where things are cheaper if it’s within reason.”

She said the cost at the pump will also have a nominal effect on retail product prices since the cost of shipping goods to the location will inevitably become higher.

Policy analysts have said the gas tax is more equitable than other types of taxes because it amounts to a user fee for the infrastructure, but Cammenga said politicians must be disciplined with their spending to keep that equity.

“Every dollar that the government spends is a dollar that comes out of a taxpayer’s pocket,” she said. 

The new tax money is going to pay for a multi-year, $45 billion infrastructure plan.