Bill Text: NJ A2979 | 2012-2013 | Regular Session | Introduced

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Bill Title: Allows certain fuel dealers and distributors refunds of petroleum products gross receipts tax and credits against motor fuel tax for certain bad debts from sale of fuel.

Spectrum: Slight Partisan Bill (Republican 5-2)

Status: (Introduced - Dead) 2012-05-24 - Introduced, Referred to Assembly Appropriations Committee [A2979 Detail]

Download: New_Jersey-2012-A2979-Introduced.html

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LEGISLATIVE FISCAL ESTIMATE

ASSEMBLY, No. 2979

STATE OF NEW JERSEY

215th LEGISLATURE

 

DATED: DECEMBER 28, 2012

 

 

SUMMARY

 

 

Synopsis:	Allows certain fuel dealers and distributors refunds of petroleum products gross receipts tax and credits against motor fuel tax for certain bad debts from sale of fuel.
Type of Impact:	Annual loss of revenue from the General Fund and a potential impact on the Transportation Trust Fund.
Agencies Affected:	Department of the Treasury.

 

 

Office of Legislative Services Estimate
Fiscal Impact		Potential Annual Impact
State Cost		Minimal administrative costs
State Revenue Loss		Unknown revenue loss

 

 

·        The Office of Legislative Services (OLS) cannot accurately estimate the potential fiscal impact of this bill.  Some amount of annual State revenue losses are likely to occur, but the OLS has no New Jersey or national data on which to base an estimate.  In addition, there is likely to be a minimal annual administrative cost associated with managing and reviewing the credits and refunds claimed under the bill.

 

 

BILL DESCRIPTION

 

      Assembly Bill No. 2979 of 2012 allows motor fuel distributors and heating oil dealers a refund of their petroleum products gross receipts tax for certain "bad debts" on their sales of fuel. This bill also allows motor fuel distributors a credit against their motor fuel tax due for certain bad debts on their sales of motor fuel.  The petroleum products gross receipts tax and the motor fuels tax are frequently co-collected but are independently administered.

      This bill allows a distributor or dealer who has an account that becomes an uncollectible bad debt to claim a refund of petroleum products gross receipts tax for the petroleum products gross receipts tax portion of the bad debt.  To make the process as simple as possible, the sellers that are recognized as licensed companies allowed to directly pay petroleum products gross receipts tax on their sales are allowed, in the alternative, to take the refund in the form of a deduction on their tax returns.

      This bill allows a motor fuel distributor who has an account that becomes an uncollectible bad debt to claim a credit against motor fuel tax liability for the motor fuel tax portion of the bad debt.

      The bill defines that a "bad debt" becomes uncollectible when it becomes a bad debt deduction for federal income tax purposes.

      In the case of each tax, if a portion of the bed debt that was previously written off as uncollectible is ultimately collected, a dealer or distributor who was allowed a refund or credit must pay the portion of the amount collected that represents the tax liability.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS cannot accurately estimate the potential fiscal impact of this bill.  Some amount of annual State revenue losses are likely to occur, but the OLS has no New Jersey or national data on which to base an estimate.  In addition, there is likely to be a minimal annual administrative cost associated with managing and reviewing the credits and refunds claimed under the bill.

      In Fiscal Year 2011, the motor fuels tax is projected to raise $565.0 million and the petroleum products gross receipts tax is projected to raise $228.0 million, according to the Governor's revenue certification.  Combined, these two revenue sources are projected to raise $793.0 million, or about 2.5 percent of total State budgeted revenues.  While the proportion of motor fuels and petroleum revenues that may be at risk under this bill is unknown, the OLS notes that each 0.1 percent of these sources is worth about $793,000.  Accordingly, if fuel distributors and dealers annually claim credits and refunds under this bill equal to the tax paid on 0.1 percent of their annual sales, the State may see an annual revenue loss of about $793,000.  If fuel distributors and dealers annually claim credits and refunds under this bill equal to the tax paid on three times that level, or 0.3 percent of their annual sales, the State may see an annual revenue loss of about $2,379,000.  The actual State tax revenue reduction will depend on actual taxpayer claims, and may be more than or less than these illustrative examples.

      The OLS also notes that, to the extent that motor fuels tax revenues are Constitutionally dedicated to the Transportation Trust Fund (TTF), there may be some impact on the resources of the TTF.  However, since General Fund resources annually supplement the TTF above the Constitutionally dedicated levels, the extent of any potential impact is uncertain.

 

 

Section:	Revenue, Finance and Appropriations
Analyst:	Martin Poethke  Lead Fiscal Analyst
Approved:	David J. Rosen Legislative Budget and Finance Officer

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).