Bill Text: NJ S1734 | 2024-2025 | Regular Session | Introduced
Bill Title: Provides three-month reduction or suspension of tax on highway fuels based on average retail price of unleaded regular gasoline; makes an appropriation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-01-09 - Introduced in the Senate, Referred to Senate Transportation Committee [S1734 Detail]
Download: New_Jersey-2024-S1734-Introduced.html
STATE OF NEW JERSEY
221st LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2024 SESSION
Sponsored by:
Senator PAUL D. MORIARTY
District 4 (Atlantic, Camden and Gloucester)
SYNOPSIS
Provides three-month reduction or suspension of tax on highway fuels based on average retail price of unleaded regular gasoline; makes an appropriation.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act concerning the taxation of highway fuels and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. As used in this act:
"Blended fuel" means a mixture composed of gasoline, diesel fuel, kerosene or blended fuel and another liquid, including blend stock other than a de minimis amount of a product such as carburetor detergent or oxidation inhibitor, that can be used as a fuel in a highway vehicle. The term includes but is not limited to gasohol, biobased liquid fuel, biodiesel fuel, ethanol, methanol, fuel grade alcohol, diesel fuel enhancers and resulting blends.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Gasoline" means all products commonly or commercially known or sold as gasoline that are suitable for use as a motor fuel. The term does not include products that have an ASTM octane number of less than 75 as determined by the "motor method," ASTM D2700-92. The term does not include racing gasoline or aviation gasoline, but for administrative purposes does include fuel grade alcohol.
"Highway fuel" means gasoline, blended fuel that contains gasoline or is intended for use as gasoline, liquefied petroleum gas, and diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, and kerosene, other than aviation grade kerosene.
"Motor fuel tax" means the tax imposed under the "Motor Fuel Tax Act," P.L.2010, c.22 (C.54:39-101 et seq.).
"Office of the Economist" means the Office of the Economist in the Board of Public Utilities, or its successor.
"Petroleum products gross receipts tax" means the tax imposed under the "Petroleum Products Gross Receipts Tax Act," P.L.1990, c.42 (C.54:15B-1 et seq.).
"Retail price per gallon" means the price charged by retailers in the State for a gallon of the petroleum product dispensed into the fuel tanks of motor vehicles, without State or federal tax included.
"Unleaded regular gasoline" means gasoline of the octane rating equal to the lowest octane rated gasoline offered for sale at a majority of the gasoline retailers in the State.
2. a. On or before the 15th day of each month following the effective date of this act, and concluding in September 2022, the State Treasurer, in consultation with the Office of the Economist, shall determine the average retail price per gallon of unleaded regular gasoline in the State during the current month. The State Treasurer shall post the determination on the official Internet website of the Division of Taxation in the Department of the Treasury.
b. If the determination of the State Treasurer results in the reduction, suspension, or reimposition of the motor fuel tax and the petroleum products gross receipts tax, as provided under sections 3 and 4 of this act, then the State Treasurer shall immediately notify, in writing, each person who shall be otherwise liable for the precollection or payment, as applicable, of the motor fuel tax or the petroleum products gross receipts tax.
3. a. Notwithstanding any provision of the "Motor Fuel Tax Act," P.L.2010, c.22 (C.54:39-101 et seq.) to the contrary, during the months of June 2022 through August 2022, the rate of tax imposed under paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) shall be set as follows:
(1) the rates otherwise set forth in paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) if the average retail price per gallon of unleaded regular gasoline was less than $4.50 during the preceding month;
(2) a 50 percent reduction
in the rates imposed under paragraphs (1) and (2) of subsection a. of section 3
of P.L.2010, c.22
(C.54:39-103) if the average retail price per gallon of unleaded regular
gasoline was equal to or greater than $4.51 but not greater than $5.00 during
the preceding month;
(3) a 75 percent reduction
in the rates imposed under paragraphs (1) and (2) of subsection a. of section 3
of P.L.2010, c.22
(C.54:39-103) if the average retail price per gallon of unleaded regular
gasoline was equal to or greater than $5.01 but not greater than $5.50 during
the preceding month; and
(4) no tax shall be imposed under paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) if the average retail price per gallon of unleaded regular gasoline exceeded $5.50 during the preceding month.
b. For each month in which
the tax imposed under paragraphs (1) and (2) of subsection a. of section 3 of
P.L.2010, c.22
(C.54:39-103) is reduced or suspended pursuant to subsection a. of this
section, any person otherwise liable for the precollection or payment of that
tax shall submit a written report to the director on or before the 22nd day of
the following month. In addition to any other information that the director
may deem appropriate, the report shall indicate the:
(1) number of gallons of highway fuel sold or used by the person in this State during the month;
(2) amount of tax paid for the month under paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103); and
(3) total amount of tax that would have been owed for the month under paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) if the tax was not reduced or suspended pursuant to this section.
c. The benefit of any reduction or suspension of taxation provided under subsection a. of this section shall be passed on to the consumers of highway fuel, and the retail price of highway fuel sold in this State shall be reduced to reflect the reduction or suspension of taxation.
4. a. Notwithstanding any
provision of the "Petroleum Products Gross Receipts Tax Act," P.L.1990, c.42
(C.54:15B-1 et seq.) to the contrary, during the months of
June 2022 through August 2022, the rate of tax imposed on highway fuel under
paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42
(C.54:15B-3) shall be set as follows:
(1) the rates otherwise imposed on highway fuel under paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) if the average retail price per gallon of unleaded regular gasoline was less than $4.50 during the preceding month;
(2) a 50 percent reduction in the rates imposed on highway fuel under paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) if the average retail price per gallon of unleaded regular gasoline was equal to or greater than $4.51 but not greater than $5.00 during the preceding month;
(3) a 75 percent reduction in the rates imposed on highway fuel under paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) if the average retail price per gallon of unleaded regular gasoline was equal to or greater than $5.01 but not greater than $5.50 during the preceding month; and
(4) no tax shall be imposed on highway fuel under paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) if the average retail price per gallon of unleaded regular gasoline exceeded $5.50 during the preceding month.
b. For each month in which the tax imposed on highway fuel under paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) is reduced or suspended pursuant to subsection a. of this section, any person otherwise liable for the payment of that tax shall submit a written report to the director on or before the 22nd day of the following month. In addition to any other information that the director may deem appropriate, the report shall indicate the:
(1) gross receipts derived by the person from the first sale of highway fuel in the State during the month;
(2) amount of tax paid on highway fuel for the month under paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3); and
(3) total amount of tax on highway fuel that would have been owed for the month under paragraphs (1) and (2) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) if the tax was not reduced or suspended pursuant to this section.
c. The benefit of any reduction or suspension of taxation provided under subsection a. of this section shall be passed on to the consumers of highway fuel, and the retail price of highway fuel sold in this State shall be reduced to reflect the reduction or suspension of taxation.
5. There is appropriated from the General Fund, from the revenues collected under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) for deposit into the "Transportation Trust Fund Account," established pursuant to section 20 of P.L.1984, c.73 (C.27:1B-20), such amounts as are necessary to offset any reductions in motor fuel tax revenues and petroleum products gross receipts tax revenues that occur as a direct result of any reduction or suspension of taxation under sections 3 and 4 of this act, subject to the approval of the Director of the Division of Budget and Accounting in the Department of the Treasury.
6. Notwithstanding any provision of subsection c. of section 3 of P.L.1990, c.42 (C.54:15B-3) to the contrary, the State Treasurer shall consider all amounts appropriated pursuant to section 5 of this act as though such amounts were motor fuel tax revenues and petroleum products gross receipts tax revenues, as applicable, for the purposes of all calculations made under subsection c. of section 3 of P.L.1990, c.42 (C.54:15B-3) relating to the determination of the highway fuel cap amount and the rate of tax imposed on highway fuel.
7. Notwithstanding any provision of section 19 of P.L.2016, c.57 (C.52:18A-257) to the contrary, this act shall not cause the review council to certify for the purposes of subparagraph (h) of paragraph (1) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) to the director that the scheduled implementation of P.L.2016, c.57 (C.54:15B-13 et al.) has been impeded.
8. Notwithstanding any provision of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to the contrary, the director shall adopt, immediately upon filing with the Office of Administrative Law and no later than the 30th day after the date of enactment of this act, such rules and regulations as the director deems necessary to implement the provisions of this act, which regulations may thereafter be amended by the director. The regulations shall expire upon the expiration of this act.
9. This act shall take effect immediately and shall expire on September 22, 2022, except that section 6 shall not expire until the effects of this act shall no longer impact the determinations of the State Treasurer under subsection c. of section 3 of P.L.1990, c.42 (C.54:15B-3).
STATEMENT
This bill provides for temporary reductions or suspensions of the State tax on highway fuels based on the average retail price of unleaded regular gasoline. The provisions of the bill would apply during the three-month period of June 2022 through August 2022.
Under the bill, the State Treasurer, in consultation with the Office of the Economist in the Board of Public Utilities, would be required to determine, on a monthly basis, the average retail price per gallon of unleaded regular gasoline in the State during the current month.
Based on these determinations, the rate of tax imposed on highway fuel would be set as follows: (1) no reduction in tax if the average retail price per gallon of unleaded regular gasoline was less than $4.50 during the preceding month; (2) a 50 percent tax reduction if the average retail price per gallon of unleaded regular gasoline was equal to or greater than $4.51 but not greater than $5.00 during the preceding month; (3) a 75 percent tax reduction if the average retail price per gallon of unleaded regular gasoline was equal to or greater than $5.01 but not greater than $5.50 during the preceding month; and (4) no tax would be imposed if the average retail price per gallon of unleaded regular gasoline exceeded $5.50 during the preceding month. The benefits of any reduction or suspension of taxation would be passed on to consumers in the form of reduced retail prices for highway fuels.
Under current law, all revenues collected under the motor fuel tax and the petroleum products gross receipts tax are deposited into the Transportation Trust Fund to support the State's transportation system. Notably, these monies are used to pay the State's debt service on transportation bonds.
Accordingly, the bill appropriates such amounts as are necessary from the revenues collected under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) to offset any reductions in motor fuel tax revenues and petroleum products gross receipts tax revenues that occur as a direct result of this bill. These monies would be deposited into the Transportation Trust Fund. The bill also requires these appropriations to be considered when the State Treasurer determines the annual rate of taxation for highway fuel under the petroleum products gross receipts tax.
