IL Pauses Gas Tax Hike, Brings Back Sales Tax Holiday

ILLINOIS — Illinois drivers will get a little break at the pump, with a planned hike in the gas tax suspended temporarily.

The state tax was set to increase July 1 to 49.6 cents per gallon—up 1.3 cents from the previous year—because of the automatic annual inflation increase built into the 2019 “Rebuild Illinois” infrastructure program signed by Gov. J.B. Pritzker, according to Illinoispolicy.org.

The newly passed budget for FY2027, though, delays that increase for six months, according to Governor JB Pritzker's office.

In July 2025, the tax was 48.3 cents per gallon, which was up from 47 cents per gallon in July 2024. The increases are automatically built into the program. Illinoisans are currently seeing an average gas price of $4.69 per gallon as of June 3, up from about $3.36 a year ago, according to the AAA. It's a slight dip in average price from last month, which notched at $4.933. The national average is currently $4.26 per gallon.

Governor JB Pritzker touted on social media Tuesday that the state is "pausing our motor fuel tax," while the release from his office states only that the increase is paused.

The Motor Fuel Tax Law imposes a tax per gallon on all motor fuel (i.e., diesel fuel, gasoline, gasohol, liquefied petroleum gas (LPG, commonly known as "propane"), compressed natural gas (CNG), and liquefied natural gas (LNG)) used in motor vehicles operating on Illinois public highways and in recreational type watercraft operating on Illinois waters.

Pritzker has pointed the finger at President Donald Trump, alleging that international conflicts and economic policies under Trump's watch are driving up fuel costs.

States like Indiana and Kentucky, though, have frozen their states' gas tax temporarily to give drivers a break, the Chicago Tribune reports.

IllinoisPolicy.org reports that when state and local taxes are factored in, many Illinois drivers pay more than 85 cents per gallon in taxes at the pump.

Meanwhile, the state plans to use $150 million in sales tax revenue brought in by the motor fuel tax to offset a budget shortfall, Illinois Policy.org reports.

Sales Tax Holiday Is Back

In a move to help out taxpayers, the new budget also brings back a Back-to-School Sales Tax Holiday. Families shopping for school supplies, clothing, computers, and other school necessities will not pay state sales tax from August 7-16.

“In the face of economic uncertainty and devastating federal cuts, Illinois chose stability, responsibility and compassion,” said Senate President Don Harmon (D-Oak Park). “This budget strengthens support for working families, protects access to hospitals and health care, invests more than 300 million new dollars in public education and provides relief for parents through a sales tax-free shopping holiday, and it does it all without raising the state income tax or sales tax. I’m grateful to Governor Pritzker, Speaker Welch and the members of the General Assembly for working together to once again achieve our shared goal of a responsible budget focused on protecting the people of the great state of Illinois.”