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Division of Taxation

Public Utility Taxes

Public Utility Franchise Tax applies to all sewerage and water companies having lines and mains along, in, on, or over any public thoroughfare.

The Franchise Tax rate is:

  • 2% for taxpayers with calendar year gross receipts of $50,000 or less, and
  • 5% for taxpayers with calendar year gross receipts exceeding $50,000.

The proportion of gross receipts subject to tax is the ratio of the taxpayer's total length of lines or mains which are located along, in, on, or over any street, highway, road, or other public place to the whole length of lines or mains. Measurements of lengths of lines or mains exclude service connections. See Excise Rates.

The Franchise Tax is payable to the State in three installments:

  • 35% due May 15,
  • 35% due August 15, and
  • 30% due November 15.

Public Utility Gross Receipts Tax is in addition to the Franchise Tax and is in lieu of the local taxation of certain properties of sewerage and water companies in New Jersey.

The Gross Receipts Tax of 7.5% (applied to the gross receipts for the preceding calendar year) levied against the sewerage and water companies is payable to the State in three install¬ments:

  • 35% due May 15,
  • 35% due August 15, and
  • 30% due November 15.

See also, Excise Rates.

Public Utility Excise Tax is an additional tax on sewerage and water public utilities. Sewerage and water companies must pay on a calendar year basis (due in full by May 1). The excise rates are as follows:

  • 0.625% on gross receipts subject to the Franchise Tax (0.25% for taxpayers with gross receipts not in excess of $50,000 annually);
  • 0.9375% on gross receipts of all sewerage and water public utilities.

Applicable Laws and Rules

N.J.A.C. 18:22, P.L. 1997, C. 167


Last Updated: Friday, 05/13/22