ILLINOIS — The end of a grocery tax suspension, the increase of the state’s tax on gas, the doubling of certain fees; there are multiple aspects of life in Illinois set to become more expensive on July 1.
Tax on groceries returns
Perhaps the most far-reaching impending change is the return of the state’s 1% tax on sales of groceries. Though one penny for every dollar spent is arguably a low amount, it is a tax which impacts nearly every resident of Illinois.
Read the Illinois Department of Revenue’s informational bulletin for retailers on the return of this tax.
Motor fuel tax increases
The state’s Motor Fuel Tax Law imposes an annual increase on July 1 to Illinois’ Part A fuel tax. This is a separate tax from the Part B rate determined January 1 every year, and any July 1 local municipal fuel tax increases such as those in DuPage, Kane, Lake, McHenry, and Will Counties.
The yearly increase is tied to the Consumer Price Index from the U.S. Department of Labor which for 2023 is 7.41%. As such, the cost of gasoline will jump by more than three-cents per gallon on July 1 simply due to the Part A fuel tax increase which will go from $0.423 per gallon to $0.454.
The same tax increase also applies to diesel fuel, jumping from $0.498 per gallon to $0.529, liquefied natural gas, liquefied petroleum gas, and compressed natural gas.
Certain fees double for coroners and real estate transactions
House Bill 2332 was signed into law in June and doubles the cost of cremation for county coroners and medical examiners. The current cost is $50 per permit, but on July 1 it will jump to $100.
That’s not the only state-imposed fee doubling in the new fiscal year. House Bill 3878 amended the Rental Housing Support Program Act to increase the state surcharge on all county recorder real-estate documents. Currently, each county recorder is required to collect a $9 fee for any such documents, but as of July 1 that extra fee will be $18.
The Rental Housing Support Program, created by the Illinois legislature in 2005, primarily provides rental assistance to those who are unable to pay their housing costs for one reason or another.
Local sales tax increases
Fifteen local municipalities across Illinois are set to increase their sales tax, four of which are in the Chicago area: Barrington, Naperville, St. Charles, and Winfield.
Barrington is enacting a 1% increase which will result in a 10% sales tax in its Cook County portion and an 8% sales tax in its Lake County portion.
Naperville’s Heinen Business District will see a 0.50% increase up to 8.25%, while its Block 59 Business District will jump 1% to 8.75%.
St. Charles is implementing a 0.50% increase up to a new 8.50% total sales tax.
Winfield’s sales tax will jump 0.25% to a new total of 7.75%.
See the full list of local municipal sales tax increases across Illinois here.
Minimum wage increases in Chicago and Cook County
Though not the result of a new law, the next scheduled annual minimum wage increase will also take effect on July 1 for the City of Chicago and the rest of Cook County. While not a tax, the increase in labor costs could push prices of goods and services up for local consumers.
The city’s hourly minimum wage will rise $0.40 per hour to $15.80 for businesses with 21 or more employees, and rise $0.50 per hour to $15 for businesses with four to 20 employees. Also set to rise is the base hourly salary for tipped employees, going up $0.24 to $9.48 for businesses with 21 or more employees, and jumping to $9 per hour for those with four to 20.
Meanwhile a similar increase will take place for suburban Cook County with the hourly minimum wage rising $0.35 to $13.70, and $0.60 to $8 per hour for tipped workers.
Other new laws effective July 1
A number of other new laws are set to take effect with the state’s new fiscal year. Below is a non-exhaustive list of the bills and a brief synopsis of each intended purpose.
Bill Number: SB 250
Description: Fiscal Year 2024 appropriations bill.
Bill Number: HB 1273
Description: Makes Constitution Day a commemorative holiday.
Bill Number: HB 1688
Description: Allows cars, vans, and other first division vehicles to operate as school buses under a Secretary of State permit.
Bill Number: SB 1963
Description: Amends the Use Tax Act, the Service Use Tax Act, and the Service Occupation Tax Act in numerous ways.
Bill Number: HB 2380
Description: Amends and expands eligibility for the Illinois Student Assistance Commission’s existing human services professional loan repayment grants.
Bill Number: SB 3130
Description: Requires DCFS to provide youth in care access to the department’s Search and Reunion services within 30 days prior to the youth in care turning 18 years old.
Bill Number: SB 3459
Description: Provides that the Adjutant General, the Assistant Adjutant General for Army, or the Assistant Adjutant General for Air, or a representative designated by the Adjutant General may present one State flag of Illinois to the next of kin of the deceased member of the Illinois National Guard or any Illinois resident dies while on State Active Duty or while serving in duty or training statuses pursuant to Title 10 or Title 32 of the United States Code as approved by the member’s service component.
Bill Number: HB 3551
Description: Establishes the Bond Authorization Act of 2023
Bill Number: HB 3817
Description: Implements the Fiscal Year 2024 Budget.
Bill Number: HB 4639
Description: Repeals a Section concerning the licensing of manufactured home dealers.
Bill Number: HB 4825
Description: Allows vehicle registration applicants to self-disclose potential conditions that could impede communications with a peace officer.
Bill Number: HB 5496
Description: Amends several statutes to uniformly replace the term “accident” in relation to automobiles, motor vehicles, and traffic accidents with the term “crash.”