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Tax Cut Plan Would Reduce Gas Prices; Encourage Energy Conservation;
Wednesday, May 16, 2001
The New York State Senate today passed legislation that would eliminate the four cents per gallon state sales tax on gasoline and diesel fuel and save motorists an estimated $400 million. The gas tax cut is part of the Senate's $2.2 billion tax cut package that also targets a host of other initiatives aimed at stimulating job and economic growth, as well as helping families meet health care and other needs.
"Every time you go to the gas pump the price is a little higher," Senate Majority Leader Joseph L. Bruno said. "The Senate's gas tax elimination plan would provide much-needed relief from skyrocketing gas prices that are hurting drivers in the wallet not only at the gas station, but in the form of every product affected by the higher prices."
According to the Automobile Club of New York, average prices for regular grade unleaded gasoline have climbed 23 cents in one month to $1.752 per gallon, an all-time high. The Senate bill could provide additional relief by giving localities the option to eliminate the local sales tax on gasoline.
In addition to abolishing the state gas tax, the energy tax cut bill (S.2B) also includes
$485 million in tax saving proposals designed to stem rising energy costs including the elimination of the state sales tax on home energy conservation products like insulation, caulking, thermal windows, and furnaces; repeal of the Gross Receipts Tax on home energy; and the creation of a Home Energy Assistance Tax Credit to help low-income New Yorkers pay rising energy bills.
"During the winter everyone was concerned about the cost of heating their homes, in the spring everyone is concerned about the price of gassing up their cars. The Senate's energy tax cut plan addresses both of these very serious problems through tax cuts, tax credits and measures to encourage conservation," Senator Bruno said.
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In addition to the energy tax cut legislation, the Senate also passed legislation (S.4A) that includes more than $1.3 billion in tax cuts aimed at reducing property taxes, tax credits to help families care for children and elderly loved ones, an innovative tax credit to encourage small businesses to provide health insurance for their employees, the expansion of the successful Empire Zone program, and programs that would reduce sales taxes on home computers and "hands-free" cell phone accessories.
"Every day we are seeing more signs of a nationwide economic downturn," said Senate Finance Committee Chairman Ronald B. Stafford (R-C, Plattsburgh). "It is important that we do everything possible to protect New Yorkers by encouraging new economic growth and providing tax relief for families and businesses."
The Senate tax cut package includes the following:
Bringing more jobs to the Empire State
The Senate Budget Resolution also includes tax credits to help attract industry, encourage economic development, and create more jobs throughout the state:
* the Gen*NY*sis program, designed to promote the growth of the biotechnology industry in New York, would provide $45 million in targeted tax relief for biotech employers;
* the Senate proposes to expand the popular Empire Zone program by creating 14 new zones across the state and expanding the existing 52 zones;
* to help more businesses invest in new equipment and technological advances, the Senate has proposed an expansion of the Investment Tax Credit to include leased equipment, saving businesses $55 million a year;
* the gradual elimination of the Alternative Minimum Tax would save businesses $50 million when fully implemented, thus encouraging more investment in New York State;
* the Senate Majority's proposal to repeal the petroleum business tax on kero-jet fuel would save airlines $10 million and help reduce airfares for New York travelers.
Reducing taxes for New York's small businesses
* The Senate has also addressed the mounting costs of health insurance premiums for small businesses across the state with the $235 million health care tax credit. Under this plan, eligible small businesses would be allowed a tax credit of 10 percent the cost of health insurance premiums;
* the Vendor Credit would compensate small business for collecting sales taxes by allowing them to retain 7 percent of the sales taxes they collect, saving them a total of $25 million;
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* to encourage the growth of the biotechnology industry in New York, the Senate proposes $20 million in tax credits to help improve the cash flow for smaller, fledgling biotech firms;
* the High Technology Job Retraining Credit would save small businesses in the burgeoning high-tech industry $10 million a year.
Tax relief for New York Farmers
* To help farmers maintain existing land and obtain additional farmland, the Senate supports the Governor's Farmland Improvement Credits which would save New York farmers $8 million annually;
* The Senate also supports the Governor's Farmer's School Property Tax Relief which provides $5 million in tax cuts to give landowners needed incentives to continue to rent out agricultural property;
* The 15 percent refundable health insurance credit would save farmers $15 million a year and help them provide their families and employees with affordable health care;
* The Senate proposal to remove the alternative minimum tax limitations for farms would save farmers $2 million annually;
* the total value of the Senate Majority's farm tax cut proposal is $40 million, including the above.
Helping New York families care for loved ones
The Senate has also proposed tax credits that would help working New York families care for their loved ones, both old and young:
* the $50 million Elder Care Tax Credit would provide a tax credit of 20 percent of the expenses incurred for the in-home care of an elderly relative;
* the Child Care Credit Enhancement would give even more New Yorkers a tax credit for child care expenses, saving New York families $25 million annually;
* in addition, the Senate has proposed a $20 million Adoption Credit which would not only offset the cost of adopting a child in New York, but give more New Yorkers an added financial incentive to do so.
Reducing property taxes
The Senate also supports the Governor's Co-STAR proposal which would provide county tax relief for eligible farmers and seniors. The plan, modeled after the successful STAR program, would save New Yorkers an additional $230 million in property taxes.
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Bringing more computers into New York homes
One of the more innovative Senate Majority proposals is designed to increase the number of New York homes with home computers. Presently, New York ranks on the bottom third of this list nationwide. Under the Senate's plan, New Yorkers would enjoy a one-week exemption of state sales tax on the purchase of a home computer. It is estimated that Sales Tax-Free PC Week could save New Yorkers $20 million and bring up to a quarter-million new computers into New York homes.
Safe cell-phone use
To encourage safe use of cell phones, the Senate also has proposed a sales tax exemption on the purchase of "hands free" cell phone accessories to promote safer use of cell phones on New York roads and highways.
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