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Gov. J.B. Pritzker signed Senate Bill 1963 that gives gas
stations a 10% sales tax exemption to sell gasoline with a
higher blend of ethanol. The sales tax incentive is designed to
boost sales of gasoline with 15% ethanol blend, said Russ Orrill,
public policy manager for the Illinois Corn Growers Association.
“In Iowa, there are a lot more stations that sell gas with an
E15 blend. We’re trying to increase the need and the want for
E15 here in Illinois,” Orrill said.
Most Illinois motorists buy gas with a 10% blend of ethanol. In
May, the Environmental Protection Agency issued a waiver to
allow the sale of 15% ethanol blend gasoline this summer.
The EPA is expected to permit year-round sales of E15 gasoline
in seven Midwest states, including Illinois, starting in 2024.
The sales tax incentives are voluntary. Retailers can use them
to increase market demand for E15 blend gas.
“Ethanol is a commodity that our farmers grow in our backyards
throughout the state of Illinois. It’s renewable and
sustainable,” Orrill said. "It lowers the carbon intensity of
gasoline. It reduces the CO2 emissions by 40 to 50%."
The new rule provides a 10% sales tax exemption for the E15
blend that most vehicles can use. There is a 20% sales tax
exemption for fuel with a 20% to 50% blend of ethanol, and a
100% tax exemption for vehicles that can run on fuel with an 85%
blend of ethanol.
State Sen. Pat Joyce, D-Essex, introduced the legislation
earlier this year with the backing of Sen. Celina Villanueva,
D-Chicago.
“They were both tremendous to work with,” Orrill said. “Joyce is
a farmer himself.”
The new tax structure will help farmers and be better for the
environment, Joyce said.
“When the demand for ethanol-based fuel goes up, we see the
demand for Illinois corn rise as well,” Joyce said in a
statement.
The sales tax measures were written into a larger tax omnibus
bill that passed the Illinois House on a 79-25-2 vote and the
Senate on a 53-1 vote.
The sales tax exemptions are set to expire in 2028. Joyce’s
original legislation would have extended them through 2030.
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