Public Utility Taxation in Illinois
Taxation of natural gas, electricity and telephone utililty revenues has become an important source of state and local government revenue in Illinois. Rising costs of fossil fuels and electric power plant construction have caused utility tax revenues to grow more rapidly than such other revenue sources as general sales and property taxes. The increase in utility taxes has been especially dramatic in those municipalities, such as the City of Chicago, that have raised tax rates on the expanding utility tax base. The rapid growth of state and local utility taxes in Illinois is of special concern because the stat has one of the highest utility tax levels in the nation.