(The Center Square) – Some are taking issue with Governor J.B. Pritzker’s Fiscal Year 2022 budget proposal which would bring an end to the sales tax exemption for biodiesel fuel in Illinois.
Pritzker said accelerating the expiration of the sales tax exemption for biodiesel will increase the state general funds revenues by an estimated $107 million dollars.
The Illinois Soybean Growers Association is not happy about it. Chairman Doug Schroeder said Illinois uses 180 million gallons of biodiesel each year which generates $600 million to Illinois family farms annually.
“To get the tax credit, you have to have 11% bio in the mix or more, and if that tax credit goes away, it will be a little cheaper to run straight diesel, so that is going to be a problem,” said Schroeder.
The ISG is also speaking out in support of HB299, a bill introduced in the Illinois legislature in January that aims to create a state renewable fuels standard. The legislation would require a B5 blend from July 1, 2021 through July 1, 2024 when the requirement would increase to B20.
“If we go to B20, it would almost double the current numbers and would be a bigger win for us yet,” said Schroeder.
Eliminating the sales tax exemption on biodiesel would add an estimated 20 cents per gallon to the price of diesel fuel. Josh Sharp, CEO of the Illinois Fuel and Retail Association said the state is already at a disadvantage when it comes to prices at the pump.
“Illinois is one of only six states that imposes a sales tax on all motor fuels, so that already makes us very uncompetitive when it comes to the motor fuel market,” said Sharp.
Sharp feels ending this incentive would be damaging to the agriculture community in Illinois and hurt small business members at a time when it’s so easy for customers to drive across the state to full up their vehicles.
“It keeps us competitive in price with our surrounding states, but if that goes away, all of a sudden all of that truck traffic that comes through the sate is going to be looking at other states to stop and fill up in,” said Sharp.