Illinois lawmaker pursues summer sales tax holiday for fuel

| Wednesday, April 16, 2008

If an Illinois state lawmaker gets his way, truckers and other drivers would get a four-month tax break at the fuel pump.

Rep. Bill Black, R-Danville, introduced a bill that would offer a sales tax holiday on motor fuels sold in the state between May 1, 2008, and Sept. 15, 2008. The state made a similar cut in 2000, but it lasted for six months.

Black and other Republicans were unsuccessful in an attempt two years ago to renew the tax holiday. Opposition from Gov. Rod Blagojevich, a Democrat, was cited for the bill’s demise. Hopeful that sentiment among the Democratic-led House and the governor has changed, Black has once again taken up the effort.

The latest effort in the state to help consumers cope with the cost of fuel would result in at least a 20-cent-per-gallon price break on diesel at today’s price. Motorists would save about 17 cents per gallon on gas.

Consumers now pay a 6.25 percent sales tax on motor fuel pumped into their tanks; 5 percent goes to the state with the rest earmarked for local governments. The bill would temporarily eliminate the state’s portion of the tax. As a result, only 1.25 percent of the tax would be tacked onto fuel purchases.

Illinois is one of nine states to apply a general sales tax on fuel in addition to a per-gallon state tax.

Critics say a break in the tax at the pump wouldn’t guarantee savings for consumers. Others say the tax holiday would hit the state in the pocketbook.

Black said he doesn’t buy that argument. Because of the high cost of fuel, the state’s revenue from the sales tax is significantly higher, he said.

To make matters worse for consumers, the sales tax collected on fuel doesn’t go for roads. Instead, it’s routed to the state’s general fund.

The bill – HB6318 – is in the House Rules Committee.

To view other legislative activities of interest for Illinois, click here.

– By Keith Goble, state legislative editor
keith_goble@landlinemag.com

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