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Mitchell Proposes Tax Relief for Motorists
State
Should Not Be Making a Windfall on Taxpayers' Backs
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[November 16, 2007]
In light of the rising gas
prices and the upcoming holiday travel season, state Rep. Bill
Mitchell is proposing legislation that will provide sales tax relief
for Illinois motorists.
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 Mitchell came to Lincoln on Thursday afternoon, where he was met by
Logan County Board Chairman Dick Logan.
He made his announcement at the Fifth Street Food Mart, the only
remaining privately owned gas station in Lincoln. Cliff McCumber is
in the process of becoming its sole proprietor.
The statewide average price of gasoline is currently more than $3
per gallon. Analysts are predicting record-high gas prices through
the holiday season. This is leading to windfall tax receipts for the
state, as it charges a 5 percent sales tax on gas.
"Speculators are driving up the price of oil, hitting our working
families in the pocketbook as they try to cope with rising gas
prices," Mitchell said. "The state of Illinois shouldn't be in the
business of gas-gouging. We need to provide immediate tax relief to
Illinois motorists."
Mitchell is proposing that the state charge sales tax only on the
first $1.50 per gallon of the selling price of gasoline.
House Bill 4108 would exempt from the state sales tax that part
of the selling price of motor fuel or gasohol that exceeds $1.50 per
gallon.
According to the latest estimates, the state collects
approximately $549 million in sales tax revenue (annualized) when
the price of gasoline is $2.50 per gallon. At $3 per gallon, the
state will collect nearly $669 million in sales tax revenue. These
estimates indicate that the state takes in an extra $120 million
(annualized) for every 50-cent increase in the price of a gallon of
gasoline.
[to top of second column]
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Estimated annual motor fuel sales tax revenues
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Price per gallon |
Sales tax revenue |
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(Gasoline and diesel) |
(In millions) |
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$2.00 |
$428.5 |
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$2.50 |
$548.6 |
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$3.00 |
$668.7 |
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$3.50 |
$788.7 |
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$4.00 |
$908.8 |
"The governor has said repeatedly that he doesn't want to raise
taxes on working people," Mitchell said. "I agree and believe we
should pass my legislation to provide tax relief to Illinoisans
being hit hard by the high price of gas."
The 5 percent sales tax does not affect the road funds. This
money goes straight into the state's general revenue fund -- in
other words, the state checkbook -- which pays salaries, Mitchell
said.
Illinois is one of only 10 states that impose a sales tax on
gasoline. In addition to the 5 percent state sales tax, Illinois
also has a motor fuel tax of 19 cents per gallon. Illinois collected
approximately $1.4 billion in motor fuel tax receipts in fiscal
2006.
[Text from news release from
Rep. Bill
Mitchell and LDN]
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