Senator Golden: Suspend Nyc Residential Fuel Tax

Martin J. Golden

January 31, 2006

Albany- The New York State Senate today approved legislation (S.5984A), sponsored by Senator Martin Golden (R-C-I, Brooklyn), that would give New York City the option of suspending its local sales tax on residential home heating fuel for the months February, March and April of this year. It is estimated that suspending the city tax on heating fuel would save residents about $20 million.

"This measure gives the City the option of helping to relieve this burden on its citizens by suspending local taxes imposed on fuel oil and natural gas people use to heat their homes to assist its residents through a difficult time. New York City residents need this relief," said Senator Golden.

Senator Golden, Chairman of the Senate Aging Committee, also joined the Senate in approving the "Senior Heat" program legislation which would provide $200 rebate checks to eligible senior citizen homeowners to help offset the cost of home heating. Seniors approved for the enhanced STAR school property tax rebate program (at least 65 years old with an annual income of less than $64,650) would be eligible for the Senior Heat program. The plan would also provide a $100 refundable State tax credit to eligible senior citizens who rent and pay for their heat. The program would provide an estimated $140 million in assistance to more than 640,000 senior homeowners and renters.

The Senate also adopted a resolution, sponsored by Senator Martin Golden (R-C-I, Brooklyn) asking the federal government to increase the contingency funding for the low income Home Energy Assistance Program (HEAP). New York State has received $15 million in 2005-06 contingency HEAP funding, compared to $42.4 million in contingency funding in 2004-05.

Last week, the Legislature passed a bill, now law, that will provide an additional $100 million in emergency funds for the Home Energy Assistance Program to ensure that seniors and low-income New Yorkers are able to afford to heat their homes this winter.

"New York State has responded and significantly added funds to help seniors and low income New Yorkers face the rising costs of home heating, the federal government needs to act now to release the additional funds available to ensure that no one has to choose between heating their homes and paying for food and medicine," said Senator Golden.

Golden’s legislation today is part of the New York State Senate’s comprehensive energy plan that would provide $350 million in relief from high energy costs to small businesses to help them create and retain jobs. The plan also included measures to provide energy cost relief for small businesses and to place a cap on the gasoline sales tax.

The centerpiece of the Senate energy plan would address that concern by providing a $350 million refundable tax credit that would help 386,000 eligible small businesses across New York State afford the rising cost of energy. Businesses with fewer than 20 employees would be eligible for the assistance. Businesses of this size employ about 1.4 million New Yorkers. Under the plan, a credit of two cents per Kilowatt Hour (KwH) would be applied directly to eligible businesses’ tax liability, while businesses that do not owe taxes would receive a rebate check.

The Senate plan excludes businesses that already receive similar benefits through the Empire Zone and Power for Jobs programs. It also excludes sole proprietorships working out their residence, since it would be difficult to segregate residential electric usage from business usage. The Senate plan will also eliminate the Petroleum Business Tax on non-residential heating fuel, further reducing energy expenses for small businesses by up to $7 million a year.

The Senate also approved a bill to place a cap on the State and local sales taxes on gasoline that would save consumers about $240 million annually as gas prices currently average nearly $2.60 per gallon, and all localities participate. The New York City Council, and many other local government officials, have also asked the Senate to adopt a cap on gas sales taxes.

The Senate energy plan would cap the State and local sales tax on gasoline at a taxable value of $2 per gallon. The cap would save motorists an estimated $120 million annually in State sales taxes, if gas prices stay at about $2.60 per gallon. The cap covers the local sales tax on gas unless a local government votes to opt out of the cap.