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What is the Motor Fuel Tax?
The Motor Fuel Tax in Illinois is a tax that is imposed on drivers for the privilege of driving on Illinois roads. The tax is paid upfront by distributors of fuel and the distributors then collect the tax from their customers.
What are the current Motor Fuel Tax rates?
The Motor Fuel Tax rate is currently set at 0.483 cents per gallon for gasoline and 0.558 cents per gallon for diesel. These rates are set to expire on June 30, 2026.
When will the Motor Fuel Tax rates increase?
The Motor Fuel Tax rate will increase on July 1, 2026, and the increased rate will remain in effect through June 30, 2027. The rate effective on July 1 will bring the tax on gasoline to 0.496 cents per gallon and the tax on diesel to 0.571 cents per gallon.
Why is the tax on gas increasing?
The tax on gasoline in Illinois is increasing due to Governor J.B. Pritzker’s 2019 “Rebuild Illinois” plan. The plan automatically adjusts the gas tax based on inflation.
The gas tax rate will increase by an amount equal to the percentage increase in the CPI-U on each following July 1. The CPI-U is the Consumer Price Index For All Urban Consumers. The CPI-U is based on a random sample of prices collected monthly from retail and service establishments, and it is the most widely cited indicator of inflation or deflation in the United States.
Will the gas tax be suspended?
This month, the Illinois legislature, at the direction of Governor JB Pritzker, announced that the 1.3 cent increase on the tax on gasoline that was to go into effect on July 1, 2026, will be paused for 6 months. The automatic increases are tied to inflation and will resume in December 2026.
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