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February 12, 2004

Governor proposes cut to petroleum business tax in 30-day amendments

Governor Pataki has proposed a $1.5 million cut to the state's petroleum business tax (PBT) in his 30-day amendments to the executive budget.

The Governor's proposal would eliminate the PBT on jet fuel by planes that are cruising or landing on in-state flights. Current state law taxes all fuel used during take-off on any flights originating within the state. Flights that land beyond the state borders do not pay the current tax on in-flight and landing fuel.

This has the effect of imposing a higher tax burden on in-state air travel, the Governor's release said.

"This existing tax, which was imposed in 1990, contributes to higher air travel costs, and particularly affects upstate New York's regional airports," the release said. "By eliminating this disparity, in-state and out-of-state flights will be taxed on an equal basis."

The 30-day amendments make no significant changes to the original executive budget, the release said. Most of the amendments are "technical and mechanical changes," the release said.

The amended financial plan projects "slightly higher revenues for the balance of the current fiscal year, offset by slightly higher than projected spending," the release added.