By Christopher Colyer
After an extensive three-month long political and financial stalemate, New Jersey Governor, Chris Christie and Democratic leaders reached a deal to renew the Transportation Trust Fund, reviving dozens of construction plans that remained lifeless for months on end. By proposing to raise the gas tax by 23 cents a gallon to replenish the fund, which is recycled and applied to road, rail, and bridge improvements for the state, New Jersey’s transportation projects can swiftly resume.
Though the deal is outstanding for the infrastructure of the state, its inhabitants are faced with considerable financial burdens, as it is feared the tax hike is a supplement too extreme to manage. The gas tax is merely one slice of the tax package and its impact is predicted to be substantial to all residents of the Garden State. Here’s what you need to know:
The core of the tax compendium
The gas tax, the centerpiece of the proposed deal, is planned to be fused with a prevailing 14.5 cent tax, attaining the tax at 37.5 cents a gallon. In addition to the gas tax increase – other significant tax law changes included in the bill include reduction in the estate tax, sales tax, a boost in earned income tax credit, a tax exemption for veterans, and new exemptions to retirement income.
Slight fluctuation of the proposed tax
The budget impact of the additional gasoline tax revenue will oscillate from year to year, generating approximately $1.16 billion a year for New Jersey. In consequence, it is estimated the elevation will cost NJ drivers approximately $170 more every year. On the ballot this November is a NJ constitutional amendment to dedicate all gas tax revenues to the transportation trust fund.
The deal is admired by many who have longed for an enduring transportation funding resolution and condemned by advocacy establishments who claim that the counterweight tax cuts tax will threaten critical funding for essential state programs, education, and public pension.
The gas tax will be implemented by midnight on November 1st.
To read more about this deal, click here.
Chris Colyer, CPA, MST, MBA is a Partner in the Tax Services Group at Wiss. Chris’ role focuses on U.S. Federal taxation, high-net-worth taxation, and international taxation. This also includes monitoring legislative and regulatory changes to determine potential impact on clients. Reach Chris at 973.994.9400 or ccolyer@wiss.visioncreativegroup.com.