Senator Charles J. Fuschillo, Jr. (8th Senate District) announced today that both the Senate and Assembly passed legislation that would cap and lower the state gasoline sales tax.
"New York State is delivering relief from soaring gas prices," said Senator Fuschillo. "As I’ve been saying all along, governments should not be making windfall profits while the already overburdened taxpayer is forced to spend well over $3 per gallon to fill up their car. With the passage of this legislation, we will be returning some of that tax revenue back to the taxpayers, enabling them to finally start saving money at the gas pump."
With gas prices over $3 per gallon, the state is currently collecting an average of 12 cents per gallon in sales taxes. Local governments are collecting an additional 12 to 15 cents per gallon in local sales taxes.
The legislation would cap and lower the State sales taxes on gas at 8 cents per gallon, effectively freezing the tax at the $2 per gallon rate. The agreement allows local governments to pass a law capping their own local sales tax on gas at a fixed rate at or lower than the 12 to 15 cents per gallon they collect based on current prices. The 8 cent cap would be reduced proportionately should gas prices fall below $2 per gallon.
If the Governor signs this legislation into law, the cap would take effect on June 1st, saving drivers as much as 8 to 11 cents per gallon if their local government participates in the plan.
To ensure these revenues are returned to taxpayers, the legislation would enact a fine of $5,000 per incident, per day, for any station that does not pass these savings onto consumers. The State Commissioner of Taxation and Finance, in conjunction with the Chair of the State Consumer Protection Board, would be charged with enforcing the cap.
In addition, the legislation creates a tax credit for homeowners who purchase home heating oil that contains biodiesel fuel. The credit would be equal to the percentage of biodiesel contained in the fuel, i.e. a 10 cent per gallon credit for heating fuel containing 10 percent biodiesel. It also creates a tax credit for the purchase of energy efficient residential home heating systems. The credit would be equal to 50 percent of the purchase and installation costs, not to exceed $500.
The bill has been sent to Governor Pataki for his approval.
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