New York Senate acts to cut state fuel tax

| 2/28/2006

The New York Senate has approved a measure designed to ease the spiraling cost of motor fuels in the state.

“The state has been profiting from the rise in gas prices because higher prices mean higher gas taxes,” Senate Majority Leader Joseph Bruno, R-Brunswick, said in a recent statement on the bill. “The Senate plan would cap the tax, reduce the cost of (motor fuels) at the pump and limit the impact on consumers’ wallets.”

Senators approved the measure during a one-day special session this past September only to see it fail to receive consideration in the Assembly, effectively killing it for the year. Once the 2006 legislative session kicked off last month, the effort was restarted in the Senate and sent back to the Assembly for debate.

The sales tax cap legislation – S5968 – calls for the state and localities to add sales tax to only the first $2 worth of a gallon of gasoline or diesel. With the price at the pump about $2.60 a gallon throughout most of New York, that would mean a savings of about 8 cents a gallon. At the current pump price, it could save consumers as much as $240 million annually.

Bruno said localities could opt out of the tax.

Senators also are discussing  a bill – S5969 – to prohibit fueling stations from raising the price of fuel more than once a day. Any station owner found in violation would be subject to a $1,000 fine per occurrence.

The bill is in the Senate Consumer Protection Committee.