Bill Text: NJ S2359 | 2016-2017 | Regular Session | Introduced
Bill Title: Provides 6.8 cents-per-gallon petroleum products gross receipts tax rate for aviation fuel and removes the "burn out" limitation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2016-06-16 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S2359 Detail]
Download: New_Jersey-2016-S2359-Introduced.html
Sponsored by:
Senator RAYMOND J. LESNIAK
District 20 (Union)
SYNOPSIS
Provides 6.8 cents-per-gallon petroleum products gross receipts tax rate for aviation fuel and removes the "burn out" limitation.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a separate petroleum products gross receipts tax rate for aviation fuel and removing the "burn out" limitation, amending P.L.1990, c.42 and P.L.1991, c.181.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1990, c.42 (C.54:15B-2) is amended to read as follows:
2. For the purposes of this act:
"Aviation fuel" means "aviation fuel" as defined by section 2 of P.L.2010, c.22 (C.54:39-102).
"Company" includes a corporation, partnership, limited partnership, association, individual, or any fiduciary thereof.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"First sale of petroleum products within this State" means the initial sale of a petroleum product delivered to a location in this State. A "first sale of petroleum products within this State" does not include a book or exchange transfer of petroleum products if such products are intended to be sold in the ordinary course of business.
"Gross receipts" means all consideration derived from the first sale of petroleum products within this State except sales of:
a. asphalt;
b. petroleum products sold pursuant to a written contract extending one year or longer to nonprofit entities qualifying under subsection (b) of section 9 of P.L.1966, c.30 (C.54:32B-9) as evidenced by an invoice in form prescribed by subsection b. of section 3 of P.L.1991, c.19 (C.54:15B-10);
c. petroleum products sold to governmental entities qualifying under subsection (a) of section 9 of P.L.1966, c.30 (C.54:32B-9) as evidenced by an invoice in form prescribed by subsection b. of section 3 of P.L.1991, c.19 (C.54:15B-10); and
d. polymer grade propylene used in the manufacture of polypropylene.
"Motor fuel" means "motor fuel" as defined by section 2 of P.L.2010, c.22 (C.54:39-102).
"Petroleum products" means refined products made from crude petroleum and its fractionation products, through straight distillation of crude oil or through redistillation of unfinished derivatives, but shall not mean the products commonly known as number 2 heating oil, number 4 heating oil, number 6 heating oil, kerosene and propane gas to be used exclusively for residential use.
"Quarterly period" means a period of three calendar months commencing on the first day of January, April, July or October and ending on the last day of March, June, September or December, respectively.
"Retail gasoline price survey" means a Statewide representative random sample of retail gasoline prices conducted by the Board of Public Utilities, Office of the Economist, or its successor, that shall be completed for the month of November and May of each year.
"Retail price per gallon" means the price posted by gasoline retailers in the State for unleaded regular gasoline.
"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.
(cf: P.L.1991, c.181, s.1)
2. Section 7 of P.L.1991, c.181 (C.54:15B-2.1) is amended to read as follows:
7. "Gross receipts," as otherwise defined by section 2 of P.L.1990, c.42 (C.54:15B-2), shall not include receipts from sales of petroleum products used by marine vessels engaged in interstate or foreign commerce [and sales of aviation fuels used by common carriers in interstate or foreign commerce other than the "burnout" portion which shall be taxable pursuant to rules promulgated by the director].
(cf: P.L.1991, c.181, s.7)
3. Secion 3 of P.L.1990, c.42 (C.54:15B-3) is amended to read as follows:
3. a. There is imposed on each company which is engaged in the refining or distribution, or both, of petroleum products and which distributes such products in this State a tax at the rate of two and three-quarters percent (2 3/4%) of its gross receipts derived from the first sale of petroleum products within this State; provided however, that the applicable tax rate for fuel oils [, aviation fuels] and for motor [fuels subject to tax under R.S.54:39-1 et seq.] fuel shall be converted to a cents per gallon rate, rounded to the nearest cent, that shall be calculated by the use of the average retail price per gallon of unleaded regular gasoline in December 1990, as determined in a survey of retail gasoline prices that included a Statewide representative random sample conducted in December 1990 for that month by the Board of Public Utilities, Office of the Economist, and shall be effective for the tax due for months ending after that date; provided further, that the applicable rate for aviation fuel shall be a rate of $0.068 per gallon; and
b. There is imposed on each company that imports or causes to be imported, other than by a company subject to and having paid the tax on those imported petroleum products that have generated gross receipts taxable under subsection a. of this section, petroleum products for use or consumption by it within this State a tax at the rate of two and three-quarters percent (2 3/4%) of the consideration given or contracted to be given for such petroleum products if the consideration given or contracted to be given for all such deliveries made during a quarterly period exceeds $5,000; provided however, that the applicable tax rate for fuel oils [, aviation fuels] and for motor fuels subject to tax under R.S.54:39-1 et seq. shall be converted to a cents per gallon rate, rounded to the nearest cent, that shall be calculated by the use of the average retail price per gallon of unleaded regular gasoline in December 1990, as determined in a survey of retail gasoline prices that included a Statewide representative random sample conducted in December 1990 for that month by the Board of Public Utilities, Office of the Economist, and shall be effective for the tax due for months ending after that date; provided further, that the applicable rate for aviation fuel shall be a rate of $0.068 per gallon.
c. Each year as of January 1, the rate for aviation fuel then in effect on the immediately preceding December 31 shall be adjusted as follows: the rate shall be multiplied by a fraction, the numerator of which is the sum of the monthly producer price index (unadjusted) published by the Bureau of Labor Statistics of the United States Department of Labor for the category of commodities designated "refined petroleum products" for the 12 consecutive months ending with the month of August of the immediately preceding year and the denominator of which is the sum of the monthly producer price index (unadjusted) published by the Bureau of Labor Statistics of the United States Department of Labor for the category of commodities designated "refined petroleum products" for the 12 consecutive months ending with the month of August in the year prior to that immediately preceding year, and rounded to the nearest tenth of a cent; provided however, that the adjusted rate shall not increase above or decrease below the rate in effect on the immediately preceding December 31 by more than five percent.
(cf: P.L.2000, c.48, s.1)
4. This act shall take effect immediately and apply to first sales of petroleum products within this State and to deliveries of petroleum products for use or consumption within this State made on or after July 1, 2016.
STATEMENT
This bill provides a 6.8 cents-per-gallon petroleum products gross receipts tax rate for aviation fuel and removes the "burn out" limitation on aviation fuel used by common carriers in interstate or foreign commerce.
Currently, aviation fuel is taxed under the petroleum products gross receipts tax at a 4 cents-per-gallon rate based on the retail price of gasoline in December of 1990. This bill applies a 6.8 cents-per-gallon rate, beginning with fuel used or consumed on or after July 1, 2016.
Currently, the aviation fuel used by common carriers (airlines, air freight companies, and air shuttles) in interstate or foreign commerce (any flight that does not take off and land in this State) is limited to the fuel used in the "burnout" portion of the flight (fuel used in takeoff). This bill removes that "burnout" limitation: tax will apply to all of the fuel that an aircraft loads in New Jersey.
