Illinois No. 3 in U.S. for high gas taxes
Illinoisans pay the third-highest gas taxes in the nation at nearly $0.85 per gallon. California leads and Michigan edged into the No. 2 spot.
Illinois’ gasoline taxes got higher during the past year, but the state dropped a spot to No. 3 in the U.S. thanks to a hefty Michigan increase.
Illinoisans are paying just shy of 85 cents per gallon in local, state and federal taxes and fees. The national average is 52 cents, according to the U.S. Energy Information Administration.
California’s taxes were No. 1 at 89 cents per gallon. Michigan was 66 cents a year ago but increased to 87 cents to claim the No. 2 spot in the January federal survey.
Heading west out of Illinois can save 37 cents in taxes by buying in Missouri or Iowa.
Illinois’ practice of applying sales taxes to gasoline after the motor fuel tax is charged effectively creates a tax-on-tax situation for drivers. This has led some residents, particularly those near state borders, to fill up elsewhere.
Gov. J.B. Pritzker doubled the per-gallon state tax in 2019 from 19 to 38 cents, which has now climbed to 48.3 cents thanks to automatic annual increases hitting each July 1. Those automatic tax hikes let state lawmakers skirt responsibility for voting on the yearly increases.
Before Pritzker got his hands on the gas tax formula, Illinoisans paid a total 54.5 cents per gallon in local, state and federal taxes. That means each car averages an extra $131 per year thanks to taxes.
What’s happened to all that tax revenue? It built up to a $3.3 billion surplus in the state road fund, which state lawmakers just raided for a $1 billion bailout of Chicago-area mass transit. That deal required a $1 billion tollway hike so trade unions would not lose work and would back the bargain.
Gas taxes are one of the most regressive forms of taxation, meaning they hit lower-income families the hardest. Those families often have older, inefficient vehicles that burn more gas.
Gas prices fluctuate, but Illinois gas taxes only go one way.