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Illinois gas tax to increase July 1 – NBC Chicago

Illinois gas tax to increase July 1 – NBC Chicago

Illinois motorists will notice a small increase in their gas prices starting next month as the state’s fuel tax is set to increase by more than 3%.

According to the Illinois Department of Revenue, the tax on gasoline will increase from $0.454 cents per gallon to $0.47, an increase of just over 3.5%.

Diesel fuel taxes will also increase from $0.529 to $0.545 per gallon, an increase of just over 3%, according to the state’s website.

Since a short moratorium has been imposed on the increases due to the increase in inflation in recent years, which has increased twice in 2023 and now for the third time in July 2024.

According to officials, the state fuel tax will increase each year and will be indexed for inflation. In 2019, lawmakers voted to change how the tax was calculated, allowing it to increase from $0.19 to $0.38 and then increase each year based on inflation.

The fuel tax is used to finance construction projects at both the state and local levels. Illinois voters added an amendment to the state Constitution in 2016 to prohibit these revenues from being used for anything other than transportation costs.

Illinois has collected $2.67 billion in fuel taxes since July 1, 2023, according to the office of Illinois State Comptroller Susana Mendoza.

Sales taxes in Illinois are also levied on fuel, officials said. Motorists also pay an excise tax on fuel, which is administered by the federal government. According to the U.S. Department of Energy, gas is taxed at the federal level at a rate of $0.184 cents per gallon.

According to the Tax Foundation, Illinois has the second-highest fuel tax rate in the country, behind only California.