In Illinois: The Proposed Gas Tax Rise and the Threat to Border Fuel Retailers

Illinois’ roads and bridges find themselves in a dilapidated state. Earlier this year, a portion of Lake Shore Drive had to be closed for repairs after cracked beams were found in the bridge.

What’s going to fix the state’s fast-aging transport infrastructure?

Some—well at least the legislators for sure—believe that the solution lies in a gas tax rise.

In Illinois - The Proposed Gas Tax Rise and the Threat to Border Fuel Retailers

In December 2018, Chicago Mayor Rahm Emanuel proposed a 20 to 30 cent increase in Illinois’ gas tax to fund a major statewide transportation bill. Later, Gov. J.B Pritzker supported the proposal in one of his legislative sessions.

While there’s no doubting the fact that Illinois needs to do something—and something fast—about the problem, it’s hard to say that the solution lies in increasing the gas tax.

For what it’s worth, the proposal if accepted will negatively impact the people of Illinois who already pay a fortune in gas tax. More concerningly, it could threaten the business of fuel retailers that operate at the borders of the state.

Currently, Illinois has a fuel excise tax of 19 cents per gallon. Sales tax is also applied to fuel sales in the state, which brings the grand total to 37.2 cents per gallon. Compare that to the gas tax rates that people pay in the bordering states such as Missouri, the difference evidently becomes debilitating to the revenue of border retailers. As such, a 20- or 30-cent tax increase will only make things worse for them.

Why would anyone want to stop at these gas station when they could just drive a few more miles further, cross the border, and get the gas at cheap?

Maybe, a better solution for everyone involved would be to come up with a consolidated strategy, where other funds generating options are also leveraged and any tax increase is kept to the minimum.

As a company that sells gas station equipment, we aren’t really in a position to suggest an alternative. All we know is, you can’t expect to thrive in the long run by overlooking the interests of the community that plays such a vital role in driving the economy of Illinois and the country in general.

On the behalf of the entire team of John W. Kennedy Company, we’d like to request the decision makers to think about the fuel retailers of the state before making any final decision.

John W. Kennedy Company is your one stop shop for gas station equipment and supplies. We sell gas station breakaways, nozzle swivels, pipe fittings, service station hardware, shop management systems and everything else you need to keep your gas station operational, safe and efficient. Visit our online store to learn more about our product range.

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