State senator wants special session to cap Illinois' sales tax on gas

[May 17, 2022] By Scot Bertram | The Center Square contributor

(The Center Square) – A Republican state senator is pushing for a special legislative session in Illinois to address high gas prices across the state.

As of Monday, according to AAA, the average price for a gallon of gas statewide was $4.83. In Chicago, the average price reached $5.11 per gallon. The average price nationally is $4.48.

State Sen. Dave Syverson, R-Cherry Valley, said his legislation to cap the state’s sales tax on motor fuel at 18 cents per gallon could provide real relief to consumers.

“Illinois is one of just seven states that charges a sales tax of 6.25% on top of the regular gas tax,” Syverson said. “As the price of fuel goes up, so does the tax. A state that used to be getting sales tax based on $2.80 a gallon, and now they're getting sales tax based on $5.00 or more a gallon. They're reaping an increased profit of 13 to 15 cents per gallon.”

In additional to the sales tax, Illinois also assesses a motor fuel tax of nearly 40 cents a gallon after doubling it in 2019.

Syverson says the sales tax on top of the gas tax adds up to about $2.5 million more each day going into the state’s coffers than before the price surge began.

“All we're saying is you didn't plan on this money, so let's roll the sales tax back to where it was last year,” Syverson said. “Let's cap it and let's leave that money in the taxpayer's hands and not give it to government.”

He says the gas tax, by law, has to go to local and state roads and can't be used for any other purpose. However, the sales tax on fuel enters into the state’s general fund and can be spent any way deemed appropriate.

The legislation to cap the sales tax amount, Senate Bill 4195, has been adopted by the full Senate Republican caucus. It was introduced in March, but lawmakers instead agreed to delay until January 2023 the state's automatic annual increase of the gas tax tied to inflation, which amounts to about a two-cent increase per gallon.

Syverson argues the delayed two-cent a gallon increase is not much relief for drivers and the increased cost of filling up is a big deal for Illinois communities located near other states.
 

“The majority of population lives close to the border,” Syverson said. “When you charge a sales tax and our surrounding states don't, that extra 15 cents makes our prices even more dramatic. When it gets to be more than 50 cents a gallon difference, consumers will drive a few miles to buy that gasoline. Truckers will fill up in other states. Then the state of Illinois loses all those revenues.”

He argues capping the sales tax on fuel could mean up to $1 billion of relief to consumers over the next year and keep more gas sales and ancillary purchases inside the state.

“We can do this within a couple of days,” Syverson said. “The governor could call special session. We could be down there within 48 hours. We could pass my bill and the governor could sign it. The tax could be rolled back by this weekend, and consumers could be saving.”