Legislature in agreement on gas taxes

[steven]

The state Senate and Assembly leadership announced Wednesday they have reached a deal to cap state sales taxes on gasoline.

The deal will effectively limit state taxes on a gallon of gasoline to 8 cents. That is the same level as the state's sales tax charges on gas as if fuel costs $2 a gallon.
http://www.bizjournals.com/buffalo/s...ml?jst=b_ln_hl

[Ragin]

According to the article this amounts to about 0.04 cents per gallon.

The deal between the Senate and Assembly also allows local govt's to opt in on a cap on their collection of sales tax on fuel.

In your post on May 8th the article said, "If local governments follow suit on easing back the sales tax, motorists would gain up to an extra $400 million. The tax change on both the local and state levels would save motorists about 10 cents a gallon, Assembly officials said."

Anyone want to wager on what Erie County will do?

I think I'll stick to betting on race horses

[Ragin]

hmmm .. leave it to our elected leaders to reach a deal that in all likelyhood won't be worth the paper it's written on

From today's Buffalo News:

"Counties, which charge between 8 cents and 15 cents a gallon in sales taxes, also are capable of reducing their sales tax to match the new state rate.
But it is not required, and it remains unclear whether cash-strapped counties like Erie County could afford to do so.

Erie County Executive Joel A. Giambra was unavailable to comment."

At the pump .....

"Motorists shouldn't count their savings just yet. While legislators were praising the deal, there are questions about whether motorists will ever see in savings.

The agreement calls for the state Tax Department and Consumer Protection Agency to monitor whether the savings reach motorists. The agreement also stipulates that gasoline stations can be fined $5,000 for not cutting prices to reflect the tax cut savings.

But gas stations don't collect the state taxes. That is done between the refinery and distributor level.

"We may never get that reduction," said Ralph Bombardiere, executive director of the Association of Service Stations and Repair Shops, when asked if oil companies or distributors will pass the savings to his stations, which in turn would pass it on to consumers."

and word from our Govenor ....

"Gov. George E. Pataki did not sign on to Wednesday's agreement, and he has raised concerns about lawmakers adding new initiatives that will impact a 2006 state budget that is already on the books. A spokesman said the administration was waiting to hear how the tax cut would be funded."

Anyone got a racing form?

[300miles]

About that cap on the gas sales tax
Business First of Buffalo - 1:41 PM EDT Wednesday

New York state convenience store operators are advising consumers that the touted cap on gasoline sales taxes may not amount to as much as stated.

Gov. George Pataki signed a measure this month that, effective June 1, will limit gas sales taxes at eight cents, or 4 cents per gallon. Legislative aides in Albany have estimated that as much as $450 million in revenue would be passed back to consumers from state coffers each year.

With the price of a gallon of gasoline retailing for nearly $3, supporters say motorists can expect to realize savings of nearly 4 cents. The New York Association of Convenience Stores said Wednesday that calculation is not accurate.

"The publicity surrounding this legislation may have created a false expectation that pump prices will drop 4 cents tomorrow," said James Calvin, President of the New York Association of Convenience Stores, an Albany-based trade group. "Right now it looks like it will be more in the 2-and-a-1/2 to 3-cent range."

He said some have erroneously theorized that under the current 4 percent rate, consumers were paying 12 cents in state sales tax on a $3 gallon of gas, and if the tax was capped at 8 cents, it would save them 4 cents. Calvin said in reality, however, at $3 a gallon, consumers pay about 10.8 cents in state sales tax -- not 12. That is because retailers are required to apply the 4 percent tax rate not to the entire $3 selling price, but to the selling price excluding various state and local taxes that were prepaid by the wholesale distributor. That puts the price at about $2.70 per gallon. The switch to a flat 8 cents per gallon tax translates to a savings of 2.8 cents per gallon, the association said.

In Erie County, it may not matter because neither County Executive Joel Giambra nor a majority of the Legislature favor implementing the cap, saying the county needs the added revenue.



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