Illinois Gas Tax Bill Shifts Transit Funding Debate

Illinois bill would suspend 6.25% gas sales tax from July through December 2026

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Illinois Bill Seeks Gas Tax Suspension for 6 Months

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Illinois drivers could see relief at the pump under legislation that'd suspend the state's 6.25% sales tax on gasoline for six months. Representative C.D. Davidsmeyer is backing House Bill 5738, which would eliminate the sales tax from July 1 through December 31, 2026, as gas prices in central Illinois reached $4.27 per gallon in early April. The measure targets what Davidsmeyer calls a 'tax-on-a-tax' that adds to Illinois' already second-highest gas tax in the nation at 48.3 cents per gallon.

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The legislation comes as working families and seniors struggle with rising living costs and fuel expenses heading into summer driving season. Illinois currently imposes both a 48.3-cent-per-gallon excise tax and a 6.25% sales tax on gasoline purchases, making it one of the most expensive states for fuel. Davidsmeyer argues the sales tax suspension is justified after October 2025's Senate Bill 2111 redirected nearly $500 million from Downstate road funds to Chicago's transit system. That legislation shifted the transportation funding split from 55/45 Downstate/Chicago to 85/15 Chicago/Downstate, part of a $2.5 billion bailout of Chicago's mass transit system enacted by Governor JB Pritzker and Democrats during the October 2025 Veto Session.

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House Bill 5738 would provide a six-month reprieve from the state sales tax specifically, leaving the 48.3-cent excise tax in place. At current prices of $4.27 per gallon, the 6.25% sales tax adds roughly 27 cents per gallon to drivers' costs. For a typical 15-gallon fill-up, suspending the sales tax would save drivers about $4 per tank. The legislation doesn't address local sales taxes that some municipalities add to gas purchases, and officials haven't said whether the suspension could be extended beyond December 31, 2026, if gas prices remain elevated.

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The proposed suspension would take effect July 1, 2026, and run through the end of the year, covering the peak summer driving months and fall travel season. Davidsmeyer is urging colleagues to support the measure as gas prices hit historic highs. The representative emphasized that Illinois families can't afford to pay the sales tax when fuel costs are already strained by the nation's second-highest gas tax. Officials haven't said when the bill might come up for a vote or whether it has sufficient support to pass.

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Drivers affected by gas price fluctuations can monitor fuel costs and plan trips accordingly. The legislation aims to provide direct relief at the pump during a period of elevated prices, though the actual savings will depend on gas price levels throughout the suspension period. Moovit provides real-time transit updates and trip planning for riders across Illinois who may be looking for alternatives to driving as fuel costs remain high.