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Bill

A 11489

Provides for a fuel tax holiday until the end of the ongoing hostilities with Iran and the reopening of the strait of Hormuz

2025 Regular Session Introduced by Ken Blankenbush and 3 co-sponsors

The bill creates a temporary fuel tax holiday in NY, requiring price reductions to pass tax savings to customers and authorizing credits/refunds for prepaid taxes.

REFERRED TO WAYS AND MEANS
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WeVote Research Nonpartisan
Bill Summary · A 11489

Overview

A. 11489 is a New York Assembly bill introduced in May 2026 that would create a temporary fuel tax holiday. The exemption applies to taxes on retail sales of fuel gas, motor fuel, and diesel motor fuel during an “applicable period” defined as starting the first of the month after the act’s effective date and ending the first of the month after the end of ongoing hostilities with Iran and the reopening of the Strait of Hormuz. The bill would also provide for price reductions, refunds/credits to retailers, and related advertising and financial arrangements. It includes a mechanism to sunset automatically one year after the applicable period and requires agency actions to implement.

Main purpose and intent

  • Provide a temporary tax-free period for fuel sales in New York in response to geopolitical tension (ongoing hostilities with Iran and reopening of the Strait of Hormuz).
  • Preserve consumer price reductions by requiring retailers and utilities to pass through the tax savings to customers.
  • Establish a support structure for retailers and utilities to receive refunds/credits for prepaid taxes and to advertise the tax-free period.
  • Allow municipalities to opt in to eliminate all fuel taxes for the applicable period.

Key provisions and changes

  • Section 50: Fuel tax holiday
    • Definitions:
    • “Applicable period” = from the first of the month after enactment until the first of the month after hostilities with Iran end and Hormuz reopening.
    • Aligns “diesel motor fuel,” “motor fuel,” “filling station,” “retail sale,” “retail seller,” and “sale” with existing tax law definitions.
    • Extends to “fuel gas” and utilities (as defined in New York law) for cross-referencing purposes.
    • Exemption from taxation (b):
    • Taxes on retail sales of fuel gas, motor fuel, and diesel motor fuel during the applicable period are exempt from state taxes under Articles 12-A, 13-A, and 28 of the Tax Law.
    • If a municipality has chosen to eliminate the tax under Article 29, that tax would also be exempt during the applicable period.
    • Price reduction (c):
    • Retail sellers must reduce the price per gallon by the amount of prepaid taxes and any tax in excess of prepaid amounts that would have been collected absent the exemption.
    • Utilities must reduce fuel gas rates per kilowatt hour by the same logic.
    • Advertising (d):
    • Retailers may advertise tax-free fuel starting up to three days before and ending with the applicable period’s end.
    • Utilities may advertise tax-free fuel rate calculations under the same timing rule.
    • Refunds and credits (e):
    • Retail sellers receive a credit against taxes due for prepaid taxes corresponding to the applicable period.
    • If located in a municipality that eliminated Article 29 tax, that credit applies for prepaid taxes there as well.
    • Credit equals the prepaid tax per gallon for each gallon sold during the applicable period.
    • Credits may be claimed on the period’s tax return; amendments allowed for late-filed returns within specified limits; no interest on credits.
  • Finance law amendment (Section 2):
    • The Comptroller, within 45 days after the applicable period, must transfer from the General Fund to the Special Obligation Reserve and Payment Account an amount equal to what would have been deposited if the exemption had not occurred.
  • General Business Law amendment (Section 3):
    • Requires price reductions by distributors/retailers to reflect the tax prepayment reductions or credits described in Section 50.
  • Tax Law amendment (Section 4):
    • Mirrors price-reduction requirements for distributors and retail customers consistent with Section 50.
  • Local option (Section 5):
    • Municipalities may opt to eliminate all taxes on fuel gas, motor fuel, and diesel fuel for the applicable period via local law, provided notification to the State Tax Commissioner no later than the Wednesday before the period begins.
  • Administrative (Section 6):
    • The Commissioner of Taxation and Finance will issue emergency rules to implement the tax-free sales and refunds.
  • Effective date and sunset (Section 7):
    • Act takes effect immediately.
    • Expire and be repealed one year after the end of the applicable period.
    • Requires notification to the Legislative Bill Drafting Commission to maintain an accurate official text in the state’s law database.

Who would be affected

  • Retail sellers of motor fuel, diesel motor fuel, and fuel gas (gas stations, convenience stores, etc.).
  • Retail customers purchasing motor fuel, diesel motor fuel, and fuel gas.
  • Utility corporations that provide fuel gas (electric, gas, and related utilities) and their customers.
  • Municipalities that opt to eliminate fuel taxes under Article 29 or related provisions.
  • State agencies (Comptroller and Tax Department) responsible for administering refunds/credits and implementing rules.

Procedural and timeline aspects

  • The bill defines the applicable period as starting the first month after enactment’s effective date and ending the first month after hostilities with Iran end and Hormuz reopens.
  • Advertising is allowed in a narrow window before and during the applicable period.
  • Refunds/credits can be claimed on the retailer’s return for the period; amendments permitted under specific conditions; no interest on credits.
  • The Comptroller must transfer funds to the Special Obigation Reserve within 45 days after the applicable period.
  • The act expires automatically one year after the end of the applicable period, unless extended by further legislative action.
  • The Department would issue emergency regulations to implement the program.

Practical impact and considerations

  • Consumers could see a temporary reduction in fuel prices equivalent to state taxes on fuel during the applicable period.
  • Retailers bear initial cost through prepaid taxes but receive credits to offset those costs; timing and administration depend on state processes.
  • Utilities may pass through tax-free savings to customers via reduced fuel gas rates.
  • municipalities have a tool to further reduce or eliminate local fuel taxes during the period.
  • The measure is federal-spurred or geopolitically motivated, targeting energy prices during a specific international crisis window.

If you’d like, I can provide a section-by-section plain-language breakdown or compare this proposal to existing New York fuel tax rules.

Compiled from official sources — confirm details with the bill’s official record.

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