Several Illinois Taxes Increase July 1

The first round of Illinois tax increases will take effect on July 1. Lawmakers ended their spring session by imposing $4.7 billion in tax and fee hikes on Illinoisans.

The state’s gas tax will go from 19 cents per gallon to 38 cents per gallon. Illinois residents will be paying the second-highest overall gas tax burden in the U.S.

Illinoisans will also pay higher taxes on cigarettes with a $1 per pack increase, while the state will also be one of only eight in the country to impose a tax on e-cigarettes at the state level.

The tax rate for proceeds from video gambling machines will increase to 33% from 30%, with an additional 1% increase in the rate the following year.

A new tax on managed care health insurance organizations will also go into effect based on the number of members they have whether they are private or part of the state’s Medicaid program.

The plan will free up $390 million in general revenues through a combination of increased federal reimbursements and shoring up Medicaid accounts that are not part of the general operating budget. However, most of these taxes would be paid back through federal reimbursements on state Medicaid spending.

The real estate transfer tax for non-Illinois residents will triple from 50 cents up to $1.50 per $500 of value sold. 

There was another $2.59 billion in tax hikes passed during lawmakers’ spring session. They are set to impact residents later down the road.