“Revised New Jersey Transportation Trust Fund Authority Act”
P.L. 2016, Chapter 56
This law revises the “New Jersey Transportation Trust Fund Authority Act of 1984” and establishes State Transportation Infrastructure Bank within NJ Environmental Infrastructure Trust; renames NJ Environmental Infrastructure Trust. The amendments include that all revenues generated from the Motor Fuels Tax and the Petroleum Products Gross Receipts Tax are now deposited into the Transportation Trust Fund.
“Adjustments to Specified State Taxes”
P.L. 2016, Chapter 57
This law amends and supplements specified State taxes pertaining to decreasing the Sales and Use Tax Rates, phasing out the Estate Tax, increasing the Gross Income Tax Pension and Retirement Exclusions, increasing the NJ Earned Income Tax Credit (NJ EITC), establishing a new Veteran’s Personal Exemption, and creating a cents per gallon rate on Petroleum Products Gross Receipts Tax (aka Gas Tax).
Sales and Use Tax – The sales tax rate is reduced from 7 percent to 6.875 percent on and after January 1, 2017, and then again to 6.625 percent on and after January 1, 2018.
Estate Tax – The estate tax exemption increased from $675,000 to $2 million for decedents dying on or after January 1, 2017, but before January 1, 2018. For decedents dying on or after January 1, 2018, there will be no Estate Tax.
Gross Income Tax – This law made changes to various income exclusions, deductions and credits within the Gross Income Tax. Please see below:
Pension and Other Retirement exclusion – This law increases the gross income tax pension and other retirement income exclusions for qualified taxpayers over a four-year phase-in period. When fully phased in for Tax Year 2020, the exclusions will be $100,000 for married/civil union couples filing jointly, $75,000 for individuals, and $50,000 for married/civil union partners filing separately.
Earned Income Tax Credit – For tax years beginning on or after January 1, 2016, this law increases the New Jersey earned income tax credit (NJ EITC) from 30 percent to 35 percent, of the allowable federal credit.
Personal exemptions and deductions – This law establishes a personal exemption of $3,000 for veterans who were honorably discharged or released under honorable circumstances from active duty in the Armed Forces of the United States, a reserve component thereof, or the National Guard of New Jersey in a federal active duty status, as defined in N.J.S.38A:1-1. This exemption is in addition to the $1,000 personal exemption that each taxpayer is entitled to, and any other additional exemption for which the veteran is eligible.
Petroleum Products Gross Receipts Tax – This law increases the Petroleum Products Gross Receipts Tax (PPGRT) for various fuels as follows:
Petroleum Products Other than Highway Fuel and Aviation Fuel – Effective November 1, 2016, any company that refines and/or distributes petroleum products (other than highway fuel and aviation fuel) pays a tax of 7 percent on their gross receipts from the first sale of those products in New Jersey.
Gasoline and Liquefied Petroleum Gas (LPG) – Effective November 1, 2016, any company that refines and/or distributes highway fuels pays a tax of 12.85 percent on the gross receipts from the first sale of gasoline, including blended fuel that contains gasoline or is intended for use as gasoline, and LPG in the State. When converted to cents per gallon the PPGRT on gasoline will be 22.6 cents per gallon, plus the additional tax of four cents per gallon.
Diesel Fuel – The tax rate on the gross receipts from the first sale of diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, and kerosene, other than aviation grade kerosene, remains unchanged on November 1, 2016, through December 31, 2016. A tax rate increase of 12.85 percent will be phased in on January 1 2017, and July 1, 2017. When converted to cents per gallon, the PPGRT on diesel will be 15.9 cents per gallon, plus the additional tax of 4 cents per gallon.
Fuel Oil – Effective November 1, 2016, the gross receipts from the first sale of fuel oil products in New Jersey are taxed at 7 percent. When converted to cents per gallon, the PPGRT on fuel oil will be 12.4 cents per gallon.
Additional Tax – There is an additional tax of 4 cents per gallon on the gross receipts from the first sale in New Jersey of gasoline, blended fuel that contains gasoline or that is intended for use as gasoline, LPG, and aviation fuel.
The additional tax is also imposed on the gross receipts from the first sale of diesel fuel, blended fuel that contains diesel fuel or is intended for use as diesel fuel, and kerosene, other than aviation grade kerosene, on sales made before July 1, 2017. On and after July 1, 2017, the additional tax will increase to 8 cents per gallon.
“Deferred Mortgage Loan Payments”
P.L. 2016, Chapter 63
This law allows a New Jersey resident who is mobilized for federal active duty as a member of the National Guard or a Reserve Component of the Armed Forces to request a deferment of his or her mortgage payments. The request for deferment will result in the mortgagee extending the term of the loan for the period of active duty plus 60 days.
This law also extends the deferment of property tax bills currently allowed for residents enlisted in any branch of the Armed Forces to a resident who is mobilized for federal active duty as a member of the National Guard or a Reserve Component of the Armed Forces. The deferment of the property tax ends 90 days after the resident’s last day of mobilization. No interest will be charged if the deferred property tax amount is paid in full within the 90-day grace period. No tax lien may be issued against the property for which the deferment of payment of a tax bill is granted.
“Stadium and Arena Property Tax Exemption”
P.L. 2016, Chapter 65
This law clarifies and reaffirms that stadiums and arenas owned by government entities are entirely exempt from property taxation. The bill reaffirms that when government entities enter into private-public arrangements and lease property to for-profit entities to achieve stadium and arena uses that such property, including any leasehold interest in such property, remains entirely tax exempt.
“Motor Fuel Bad Debt”
P.L. 2016, Chapter 66
This law provides 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.
“Atlantic City Alliance Abolishment”
P.L. 2016, Chapter 5
Under this law, beginning with calendar year 2016, and for the next succeeding nine calendar years, casino gaming properties located in Atlantic City are exempt from local property taxation on real property and existing improvements, including accessory hotels, conference centers, parking garages, and other appurtenant facilities and are now responsible for making a payment in lieu of taxation (PILOT).
“Economic Redevelopment and Growth Grant (ERGG) Clarification”
P.L. 2016, Chapter 51
This law authorizes the Economic Development Authority (EDA) to award an additional $90 million worth of tax credits under the Economic Redevelopment and Growth Grant (ERGG) program and reconciles recent, nearly simultaneous enactments of the 216th Legislature, each of which amended that section of law. Section 6 of P.L.2009, c.90 imposes limits on the overall amount of tax credits the EDA may approve under the ERGG program, and allocates funding to specific geographic regions and categories of projects. Prior to the recent amendments to this statute, this provision of law limited the overall amount of tax credits that EDA may approve under the ERGG program to $600 million.
“Business Employee Incentive Program (BEIP) Revised Payout Schedule”
P.L. 2016, Chapter 9 – This law revises the priority schedule that was established by P.L.2015, c.194 (C.34:1B-137.1 et al.) for the issuance of converted tax credits under the Business Employment Incentive Program. The new schedule decreases the percentage of accrued BEIP tax credit amounts in years one and two to 5 percent and 20 percent respectively, and increases the amount to 25 percent annually in years three through five.