Labor Day weekend travel made pricier by Illinois’ gas taxes

Labor Day weekend travel made pricier by Illinois’ gas taxes

Illinois’ multilayered state and local gas taxes drive up prices at the pump

Gas prices in Illinois and Indiana are reaching new heights, thanks to Hurricane Harvey and the increased demand around Labor Day weekend. However, in Illinois there’s more driving the price of gas than just market forces and the tragedy unfolding in Texas.

The average price of a regular gallon of gas in Illinois as of Sept. 1, was $2.54, slightly above the national average of $2.52, according to AAA. Part of that cost comes from Illinois’ multilayered state gas taxes. In addition to the federal tax on gas of $0.18 per gallon, motorists in the Prairie State also have to pay a state excise tax, a state environmental tax and the state sales tax.

Other states only require consumers to pay a fixed amount per gallon of gas. Illinois is one of only seven states to charge sales tax on gasoline. Nationwide, Illinois ranks 11th for gas prices, according to a January 2017 Tax Foundation study.

But for Chicagoans, the price is considerably higher.

In Chicago, the average price of a gallon of gas is $2.79, according to AAA. One of the main reasons Chicago’s gas prices are so high is due to the many taxes levied on Chicago gas. In addition to the fixed federal tax per gallon and the multiple state taxes on gas, those filling up in the Windy City have to pay excise taxes levied by both the city of Chicago and Cook County. Gas sold in Chicago is also subject to different home rule taxes, bringing the price up even higher.

And in July, Illinois lawmakers ended the state’s tax break for certain kinds of gasohol, which could cause prices at the pump to rise. Gasohol is a mixture of gas and ethanol. The tax break’s purpose was to encourage the use of certain types of gasohol, and the state previously gave tax breaks for distributors who used E10 and other types of gasohol. Originally slated to expire Dec. 31, 2018, lawmakers moved that up to July 1, 2017.

While gas prices often fluctuate due to seasonal and market changes, much of the higher cost in Illinois stems from the state’s web of gas taxes and the policies implemented by state and local lawmakers.

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