Hybrid Car Review

All new and used hybrid cars, plus any new (2008 or better) vehicles that get 35 mpg or better, will be eligible for a tax break in New York.

The sales tax on all transactions would be eliminated, making hybrid car sales a lot more attractive.

Source:WTEN: Albany, New York News, Weather, Sports - Hybrid Tax Break

I think this is in reference to bill A7626-B. In which case, the bill was submitted by Englebright and if it makes it's way through would take affect on October 1, 2008. It would also authorize cities and counties to grant similar exemptions.

According to the justification:

In 2005, the state tax credit for the purchase of hybrid vehicles expired. This legislation would eliminate the assessment of state sales and use taxes on the purchase of new and used hybrid vehicles and other "high-efficiency vehicles" -- defined as those certified in the updated 2008 fuel economy guide of the United States Environmental Protection Agency to be 2008, or later, models which have a highway fuel economy estimate of 35 miles per gallon or better or which uses no motor fuel or diesel fuel -- and authorize local governments to adopt similar incentives. To reduce the state's dependence on foreign oil and combat global climate change, the state has a prevailing interest in the promotion of hybrid and other high efficiency vehicles. Moreover, the creation of such an incentive will compensate consumers for purchasing decisions that mitigate pollution and other negative externalities. In addition, the enactment of this legislation will encourage the development and manufacture of new environmentally-responsible models and the purchase of these vehicles by individuals otherwise predisposed to less environmentally-friendly alternatives.

It's estimated this bill will cost the state $36 million SFY 2007-08; $42 million SFY 2008-09.