State’s gasoline tax hike goes into effect Tuesday; here’s what it could cost you

Illinois motorists will pay an average of about $6 more in gasoline taxes over the coming year as the state’s motor fuel tax rate hike goes into effect Tuesday.

This year’s increase, which is tied to the annual inflation rate, amounts to roughly 2.76%. That will drive the state’s motor fuel tax rate on gasoline from 47 cents per gallon to 48.3 cents per gallon.

For diesel fuel vehicle drivers, the tax rate is increasing from 54.5 cents per gallon to 55.8 cents per gallon.

Officials at the Illinois Department of Revenue said the increase is expected to generate $76 million more in motor fuel taxes over the course of the next fiscal year, which ends June 30, 2026. The current motor fuel tax rate generates more than $2 billion a year.

According to the Federal Highway Administration, Illinois motorists drive an average of 12,581 miles each year. An iSeeCars.com study from 2024 shows the average Illinois passenger vehicle gets 27.4 miles per gallon. All things being equal, the average Illinois auto driver would have paid $215.82 in state motor fuel taxes this year and can expect to pay $221.77 in the coming year, an increase of $5.95.

However, all things likely aren’t equal. FHA research shows most Americans are driving more each year, and during the first four months of 2025, average daily travel is slightly above the previous two years’ figures.

Officials at the Illinois Policy Institute, a conservative government watchdog group, are quick to note the state’s tax rate is in addition to other motor fuel taxes imposed by federal, municipal and county authorities. And Illinois is “one of three states that applies the state’s general sales tax on top of the price of gasoline,” they stated in a recent report on the motor fuel tax rate hike.

Revenue from Illinois’ motor fuel tax is split among the state, municipalities, counties and township road districts. A complex formula determines how the money is divided.

Before 2019, the state’s motor fuel tax rate was 19 cents per gallon. That money was divvied up after the state recovered some administrative costs, according to an Illinois Municipal League fact sheet. The state got 45.6% with the remaining 54.4% going to the Illinois Department of Transportation for distribution to local governments.

Those IDOT funds were divided four ways: 49.1% to municipalities on a per capita basis; 16.74% to Cook County; 18.72% to the other counties, in proportion to vehicle registrations; and finally, 15.89% to township road districts in proportion to the total mileage of roads in the state.

In 2019, the General Assembly approved a plan to double the motor fuel tax rate and increase it annually by the rate of inflation. The additional funding can’t be used for anything but road construction, under state statute.

The new law left the funding formula in place for the first 19 cents per gallon collected, but then changed the distribution rate for the additional funds. The new funds are first divided, with 80% going to the state and 20% going to mass transit agencies like RTA, CTA, Metra and Pace.

Of the new funds the state receives, 60% stays with the state. The other 40% gets split among municipalities, counties and townships. Municipalities receive almost half those remaining funds, according to the IML fact sheet. Counties and townships share the remainder.

https://www.dailyherald.com/20250630/news/states-gasoline-tax-hike-goes-into-effect-tuesday-heres-what-it-could-cost-you/