Why are gas prices the highest in Illinois as compared to the rest of the Midwest?
Traditional motor fuel taxes are a fixed amount per gallon. These federal and state taxes generally pay for road maintenance and other transportation expenses – motorists in all states pay these taxes. Illinois, however, is one of only seven states that tack on additional gas taxes beyond the motor fuel taxes. But most consumers don’t realize that, because these costs don’t show up on their receipts – they’re built into the price.
Combined, all federal, state, county and Chicago taxes total $0.77 per gallon at Aug. 17’s price. Of this $0.77 in taxes added on to each gallon of gas in Chicago, only $0.37 comprise federal and state excise taxes. The remaining $0.40 is composed of: Illinois’ 6.25-percent sales tax, which adds $0.18 per gallon; county and city sales taxes, which add an additional $0.11 per gallon to the price; an Illinois environmental tax; additional county and other home-rule sales taxes; and regional transportation authority taxes.
By: Mansoor Ansari J.D., LL.M. (TAX)
PH: (888) 577-1482