As most, if not all of you, are aware, Governor Christie signed into law an increase of the Petroleum Products Gross Receipts Tax (PPGRT) effective November 1, 2016. I will attempt to summarize the changes below:
On November 1, 2016, the PPGRT on gasoline will be 22.6 cents per gallon, plus the additional tax of four cents per gallon, for a total of 26.6 cents per gallon. The Motor Fuels Tax charged on gasoline is unchanged by these amendments and remains at 10.5 cents per gallon.
Diesel Fuel, Blended Fuel that contains Diesel Fuel, and Kerosene
The PPGRT on diesel fuel, blended fuel that contains diesel fuel, and kerosene remains unchanged for the period of November 1, 2016 through December 31, 2016. The tax increase for these products will be phased in, the first increase will go into effect on January 1, 2017 and the second increase will go into effect on July 1, 2017. For the period of November 1, 2016 – December 31, 2016, these fuels continue to be subject to the additional tax of four cents per gallon. The Motor Fuels Tax charged on diesel products is unchanged by these amendments and remains at 13.5 cents per gallon. We will notify you of the amount of the January 1 and July 1 increase as soon as we receive the information from the State of New Jersey.
Floor Stocks Tax
A floor stocks tax is a tax imposed on inventory that a taxpayer has on hand the day before the new tax rate goes into effect. The floor stocks tax due is the difference between the tax that was previously paid on the number of gallons in inventory at the close of the business day on the day before the new tax rate goes into effect and the tax that is due on those gallons at the increased tax rate. (22.6 cents per gallon multiplied by the amount of gallons of gasoline in inventory at close of business on October 31). For purposes of the floors stocks tax, close of the business day means the time at which the last transaction has occurred for that day. For businesses that operate 24 hours a day, the last transaction occurs at 11:59 p.m.
The amount of fuel in dead storage in each storage tank may be excluded from the gallons of fuel reported. The amount of gasoline in dead storage is 200 gallons for a tank with a capacity of less than 10,000 gallons and 400 gallons for a tank with a capacity of 10,000 gallons or more.
Below are the steps that should be taken:
1. Take an inventory of all gasoline in storage at the close of the business day on October 31, 2016, for which tax has been previously paid;
2. Report the inventory to the Division no later than December 15, 2016; http://www.state.nj.us/treasury/taxation/pdf/other_forms/petroleum/pptg-inv.pdf
3. Remit the floors stock tax to the Division no later than February 1, 2017. http://www.state.nj.us/treasury/taxation/pdf/other_forms/petroleum/pptgfs.pdf