New York Assemblymen Want Gas Tax Suspended

August 31, 2005

Amid the record prices at the pump, four New York State lawmakers are advocating a temporary suspension of the state’s sales tax on gasoline. As today’s Buffalo News reports:

Four Republican Assemblymen called Monday for the State Legislature to return to session this week and suspend the state portion of the sales tax on gasoline in time for Labor Day weekend. Joining Assemblymen Jim Hayes, R-Amherst; Jack Quinn, R-Hamburg; Joseph Giglio, R-Gowanda; and Brian M. Kolb, R-Canandaigua, at a news conference at a Noco Express Station at Maple and Sweet Home roads, Amherst, were representatives from Noco Energy Corp. and the AAA of Western and Central New York. “Our proposal is to suspend the 4 percent state sales tax on gas and diesel fuel from Labor Day weekend to New Year’s Day,” said Kolb, chairman of the Assembly Republican Program Committee. “Our plan would save New York motorists an estimated $216 million.” The assemblymen noted that the sales tax on gasoline at the pump is a “tax upon a tax,” since the state already imposes taxes on fuel at the wholesale level. At current prices, lifting the 4 percent sales tax would save motorists about 10 cents a gallon.

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Unlike most states that charge only an excise tax on gasoline (i.e., a tax per gallon consumed regardless of price), New York charges a basic sales tax on gasoline, which means that your gas tax liability per gallon will rise as the price rises. This does allow, however, for the state to somewhat limit the negative impact faced by most other states with regards to gas tax revenue as a result of these higher prices. With regards to this proposal, though we generally support measures that lighten tax burdens, temporary relief from the gas tax — like sales tax holidays for back-to-school — is highly non-neutral. And unless it is accompanied by a reduction in government spending somewhere, which is unlikely, taxpayers will end up paying for it somehow at some time.

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