65 ILCS 5/8-11-4
Each owner of a motor vehicle or motor bicycle may be required by any such city, village, or town within which he resides to pay a regular tax or license fee for the use of such motor vehicle or motor bicycle.
In place of the regular license fee, any city, village or incorporated town may provide for a motor vehicle tax or license fee at a reduced rate for residents age 65 or over.
Any city, village or incorporated town of 40,000 or more inhabitants may appropriate monies annually from such funds, for the construction, maintenance and operation of testing stations for the inspection of equipment of motor vehicles as authorized by Section 11-40-2. The balance of such funds in cities, villages and incorporated towns of 40,000 or more inhabitants, and the total of such funds in other cities, incorporated towns and villages shall be used for the purpose of improving, paving, repairing or maintaining the streets and other public roadways within such city, incorporated town or village, provided, that the actual cost of the collection of such fees and the disbursement thereof may be deducted from the total amount collected and in cities and villages of more than 3,000 inhabitants, not to exceed 35% of such fees may be used also for payment of salaries and wages of policemen engaged in the duty of regulating traffic.
This amendatory Act of 1973 is not a limit upon any municipality which is a home rule unit.
65 ILCS 5/8-11-4