BILL NUMBER: S393
SPONSOR: PALUMBO
 
TITLE OF BILL:
An act to amend the tax law, in relation to computing sales and compen-
sating use tax on retail sales of motor fuel and diesel motor fuel at a
rate of cents per gallon
 
PURPOSE:
Computing sales and compensating use tax on retail sales of motor fuel
and diesel motor fuels at a rate of cents per gallon will help prevent
potential revenue loss.
 
SUMMARY OF PROVISIONS:
Section 1 amends the tax law by adding a new paragraph (8) to establish
the quarterly computation of motor fuel and diesel motor fuel by the
commissioner, a rate of cents per gallon rounded to the nearest cent and
multiplied by the cost of the fuel.
Section 2 amends the tax law by adding a new subparagraph (iv) which
establishes that the sales and compensating use taxes on motor fuel and
diesel motor fuel in New York State shall be prepaid on each gallon of
fuel.
Section 2 provides the effective date.
 
JUSTIFICATION:
Currently, in New York State, fuel tax is collected in a complicated
two-part system. First, retail locations (gas stations) must prepay the
New York State specific tax upon delivery of their product. Distribu-
tors are then required to collect and deliver that tax to New York
State. Second, retail locations are then required to collect a county
sales tax which is calculated in real-time instead of prepaid as the
product is sold. This complicated system of tax collection has unfortu-
nately left substantial room for tax evasion. Less reputable retailers
have been found under reporting sales allowing them to pay less in coun-
ty tax. The auditing process often takes such a substantial amount of
time that when discrepancies are discovered, the gas station in question
has often either shut down or changed legal names leaving New York State
and its counties with enormous lost revenue
 
LEGISLATIVE HISTORY:
2024 S.4799/A.2425; 2022 S.4593A.6776; 2020 A.7411; 2016 A.7923; 2014
A.9839.
 
FISCAL IMPLICATIONS:
Increased tax revenue for local governments.
 
EFFECTIVE DATE:
This act shall take effect on the first day of a sales quarterly period.

Statutes affected:
S393: 1111 tax law