February 08, 2023


When it comes to gas, Illinois is taxing taxes

Scott Reeder

Illinois politicians must think we are really dumb. They just passed legislation that requires every gas pump in the state to bear a sticker telling us that the state could be screwing us over even worse at the gas pump.

Of course, they don’t phrase it that honestly. Illinois will still have the second-highest gasoline taxes in the nation — but, hey, our politicians are putting off a 2-cent-a-gallon tax hike scheduled for July 1 until Jan. 1, 2023.

Let’s say in July, I were to pull into a service station to fill my pickup with fuel and I spend $100. (I spent that much two weeks ago – the most I’ve paid in my life at a gas pump.) The legislature wants me to know life could be much worse. If they hadn’t put off the tax increase, I could have paid $100.40.

Feeling a little underwhelmed? Well, you ought to be.

In 2019, Gov. JB Pritzker and legislative Democrats doubled the state’s gas tax, increasing it from 19 cents a gallon to 38 cents, and added an annual increase tied to inflation. It’s that annual increase for this year that may be suspended for six months, not the doubling of the state gas tax in 2019 or the inflationary increases that already have kicked in since then.

Illinois not only taxes gasoline by the gallon but it imposes a separate sales tax that taxes it by the dollar. The taxes paid per gallon are used in the basis to determine sales tax on the overall sale.

We are taxing taxes.

Josh Sharp, chief executive officer of the Illinois Fuel and Retail Association, said Illinois may be the only state that assesses its sales tax on top of the gas tax. Folks in some parts of Illinois are paying about 50 cents a gallon in state taxes alone.

Add on the federal taxes and consumers are paying about 77 cents a gallon in taxes, he said.

That’s shameful, particularly when gasoline prices are at near record levels. Families across the state have suffered through two years of a pandemic and now are struggling against the highest inflation the nation has experienced in nearly 40 years.

As stipulated in the budget Pritzker signed this week, every gas pump in the state must have a 4-by-8-inch sticker reading: “As of July 1, 2022, the State of Illinois has suspended the inflation adjustment to the motor fuel tax through December 31, 2022. The price on this pump should reflect the suspension of the tax increase.”

If a gas station owner does not comply, they will face a $500 fine for each day they are out of compliance.

“We don’t think the government can compel a business or a private citizen or anyone for that matter to utter speech that they don’t want to participate in, and, to us, this is a very political speech. It’s right before an election. It’s difficult to make the case that there is a public safety aspect to this. It’s a political message. It’s talking about a tax hike,” Sharp said.

“This is just an effort to make retailers engage in free political advertising.”

Sharp said his organization plans to file a lawsuit to block its implementation on the grounds that it violates the free speech rights of his members.

The delay of the 2-cent-per-gallon tax hike moved its implementation from before the November election to less than two months after. No one, least of all Pritzker, wants to be blamed for $4.50 gasoline.

In fairness, there is little a governor can do about fluctuating oil prices on the international commodity exchanges. The only thing they can influence that affects the price of gasoline is how it’s taxed.

But instead of making a tough call on reducing state revenue and bringing gas taxes down to be in line with other states, our lawmakers chose a flimsy sticker to cover their culpability in making Illinois one of the most expensive places in the nation to fill up.

We deserve better.

• Scott Reeder, an Illinois Times staff writer, can be reached at sreeder@illinoistimes.com.

Scott Reeder

Scott Reeder

Scott Reeder, a staff writer for Illinois Times, can be reached at: sreeder@illinoistimes.com.