People who buy gas in Illinois, pay to park in Chicago, buy a new car, register a vehicle, smoke or buy things online, will soon be paying more in taxes to the state of Illinois.
A slew of tax increases are coming July 1 with the various budget, gambling expansion and public works construction bills lawmakers passed in the final days of session last weekend.
“I’m actually very proud of how this was put together,” Gov. J.B. Pritzker said. “You’ve got to look at how do you pay for these things. It’s very important that you do it properly.”
Drivers will pay higher taxes and fees. For those who drive about 12,000 miles a year, the doubling of the gas tax from 19 cents to 38 cents per gallon would mean an additional $114 to the state, but that will vary depending on gas mileage. Car owners will also pay $50 more for annual registration. For those buying a new car, the vehicle documentation fee nearly doubles to $300, more than all of Illinois' neighboring states except Kentucky. And people who park in Chicago will pay up to a 9 percent tax.
Smokers will also feel the pinch because there’s an extra $1 per pack tax, bringing the total tax to nearly $3 a pack. A pack-a-day smoker will pay a total tax of more $1,000 – $365 more than last year – to the state.
Shopping online will also have a sales tax tacked on, in part because of new language passed by the state legislature this session.
Taxpayers United of America President Jim Tobin said the taxes are going to hit certain populations hard.
“The state’s residents who are poorer are the most affected by the enormous, regressive tax increases on these items,” Tobin said.
He said the new tax increases on everyday items show Pritzker has broken his promise.
“He’s already proven now that’s he’s all in favor of raising taxes on the middle class and poor by over $2 billion in the form of a gas tax and these other regressive tax increases that he just signed off on the other day,” Tobin said.
The increased taxes and fees will pay for the largest state budget, and what the governor said is the largest public works program for the state of Illinois. Democrats, and some Republicans, have said the taxes are needed, especially for infrastructure projects.
Taxpayers Federation of Illinois President Carol Portman said a lot of people will focus on the tax increases, but it was a mixed bag with some tax credits carved out for certain businesses.
“It’s a complicated state and the taxes are complicated and a lot happened over the course of the last week,” Portman said.
She highlighted the repeal of the corporate franchise tax that supporters have said will lower the tax burden for 300,000 businesses in the first of a planned five-year phase-out. Republican leaders also touted tax credits for manufacturers’ purchases, certain construction jobs and incentives to bring data centers to Illinois.
“A real mixed bag and scores of tax changes ranging from a very small, minor, little correcting a glitch as a result of federal tax reform and then big things like repealing the franchise tax,” Portman said. “That was a terrific change.”
Where you’ll be paying more if the governor signs all the proposed measures:
Motor fuel tax: Beginning July 1, 2019, the 19 cent gas tax is doubled to 38 cents a gallon. Driving 12,000 in a vehicle averaging 20 miles a gallon will mean an additional $114 per year in gas taxes for a total of $228.
Vehicle registration: Starting Jan. 1, 2020, the vehicle registration fee is going up by $50 per year. The lowest tier of vehicle registration will increase to $149.
Electric vehicles: Also Jan. 1, 2020, annual registration fee goes up from $34 a year to $248 a year.
Parking: Beginning Jan. 1, 2020, there’s a 6 percent tax on daily and hourly garage parking. If it’s $12 a day, you’ll pay $12.72, including the tax. There’s a 9 percent tax on monthly and annual garage parking. If you park at a ramp on N. Clark St. in Chicago, that will cost $120 a month. With the 9 percent tax, that’s a total of $130.80.
Vehicle purchase documentation: The state’s documentation fee for vehicle purchases will be increased to $300. That’s nearly double what it is now, and more than Indiana’s, Iowa’s, Missouri’s and Wisconsin’s, but not more than Kentucky’s fee.
Tobacco: An extra $1 per pack of cigarettes will be added bringing the total to $2.98. A pack-a-day smoker will pay an additional $365 for a total tax of over $1,000 to the state. Electronic cigarettes will be taxed at 15 percent.
Online sales: Beginning Jan. 1, 2020, remote sellers meeting certain thresholds will have to remit sales taxes to the state of purchase from within the state.
Video gambling: The tax on video gambling would go up from 30 percent to 33 percent.
Sports betting: There will be a 15 percent tax on sports books.
Recreational marijuana: The state will levy taxes of up to 41.25 percent on potent recreational marijuana.