Illinois’s new budget gives tax relief to consumers. It also penalizes companies that fail to advertise this fact.
Illinois lawmakers passed the FY 2023 budget worth $45 billion Saturday. It eliminates the 1 percent state grocery tax, effective July 20,22. This also defers an inflation adjusted increase of the gas tax in Illinois to 2.2c per gallon, which will occur from July 2022 through January 2023.
Democratic budget supporters claim that the idea is to provide assistance to state residents at a time when fuel and food prices are rising.
Gov. J.B. Pritzker, a Democrat. It’s only for people who have $10 to put into their gas tanks at once, as filling the entire tank with gasoline is too expensive.
However, the pause in tax increases and taxes comes with a catch. Groceries and gas stations must inform consumers about the new tax policy. For not complying, the latter could face $500 in fines
Notices will be placed on fuel pumps by retailers informing customers about the delays of the state’s inflation adjustment. Also, “the pump price should reflect the suspension or the increase in tax.”
Greg Sharp from the Illinois Fuel and Retail Association says, “To be forcibly under threat of being fined to post these information, it is absurd.” “It is government-compelling speech. It is also unconstitutional.”
Sharp says that the policy is vaguely written and leaves many practical questions unanswered, such as whether penalties would apply per retailer or per pumps, or whether customers will take down or damage signs.
Signage requirements go into effect July 1st. Sharp tells There are reasons The IFRA is likely to file a lawsuit in opposition to the policy within the next few weeks.
Also, grocery stores will need to update their receipts with an announcement that the state’s next-year grocery sales tax is 0 percent. If this information is not possible to display on the receipts, then stores will be able to post it on signs that are at least 4 by 8.
Rob Karr from the Illinois Retail Merchants Association says “Putting it onto the receipts, is very very difficult.” The sign will be visible for the consumers by those who are able to.
Grocery shops, and not gas stations, will not be punished for failing to post signs. Karr states that the IRMA has not considered a lawsuit against the requirement.
Sharp attributes the differing treatment of gas stations and grocery stores to the fact gas prices have proved politically difficult for Governor Scott, who is currently running for reelection.
“I believe our governor is very concerned about the necessity of wearing the jacket because high gas prices are rising. “And he should be worrying,” he states. I believe that is why Springfield gave the industry the authority to conduct this.”
The populist strategies are designed to placate anger about high gas prices by state governments throughout the country. These include cash rebates and gas tax holidays.
All of them have some drawbacks. The cash rebates can be poorly targeted, and in certain cases will exceed any state taxes paid by the recipient. The gas tax holidays permit motorists to skip paying for roads that they use.
Illinois’ demand that gas stations advertise its tax policies actively under the threat of being fined is a great example of this. The governor’s political message and the state legislatures are being promoted by retailers during election years.
Evidently, gas station owners don’t like being treated this way and they plan to sue.