Illinois gas tax doubles in time for record holiday traffic

Travelers filling up in Illinois will pay a 19-cent premium for the privilege of buying gas in the Prairie State.

Illinois’ gas taxes vaulted to third-highest in the nation July 1, when the state motor fuel tax doubled to 38 cents, and could go higher yet.

The new tax started just in time for Independence Day weekend travel, which AAA projects will be the busiest ever. The organization anticipates nearly 2.4 million Illinoisans will travel more than 50 miles from home during the weekend. When it comes time for those travelers to fill up, they might be inclined to save a little by buying gas in another state.

Illinois’ new motor fuel tax is tied to inflation, meaning it will automatically rise in future years without requiring lawmaker approval. The tax is projected to reach 43.5 cents by 2025, a 130% increase from June 2019.

On average, an Illinois driver travels 12,921 miles a year, and the average vehicle consumes one gallon of gasoline every 24.7 miles. Based on those numbers, Illinoisans will pay $100 more a year under the 38-cents-per-gallon state gas tax in its first year. By 2025, that burden will rise to nearly $130 more per year.

Statewide, Illinoisans are paying an average price of $2.91 per gallon, up to 47 cents more than the average price in neighboring Missouri.

Nationwide, travelers are getting a break compared to last Independence Day, with average gas prices down 23 cents. Unfortunately, Illinoisans aren’t experiencing any relief: Gas prices are up 7 cents compared to last year.

Illinois drivers venturing into other states – or who have family coming into the state – would be wise to fill up elsewhere.

Those traveling in the Chicago area could save 29 cents per gallon by purchasing gas in nearby Gary, Ind. Those near the Illinois-Missouri border could save 47 cents per gallon by choosing to fill up in Cape Girardeau rather than nearby Carbondale.

Had the 19-cent gas tax hike not gone into effect, gas would be cheaper in some areas of the Illinois-Missouri border. Drivers in the Belleville area would have actually paid lower prices in Belleville than in St. Louis, but thanks to the new Illinois tax are facing gas prices 9 cents more expensive per gallon.

Beyond the state-level increase, the new law as of July 1 also allows Chicago to increase its local gas tax by 3 cents; Lake County and Will County to impose a gas tax of up to 8 cents per gallon; and DuPage, Kane and McHenry counties to double their 4-cent-per-gallon gas taxes to 8 cents. These additional hikes in heavily populated areas may end up making Illinois’ average gas tax burden the highest or second-highest in the nation.

While AAA doesn’t anticipate the state’s gas tax hike to be enough to deter travelers during the holiday weekend, it will almost certainly affect where drivers decide to purchase their gasoline. Illinois retailers lose in that calculation.