Avella: Ease Pain At The Pump
State Sen. Tony Avella has introduced legislation (S.6852) in the State Senate requiring the city to compute its sales and compensating use tax for gasoline and diesel fuels at a flat, cents per gallon, rate rather than the current percentage per gallon rate.
Currently, New York State taxes consumers a flat rate of 8 cents per gallon for retail gas sales. The flat rate remains constant regardless of the fluctuation in the price of gas. However, the city charges consumers a percentage of the sale price per gallon of gas on top of the state’s sales tax.
For example, gasoline at a base price of $2.50 per gallon is taxed by the state at 8 cents a gallon and also receives an MTA district tax of $0.0075 per gallon. The city taxes the gasoline at 10 cents per gallon.
Gas sold at $4.50 per gallon is taxed the same 8 cents a gallon by the state and receives the same $0.0075 per gallon MTA surcharge but is taxed by the city at 18 cents a gallon.
“As we all cry out in pain over the rapid increase of gas prices the past few months, the city is quietly sitting back and collecting an unfair and underserved surge in revenue,” stated Avella. “Not only are consumers being gouged by the base price of oil but they are also being gouged by the city collecting a percentage rate. With the rapid increase in gas prices, the city is receiving an undeserved windfall tax revenue at the expense of its commuters.”
“At four dollars a gallon,” he added, “the difference between the percentage and the flat rate would save someone buying 20 gallons of gas a week roughly eighty dollars over the course of a year.”
