Senate Will Approve, Again, Legislation To Cap Sales Tax On Gas

George Winner

May 05, 2006

Albany, N.Y.-- State Senator George H. Winner, Jr. (R,C-Elmira) today said that the Senate next week will approve, for the fourth time, legislation he co-sponsors to cap the state and local sales taxes on gasoline at $2 per gallon.

"It wouldn’t make a huge difference in the price of a gallon of gas, but it would be something better than we’re getting at the pump right now," said Winner, a member of the Senate Energy and Telecommunications Committee. "It’s one of the few actions that New York government can take to help motorists, and we should take it right now."

If approved by the Assembly and enacted into law by Governor George Pataki, the Senate gas tax cap plan could reduce the price of gas by about eight cents per gallon and save New York motorists $450 million annually. The Senate measure would cap both state and local sales taxes on gasoline, although localities are given the option of not implementing a cap. The cap on the state sales tax would save New York consumers approximately $225 million annually. If all local governments participated and gas prices stay at about $3 per gallon, motorists statewide would save $450 million annually.

Winner noted that the Senate first passed the gas cap plan last September. It was reapproved by the Senate in January and for a third time as part of the Senate’s proposed 2006-07 state budget. Despite strong support for the cap among many individual Assembly members,Assembly leaders have resisted action on the legislation.

According to Winner, had the Assembly and the governor enacted the Senate plan last September, New York’s consumers would already had saved $75 million.

"The current and ongoing gas tax windfall shouldn’t be a pot of government spending money," Winner said.

The legislation the Senate will bring to the floor next week would mandate that the savings be passed along to consumers at the pump and direct the Commissioner of Taxation and Finance to enforce the measure.

The gas tax cap remains the centerpiece of a more comprehensive Senate strategy to encourage the development of alternative energy sources, encourage consumers to purchase energy saving appliances and materials, and help seniors better afford home heating costs. Other energy-related measures approved by the Senate last September and again in January, but not acted on by the Assembly leadership, would:

> provide incentives to purchase alternative fuel vehicles;

> provide a property tax exemption on land that contains alternative energy generation systems;

> eliminate the state sales tax on insulating materials such as high efficiency windows, doors, weather-stripping, pipe sheathing and alternative energy systems in or attached to a building such as wind power or fuel cells;

> provide four sales tax free weeks (one per season) on a variety of Energy Star certified products, such as washers and dryers, refrigerators and dishwashers, and furnaces and hot water heaters; and

> provide a tax credit for businesses that install alternative energy equipment such as wind, solar or fuel cells.