New Illinois laws and tax changes set to kick in on July 1, 2025

SPRINGFIELD, Ill. (WTVO) — On July 1st, 2025, several new laws and tax changes are set to go into effect in Illinois.

Most of the newest laws in the state went into effect on January 1st, 2025, such as a minimum wage increase, but a few are still on the books to go into effect in the second half of the year.

The updates were passed during the 2024 and 2025 legislative sessions and signed into law by Gov. JB Pritzker, including environmental regulations, labor protections, and taxes.

Increase in the Motor Fuel Tax

The automatic annual Motor Fuel Tax increase was put in place to account for inflation.

Currently, Illinois residents pay the second-highest gas tax in the country, behind California.

The gas tax is currently 45 cents per gallon, but it will increase to 48.3 cents per gallon on July 1st. Tax on diesel fuel will rise from 54 to 55 cents per gallon.

Ban on single-use plastic bottles in hotels

Senate Bill 2960 bans hotels with 50 or more rooms from providing small single-use plastic bottles (under 6 ounces) for products such as shampoo, conditioner, or soap. The measure is meant to reduce plastic waste. The bill goes into effect on July 1st, 2025. Hotels will fewer than 50 rooms will have until January 1st, 2026, to comply.

Sales tax on leases and rentals

Effective on July 1st, 2025, House Bill 4951 changes how sales tax is handled on leased or rented property. In the past, lessors paid sales tax on the purchase of property — other than motor vehicles, watercraft, aircraft, and semi-trailer — and did not collect tax on lease payments. Under the new law, lessors can purchase property tax-free using a resale exemption and charge sales tax on lease or rental payments. The new law also impacts lessors of certain computer software licenses.

New taxes on sports betting

Included in the Fiscal Year 2026 budget was an amendment to House Bill 1928, which assesses a per-wager tax on sports betting. Beginning on July 1st, a tax of 25 cents per wager will be levied on the first 20 million wagers placed with licensed sports books. After that, the rate will increase to a tax of 50 cents per wager. The state hopes to raise $36 million in yearly revenue from the change.

Training in opioid overdose reversal medication

House Bill 5028 requires the state to train employees in the use and administration of opioid antagonists, such as Narcan (naloxone), starting July 1st, 2025. The law aims to combat opioid overdoses by training state employees to respond effectively in emergencies.

Increases in local sales taxes

At least 50 municipalities in Illinois are set to see their local sales tax increase on July 1st, 2025. The Illinois Department of Revenue sad the rate change will range from .25% to an additional 2%, impacting business district sales tax, county public safety and mental health taxes, school facilities, home rule municipal sales tax, and non-home rule sales tax.

For a full list of new laws in Illinois in 2025, go here.