The state's suspended gas tax increase ended Sunday: What you need to know

A six-month pause on a scheduled gas tax increase in Illinois ended New Year's Day, but multiple pieces of legislation introduced in the General Assembly could counter the hike.

The pause stopped a 2.2-cent per gallon increase originally slated for last July 1 when the tax was set to rise to 41.4 cents per gallon. Gov. JB Pritzker's signature on the state budget, however, paused that tax increase until the new year and also included a yearlong suspension of the 1% grocery tax.

Related:Gov. JB Pritzker signs $46.5B budget including rebates, checks to Illinois taxpayers

Democrats saw this move as a much-needed form of tax relief for Illinoisans amid times of high inflation. Republicans chalked it up as an election season gimmick.

The increase in the gas tax is scheduled each year for July and is tied to annual inflation calculated by the Department of Labor. The Consumer Price Index for 2022 was 8.2%, making for an increase of approximately 3.1 cents per gallon and 42.4 cents per gallon overall.

There are two increases this year.

Only California has a higher gas tax than Illinois. The Land of Lincoln had an average price per gallon of $3.27 according to AAA on Friday — 10 cents more than the national average. This year, the U.S. Energy Information Administration is expecting the national average price to drop to $3.51 per gallon compared to $3.99 in 2022.

For more than 20 years, the gas tax stood steady at 19 cents per gallon but that changed in 2019 with the passage of the Rebuild Illinois infrastructure plan. An increase to 38 cents followed to help afford the $45 billion construction program, which is also funded by vehicle registration fees, title fees and sales tax on motor fuel.

Bills addressing the gas tax

The 102nd Illinois General Assembly will reconvene this week for its lame duck session, where it is possible that legislators will consider bills regarding the gas tax.

House Bill 5829 has secured several Republican co-sponsors, including state Rep. Sandy Hamilton of Springfield. The bill would extend the pause until July 1, 2023.

The bill sponsored by state Rep. Chris Bos, R-Lake Zurich, also would end the current state requirement for motor fuel retailers to post a sign notifying customers of the pause. Those that did not could be found guilty of a petty offense carrying with it a $500 fee per day the retailer was in violation.

“Illinois residents are no strangers to tax increases, but the weight of inflation partnered with increased taxes isn’t sustainable,” said Bos in a statement. “As a lawmaker, it’s my job to work toward viable solutions to our state’s biggest challenges and right now that’s the rising cost of living in Illinois. My legislation is an effort to provide relief at gas pumps across the state.”

Bos' bill was referred to the House Rules Committee in November.

Another more recently introduced piece of legislation would pertain to the sales tax levied on motor fuel and gasohol. State Rep. Ryan Spain, R-Peoria, introduced House Bill 5860 in late December and would drop the sales tax on these types of fuel from 6.25% to 1.25%. This decrease is the same rate as seen during the state's previous sales tax holiday in August 2022 for back-to-school shopping.

According to the Illinois Department of Transportation, revenues from the sales tax on motor fuels were expected to bring in $600 million for the Rebuild Illinois plan at full implementation. Spain's bill accounts for the decreased sales tax revenues by having the state Department of Revenue feed into the State and Local Sales Tax Reform Fund all of the net revenue from the 1.25% tax instead of the 20% of revenue under the current 6.25%.

The likelihood of action on any of these bills remains unknown, but would require bipartisan support from the Democratic supermajorities in both chambers.

The lame duck session is scheduled to run from Wednesday through Jan. 7 before picking backing up on Jan. 10.

Contact Patrick Keck: pkeck@gannett.com, twitter.com/@pkeckreporter

This article originally appeared on State Journal-Register: New year, new gas tax: Illinois to have two gas increases in 2023