Relates to eliminating state sales and compensating use taxes on motor fuels and diesel motor fuels and authorizing localities to eliminate such taxes at the local level; repealer

Title of bill

An act to amend the tax law, in relation to eliminating state sales and compensating use taxes on motor fuels and diesel motor fuels and authorizing localities to eliminate such taxes at the local level; in relation to reducing the tax rate from four cents per gallon to two cents per gallon, and to amend the public authorities law, the highway law and the tax law, in relation to making technical changes; and to repeal certain sections of the tax law relating thereto

Purpose or general idea of bill

This bill eliminates the state sales and use tax on motor and diesel motor fuels; allows local governments to also eliminate their portion of sales and use tax on motor and diesel motor fuels; reduces the state excise tax on motor and diesel motor fuels from 8 cents per gallon to 2 cents per gallon; and provides any loss in revenue from the excise tax reduction that is dedicated to the highway and bridge trust funds be offset by the state general fund.

Summary of specific provisions

Section 1 exempts motor fuel and diesel motor fuel from state sales and compensating use tax.

Sections 2 through 6 provides local governments with the option to eliminate their portion of sales and compensating use tax on motor fuel and diesel motor fuel.

Section 7 reduces the state excise tax on diesel motor fuel from four cents per gallon to two cents per gallon.

Section 8 repeals the additional two cents per gallon excise tax on diesel motor fuel.

Section 9 repeals the supplemental two cents per gallon excise tax on diesel motor fuel.

Section 10 reduces the state excise tax on motor fuel from four cents per gallon to two cents per gallon.

Section 11 repeals the additional two cents per gallon excise tax on motor fuel.

Section 12 repeals the supplemental two cents per gallon excise tax on motor fuel.

Sections 13 through 16 amends the public authorities law, the tax law and the highway law with regards to the tax provisions being repealed in this bill that are dedicated to the Mass Transportation Trust Fund, the Highway and Bridge Trust Fund and the Mass Transportation Operating Assistance Fund.

Section 17 provides that any revenue that would have been received by the Commissioner of Taxation and Finance prior to the enactment of this bill will now be funded by the State general Fund.

Section 18 provides the effective date.

Justification

Even as gasoline prices decline nationwide New York State still has some of the highest prices at the pump in the country. This is mainly attributed to the high level of taxation that is in place on each gallon of gasoline sold in New York State. This bill would reduce the state taxes placed on a gallon of motor fuel from 34 cents per gallon to 20 cents per gallon, a 14 cents per gallon reduction or 40%. Much of the revenue generated by the taxes placed on gasoline is dedicated for maintenance and improvements of highways, bridges and roads. This bill ensures that those funds will continue to be provided for these very important infrastructure projects from the State General Fund.

Prior legislative history

New bill.

Fiscal implications

It is estimated that this bill will provide $875 million in savings to New York motorists.

Effective date

Immediately.