NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5794
SPONSOR: Giglio TITLE OF BILL:
An act to amend the tax law, in relation to computing sales and compen-
sating use tax on retail sales of motor fuel and diesel motor fuel at a
rate of cents per gallon
PURPOSE OR GENERAL IDEA OF BILL:
Computing sales and compensating use tax on retail sales of motor fuel
and diesel motor fuels at a rate of cents per gallon will help prevent
potential revenue loss.
SUMMARY OF PROVISIONS:
Section I amends the tax law by adding a new paragraph (8) to establish
the quarterly computation of• motor fuel and diesel motor fuel by the
commissioner, 'a rate of cents per gallon rounded to the nearest cent
and multiplied by the cost of the fuel.
Section 2 amends the tax law by adding a new subparagraph (iv) which
establishes that the sales and compensating use taxes on motor fuel, and
diesel motor fuel in New York State shall be prepaid on each gallon of
fuel.
Section 2 provides the effective date.
JUSTIFICATION:
Currently, in New York State, fuel tax is collected in a complicated
two-part system. First, retail locations (gas stations). must prepay the
New York State specific tax upon delivery of their product. Distributors
are than required to collect and deliver that tax to New York State.
Second, retail locations are then required to collect a county sales tax
which is calculated in real-time instead of prepaid as the product is
sold. This complicated system of tax collection has unfortunately left
substantial room for tax evasion. Less reputable retailers have been
found under reporting sales allowing them to pay less in county tax. The
auditing process often takes such a substantial amount of time that when
discrepancies are discovered, the gas station in question has often
either shut down or changed legal names leaving New York State and its
counties with enormous lost revenue.
PRIOR LEGISLATIVE HISTORY:
2022 A.6776- referred to ways and means
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
Increased tax revenue for local governments.
EFFECTIVE DATE:
This act shall take effect on the first day of a sales quarterly period.
STATE OF NEW YORK
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5794
2025-2026 Regular Sessions
IN ASSEMBLY
February 20, 2025
___________
Introduced by M. of A. GIGLIO -- read once and referred to the Committee
on Ways and Means
AN ACT to amend the tax law, in relation to computing sales and compen-
sating use tax on retail sales of motor fuel and diesel motor fuel at
a rate of cents per gallon
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision (m) of section 1111 of the tax law is amended
2 by adding a new paragraph 8 to read as follows:
3 (8) The sales and compensating use taxes imposed by subpart B of part
4 one of article twenty-nine of this chapter in regard to retail sales of
5 motor fuel and diesel motor fuel shall be computed, as determined quar-
6 terly by the commissioner, at a rate of cents per gallon, rounded to the
7 nearest cent, multiplied by the cost of the fuel.
8 § 2. Paragraph 2 of subdivision (e) of section 1111 of the tax law is
9 amended by adding a new subparagraph (iv) to read as follows:
10 (iv) Where motor fuel is imported, manufactured or sold in, or diesel
11 motor fuel is sold or used in this state, the sales and compensating use
12 taxes imposed by subpart B of part one of article twenty-nine of this
13 chapter as computed pursuant to subdivision (m) of this section shall be
14 prepaid pursuant to section eleven hundred two of this article on each
15 gallon of fuel.
16 § 3. This act shall take effect on the first day of a sales tax quar-
17 terly period, as described in subdivision (b) of section 1136 of the tax
18 law, next commencing at least ninety days after the date this act shall
19 have become a law and shall apply in accordance with the applicable
20 transitional provisions of sections 1106 and 1217 of the tax law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01581-01-5
