TAX FILE: Diesel tax breaks proliferate

Michigan Gov. Jennifer Granholm signed a bill on July 7 that immediately lowered the state tax rate on biodiesel by three cents per gallon, from 15 to 12 cents. Less than a week earlier, on July 1, 14 counties and two cities in New York lowered their local sales taxes on gasoline and diesel fuel. The localities switched from a tax based on a percentage of the retail price to a flat 8 cents per gallon. In May, Gov. George Pataki had signed a bill to convert the state sales tax from a 4 % rate to an 8 cent-per-gallon rate.