Illinois proposed an increase in its gas tax rates on May 9, 2019, and the hike is now live. Under the implemented provisions, the new gas tax rates for Illinois are 38 cents per gallon (CPG). This makes Illinois the state with the highest total fuel taxes in the country.
The Backstory
The Land of Lincoln had been pushing for gas tax increase since the start of the year amidst the deteriorating condition of the state’s transport infrastructure. Legislators argued that more funds were needed to maintain, repair and restore the roads and bridges of Illinois.
When Chicago Mayor, Rahm Emanuel, initially suggested to raise the tax rates to 30 CPG, fuel retailers strictly opposed his proposal. They had a valid point; their business could not afford to pay exorbitant amount in gas taxes. Especially, for border retailers, this was a more legitimate concern, as they were competing with cross border gas stations that already enjoyed a retail price advantage. Any further addition to gas tax rates would have meant them losing any remaining customers they had.
Thankfully, the fuel retailers succeeded in what they wanted. Little did they know, however, that their victory would be short lived.
Three months later, State Senator Martin Sandoval and Don DeWitte re-echoed the sentiments of Rahm Emanuel on the house floor by proposing House Bill 391. This time the suggestion was unfortunately approved.
Worried Border Retailers
Border retailers are seriously worried. Their worst fears have come true. They believe this decision is going to make the borders narrower as consumers would flock to cross border stations to the gas on cheap fill their tanks at a significant savings. Missouri is going to benefit the most from this latest plight of the border retailers of Illinois. And while there aren’t a significant amount of stations on theIndiana/Illinois border, the few that are on the Illinois side will also obviously struggle.
Without a doubt, these are worrying times for the border retailers of Illinois.
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