New York State gas tax holiday

The New York State Senate passed S4880B-2011, a bill to rescind the state’s 31.9 cents per gallon gasoline taxes during summer holidays this year.

New York’s gas holiday bill would suspend the gas tax on the holiday weekends of Memorial Day, Independence Day, and Labor Day in 2011. The bill also directs the state comptroller to transfer money from the state’s general fund to New York’s Highway and Bridge Trust Fund. The bill also gives municipalities the authority to suspend their own local gas taxes if they elect to participate in the tax holiday.

There’s also a ridiculous and, frankly, unenforceable provision in the bill that retailers must reduce the price at the pump by the state tax amount.

New Yorkers burn about three million gallons of gasoline per day. New York state refiners and distributors deliver about three million gallons of gasoline per day. A gas tax holiday isn’t going to suddenly increase refinery production capacity. Consumers will fill up on the first and last days of the tax holiday, and motorists from neighboring states will drive into New York for the bonanza as well.

If retailers don’t increase the pump price, I predict gasoline shortages this weekend in New York should the bill pass the Assembly and be blessed with the Governor’s signature. If the refineries and distributors try to moderate the demand by raising prices, they’ll be accused of price gouging, but I predict record profits for oil companies this weekend and I believe they’ll get away with increasing those prices. This is another gold mine for the oil companies provided at taxpayer expense and with very little net benefit for consumers.

The bill for now remains stuck in committee in the state Assembly. Kudos to Cap’n Transit, who highlights which Senators voted which way on this gas tax holiday bill.

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