Six-Month Gas Tax Holiday Begins in New York as Price at Pump Continues to Surge

A person uses a petrol pump at a gas station as fuel prices surged in New York City, on March 7, 2022. Andrew Kelly/Reuters

Drivers in New York will get a six-month gas tax holiday as of June 1 amid record-high gas prices across the United States.

The move to provide drivers some relief at the pump was proposed earlier this year when inflation and the war in Ukraine sent gas prices soaring.

Under the relief program, excise tax, repaid sales tax, and state sales and use taxes as well as the additional state sales and use tax imposed in the Metropolitan Commuter Transportation District (MCTD), will be suspended for motor fuel and highway diesel.

The tax relief will continue through Dec. 31, 2022, and will provide a reduction of at least $0.16 per gallon statewide. Local sales and use taxes are not suspended under the program.

“Fuel prices have surged in recent months, hurting working families and small businesses the most, and it is crucial that we provide New Yorkers relief,” Gov. Kathy Hochul said in announcing the relief program on Wednesday.

“By suspending certain fuel taxes for the next seven months, New York is providing some $609 million in direct relief to New Yorkers—a critical lifeline for those who need it most. At a time when families are struggling because of economic headwinds and inflation, we will continue to take bold action to reduce the economic burden on New Yorkers and get money back in their pockets.”

Average gasoline pump prices across the United States rose to $4.715 on June 2, according to the latest data from AAA. In New York, the price per gallon is $4.827, up from $3.078 this time last year.

New York’s gas tax would have added between 47 cents and 48 cents to each gallon pumped by drivers.

Twenty-five counties across the State have also taken action to set temporary caps on the sales tax charged per gallon of gas and diesel.

New York joins a number of states, including Connecticut, Georgia, and Maryland to cut gasoline taxes as prices across the nation soar. Earlier this week, prices at the pump surged even higher after the European Union agreed to a partial ban on Russian oil imports by the end of the year.

E.U. leaders agreed on a plan to block roughly 90 percent of oil imports from Russia to the E.U. as part of the sixth package of sanctions against Russia over its invasion of Ukraine.

The embargo covers Russian oil imports to the E.U. that are transported by the sea while another 10 percent that is delivered by pipeline is exempt due to Hungary’s dependence on pipelines to transport the oil.

President Joe Biden’s administration announced on May 24 that it would sell up to 40.1 million barrels of crude oil to be released from the Strategic Petroleum Reserve (SPR) over the coming months.

The move is part of Biden’s announcement on March 31, to release one million barrels of crude oil a day for six months to help offset the global supply disruption prompted by President Vladimir Putin’s military action in Ukraine, and help stabilize volatile energy prices for Americans.