Illinois doubles fuel tax rates, nixes truck fee

July 2019

Keith Goble

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Fuel tax rates in Illinois are on the verge of doubling. In a nod to truckers, the state also is prepared to relieve professional drivers of a burdensome tax collected for nearly two decades.

The state now collects 19 cents on each gallon of gas sold and 21.5 cents on diesel. The tax rates are unchanged since 1990.

Dubbed “Rebuild Illinois,” a $45 billion capital plan approved by the General Assembly and endorsed by Gov. J.B. Pritzker will raise the state’s fuel tax rates to 38 cents on gas and 45.5 cents for diesel fuel.

“The Rebuild Illinois plan will reinvigorate our economy and strengthen our rightful status as the transportation and supply chain hub of the nation,” Pritzker said in prepared remarks following the bill’s passage.

The additional taxes and fees on vehicles in SB1939 are estimated to raise $2.4 billion annually. The fuel tax rates also will be tied to inflation.

The fuel tax rate increases go into effect July 1.

A separate component of the capital plan gives Chicago area governments authorization to collect a fuel tax of up to 8 cents.

The 177-page bill includes other vehicle fee increases to take effect on Jan. 1, 2020.

Most vehicles will see registration fees raised from $98 to $148. Registrations for 80,000-pound trucks will increase by $100 to $1,515 – up from $1,415.

One more provision in the bill will end collection of the commercial distribution fee.

Since 2004, the state has collected a surcharge on annual registration fees for vehicles between 8,001 pounds and 80,000 pounds. Once set at 36%, the fee now is at 14.35%.

Truckers have long been required for more than a decade to chip in $400 to cover the commercial distribution fee. On top of the nearly $2,800 they already pay for base plates, truckers pay about $3,200 a year to tag their trucks in the state.

Truckers say the fee amounts to a tax on a tax. Effective July 1, 2020, the tax on a tax will be removed. LL

Keith Goble

Keith Goble has been covering trucking-related laws since 2000. His daily web reports, radio news and “OOIDA’s State Watch” in Land Line Magazine are the industry’s premier sources for information regarding state legislative affairs.

Synchrony Financial