Senator Fuschillo Cosponsors Legislation To Cap Gasoline Sales Tax
To provide drivers with relief from escalating gas prices, Senator Charles J. Fuschillo, Jr. (8th Senate District) recently cosponsored legislation, which was passed by the New York State Senate, that would cap the sales tax on gasoline once the price of gas reaches $2 per gallon. This plan would save New Yorkers between six and eleven cents per gallon, which would amount to as much as $240 million per year statewide.
"High gas prices have been taking their toll on our drivers, and one of the easiest ways to reduce that burden is to cap the amount of taxes consumers pay at the pump. This legislation would give real, immediate relief to New York’s already overburdened drivers," said Senator Fuschillo.
Under this legislation, the State would only collect its 4 percent sales tax on the first $2 paid per gallon of gasoline. County sales taxes would be similarly capped, unless the county chooses to opt out of this plan and continue collecting their full sales tax on fuel. Currently, sales tax revenues increase as the price of gasoline rises, further inflating the price motorists pay per gallon and enabling governments to reap a financial "windfall" in tax funds.
Estimates are that the state and local governments have reaped a $100 million sales tax windfall since gas prices broke the $2 per gallon mark one year ago. This week, gas prices averaged $2.61 per gallon on Long Island, the highest in the state outside New York City, according to AAA. In February 2005, Long Island motorists paid $2.04 per gallon, AAA said.
If the price of gasoline averages approximately $2.60 per gallon, this measure would save taxpayers approximately $120 million in state taxes this year, and an additional $120 million if all of New York's counties participate.
The legislation is now in the Assembly’s Ways and Means Committee.