Senator Michael Balboni has announced a legislative agreement to provide New York motorists relief from high gas prices by capping and reducing the sales taxes on gasoline. The plan, which will lower the cost of gasoline by up to 8 cents per gallon and save New York drivers as much as $450 million annually, goes into effect June 1.

Under the agreement, Nassau and Suffolk Counties would also have the option of passing laws to cap the local sales tax on gas at a fixed rate, which would provide further relief for Long Island motorists.

"The state should not reap a windfall when the price of gasoline soars, nor should big oil companies get richer," Senator Balboni said. "The plan agreed upon by the Legislature will freeze the tax when gas prices soar over $2 per gallon, offering immediate and much-needed relief for struggling New York motorists."

Legislator Vincent Muscarella and members of the Republican Caucus to the Nassau County Legislature have filed a bill that would not only opt Nassau into the elimination of state tax on gasoline passed over $2 a gallon but also provides for the county to eliminate its tax on gasoline over $2 a gallon.

"We want to be ready to give much needed tax relief on the ever-increasing price of gasoline to our residents," Muscarella said. "Legislation in Albany will soon be passed and we want Nassau County to be ready to not only join in eliminating the state sales tax over $2 a gallon but also the county tax on the same amount."

Currently, New York State collects 4 percent of every gallon of fuel in sales tax, an average of 12 cents per gallon at current prices. As the price of gas goes up, the state collects more and more tax revenue.

The legislative agreement also requires that service station owners pass along the savings to consumers in the form of lower gas prices. The State Commissioner of Taxation and Finance, in conjunction with the chair of the State Consumer Protection Board, would be charged with enforcing the cap. There would be a fine of up to $5,000 per incident, per day, for stations that do not pass along the savings to motorists.

Senator Balboni has long urged a rollback of the state gas sales tax. Recently, he established an online petition drive to solicit public support for this new tax-saving measure and to urge the Assembly to agree to the proposal. Prior to this agreement, the Senate had twice passed legislation instituting a cap on the gas sales tax at $2 per gallon, but the Assembly had not acted on any gas tax relief measure.

Should gas prices fall below $2 per gallon, the 8-cent cap would be reduced proportionately. Both the Senate and the Assembly are expected to approve the legislation this week.

Both houses of the Legislature will continue to discuss proposals to encourage the development and use of alternative sources of energy and encourage energy conservation and the purchase of energy-saving products and materials.