Dutchess County Executive Marc Molinaro and County Legislature Chairman Gregg Pulver announced today they are proposing a resolution to the County Legislature to temporarily amend the County’s sales tax calculation on retail sales of motor fuel and diesel motor fuel, capping the amount of sales tax the County collects and offering residents much-needed relief as fuel costs spike due to worldwide pricing forces.
County Executive Molinaro is proposing Dutchess County change its sales tax calculation for retail motor fuel and diesel motor fuel purchases to provide the maximum benefit for consumers allowed under State law. The County Executive’s proposal would cap the amount of county sales tax collected on each gallon of retail motor fuel at $.08. Under the current sales tax methodology, consumers pay 3.75% county sales tax on their total motor fuel purchase, in addition to a myriad of other State and federally imposed taxes and fees.
County Executive Molinaro said, “As the price at the pump skyrockets, I propose Dutchess County do all it can, under New York State law, to ease the pain for local motorists. We recognize this relief is limited, but we must do what we can to help as families, farmers and small businesses are crushed by rising costs. By cutting and capping the county tax on gas – we can provide some assistance and I encourage my colleagues to adopt this proposal.”
New York State law imposes strict parameters on how counties tax motor fuel purchases. Counties have two options for calculating the sales tax on motor fuel – a percentage rate method on the total purchase or a cents-per-gallon methodology, calculated at a cents-per-gallon rate which, when applied to the county’s sales tax percentage of 3.75%, equals either $2 per gallon or $3 per gallon. Counties do not have an option to exempt retail gasoline or diesel fuel purchases from local sales tax under State law.
As does nearly every county in New York State, Dutchess County currently uses a percentage rate method whereby the County receives sales tax totaling 3.75% of all motor fuel sales in the County; if a gallon of gas costs $4.25 for example, the County receives $.16 per gallon in sales tax. Under County Executive Molinaro’s proposal, the County would implement a cents-per-gallon methodology, rather than a percentage of a climbing price, with county sales tax charged only on the first $2 of the per-gallon gasoline price, or a total of $.08 per gallon.
Chairman Pulver said, “Our nation is currently experiencing inflation the likes of which we haven’t seen in some 40 years, including recent spikes at the pump. County Executive Molinaro and I feel strongly about cutting and capping the County’s tax on motor fuel to help families throughout Dutchess County during these difficult economic times, and I urge my fellow legislators to approve this measure to bring relief to residents.”
The County Legislature will vote on the resolution to cut and cap the local county sales tax on retail motor fuel purchases at its April 11th board meeting, and the new sales tax cap would be effective June 1, 2022, pending approval of the New York State Commissioner of Taxation and Finance, and it would expire on December 1, 2022. New York State law states local sales tax enactments of this kind can take effect only on March, June, September or December 1st of any year and a certified copy of the local enacted resolution must be transmitted to the State at least 90 days prior to the effective date. The New York State Commissioner of Taxation and Finance may reduce the 90-day notice requirement period to not less than 30 days – Dutchess County will request this waiver.
Local county sales tax is one of several state and federally imposed taxes and fees on retail sales of gasoline and diesel purchases. The pump price per gallon of fuel includes federal tax, NYS motor fuel/diesel motor fuel excise tax, a petroleum business tax, the NYS Sales Tax (which includes the Metropolitan Commuter Transportation District (MTA) tax) as well as local sales tax.
County Executive Molinaro’s proposed gas tax cut and cap is just the latest in his tax relief initiatives to return to residents the hard-earned dollars they entrust to their county government. His 2022 Executive Budget, which the Legislature adopted in December 2022 with few amendments, included a $5.5 million reduction in the County’s tax levy – the largest such decrease in County history as well as eighth consecutive County property tax levy reduction – the seventh straight property tax rate decrease for homeowners and businesses, and the elimination of County sales tax on clothing items up to $110.
Legislator Yvette Valdés Smith, Minority Leader of the Dutchess County Legislature, said, “Skyrocketing gas prices have affected every single resident of Dutchess County. As a working mom, I know how difficult it is to make ends meet, so I am proud to partner with my colleagues in the Legislature and the County Executive to cap the gas tax and help ease the financial strain that our communities are experiencing. We recognize that this is a first small but important measure and are committed to continue looking for ways to help the residents we serve.”
Legislator Will Truitt, Majority Leader of the Dutchess County Legislature, said, “Unlike the failings of leaders at other levels of government that have led to the exponential increase in gas and diesel prices recently, locally we continue to take action to provide relief. I fully support County Executive Molinaro’s and Chairman Pulver’s resolution to provide savings at the pump with this tax cut and cap and I look forward to its enactment so our neighbors throughout the County can keep more of their hard-earned dollars.”