New Jersey fuel tax rates head down starting Oct. 1
September 27, 2021
Truckers and motorists fueling in New Jersey are days away from getting a break in fuel tax expenses. One year after the state increased taxes on gas and diesel purchases by nearly a dime, a nearly equal decrease is set to be implemented.
Each October the state revises gas and diesel rates to adjust for any shortage or surplus during the prior fiscal year. As a result, starting Friday, Oct. 1, an 8.3-cent decrease in fuel rates takes effect.
The New Jersey Department of Treasury says the reduction is the result of tax revenues over the past year matching with projections.
The change is in sharp contrast to last year’s 9.3-cent hike that was attributed to tax revenues falling below projections. At the time, officials blamed the COVID-19 pandemic for the revenue shortfall.
Oct. 1 changes
The state’s fuel rate includes two components. Since October 2020, the petroleum products gross receipt tax has been set at 40.2 cents for gas and 44.2 cents for diesel.
Additionally, the motor fuels tax rate on gas is 10.5 cents. The diesel rate is 13.5 cents.
The total tax rates for gas and diesel are 50.7 cents and 57.7 cents, respectively.
Effective Friday, the gas rate will decrease to 42.4 cents and the diesel rate will be down to 49.4 cents.
Why the fuel tax swings?
A 5-year-old state law requires a steady stream of revenue to support the state’s Transportation Trust Fund. The rule requires the state treasurer to adjust the tax rate each year to ensure it brings in revenue needed to pay the bills for transportation work.
The fund is required to provide $2 billion annually to support infrastructure work.
State Treasurer Elizabeth Muoio said the upcoming fuel rates decrease is a result of actual consumption in fiscal year 2021 being closely in line with projections made one year ago. Additionally, she noted that consumption in the current fiscal year is projected to be above last fiscal year’s levels.
“We are pleased that this dedicated funding stream continues to provide billions of dollars across the state to support our critical transportation infrastructure needs,” Muoio said in prepared remarks. LL