BILL NUMBER: S2346
SPONSOR: PARKER
 
TITLE OF BILL:
An act to amend the tax law, the state finance law, and the general
business law, in relation to enacting the "gas tax holiday act of 2025"
 
PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to establish a freeze on the taxes imposed
on the manufacturing, distribution, storage, and sale of gasoline in the
state until December 31, 2023, and ensure customers receive the benefits
from reduced prices. A short freeze is critical in responding to the
surging gas pump prices and the abrupt hikes in customer's monthly ener-
gy bills.
 
SUMMARY OF PROVISIONS:
Section 1 identifies the title of the bill.
Section 2 proposed the fuel tax holiday; Provides that the taxes imposed
on retail sales of motor fuel and natural gas made during the applicable
period shall be exempt from the taxes imposed by articles twelve-A,
thirteen-A, and twenty-eight of this chapter; retailers should provide a
price reduction in the amount of tax in excess of the prepaid amount
that would have been collected by the customer; provides that a retail
seller may advertise that the motor fuel and/or natural gas is being Or
will be sold without the state taxes.A retailer is entitled to receive a
credit against the taxes due pursuant to article twenty-eight of this
chapter for the amount of tax that the retail seller prepaid pursuant to
articles twelve-A, thirteen-A, twenty-eight, and if applicable, article
twenty-eight of this chapter; Retailer May claim the credit for the
sales of motor fuel and diesel fuel for the applicable period.
Section 3 amends the state finance law, authorizing the comptroller, in
consultation with the director of the division of the budget, shall
authorize the appropriate method for the appropriation of funds special
obligation reserve and account an amount equal to the amount that would
have otherwise been deposited in the special obligation reserve and
payment account pursuant to this section if the exemption
Section 4 amends the general business law to provide that price
reductions shall reflect change in sales tax computation.
Section 5 provides that the benefits flow down to customer requiring
every person engaged in the retail sale of motor fuel and natural gas
and/or a distributor of such, by reducing the prices charged for motor
fuel and natural gas in an amount equal to any reduction in taxes
prepaid by the distributor, credit for the amount of taxes prepaid by
the retail seller allowable.
Section 6 provides that a municipality may elect to eliminate all taxes
and motor fuel and diesel motor fuel.
Section 7 authorization the commissioner of taxation and finance to
promulgate rules, on an emergency basis necessary to provide the tax
freeze.
Section 8 sets the effective date.
 
JUSTIFICATION:
Existing law, the motor vehicle fuel tax law, imposes a tax upon each
gallon of motor vehicle fuel removed from a refinery or terminal rack in
this state, entered by this state, or sold in this state, at a specified
rate per gallon. A sales and use tax is also imposed on natural gas.
Currently, gas prices at the pump for motor fuel nears $3.5 per gallon
across the state, due to supply chain shortages and tax prices. Abrupt
hikes recently imposed on customer energy bills, also for similar
reasons, have left many with bills 4 times higher than their previous
and usual amount. Subsequently, consumers are left unable to pay their
energy bills and overwhelmed with the prospects of a lengthy debt
sentence Especially problematic as the state continues to struggle with
accounting arrears and the payment of such. These prices show little
indication that they will decrease without intervention.
A "gas tax holiday" is a limited yet effective way to provide families
with modest relief and support local businesses and employers.
Although, gas cannot play a long-term role nor will any new gas infras-
tructures be built in the state, it plays a short-term role in reducing
our reliance on coal-fired electricity for a smooth transition to inter-
mittent renewable sources such as solar and wind. A momentary tax break
in response to the recent surges would not thwart our climate goals but
keeps current rates justifiable and assists in the just transition to
renewable energy.
This bill would suspend the imposition of taxes on motor fuel gas and
the state sales and use tax until December 31, 2023. The rate will be
lower for sellers and distributors, who must then pass it down to
consumers via lower utility rates and lower fuel cost. The benefits
received from the tax shall also be properly appropriated under the act.
 
PRIOR LEGISLATIVE HISTORY:
2023/24: S4925- Amend and recommit to budget and revenue
2021/22: S8479A - Amend and recommit to budget and revenue
 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S2346: 89-b state finance law, 89-b(3) state finance law, 392-i general business law, 1817 tax law