Quietly Passed, Loudly Felt: Illinois’ New Laws and Taxes Take Effect July 1

GraniteCityGossip.com, July 5, 2025

While most eyes in our area were on fireworks, BBQs, food and family gatherings for the July 4th holiday, a wave of new laws and taxes quietly took effect in Illinois on July 1, 2025. After digging through dozens of legislative records and budget documents, GraniteCityGossip.com compiled a clear breakdown of what’s changing—and what may be coming soon.

A New Gas Tax Hike
Illinois drivers are now paying 48.3 cents per gallon in state gas tax, up from 47 cents per gallon in 2024. Diesel fuel rose to 55.8 cents per gallon. These increases are tied to inflation and make Illinois one of the most heavily taxed states at the pump.

Home Delivery Tax (“Pritzker Tariff”)
Online shoppers will notice a new statewide fee on all residential package deliveries. Nicknamed the “Pritzker Tariff,” this per-delivery tax helps fund Chicago’s struggling mass transit system. The fee applies to all packages delivered to homes—regardless of item size or where it was purchased.

Vape and Tobacco Tax Hikes
Taxes on vapes, nicotine pouches, cigars, and related products tripled—from 15% to 45%. Cigarette taxes also rose by $1 per pack. State officials estimate this will generate nearly $30 million in new annual revenue.

Short-Term Rental Taxes
Airbnb and VRBO hosts are now required to collect Illinois’s Hotel Operators’ Occupation Tax—6% of 94% of gross receipts—similar to hotels. This adds consistency statewide and brings in additional revenue from the booming short-term rental market.

Single-Use Plastic Restrictions
Restaurants and food vendors must now provide plastic utensils, straws, and containers only upon request. Hotels with 50 or more rooms can no longer offer small single-use plastic toiletry bottles. The new rules aim to reduce landfill waste and promote reusable alternatives.

Online Sports Betting Fee
A new fee now applies to each sports bet placed online: 25 cents per wager for the first 20 million bets per operator, 50 cents per wager after that FanDuel, DraftKings, and others have announced plans to pass this cost on to users beginning September 1.

Tipped Minimum Wage Bump in Chicago
Chicago’s minimum wage rose to 16.60/hour, with tipped workers now earning 12.62/hour. This is part of the city’s “One Fair Wage Ordinance,” designed to eliminate the tipped wage gap by 2028. Similar changes may roll out statewide in the coming years.

Certainly, there has to be some good news in the mix – a reduction in a tax or a fee. Don’t hold your breath. Lawmakers are also considering a new 6.25% sales tax on dozens of personal and professional services that are currently untaxed in Illinois. If passed, this could affect:
Haircuts, manicures, and massage therapy
Dog grooming and pet sitting
House cleaning, landscaping, auto repair, tutoring
Streaming services, gyms, and event planning

Supporters say it could provide long-term funding for transportation and reduce reliance on goods-based taxation. Critics argue it would hurt small businesses and working-class families. As of July, this services tax is still under review in Springfield.