(ALBANY, NY) State Senator Dale M. Volker (R-I-C, Depew) today announced that the New York State Senate passed legislation to roll back New York's gas tax to provide some relief to strapped motorists faced with rising gas prices. The plan, which has been agreed to by the State Assembly, will save motorists up to $450 million a year and immediately lower the cost of gasoline in New York by at least four cents per gallon, and will take effect June 1 pending Governor Pataki’s approval. The bill would cap the State sales taxes on gas at 8-cents per gallon, effectively freezing the tax at the $2 per gallon rate.
"The costs of gasoline fluctuates daily and it continues to strain the finances of our families and our business community," said Senator Dale M. Volker. "Lowering the cost of gasoline for our consumers is a must and the savings to family and business finances will be significant. This will be another permanent tax cut for New Yorkers, and will reduce the cost of living and doing business in New York State."
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. The 8-cent cap would be reduced proportionately should gas prices fall below $2 per gallon. Local governments collect between 12-cents and 15-cents per gallon from local sales taxes. The bill allows local governments to opt in and match the State savings at the local level. This cap on the State sales tax on gas would take effect on June 1, 2006.
The measure requires 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 bill (S.7909) 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.
The Senate and Assembly will continue to discuss proposals to encourage the development and use of alternative sources of energy and encourage energy conservation and the purchase of energy-saving products and materials.