I-Team: Illinois' 'tire tax'

May 9, 2014 (WLS) -- Whether you've hit a pothole this season, or just need to replace them, you could end up spending hundreds of dollars on new tires for your vehicle. But did you know there's also something called a "tire tax"?

"I think it's ridiculous, I work pretty hard," said Basha Smalley, who recently replaced all four of her tires. She blames Chicago's potholes.

After spending $700, she noticed something else: a state "tire tax" of $2.50 per tire.

"I'm paying sales tax, I am paying part tax and now labor tax and now you come for another $2.50 for a tire I didn't ask for!" Smalley said.

The Illinois Tax Handbook for Legislators says it was implemented in 1992 at $1 per tire and has gone up since.

Revenue officials said there's also an additional dollar added on if you buy tires in the city of Chicago, bringing the total to $3.50 per tire.

ABC7's Jason Knowles: "So if I have to replace four tires, should I be annoyed?"

Ralph Martire, the Center for Tax and Budget Accountability (CTBA): "Well I guess I can't tell you if you should be annoyed, I think what should annoy you is the state has to keep relying on taxes like these, which nickel and dime consumers."

Martire, the executive director of CTBA, is against excise taxes, and would rather the structure of income and sales taxes be changed.

So where does all of this money go?

Most of it goes to the Illinois Environmental Protection Agency (EPA) in Springfield.

"We spend a lot of resources at our agency investigating complaints where tires are accumulating," said Lisa Bonnett, director of the Illinois EPA.

In 2013, $12.7 million dollars from the "tire tax" went to the used tire management fund to regulate storage areas and cleanup illegal, hazardous tire piles.

There are no active tire piles in the area, but the EPA provided the I-Team with pictures that show work being done by hired contractors.

"The money is also available to look at market development to use waste tires for recycling or other processes like rubber tires for playgrounds or in other type of applications," Bonnett said.

Another $3.3 million went to the state's Emergency Health Fund, which helps to prevent the spread of West Nile Virus and other diseases.

"I do see it as being a fair and reasonable fee for consumers," Bonnett said.

"Clearly the state doesn't have the general fund revenue to just provide the services it is supposed to provide from its core revenue sources, so now it is looking for other revenue sources to meet general operating needs of government," Martire said.

And what about that extra $1 in the tire tax if you buy tires in Chicago?

The city said it collected $314,000 in 2013, which goes to the general fund to pay for the city's operations.

There are three used tire cleanup contractors hired by the state: DisposALL (Cicero), CDO Trucking (Peoria) and Earth Services (Benton). The location of the cleanup dictates which contractor is used. The state said each contractor is paid only if work is done.