SPRINGFIELD, Ill. (WTVO) — Starting July 1st, Illinois residents will begin to pay more on basic necessities such as gasoline and groceries.
Last year, Gov. JB Pritzker signed a temporary initiative, the Family Relief Plan, designed to ease the effects of inflation on residents by suspending the 1% sales tax on groceries and freezing the motor vehicle tax at 39.2 cents per gallon.
On July 1st, 2023, those freezes will come to an end.
Taxes on groceries
The state’s 1% tax on groceries has been suspended for a year, but that is set to end on July 1, according to The Daily Herald.
Read the Illinois Department of Revenue’s informational bulletin for retailers on the return of this tax.
The grocery tax was suspended just before April 2022 to help reduce the cost to Illinois consumers. It only applied to food that was meant to be consumed off site, excluding candy, soda and liquor.
Illinois is one of 13 states across the country that taxes groceries, though the state’s 1% rate is the lowest among them.
This comes at a time when groceries are more expensive than before, as a recent report from the U.S. Department of Agriculture showed that prices at supermarkets were 7.1% higher in April than the year before.
Taxes on motor fuel
The state’s Motor Fuel Tax Law imposes an annual increase on July 1 to Illinois’ Part A fuel tax. This is a separate tax from the Part B rate determined January 1 every year
Illinois drivers this summer will be paying 6.2 cents a gallon more in state gas taxes than they did during Christmas, according to the Illinois Policy Institute, for a total tax of 45.4 cents, up from 42.3 cents on Jan. 1 and 39.2 cents a year ago, according to The Center Square.
The same tax increase also applies to diesel fuel, jumping from $0.498 per gallon to $0.529, liquefied natural gas, liquefied petroleum gas, and compressed natural gas.
Governor J.B. Pritzker signed into law a $45 billion infrastructure plan in 2019. That plan doubled the state’s gasoline tax from 19 cents to 38 cents per gallon, and included automatic inflation adjustments every July 1, meaning state lawmakers no longer need to vote on unpopular gas tax rate changes.
That’s on top of the state sales tax on gas, at 6.25%.
After the July 1 increase, Illinois will have the second-highest motor fuel excise tax in the nation, with Illinois residents paying 78 cents per gallon in taxes.