Senate Minority Leader Anthony Bucco and State Sen. Carmen Amato Jr. (R-Berkeley) are renewing their push for legislation that would allow New Jersey residents to deduct state fuel taxes from their gross income taxes.
S-1559, introduced in January, would allow taxpayers to deduct New Jersey taxes paid on gasoline and other motor fuel purchased for personal vehicles. The bill remains pending in the Senate.
The two Republican senators are reviving their call for the legislation as gasoline prices have climbed sharply in recent months. AAA listed New Jersey’s average price for regular gasoline at $4.42 per gallon on Sept. 21, compared with $3.14 a year earlier.
“New Jersey families are being squeezed from every direction by rising costs, and the price of filling up your tank has become yet another expense many people can barely afford,” Amato said. “Garden State residents deserve meaningful relief that helps them keep more of their hard-earned money.”
Bucco said the proposal would provide relief to families already facing higher costs for groceries, utilities, housing and transportation.
“I hear from friends and neighbors all the time about how tired they are of being nickel-and-dimed while the cost-of-living crisis continues to spiral out of control,” Bucco said. “Families are paying more for groceries, utilities, housing, and transportation, and they need meaningful relief from Trenton.”
Bucco said the legislation is designed to provide tax relief without reducing money available for transportation projects.
“Our proposal is a smart, responsible approach that helps taxpayers keep more of their hard-earned money while preserving the critical funding needed to maintain our roads, bridges, and transportation infrastructure,” he added.
Under the bill, taxpayers could deduct state fuel taxes paid for personal motor vehicle use, regardless of income or filing status. The deduction would be capped at $1,000 for the 2021 tax year and $2,000 for each year thereafter.
The legislation would apply to fuel purchased on or after Jan. 1, 2021, making the deduction retroactive to qualifying purchases dating back to that year if the bill becomes law.
The deduction would not apply to fuel expenses reimbursed by an employer or to amounts already deductible under certain business, rental, partnership, corporation or medical expense provisions of the state tax code.
Eligible taxes would include those imposed under New Jersey’s Petroleum Products Gross Receipts Tax Act and Motor Fuel Tax Act.
Amato and Bucco said Republicans have identified more than $1 billion in potential savings and spending reforms that they say could help pay for additional tax relief.