How Will Your Company Be Impacted By the Illinois Fuel Tax Hike?
With the new Illinois budget in effect as of June 5, a number of new taxes have come into effect, including the Illinois fuel tax increase. Doubling the state fuel tax to $0.38 per gallon, it's planned to fund a $45 billion infrastructure plan, improving roadways across the state. But how will this tax increase impact your business when it goes into effect on July 1? Here's a look at the potential issues you may face.
Companies that have a lot of fuel usage will be hit especially hard by the fuel tax increase. PMR Towing and Service in Marion notes that the increase will make it difficult to keep their costs low. The company, which uses 250 to 500 gallons of fuel for its two tow trucks, service truck and car on a weekly basis, estimates that they'll have increased costs of at least $2,500 per year. Manager Nicole Firebaugh reports, "It does not make me feel good at all. I’d rather be spending that money helping people out, helping our employees, you know, keeping our costs as low as we can.”
For small businesses, the costs may seem to outweigh the benefits of the Illinois fuel tax increase. Others look to agreements between the Trump Administration and top Democrats this spring to pass a $2 trillion infrastructure plan and wonder why the new increase is needed if federal funds may become available in the near future.
If your company does business in Illinois, has to travel in the state or receives goods through the state, this new fuel tax increase may lead to higher costs for your company. You may be able to mitigate these costs by switching suppliers, using more fuel-efficient vehicles or switching to locations in neighboring states that feature lower fuel taxes, but these options will also take time and money to achieve, even if they end up saving money in the long run.
How should you respond to the Illinois fuel tax increase? If you need help finding a solid strategy for your business, the experienced professionals at AccountRely are ready to help. Please feel free to reach out today to get connected to one of our experienced business professionals and start forming a strategy.