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Frequently Asked Questions: The New NJ “Gas Tax”

The State of New Jersey has changed the tax on petroleum products that include gasoline, diesel, and more. Below are some answers to Frequently Asked Questions to help you learn about the new law and how it will impact you and your business. Click the ‘+’ to read the answers to each question.

For more detailed information, please refer to this Notice from the NJ Division of Taxation.

Update 12/29/2016: The PPGRT on Gasoline remains unchanged at $0.266/gallon on January 1, 2017. The PPGRT on Diesel increases to $0.199/gallon on January 1, 2017.

 

What is happening? When?

On November 1, 2016, the state tax on gasoline (known as the Petroleum Products Gross Receipts Tax, or PPGRT) increased by 22.6 cents-per-gallon. The PPGRT on diesel fuel used on roads and highways increases on January 1, 2017 and again on July 1, 2017. The PPGRT increase on diesel for January 1, 2017 will be $0.199/gallon.  The increase for July 1, 2017 has yet to be determined. Home heating oil and Dyed diesel fuel (including #4 or #6) used for off-road purposes are exempt from this tax.  Beginning in 2017, the NJ Division of Taxation will adjust the PPGRT for gasoline and diesel on a quarterly basis.

Where does the money go?

The Governor and State Legislature for NJ increased the tax to fund transportation projects in the state. Public Question #2 on the ballot on November 8, 2016 asks the voters whether all funds raised by the tax increase should be used solely to improve roads and bridges in the state.

Will Riggins make more money?

No. Riggins is required to pay the same tax that you pay.

How will this affect home heating oil?

Heating oil for use in your home will continue to be exempt from this tax.

I have a business that stores petroleum. What do I need to do?

If you are a licensed reseller of petroleum products subject to the PPGRT, then you are required to submit a “floor stocks tax” on inventory that you had on hand at the close of business as of October 31, 2016. End users of taxable petroleum products are NOT subject to the floor stocks tax. More information on the floor stocks tax can be found on Page 4 of this Notice from the NJ Division of Taxation. Forms for submitting the floor stocks tax can be found here.

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