Local Business Headlines
- St. Louis Freightway, Port of New Orleans sign pact aimed at fostering economic growth
- J.C. Penney says it will close up to 140 stores
- Alton resident presented Living Legends Award
- Economic development course series starts March 1
- World’s Largest Garage Sale makes return April 23
- CNB Bank & Trust announces new financial advisor
- SIUE implements reverse transfer credit program with LCCC
- Divine Immanence LLC, Maryville beauty supply business, opens
Transport group, distributors differ on fuel tax
The Transportation for Illinois Coalition’s proposal to replace the state’s portion of the gas tax with a 9.5 percent wholesale fuel tax is meeting with fierce opposition from distributors, who say such action would drive more motorists across the borders to fill their tanks and drive Illinois gas retailers out of business.
The coalition — comprised of labor, construction, transportation and trade associations and the Illinois Chamber of Commerce — is proposing the tax in tandem with vehicle license and registration fee increases to raise a projected $800 million annually.
Coalition co-chairman Doug Whitley, president and chief executive officer of the Illinois Chamber of Commerce, says something has to be done to build and maintain Illinois’ roads and bridges without relying on the feds because that well has run dry.
Illinois motorists would pay an additional 14 to 17 cents per gallon on top of the current tax if the proposal were adopted.
“The federal government has been unreliable in the past two federal highway bills,” Whitley said. “The federal gas (and diesel) tax has not increased since 1993, so they haven’t put any more money into the road fund either. Congress has had to supplement the Highway Trust Fund with additional money out of the General Fund just to shore up the Trust Fund. The states lack confidence that the federal government is going to help them.”
The coalition’s proposal, Whitley says, is linked closely to the end of the 2009 Illinois capital bill, Illinois Jobs Now!, which will expire in July 2014. There is no new state funding allocated toward construction.
- See FUEL
‘Spike’ in cig tax revenues shows inventories returning after tax hike
Although the numbers show that Illinois’ cigarette tax revenue more than doubled in July compared to the same period last year, details behind the stats actually reflect inventories returning to normal.
According to the Illinois Commission on Government Forecasting and Accountability, what initially appears as a hefty spike in revenues for the state was — in reality — evidence of cigarette distributors statewide restocking their pantries after their stockpiled purchases of pre-tax-hiked product from last spring-summer was depleted. July’s net increase was $18 million.
Revenues for August of this year were also up appreciably, 73 percent or $25 million, compared to a year ago.
Jim Muschinske, the commission’s revenue manager, says the General Assembly’s $1-per-pack tax increase on cigarettes (which took effect June 24, 2012) caused a last-minute “rush” of massive distributor purchasing last spring — one that the Illinois Department of Revenue tried unsuccessfully to prevent under the old tax rate.
“Last year, the IDR attempted to thwart that stockpiling by putting a floor tax on distributors to immediately put the higher rate on and limit the amount of cigarettes they could purchase under the old rate,” said Muschinske. “But the courts said no. So there was a big purchase statewide of cigarette tax stamps, those that are affixed to the back of the packs by licensed distributors. It took a number of months for the effect of that (excessive purchasing by cigarette distributors) to go away. Now we’re back at the statutory amount. So the dollar amount you see comparing July FY 2013 to July 2012 is no surprise.”
- See TAX