Bill Text: NJ S2623 | 2018-2019 | Regular Session | Introduced
Bill Title: Requires Petroleum Products Gross Receipts Tax rate reduction if certain Legislative action is taken that includes increases in other State tax rates and revenue; dedicates revenues from certain sales and use tax increases to "Transportation Trust Fund Account."
Spectrum: Slight Partisan Bill (Republican 3-1)
Status: (Introduced - Dead) 2018-05-31 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S2623 Detail]
Download: New_Jersey-2018-S2623-Introduced.html
Sponsored by:
Senator STEVEN V. OROHO
District 24 (Morris, Sussex and Warren)
Senator DECLAN J. O'SCANLON, JR.
District 13 (Monmouth)
Co-Sponsored by:
Senators Addiego and A.R.Bucco
SYNOPSIS
Requires Petroleum Products Gross Receipts Tax rate reduction if certain Legislative action is taken that includes increases in other State tax rates and revenue; dedicates revenues from certain sales and use tax increases to "Transportation Trust Fund Account."
CURRENT VERSION OF TEXT
As introduced.
An Act requiring a reduction in the rate of tax imposed upon certain petroleum products if certain Legislative action is taken that includes increases in other State tax rates and revenues and dedicating revenues from certain sales and use tax increases to transportation purposes, amending P.L.1990, c.42, and supplementing Title 52 of the Revised Statutes and P.L.1966, c.30 (C.54:32B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. The Legislative Budget and Finance Officer shall, not later than the seventh day after any Legislative action which repeals, impairs, or amends section 19 of P.L.2016, c.57 (C.52:18A-257) and increases the rate of tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), make a fiscal estimate to be included in a certification to be provided to the Director of the Division of Taxation in the Department of the Treasury of the anticipated amount of State revenue to be generated as a result of the Legislative action which increases the rate of tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.). The fiscal estimate of the increase in State revenue pursuant to the Legislative action shall be based on the difference in total State revenue collected from the tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.) during the preceding State fiscal year and the anticipated total amount of revenue to be collected attributable to the increased rate of tax during the first full State fiscal year during which the increased rate of tax is imposed.
b. On or before the seventh day after the Legislative Budget and Finance Officer's fiscal estimate is received by the Director of the Division of Taxation, the director may contest the fiscal estimate, in which case the director shall provide any necessary information to the Legislative Budget and Finance Officer for the purposes of recalculating the fiscal estimate.
c. The Legislative Budget and Finance Officer shall, after considering all information provided by the Director of the Division of Taxation pursuant to subsection b. of this section, certify the estimate to be provided to the director for the purposes of subparagraph (i) of paragraph (1) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3) to the director. If the director elects not to contest the fiscal estimate made pursuant to subsection b. of this section, the fiscal estimate provided pursuant to subsection a. of this section shall be certified and used by the director for the purposes of reducing the cents-per-gallon tax rate pursuant to subparagraph (i) of paragraph (1) of subsection a. of section 3 of P.L.1990, c.42 (C.54:15B-3).
2. Section 3 of P.L.1990, c.42 (C.54:15B-3) is amended to read as follows:
3. a. (1) (a) There is imposed on each company which is engaged in the refining or distribution, or both, of petroleum products other than highway fuel and aviation fuel and which distributes such products in this State a tax at the rate of seven percent of its gross receipts derived from the first sale of petroleum products within this State , and there is imposed on each company which is engaged in the refining or distribution, or both, of highway fuel a tax at the rate of 12.85 percent, as adjusted pursuant to subsection c. of this section, of its gross receipts derived from the first sale of those products within this State.
(b) The applicable tax rate for gasoline, blended fuel that contains gasoline or is intended for use as gasoline, and liquefied petroleum gas, which are taxed as a highway fuel pursuant to subparagraph (a) of this paragraph, shall be converted to a cents-per-gallon rate, rounded to the nearest tenth of a cent, and adjusted quarterly by the director, effective on July 1, October 1, January 1, and April 1, based on the average retail price per gallon of unleaded regular gasoline in the State, as determined in the most recent survey of the retail price per gallon of gasoline that includes a Statewide representative random sample conducted by the Board of Public Utilities, Office of the Economist, or its successor.
(c) The cents-per-gallon rate determined pursuant to subparagraph (b) of this paragraph shall not be less than the rate determined for the average retail price per gallon of unleaded gasoline in the State on July 1, 2016.
(d) The applicable tax rate for diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, and kerosene, other than aviation grade kerosene, which are taxed as a highway fuel pursuant to subparagraph (a) of this paragraph, shall be converted to a cents-per-gallon rate, rounded to the nearest tenth of a cent, and adjusted quarterly by the director, effective on July 1, October 1, January 1, and April 1, based on the average retail price per gallon of number 2 diesel in the State, as determined in the most recent survey of retail diesel fuel prices that includes a Statewide representative random sample conducted by the Board of Public Utilities, Office of the Economist, or its successor.
Notwithstanding the provisions of subparagraph (a) of this paragraph to the contrary, for the period from the 2016 implementation date through December 31, 2016, no rate of tax shall be applied to diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, or kerosene, other than aviation grade kerosene; for the period from January 1, 2017 through June 30, 2017, the applicable rate for those fuels shall be 70 percent of the rate otherwise determined pursuant to subparagraph (a) of this paragraph, and for July 1, 2017 and thereafter the applicable rate for those fuels determined pursuant to subparagraph (a) of this paragraph.
(e) The cents-per-gallon rate determined pursuant to subparagraph (d) of this paragraph shall not be less than the rate determined for the average retail price per gallon of number 2 diesel in the State on July 1, 2016.
(f) The applicable tax rate for fuel oil determined pursuant to subparagraph (a) of this paragraph shall be converted to a cents-per-gallon rate, rounded to the nearest tenth of a cent, and adjusted quarterly by the director, effective on July 1, October 1, January 1, and April 1, to reflect the average price per gallon, without State or federal tax included, of retail sales of number 2 fuel oil in the State, as determined in the most recent survey of retail diesel fuel prices that included a Statewide representative random sample conducted by the Board of Public Utilities, Office of the Economist, or its successor.
(g) The cents-per-gallon rate determined pursuant to subparagraph (f) of this paragraph shall not be less than the rate determined for the average price per gallon, without State or federal tax included, of retail sales of number 2 fuel oil in the State on July 1, 2016.
(h) On and after the 10th day following a certification by the review council pursuant to subsection c. of section 19 of P.L.2016, c.57 (C.52:18A-257), no tax shall be imposed pursuant to this paragraph.
(i) Notwithstanding the provisions of subsection c. of this section to the contrary, on and after the first day of the second month following the certification by the Legislative Budget and Finance Officer pursuant to subsection c. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) to the Director of the Division of Taxation in the Department of the Treasury, the tax imposed pursuant to this paragraph shall be reduced on a cents-per-gallon basis so that the total revenues collected from the tax imposed pursuant to this paragraph are reduced by the amount of the revenue increase as provided in the certified estimate made by the Legislative Budget and Finance Officer.
(2) (a) In addition to the tax, if any, imposed by paragraph (1) of this subsection, a cents-per-gallon tax is imposed on each company's gross receipts derived from the first sale of petroleum products within this State on gasoline, blended fuel that contains gasoline or that is intended for use as gasoline, liquefied petroleum gas, and aviation fuel at the rate of four cents per gallon; and
(b) In addition to the tax, if any, imposed by paragraph (1) of this subsection, a cents-per-gallon tax is imposed on each company's gross receipts derived from the first sale of petroleum products within this State on diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, and kerosene, other than aviation grade kerosene, at the rate of four cents per gallon before July 1, 2017 and at the rate of eight cents per gallon on and after July 1, 2017.
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 or rates, determined pursuant to subsection a. of this section, on the consideration given or contracted to be given and the gallonage 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.
c. (1) For State fiscal years 2018 through 2026, the rate of tax imposed on highway fuel pursuant to subsection a. of this section shall be adjusted annually so that the total revenue derived from highway fuel shall not exceed the highway fuel cap amount.
(2) The State Treasurer shall, on or before December 31, 2016, determine the highway fuel cap amount as the sum of:
(a) the taxes collected for State Fiscal Year 2016 pursuant to paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) on highway fuel,
(b) the amount derived from taxing the gallonage of highway fuel subject to motor fuel tax in State Fiscal Year 2016 at the rate of four cents per gallon, and
(c) the amount that would have been derived from taxing the gallonage of highway fuel subject to motor fuel tax in State Fiscal Year 2016 at the rate of 23 cents per gallon.
(3) On or before August 15 of each State Fiscal Year following State Fiscal Year 2017, the State Treasurer and the Legislative Budget and Finance Officer shall determine the total revenue derived from:
(a) the taxes collected for the prior State Fiscal Year pursuant to paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) on highway fuel,
(b) the revenue that would be derived from imposing the tax pursuant to paragraph (2) of subsection a. of this section on highway fuel at the rate of four cents per gallon, and
(c) the revenue derived from the taxation of highway fuel pursuant to paragraph (1) of subsection a. of this section.
(4) Upon consideration of the result of the determination pursuant to paragraph (3) of this subsection, and consultation with the Legislative Budget and Finance Officer, the State Treasurer shall determine the rate of tax to be imposed on highway fuel pursuant to subsection a. of this section that will result in revenue from:
(a) the taxes collected on highway fuel for the current State Fiscal Year pursuant to paragraphs (1) and (2) of subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103),
(b) the revenue derived from the tax imposed pursuant to paragraph (2) of subsection a. of this section on highway fuel at the rate of four cents per gallon for the current State Fiscal Year, and
(c) the revenue derived from the taxation of highway fuel pursuant to paragraph (1) of subsection a. of this section equaling the highway fuel cap amount determined pursuant to paragraph (2) of this subsection, as adjusted pursuant to paragraph (5) of this subsection; and that rate shall take effect on October 1 of that year.
(5) If the actual revenue determined pursuant to paragraph (3) of this subsection exceeds the highway fuel cap amount determined pursuant to paragraph (2) of this subsection, then the highway fuel cap amount for the succeeding year shall be decreased by the amount of the excess in setting the rate pursuant to paragraph (4) of this subsection. If the actual revenue determined pursuant to paragraph (3) of this subsection is less than the highway fuel cap amount determined pursuant to paragraph (2) of this subsection, then the highway fuel cap amount for the succeeding year shall be increased by the amount of the shortfall in setting the rate pursuant to paragraph (4) of this subsection.
(cf: P.L.2016, c.57, s.14)
3. (New section) Following the enactment of P.L. , c. (pending before the Legislature as this bill), an amount equal to the anticipated amount of State revenue to be generated as a result of any Legislative action which increases the rate of tax imposed pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), shall be appropriated annually by the Legislature to the "Transportation Trust Fund Account," established pursuant to section 20 of P.L.1984, c.73 (C.27:1B-20).
4. This act shall take effect immediately.
STATEMENT
This bill requires a reduction in the Petroleum Products Gross Receipts Tax rate upon certain legislative action and is intended to keep the Legislature's promise of lower taxes. Specifically, following any Legislative action which repeals, impairs, or amends section 19 of P.L.2016, c.57, concerning a State tax review council, and increases the sales and use tax rate, the Legislative Budget and Finance Officer is required to, not later than seven days following the Legislative action, provide a fiscal estimate to the Director of the Division of Taxation in the Department of the Treasury of the anticipated amount of State revenue to be generated as a result of the Legislative action which increases the sales and use tax rate. The estimate is to be calculated based on the difference in total State revenue collected from the sales and use tax during the preceding State fiscal year and the anticipated total amount of revenue to be collected attributable to the increased tax rate.
The bill permits the director to contest the Legislative Budget and Finance Officer's fiscal estimate within seven days of receiving the fiscal estimate. If the director contests the fiscal estimate, the director must forward any necessary information to the Legislative Budget and Finance Officer for the purposes of recalculating the fiscal estimate. The Legislative Budget and Finance Officer is required to consider all information provided by the director for the purposes of potentially recalculating the fiscal estimate and transmitting the certification to the director. If the director does not contest the estimate, the Legislative Budget and Finance Officer's fiscal estimate is to be certified and transmitted to the director.
On and after the first day of the second month following the certification by the Legislative Budget and Finance Officer to the director, the Petroleum Products Gross Receipts Tax is required to be reduced on a cents-per-gallon basis so that the total revenues collected from the tax are reduced by the amount of increased sales and use tax revenue as provided in the certified estimate.
Further, the bill requires the Legislature to annually appropriate an amount equal to the anticipated amount of State revenue to be generated as a result of any Legislative action which increases sales and use tax rate to the "Transportation Trust Fund Account."
