Illinois’ second-highest gas taxes boost motorists and businesses across state lines – Muddy River News
At the MotoMart store in Sauget, Ill., drivers pay $4.30 at the pump, 20 cents more per gallon than the national average, thanks to the Prairie state being second in the nation for taxes on gasoline.
But a quick trip across the Mississippi River to St. Louis, Missouri, and drivers pay $3.85 per gallon, saving $6.75 on every 15 gallon fill.
Crossing the state line is the difference between paying the second highest and second lowest gas taxes in the nation. And for Illinois gas station owners near state lines, that means losing business.
“It’s like a tale of two cities,” said Robert Forsyth, president of MotoMart Inc. “Missouri is doing pretty well in terms of fuel demand. And Illinois is doing pretty badly.
Illinois Gas Taxes Still #2 in the U.S.
When Illinois doubled its gasoline tax in 2019, it went from the 10th-highest average tax per gallon in the nation to No. 2, where it remained in a January 2022 survey.
Forsyth operates 80 MotoMart gas stations and convenience stores in six Midwestern states, including stations in Illinois, Missouri and Indiana. He said sales at Illinois stations were down amid near-record prices as drivers are more cost-conscious and buy less when filling up.
” It’s not surprising. Illinois charges a percentage of sales tax on top of the state fuel tax on every gallon, so when prices go up at the pump, taxes at the pump go up as well,” Forsyth said. “Meanwhile, Missouri and Indiana are not adding a fuel sales tax. This means drivers save more.
He said sales in Missouri were increasing as more Illinois people crossed state lines to fill up amid high prices — and save big. This leaves Illinois gas stations at a competitive disadvantage.
“We have seen how higher gas prices impact sales; demand is decreasing and driver behaviors are changing, including where they fill up and what they buy,” Forsyth said. “This year, sales are up in Missouri and down in Illinois. The percentage increase in sales in our Missouri stores is actually greater than the decline in sales in our Illinois stores.
Forsyth blames major state taxes in Illinois for driving residents across the border by driving up the prices of necessary goods, such as fuel. He said gasoline taxes are among the most regressive in the state, affecting more vulnerable residents more than high-income residents.
“People in Illinois have the seventh highest state and local tax burden this year,” Forsyth said, based on an April Tax Foundation report. “Take an already overburdened population, then add the second-highest gasoline taxes in the country…and any further increases are that much more painful. And some feel it more than others.
“Not only are upper- and middle-class people much more likely to have more fuel-efficient vehicles than lower-income people, who end up driving older, gas-guzzling cars, but the costs Fuel costs represent a higher percentage of a family’s expenses on a low budget.”
Illinois drivers have paid the second-highest gas tax in the nation since Governor JB Pritzker doubled the state’s gas tax from 19 to 38 cents a gallon to fund $45 billion in dollars in infrastructure projects and pork. Illinoisans now pay about $1 per gallon at the pump in taxes.
Pritzker gasoline tax hike
Illinois Governor JB Pritzker doubled the state’s gasoline tax in 2019 to 38 cents from 19 cents per gallon, including automatic annual hikes. The election year tax relief package includes a 6-month deferral of the automatic hike, but that means there will be two hikes in 2023.
Pritzker proposed in his 2023 Illinois budget to temporarily delay the automatic annual increase he built in when doubling the state’s gasoline tax. But that delay means two gas tax hikes in 2023 after the election. Combined, the double hike in 2023 will bring the state gasoline tax to 45.2 cents per gallon, a 138% increase in gasoline tax since Pritzker took office.
The governor then ordered gas stations to put signs on their pumps announcing his delay in raising taxes — or pay fines of $500 a day.
“Oil marketers shouldn’t be forced to offer free election-year advertising for governor,” Forsyth said. “I surely hope that this case will be challenged in court.”
The inflationary adjustment is estimated to cost Illinois 6 cents more per gallon in taxes by the middle of 2023. Forsyth said it gives Illinois six more reasons to cross the border when filling up.