Basis and Rate of the Motor Fuel Tax

Section 500 Section 500.200  Basis and Rate of the Motor Fuel Tax a)         The Motor Fuel Tax is imposed on the privilege of operating motor vehicles upon the public highways , including toll roads, and recreational-type watercraft upon the waters of this State .  [35 ILCS 505/2] 1)         Motor fuel used in such motor vehicles upon public highways and in such recreational watercraft on public waters is taxed according to the following rate schedule; provided that, beginning July 1, 2017, the tax on compressed natural gas is imposed in cents per gasoline gallon equivalent ("GGE"), rather than in cents per gallon, and the tax on liquefied natural gas and propane is imposed in cents per diesel gallon equivalent ("DGE"), rather than in cents per gallon. The tax imposed on all motor fuel under this subsection (a)(1) is as follows: Tax Period Rate Until August 1, 1983 7½¢ per gallon From August 1, 1983 through June 30, 1984 11¢ per gallon From July 1, 1984 through June 30, 1985 12¢ per gallon From July 1, 1985 through June 30, 1989 13¢ per gallon From August 1, 1989 through December 31, 1989 16¢ per gallon From January 1, 1990 through June 30, 2019 19¢ per gallon From July 1, 2019 through June 30, 2020 38¢ per gallon From July 1, 2020 through June 30, 2021 38.7¢ per gallon From July 1, 2021 through December 31, 2022 39.2¢ per gallon On January 1, 2023, the rate of tax imposed in this subsection (a)(1) shall be increased by an amount equal to the percentage increase, if any, in the Consumer Price Index for the 12 months ending in September of 2022. On July 1, 2023, and on July 1 of each subsequent year thereafter , the rate of tax imposed under this subsection (a)(1) shall be increased by an amount equal to the percentage increase, if any, in the Consumer Price Index for the 12 months ending in March of the year in which the increase takes place.  The percentage increase in the Consumer Price Index shall be calculated as follows: (1) calculate the average Consumer Price Index for the full 12 months ending in March of the year in which the increase takes place; (2) calculate the average Consumer Price Index for the full 12 months ending in March of the year immediately preceding the year in which the increase takes place; (3) calculate the percentage increase, if any, in the current-year average determined under item (1) over the preceding-year average determined under item (2).  The rate shall be rounded up to the nearest one-tenth of one cent. [35 ILCS 505/2(a)] 2)         Through June 30, 2019 , the tax on the privilege of operating motor vehicles that use diesel fuel shall be the rate according to subsection (a)(1) plus an additional 2½ cents per gallon .  [35 ILCS 505/2(b)]  On or after July 1, 2017, the additional tax under this subsection (a)(2) applies to liquefied natural gas and propane and is imposed in cents per DGE. Beginning July 1, 2019, the tax on the privilege of operating motor vehicles that use diesel fuel, liquefied natural gas, or propane, shall be the rate according to subsection (a)(1) plus an additional 7½ cents per gallon. [35 ILCS 505/2(b)]  This total combined rate is as follows: Tax Period Rate Until August 1, 1983 7½¢ per gallon From August 1, 1983 through June 30, 1984 13½¢ per gallon From July 1, 1984 through June 30, 1985 14½¢ per gallon From July 1, 1985 through July 31, 1989 15½¢ per gallon From August 1, 1989 through December 31,1989 18½¢ per gallon From January 1, 1990 through June 30, 2019 21½¢ per gallon From July 1, 2019 through June 30, 2020 45½¢ per gallon From July 1, 2020 through June 30, 2021 46.2¢ per gallon From July 1, 2021 through December 31, 2022 46.7¢ per gallon On January 1, 2023, July 1, 2023, and on July 1 of each subsequent year thereafter, the total rate imposed under this subsection (a)(2) will be adjusted to reflect any increase under subsection (a)(1). 3) As used in this Section , "Consumer Price Index" means the index published by the Bureau of Labor Statistics of the United States Department of Labor that measures the average change in prices of goods and services purchased by all urban consumers, United States city average, all items, 1982-84 = 100. [35 ILCS 505/2] b)         The Motor Fuel Use Tax is imposed upon the use of motor fuel upon highways , including toll ways, of this State by commercial motor vehicles.  The tax shall be comprised of two parts : 1)         A tax at the rate established in subsections (a)(1) and (a)(2); and 2) A rate shall be established by the Department as of January 1 of each year using the average "selling price", as defined in the Retailers' Occupation Tax Act, per gallon of motor fuel sold in this State during the previous 12 months and multiplying it by 6¼% to determine the cents per gallon rate. [35 ILCS 505/13a(2)].  The Department may use data derived from independent surveys conducted or accumulated by third parties to determine the average selling price per gallon of motor fuel.  Third parties include, but are not limited to, commercial entities that collect data (available by contract or at no cost) regarding the selling price of motor fuel sold in this State on a per gallon basis. c)         Compressed Natural Gas ("CNG").  Compressed natural gas is subject to tax at the rate established in subsection (a)(1). 1)         Calculation of Tax Through June 30, 2017.  Because CNG cannot be measured in gallons, it must be converted to gallons using a conversion factor.  For purposes of calculating tax under the Motor Fuel Tax Law, a gallon of CNG means a quantity of compressed natural gas equal to 126.67 cubic feet of natural gas at 60 degrees Fahrenheit and one atmosphere of pressure.  In the alternative, it means a quantity of compressed natural gas that weighs 5.66 pounds. 2)         Calculation of Tax on and after July 1, 2017.  CNG is required to be sold in GGEs (Section 8 of the Weights and Measures Act; 225 ILCS 470).  Tax is calculated at the rate established in subsection (a)(1) in cents per GGE . A GGE of compressed natural gas is defined as 5.660 pounds of compressed natural gas .  [35 ILCS 505/1.8B] d)         Liquefied Natural Gas ("LNG") and Propane.  Through June 30, 2017, tax on LNG and propane is calculated at only the rate established in subsection (a)(1) and is imposed at cents per liquid gallon.  However, on and after July 1, 2017, LNG and propane are also subject to the additional tax under subsection (a)(2), calculated in cents per DGE . A DGE of liquefied natural gas or propane is defined as 6.06 pounds of liquefied natural gas or 6.41 pounds of propane. [35 ILCS 505/1.8A]  On and after July 1, 2017, LNG and propane are subject to the following restrictions: 1)         LNG and propane are required to be sold in DGEs; and 2)         If propane is not sold in DGEs, however, the measured gallon volumetric units must be converted to DGEs to properly calculate tax.  In this case, the propane used as motor fuel shall be sold in actual measured gallon volumetric units, which shall then be multiplied by 0.651 to determine the DGEs that are subject to tax under the Motor Fuel Tax Law. [225 ILCS 470/8]