Suffolk eyes tax break for gas stations

Customers stand in line for gas at a

Customers stand in line for gas at a Valero station in Mastic. The station was among those open after superstorm Sandy. Suffolk County is mulling a sales-tax break for service stations that voluntarily install backup power systems to sell gasoline when electricity is lost because of a storm like Sandy. (Nov. 5, 2012) (Credit: Getty Images)

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Suffolk County is mulling a sales-tax break for service stations that voluntarily install backup power systems to sell gasoline when electricity is lost because of a storm like Sandy.

The county's industrial development agency is exploring a proposal from its secretary, Steve Rossetti, for a six-month program. It would defray 8.625 percent of the cost of installing generators and wiring/transfer switch equipment needed to keep a station or terminal open.

Rossetti said he was responding to the gasoline shortage after Sandy made landfall on Oct. 29. "I seriously believe this is a means of ensuring we keep our economy moving" when the next storm hits, he told the agency's board of directors Thursday.

Suffolk Legis. Steve Stern (D-Dix Hills) and Nassau Legis. David Denenberg (D-Merrick) both have introduced bills that would require service stations to be equipped with "alternative power sources to enable them to distribute fuel in the event of a long-term power outage."

Rossetti said Suffolk's 4,000 stations would find his proposal "more palatable" because it's voluntary.

Not so, according to Michael Watt, executive director of the Long Island Gasoline Retailers Association. The proposed sales-tax exemption wouldn't be much of an incentive because backup power systems can cost between $30,000 and $50,000, he said.

"If government is going to require it, then government is going to have to find the money," he said Friday.

Rossetti lobbied for adoption of his proposal, but a majority of Suffolk IDA board members said it required further study.

They also tweaked a post-Sandy aid program for small businesses that was rolled out last week by Suffolk County Executive Steve Bellone. He had proposed a sales-tax exemption on building materials and equipment for companies trying to recover from Sandy.

Bellone suggested the tax break be limited to 200 businesses with payrolls of 25 workers or less. The IDA expanded the program to companies with 50 or fewer employees, bringing the total number eligible to about 46,000 -- 3,000 more companies than Bellone proposed. The benefit will still be limited to the first 200 qualified applicants.

Separately, IDA vice chairman David Rosenberg asked the agency's lawyer to contact the offices of state Comptroller Thomas DiNapoli and the state Authorities Budget Office about proposed tax breaks for a $200,000 project with ties to the IDA's independent auditor. IDAs are regulated by DiNapoli and the budget office.

The Long Island Tech Mall and Fuoco Technology have asked the Suffolk IDA for help in renovating and expanding space at 200 Parkway Dr. South in Hauppauge. In October the IDA gave preliminary approval for $57,000 in property tax savings over five years and a $12,938 sales-tax exemption.

At the time, Rosenberg and others questioned whether the deal would create a conflict of interest because Lou Fuoco, a 50 percent partner in the tech mall, also has an ownership stake in the Fuoco Group, the accounting firm that has audited IDA finances for four years.

Rosenberg said he was told by Fuoco Group director Donald P. Musgnug that the tax breaks would not preclude an independent audit. However, Rosenberg said, "I want to be very transparent, I want to make sure we are in compliance with state regulations."

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