S T A T E O F N E W Y O R K
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11438
I N A S S E M B L Y
May 15, 2026
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Introduced by COMMITTEE ON RULES -- (at request of M. of A. Dais) --
read once and referred to the Committee on Ways and Means
AN ACT to amend the tax law, the state finance law, and the general
business law, in relation to enacting the "gas tax holiday act"
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Short title. This act shall be known and may be cited as
the "gas tax holiday act".
§ 2. The tax law is amended by adding a new section 50 to read as
follows:
§ 50. FUEL TAX HOLIDAY. (A) DEFINITIONS. FOR PURPOSES OF THIS SECTION:
(1) "APPLICABLE PERIOD" SHALL MEAN FROM THE FIRST OF THE MONTH NEXT
SUCCEEDING THE EFFECTIVE DATE OF THIS SECTION UNTIL DECEMBER THIRTY-
FIRST, TWO THOUSAND TWENTY-SEVEN.
(2) "DIESEL MOTOR FUEL" AND "MOTOR FUEL" SHALL HAVE THE SAME MEANING
AS SECTION TWO HUNDRED EIGHTY-TWO OF THIS CHAPTER.
(3) "FILLING STATION" SHALL HAVE THE SAME MEANING AS SECTION TWO
HUNDRED EIGHTY-TWO OF THIS CHAPTER.
(4) "FUEL GAS" SHALL HAVE THE SAME MEANING AS IN SECTION 1-103 OF THE
ENERGY LAW.
(5) "RETAIL SALE" AND "SOLD AT RETAIL" SHALL MEAN: (I) ANY SALE OF
FUEL GAS; OR (II) ANY SALE OF MOTOR FUEL OR DIESEL MOTOR FUEL AT A FILL-
ING STATION TO A PERSON FOR USE IN A MOTOR VEHICLE.
(6) "RETAIL SELLER" SHALL MEAN ANY PERSON WHO SELLS MOTOR FUEL OR
DIESEL MOTOR FUEL AT RETAIL.
(7) "SALE" SHALL HAVE THE SAME MEANING AS SECTION TWO HUNDRED EIGHTY-
TWO OF THIS CHAPTER.
(8) "UTILITY" SHALL MEAN A MUNICIPALITY, TELEPHONE CORPORATION, UTILI-
TY CORPORATION, STEAM CORPORATION, WATERWORKS CORPORATION, AN ELEC-
TRIC CORPORATION, A GAS CORPORATION, AND A COMBINATION GAS AND ELECTRIC
CORPORATION AS SUCH TERMS ARE DEFINED IN SECTION TWO OF THE PUBLIC
SERVICE LAW, AND ANY OTHER COMMUNITY WATER SYSTEM AS DEFINED IN 10 NYCRR
§ 5-1.1.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06137-03-6
A. 11438 2
(9) "UTILITY CORPORATION" SHALL HAVE THE SAME MEANING AS SUBDIVISION
TWENTY-FOUR OF SECTION TWO OF THE PUBLIC SERVICE LAW.
(B) EXEMPTION FROM TAXATION. NOTWITHSTANDING ANY OTHER PROVISION OF
LAW, RULE OR REGULATION TO THE CONTRARY, THE TAXES IMPOSED ON RETAIL
SALES OF FUEL GAS, MOTOR FUEL AND DIESEL MOTOR FUEL MADE DURING THE
APPLICABLE PERIOD SHALL BE EXEMPT FROM THE TAXES IMPOSED BY ARTICLES
TWELVE-A, THIRTEEN-A, AND TWENTY-EIGHT OF THIS CHAPTER. IF THE RETAIL
SELLER IS LOCATED WITHIN A MUNICIPALITY THAT HAS ELECTED TO ELIMINATE
THE TAX IMPOSED PURSUANT TO ARTICLE TWENTY-NINE OF THIS CHAPTER, SUCH
TAXES SHALL NOT BE IMPOSED ON THE RETAIL SALE OF MOTOR FUEL OR DIESEL
MOTOR FUEL DURING THE APPLICABLE PERIOD.
(C) PRICE REDUCTION. (1) DURING THE APPLICABLE PERIOD, EACH RETAIL
SELLER SHALL REDUCE THE PRICE PER GALLON OF MOTOR FUEL AND DIESEL MOTOR
FUEL OFFERED FOR SALE BY THE AMOUNT OF THE TAXES THAT THE RETAIL SELLER
PREPAID ON THE GALLON OF MOTOR FUEL AND DIESEL MOTOR FUEL AND THE AMOUNT
OF TAX IN EXCESS OF THE PREPAID AMOUNT THAT WOULD HAVE BEEN COLLECTED
FROM THE CONSUMER IF THE SALE OF THE MOTOR FUEL OR DIESEL MOTOR FUEL HAD
NOT BEEN EXEMPT FROM TAX PURSUANT TO SUBDIVISION (B) OF THIS SECTION.
(2) DURING THE APPLICABLE PERIOD, EACH UTILITY CORPORATION SHALL
REDUCE THE RATE OF FUEL GAS RELATED UTILITY RATES PER KILOWATT HOUR
(KWH) OFFERED BY THE AMOUNT OF THE TAXES THAT THE UTILITY CORPO-
RATION PREPAID ON THE FUEL GAS AND THE AMOUNT OF TAX IN EXCESS OF THE
PREPAID AMOUNT THAT WOULD HAVE BEEN COLLECTED FROM THE CONSUMER IF
THE FUEL GAS RATES HAD NOT BEEN EXEMPT FROM TAX PURSUANT TO SUBDIVISION
(B) OF THIS SECTION.
(D) ADVERTISING. (1) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE
CONTRARY, A RETAIL SELLER MAY ADVERTISE THAT THE MOTOR FUEL AND/OR
DIESEL MOTOR FUEL IS BEING OR WILL BE SOLD WITHOUT THE STATE TAXES. SUCH
ADVERTISEMENT MAY COMMENCE NO EARLIER THAN THREE DAYS BEFORE THE APPLI-
CABLE PERIOD AND SHALL END BY THE END OF THE APPLICABLE PERIOD.
(2) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY, A
UTILITY CORPORATION MAY ADVERTISE THAT FUEL GAS UTILITY RATES ARE BEING
OR WILL BE CALCULATED WITHOUT THE IMPOSITION OF STATE SALES TAXES. SUCH
ADVERTISEMENT MAY COMMENCE NO EARLIER THAN THREE DAYS BEFORE THE APPLI-
CABLE PERIOD AND SHALL END BY THE END OF THE APPLICABLE PERIOD.
(E) REFUNDS AND CREDITS. (1) NOTWITHSTANDING ANY OTHER PROVISION OF
LAW TO THE CONTRARY, THE RETAIL SELLER SHALL BE ENTITLED TO RECEIVE A
CREDIT AGAINST THE TAXES DUE PURSUANT TO ARTICLE TWENTY-EIGHT OF THIS
CHAPTER FOR THE AMOUNT OF TAX THAT THE RETAIL SELLER PREPAID PURSUANT TO
ARTICLES TWELVE-A, THIRTEEN-A, TWENTY-EIGHT AND, IF APPLICABLE, TWENTY-
NINE OF THIS CHAPTER. IF THE RETAIL SELLER IS LOCATED WITHIN A MUNICI-
PALITY THAT HAS ELECTED TO ELIMINATE THE TAX IMPOSED PURSUANT TO ARTICLE
TWENTY-NINE OF THIS CHAPTER, THE RETAIL SELLER SHALL BE ENTITLED TO
CLAIM A CREDIT AGAINST THE TAXES DUE PURSUANT TO ARTICLE TWENTY-EIGHT OF
THIS CHAPTER FOR SUCH PREPAID TAXES. THE AMOUNT OF CREDIT SHALL EQUAL
THE AMOUNT OF TAX THAT WAS PREPAID PURSUANT TO ARTICLES TWELVE-A, THIR-
TEEN-A, TWENTY-EIGHT AND, IF APPLICABLE, TWENTY-NINE OF THIS CHAPTER FOR
EACH GALLON OF MOTOR FUEL AND DIESEL MOTOR FUEL SOLD AT RETAIL DURING
THE APPLICABLE PERIOD. SUCH CREDIT SHALL NOT BE ALLOWED FOR SALES THAT
WOULD HAVE OTHERWISE BEEN EXEMPT FROM TAX.
(2) A RETAIL SELLER MAY CLAIM THE CREDIT PRESCRIBED IN PARAGRAPH ONE
OF THIS SUBDIVISION WHEN THE RETAIL SELLER FILES ITS RETURN OF TAX FOR
THE SALES OF MOTOR FUEL AND DIESEL MOTOR FUEL FOR THE PERIOD THAT
INCLUDES THE APPLICABLE PERIOD. NOTWITHSTANDING THE FOREGOING, IF A
RETAIL SELLER IS REQUIRED TO FILE ITS RETURN MORE THAN THIRTY DAYS AFTER
THE CLOSE OF THE APPLICABLE PERIOD DEFINED IN PARAGRAPH ONE OF SUBDIVI-
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SION (A) OF THIS SECTION, SUCH RETAILER SHALL BE AUTHORIZED TO FILE AN
AMENDMENT TO ITS MOST RECENTLY FILED RETURN TO CLAIM SUCH CREDIT. NO
CREDIT MAY BE CLAIMED FOR THE TAXES PREPAID PURSUANT TO ARTICLE
TWELVE-A, THIRTEEN-A, TWENTY-EIGHT OR, IF APPLICABLE, TWENTY-NINE OF
THIS CHAPTER PURSUANT TO THIS SECTION IF THE CLAIM WOULD HAVE BEEN
BARRED PURSUANT TO THE ARTICLE THAT REQUIRED PREPAYMENT OF SUCH TAXES.
NO INTEREST SHALL BE PAID ON ANY CLAIMS FOR CREDIT MADE PURSUANT TO THIS
SECTION.
§ 3. Subdivision 3 of section 89-b of the state finance law is amended
by adding a new paragraph (g) to read as follows:
(G) WITHIN FORTY-FIVE DAYS AFTER THE APPLICABLE PERIOD AS DEFINED BY
SUBDIVISION (A) OF SECTION FIFTY OF THE TAX LAW, THE COMPTROLLER, IN
CONSULTATION WITH THE DIRECTOR OF THE DIVISION OF THE BUDGET, SHALL
TRANSFER FROM THE GENERAL FUND TO THE SPECIAL OBLIGATION RESERVE AND
PAYMENT ACCOUNT AN AMOUNT EQUAL TO THE AMOUNT THAT WOULD HAVE OTHERWISE
BEEN DEPOSITED IN THE SPECIAL OBLIGATION RESERVE AND PAYMENT ACCOUNT
PURSUANT TO THIS SECTION IF THE EXEMPTION DEFINED IN SUBDIVISION (B) OF
SECTION FIFTY OF THE TAX LAW HAD NOT BEEN AUTHORIZED.
§ 4. Section 392-i of the general business law, as amended by section
5 of part M-1 of chapter 109 of the laws of 2006, is amended to read as
follows:
§ 392-i. Prices reduced to reflect change in sales tax computation.
Every person engaged in the retail sale of motor fuel and/or diesel
motor fuel or a distributor of such fuels, as defined in article
twelve-A of the tax law, shall reduce the price such person charges for
motor fuel and/or diesel motor fuel in an amount equal to any reduction
in taxes prepaid by the distributor, CREDIT FOR THE AMOUNT OF TAXES
PREPAID BY THE RETAIL SELLER ALLOWABLE PURSUANT TO SECTION FIFTY OF THE
TAX LAW, EXEMPTION FROM TAXATION PURSUANT TO SECTION FIFTY OF THE TAX
LAW TO THE EXTENT THAT THE TAX THAT WOULD HAVE BEEN OTHERWISE DUE
EXCEEDS THE AMOUNT OF TAX PREPAID, or paid by retail customers resulting
from computing sales and compensating use AND OTHER taxes at a cents per
gallon rate pursuant to the provisions of paragraph two of subdivision
(e) and subdivision (m) of section eleven hundred eleven of the tax law.
§ 5. Paragraph 1 of subdivision (n) of section 1817 of the tax law, as
amended by section 30 of subpart I of part V-1 of chapter 57 of the laws
of 2009, is amended to read as follows:
(1) Every person engaged in the retail sale of motor fuel and/or
diesel motor fuel or a distributor of such fuels, as defined in article
twelve-A of this chapter, shall comply with the provisions of section
three hundred ninety-two-i of the general business law by reducing the
prices charged for motor fuel and diesel motor fuel in an amount equal
to any reduction in taxes prepaid by the distributor, CREDIT FOR THE
AMOUNT OF TAXES PREPAID BY THE RETAIL SELLER ALLOWABLE PURSUANT TO
SECTION FIFTY OF THIS CHAPTER, EXEMPTION FROM TAXATION PURSUANT TO
SECTION FIFTY OF THIS CHAPTER TO THE EXTENT THAT THE TAX THAT WOULD HAVE
BEEN OTHERWISE DUE EXCEEDS THE AMOUNT OF TAX PREPAID, or imposed on
retail customers resulting from computing sales and compensating use AND
OTHER taxes at a cents per gallon rate pursuant to the provisions of
paragraph two of subdivision (e) and subdivision (m) of section one
thousand one hundred eleven of this chapter.
§ 6. Notwithstanding any law to the contrary, a municipality may make
the election to eliminate all taxes on fuel gas, motor fuel and diesel
motor fuel pursuant to sections eleven hundred seven and eleven hundred
eight of the tax law or article twenty-nine of the tax law for the
applicable period, as defined by subdivision (a) of section fifty of the
A. 11438 4
tax law, as added by section two of this act, by local law, ordinance or
resolution, if such municipality mails, by certified or registered mail,
a certified copy of such local law, ordinance or resolution to the
commissioner of taxation and finance at such commissioner's office in
Albany no later than the Wednesday immediately preceding the first day
of the applicable period.
§ 7. The commissioner of taxation and finance shall, on an emergency
basis, promulgate and/or amend any rules and regulations necessary to
provide for the tax free sales of fuel gas, motor fuel and diesel motor
fuel and refunds of prepaid tax to retail sellers.
§ 8. This act shall take effect immediately.