Oil Habit Is Hard to Break Under New York Tax Code

[Clara T]

Oil Habit Is Hard to Break Under New York Tax Code

By DANNY HAKIM
Published: February 3, 2006

In his address to the nation on Tuesday, President Bush said the United States must move to wean itself from foreign oil. But New York's energy policies show just how hard that goal may be, with a tax code that offers more than $1 billion worth of breaks for gasoline and diesel.

And on the day of Mr. Bush's speech, the State Senate passed a bill that would grant a tax cut to giant oil companies, even as they are reporting record profits, as well as to independent distributors that bring oil into the state. Such tax breaks not only encourage continued dependence on fossil fuels, but may make it harder to accomplish what Mr. Bush, along with Gov. George E. Pataki, is calling for: the wider development and use of alternative fuels.

Many of the more than $1 billion in tax breaks that New York grants for conventional fuels — plain old gasoline and diesel — have been built up over Mr. Pataki's nearly dozen years in office, sometimes as incentives to keep businesses in the state. State gasoline and diesel taxes are discounted for commercial fishermen, farmers, nonprofit groups, private and parochial schools, private bus companies that have contracts with the state, commuter ferries, manufacturers, mining companies and veterans' groups, among others.

Republican lawmakers continue to press for more. In addition to the tax cut for oil distributors, which the Senate also passed last year, other recent measures it has passed include a reimbursement of taxes on diesel fuel paid by small businesses that charter boats for sports fishermen. Both ideas have so far stalled in the Democratic Assembly.

http://www.nytimes.com/2006/02/03/nyregion/03fuels.html?ex=1296622800&en=d3cb562815fc55e2&ei=5090&partner=rssuserland&emc=rss