Senator Flanagan Announces Cap On Gasoline Tax Signed Into Law
Senator John J. Flanagan (2nd Senate District) announced today that a cap on state sales tax on gasoline, which he sponsored in the Senate, will go into effect on June 1. The cap, which was recently signed into law, was a major component of an agreement reached recently between the Senate and the Assembly to offer relief to New York drivers.
The agreement will reduce and cap state sales tax on gasoline at eight cents per gallon, effectively freezing the tax at the $2 per gallon rate. The State currently collects an average of twelve cents in sales tax on a gallon of gasoline. The eight cent cap will be reduced proportionately should gas prices fall below $2 per gallon.
The cap on gasoline taxes was pushed for by Senator Flanagan after the Senate passed similar legislation three times over the last eight months. The Senate first passed legislation to cap the State and local sales tax on gasoline last September, then again in January and a third time in March as part of the Senate budget proposal.
New York will become the first state in the nation to take action to lower taxes to provide relief for motorists. At least 19 other states are considering similar steps. Senator Flanagan had sponsored a petition drive on his web site, www.senatorflanagan.com, to push for the Assembly to join with the Senate and received over 550 electronic signatures.
"The bottom line is that New York State should not profit when the price of gasoline spikes. This cap will provide some needed relief now and will not jeopardize funding for other programs since this is excess tax revenue that should be returned to New York drivers," stated Senator Flanagan. "This is the right thing to do to offer immediate relief for drivers."
To ensure that any savings are passed directly to the driving public, the new law calls for the State Commissioner of Taxation and Finance to enforce the law in conjunction with the Chair of the State Consumer Protection Board. The penalty for violating the law will be a fine of up to $5,000 per incident per day.
In addition, the law will:
-Provide consumers with a tax credit for the purchase of home heating oil that contains biodiesel fuel. The credit will be equal to the percentage of biodiesel contained in the fuel, i.e. a ten cent per gallon credit for heating fuel containing ten percent biodiesel;
-Create a tax credit for the purchase of energy efficient residential home heating systems. The credit will be equal to fifty percent of the purchase and installation costs, not to exceed $500; and
-Require the State Thruway Authority and New York State Energy Research and Development Agency to develop a plan to make alternative fuels, such as ethanol, available at Thruway service areas.
The state cap on gasoline sales tax will save motorists over $220 million annually and that savings could double if counties agree to cap their own local share of the gas tax an equal amount. It is estimated that Suffolk County drivers would save over $30 million annually if the county joins New York State in providing this relief.
"It is now time for Suffolk County to provide drivers with added relief. Since any tax revenue gained from the spike in gasoline prices is really an unforeseen windfall, this money should be returned to the taxpayers. The price of gasoline should not be used to enhance government revenues, especially when drivers need relief," stated Senator Flanagan. "With the summer traveling season holding much promise for the financial future of our tourism community, this relief would enhance the bottom line for Suffolk County businesses and drivers."
TO SEND AN E-MAIL TO SENATOR FLANAGAN, PLEASE CLICK HERE.
IF YOU WOULD LIKE TO RECEIVE REGULAR UPDATES FROM SENATOR FLANAGAN, PLEASE CLICK HERE.