Assemblyman David G. McDonough (R,C,I-Merrick) today announced the Assembly and state Senate have reached agreement on a plan to provide New Yorkers with relief from high gas prices by capping the state sales tax on gasoline. The agreement would save New Yorkers as much as $450 million annually at the pumps by capping the state sales tax at 8 cents, per gallon.

“For the second time in less than a year, motorists in New York have been feeling the burden of paying high gas prices. It’s about time the Legislature responded to their demands,” said McDonough. “We need to continue to work to provide New Yorkers with long-term options, such as the development of alternative fuel sources and provide tax incentives for individuals who purchase hybrid vehicles.”

New York currently collects an average of 12 cents in total sales taxes on a gallon of gas at current prices, while counties collect an additional 12 to 15 cents per gallon in local sales taxes.

County governments would have the option of passing local laws to also cap their gas sales taxes at or below the 12 to 15 cents per gallon they collect today. The cap on the state sales tax on gas would take effect June 1.

The measure requires gas retailers to pass along the savings to consumers. The state commissioner of taxation and finance chair of the state Consumer Protection Board would be charged with enforcing the cap. There would be fines of up to $5,000 per incident, per day, for retailers that do not provide the savings to consumers.

The 8-cent cap would be reduced proportionately should gas prices fall below $2 per gallon.