Gas tax increasing, trailer tax could decrease

[June 12, 2021]  By Greg Bishop

(The Center Square) – Taxes for drivers filling up at the pump in Illinois are going up again July 1, an annual increase one analyst says politicians made to take them off the hook from having to vote for tax increases in the future.

Gas prices are up more than a dollar over the previous year, driven partly by demand as government COVID-19 restrictions lift.

Patrick De Haan, head of petroleum analysis with GasBuddy, says Illinois is 6th highest in the nation and the highest in the midwest by far.

“Illinois is not the place to fill up if you’re hitting the road this summer. You’ll want to get outside the state before filling your tank,” De Haan said.

As of Friday afternoon, GasBuddy had the average for regular blends in Illinois at nearly $3.30 a gallon. Indiana was $3.05. Wisconsin was $2.92. Kentucky was $2.88. Iowa was $2.87. Missouri was $2.76.

Chicago requires a different blend which pushes prices in the metro area up, De Haan said.

Then there are the taxes. Illinois doubled state gas taxes two years ago to 38 cents a gallon and started annual increases tied to inflation. Last year’s increase was seven-tenths of a penny per gallon. This year, it’ll increase about a half-a-penny per gallon, but it depends on the blend.

“Many states now index gasoline tax changes to inflation so that politicians don’t have to vote to increase taxes, but indeed that is going to be another hit on gas prices across the state of Illinois,” De Haan said.

Before doubling the gas tax and indexing annual increase, drivers filling up in Illinois paid $1.3 billion in taxes in Fiscal Year 2019. In Fiscal Year 2020, that was $2.3 billion. So far this year with a month left to report for Fiscal Year 2021, motor fuel taxes are $2.2 billion.

Patrick De Haan, head of petroleum analysis with GasBuddy, discusses Illinois gas prices on Friday. ABATE of Illinois' Josh Witkowski talks about trailer fees on WMAY, July 1.   fuelinsights.gasbuddy.com, WMAYNews Facebook

While gas taxes in Illinois next month will have another half-a-penny per gallon tacked on, other driving-related taxes could possibly decrease.

A measure headed to the governor’s desk may change a variety of other tax increases in that two-year-old law that doubled the gas tax. Lawmakers passed Senate Bill 58 last month to decrease trailer plate fees from $118 to $36. It also removes the $10,000 cap on vehicle trade-in credits some said was double taxation.

Motorcycle lobby ABATE of Illinois’ Josh Witkowski told WMAY the measure is a win all around.

“It's a win for people who purchase used vehicles,” Witkowski said “It’s a win for people who have small trailers. It’s a win for motorcyclists all throughout Illinois because that small trailer behind your motorcycle is no longer $118.”

But, the measure does increase the title transfer fee from $150 to $155.

The bill cleared both chambers and has yet to be sent to the governor.