Sales Tax on Residential Energy

On December 5, 2013, the Dutchess County Legislature approved a sales tax on residential energy and a budget for 2014.  I did not vote in favor of the tax or the budget and would like to explain why.

Starting March 1, 2014, most residential energy sources (electricity, fuel oil, natural gas, propane, steam, coal, gas and electric services, as well as wood) will be taxed at the full local sales tax rate of 3.75%This means most residents will see an additional sales tax line on their energy bills.  The county expects this tax to result in about $7.9 M in additional revenue for 2014.

I did not support this legislation because I believe the county should not make it more difficult for residents to pay their energy bills.  I do not consider home heating and energy to be discretionary expenses.  Therefore, a sales tax on residential energy does not give residents the opportunity to control their tax liabilities in this area.  These increases especially affect low and middle income families, those on fixed income and others whose incomes have suffered in a lingering weak economy.

New York residents already pay some of the highest natural gas and electricity prices in the country.  At the same time, federal funding for the Home Energy Assistance Program (HEAP)—a program that helps lower income households heat their homes in the winter—has decreased considerably over the last few years.  Simply put, this was the wrong time to adopt such legislation.

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