NY TAX ON PETROLEUM DISTRIBUTORS TO RISE 5%
January 18, 2022
Recently, the state of New York announced plans to raise the state fuel tax that is charged to petroleum distributors by 5% on January 1, 2022.
The petroleum business tax is charged to fuel distributors across New York and is assessed on heating fuel for businesses, colleges, hospitals, and diesel motor fuel and jet fuel used by aircraft during takeoffs from New York airports. On January 1, the tax will increase from 4.8 cents per gallon to 5.1 cents per gallon of fuel. One of the main concerns regarding the tax increase is that costs associated with the increase levied on distributors will then be passed on to consumers. For example, the additional costs could be passed on in the form of higher prices, which in the context of the aviation industry could mean higher jet fuel and diesel motor fuel prices.
It is important to note however that there has not yet been an indication from distributors that they will raise fuel prices to offset the costs they will incur as a result of the 5% tax increase. If and when we receive any additional information to the contrary, we will provide a further update.
If you have any questions, please contact Evelyn Sahr (esahr@eckertseamans.com 202-659-6622) or Drew Derco (dderco@eckertseamans.com 202-659-6665).
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