Increases the prepaid state tax amount collected on motor fuel.
BILL NUMBER:S6602 REVISED 2/12/14
TITLE OF BILL: An act to amend the tax law, in relation to increasing the amount of tax required to be prepaid on motor fuel
PURPOSE OR GENERAL IDEA OF BILL: Amends the tax law to increase the prepaid sales tax amount collected on motor fuel.
SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends paragraph 2 of subdivision (e) of section 1111 of the tax law to increase the prepaid sales tax amount from 14 3/4 cents to 18 cents for the Metropolitan Commuter Transportation region and 14 cents to 16 cents for the rest of the state.
JUSTIFICATION: This bill does not increase the sales tax on motor fuel. It protects against county governments losing motor fuel sales tax revenue due to fraud by increasing the prepaid portion of these taxes.
By increasing the prepaid sales tax amount, this legislation will ensure counties collect more sales tax revenue up front, thereby protecting them from fraudulent retailers who do not currently pay the appropriate amount in local sales tax per gallon. As a result, it is anticipated that this legislation will increase sales tax revenue to county governments.
Currently, motor fuel distributors are required to prepay sales tax (14 3/4 cents per gallon in the Metropolitan Commuter Transportation region and 14 cents per gallon for the rest of the state) upon import of motor fuel. This amount of prepaid tax has not been modified since 2006, when the price of gasoline was approximately $2.50 per gallon.
Due to the fact that fuel prices have increased since the current prepaid rates were set, these amounts only provide for prepayment of approximately 40-60% of the local sales tax. Certain unscrupulous gas retailers take advantage of this differential by not paying their proper taxes. They benefit by committing fraud while placing law-abiding retailers at a competitive disadvantage. By requiring that the state sales tax and a larger share of the local sales tax be paid up front by distributors, this bill will ensure a fairer retail gas market while increasing revenue to our counties.
PRIOR LEGISLATIVE HISTORY: New bill.
FISCAL IMPLICATIONS: None to the state. Increased revenue for county governments.
EFFECTIVE DATE: Sixty (60) days after it shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 6602 IN SENATE February 11, 2014 ___________Introduced by Sen. BOYLE -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Govern- ment Operations AN ACT to amend the tax law, in relation to increasing the amount of tax required to be prepaid on motor fuel THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Paragraph 2 of subdivision (e) of section 1111 of the tax law, as amended by section 6 of part M1 of chapter 109 of the laws of 2006, is amended to read as follows: (2) (i) Where the motor fuel is imported, manufactured or sold in, or diesel motor fuel is sold or used in the region referred to in subpara- graph (i) of paragraph one of this subdivision, the tax required to be prepaid pursuant to section eleven hundred two of this article on each gallon of such fuel shall be
[fourteen and three-quarters]EIGHTEEN cents. (ii) Where motor fuel is imported, manufactured or sold in, or diesel motor fuel is sold or used in the region referred to in subparagraph (ii) of paragraph one of this subdivision, the tax required to be prepaid pursuant to section eleven hundred two of this article on each gallon of such fuel shall be [fourteen]SIXTEEN cents. S 2. This act shall take effect on the sixtieth day after it shall have become a law.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13651-01-4