Pursuit of summer sales tax holiday dies in Illinois

| Wednesday, May 28, 2008

A bill in the Illinois House that has died without debate sought to give truckers and other drivers a four-month tax break at the fuel pump.

House Republicans were unsuccessful in their attempt to persuade Democrats, who have majority control of the chamber, to allow a vote on a bill that called for a sales tax holiday on motor fuels sold in the state between May 1 and Sept. 15.

Sponsored by Rep. Bill Black, R-Danville, the measure – HB6318 – was intended to help consumers cope with the cost of fuel. It would have resulted in at least a 20-cent-per-gallon price break on diesel at today’s price. Motorists would have saved about 17 cents per gallon on gas.

Supporters said truck drivers might have saved $1,000 during the tax holiday.

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 have temporarily eliminated the state’s portion of the tax. As a result, only 1.25 percent of the tax would have been 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 said a break in the tax at the pump wouldn’t guarantee savings for consumers. Others said the tax holiday would cost the state about $200 million in revenues.

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.

To view other legislative activities of interest for Illinois in 2008, click here.

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

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