MUNI CD-MOTOR FUEL REVENUE
HB1283 amends the Illinois Municipal Code to expand the authority to impose a municipal motor fuel tax. Under current law, only municipalities located in a county with a population over 3,000,000 may levy this tax; the bill would allow all Illinois municipalities to do so by ordinance. The tax would apply to retail sales of motor fuel for use on highways or waterways, but not to aviation fuel, and would be capped at 3 cents per gallon in 1-cent increments.
The bill also sets out the administrative framework for collecting and distributing the tax. The Illinois Department of Revenue would administer, collect, and enforce the tax, deposit receipts into the Municipal Motor Fuel Tax Fund, and distribute monthly payments to municipalities after withholding a 1.5% amount for tax compliance and administration. The bill includes timing rules for adopting or changing ordinances and for when the tax becomes effective after filing with the Department.
Its impact on state law is to broaden local taxing authority statewide and to create a mechanism for municipalities to generate dedicated revenue from motor fuel sales. It would affect municipalities, fuel retailers, and consumers purchasing motor fuel within municipal boundaries, while leaving existing limits in place for aviation fuel and constitutional restrictions on taxation. Because the bill is effective immediately, it would authorize municipalities to begin using the new authority as soon as they comply with the ordinance and filing requirements.
There is no recorded committee transcript or vote history provided, so there is no documented public debate or formal sentiment in the materials supplied. Based on the bill text alone, the measure appears revenue-focused and administratively straightforward, with the main policy choice being whether to extend a local tax tool beyond the largest-county municipalities to all municipalities in the state.
The most likely point of contention is local taxation and its effect on fuel prices, especially for drivers, businesses, and municipalities near borders where tax differences can influence purchasing behavior. Supporters would likely emphasize local revenue flexibility and municipal funding needs, while opponents may object to higher fuel costs or to expanding a tax that can be passed through to consumers.
HB1283 would amend Section 8-11-2.3 of the Illinois Municipal Code to expand municipal authority to impose a motor fuel tax from only municipalities in counties with populations over 3,000,000 to all municipalities statewide. It would preserve the existing cap of 3 cents per gallon, exclude aviation fuel, and keep administration with the Department of Revenue through the Municipal Motor Fuel Tax Fund and monthly distributions to municipalities. The bill would therefore broaden local taxing power and create a new or expanded revenue option for municipalities, while affecting fuel retailers and consumers through a locally imposed per-gallon charge.
No committee discussion or vote record was provided, so there is no direct evidence of support or opposition in the supplied materials. The bill’s text suggests a practical, revenue-oriented measure rather than a controversial structural overhaul, but expanding a fuel tax authority typically draws mixed reactions because it can raise consumer costs even as it provides municipalities with additional funding. On balance, the available record is neutral and does not show formal sentiment from legislators or stakeholders.
The main likely contention is whether all municipalities should be allowed to levy a motor fuel tax, rather than limiting that authority to municipalities in the state’s largest county. Opponents may focus on the burden on motorists and fuel retailers, the pass-through of the tax to consumers, and possible cross-border purchasing effects. Supporters would likely argue that municipalities need flexible, locally controlled revenue sources and that the bill simply extends an existing tool statewide under a modest per-gallon cap.