Senator Jim Alesi (R/C-Perinton) today announced that the Legislature has reached an agreement and passed legislation to provide New Yorkers with relief from high gas prices by capping and reducing the sales taxes on gasoline.
The agreement would save New Yorkers as much as $450 million annually at the pump by capping the sales taxes at $2 per gallon. The agreement would cap the State sales taxes on gas at 8-cents per gallon, effectively freezing the tax at the $2 per gallon rate. The State currently collects an average of 12-cents in sales taxes on a gallon of gas at current prices, this bill would cap the tax at 8-cents per gallon; localities collect between 12-cents and 15-cents per gallon from local taxes. The agreement allows local governments to opt in and match the State savings at the local level.
"Families are driving to and from work, taking their kids to activities, going shopping, and meanwhile, the price to get from one place to another continues to rise," said Senator Alesi. "New York State should not reap the windfall from high gas prices at the expense of taxpayers and I urge all local governments to join the State and give taxpayers a break on gas taxes."
The cap on the State sales tax on gas would take effect on June 1, 2006. Local governments would have the option of passing a law to cap their local sales tax on gas at a fixed rate at or lower than the 12 to 15 cents per gallon they collect at today’s prices.
The measure will require that service station owners pass along the savings to 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. There would be a fine of up to $5,000 per incident, per day, for stations that do not pass along the savings.
In addition, the agreement would:
Allow New York City to reduce or eliminate its local sales tax on residential home heating fuels;
Provide Consumers with a tax credit for the purchase of 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;
Create 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; and
Require the State Thruway Authority and NYSERDA to develop a plan to make alternative fuels, such as ethanol, available at Thruway service areas.
Not only will individuals see a drop in prices at the pump, but small business, who rely on vehicles to transport products or perform everyday activities, will see tremendous savings. This legislation, sponsored by Senator Alesi, will save New York motorists on average 8-cents per gallon. This will allow small business, who rely heavily on transportation to receive thousands of dollars in savings per year.
"That savings," said Senator Alesi, "could be used to update technology, invest in infrastructure, or provide jobs for the community."