Illinois motorists will see a slight increase in their gas prices next month as the state’s tax on fuel is set to rise by more than 3%. The Illinois Department of Revenue announced that the gas tax will increase from $0.454 per gallon to $0.47, while the tax on diesel fuel will rise from $0.529 to $0.545 per gallon, both increases of just over 3%.
This latest increase follows a series of tax hikes implemented by the state in recent years, with the last increase in July 2023. The fuel tax is set to rise annually and is indexed for inflation. Revenue from the fuel tax is used to fund infrastructure projects at both the state and local levels, as mandated by a constitutional amendment passed in 2016.
Data from the Illinois State Comptroller’s office shows that since July 2023, the state has collected $2.67 billion in fuel taxes. In addition to the state tax, motorists also pay sales taxes and a federal excise tax on fuel. The federal excise tax on gas is $0.184 per gallon.
Illinois currently has the second-highest fuel tax rate in the country, trailing only California, according to the Tax Foundation. The increased tax revenue will be used to improve and maintain transportation infrastructure across the state. Motorists should prepare for a small increase in gas prices as the new tax rates go into effect next month.
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