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New Jersey Publishes Guidance on Petroleum Products Gross Receipts Tax Increase


Further to our correspondence yesterday, the New Jersey Division of Taxation has issued formal written guidance on the petroleum products gross receipts tax (PPGRT) increase taking effect November 1. The Notice confirms the tax rates of $0.266 per gallon for gasoline and LPG used in a motor vehicle (combined rate of $0.04 per gallon plus the new 12.85% converted to cents per gallon), $0.04 per gallon for highway diesel, $0.124 per gallon for fuel oil (converting the 7% statutory rate to cents per gallon) and $0.04 per gallon for aviation fuel (subject to a partial exemption for sales to common carriers in interstate or foreign commerce where only the “burnout” portion – the fuel burned in NJ airspace – is subject to the tax). The Notice also discusses the exemptions from the PPGRT, namely:

  • Dyed diesel and dyed fuel oil used for an off-highway use are exempt from the tax but become taxable if used on the highway (e.g. in a motor vehicle).

  • Undyed kerosene sold to a registered retail dealer (designated ultimate vendor) is exempt.

  • LPG is exempt from the PPGRT unless delivered into the fuel tank of a highway vehicle.

  • Highway fuel (gasoline or undyed diesel) is exempt from the PPGRT when used in autobuses, agricultural tractors not operated on the highway, farm machinery, ambulances, rural free delivery carriers on official business, vehicles that run on rails or tracks, highway vehicles operated exclusively on private property, boats and vessels used to (1) preserve and protect oysters and clams in tidal waters; (2) commercial fishing; (3) for hire by fishing, sightseeing or excursion parties; and (4) sea scout training, fire engines and related fire-fighting apparatus, stationary machinery or vehicles not designed for highway use, heating and lighting devices and emergency vehicles used by volunteer departments. These exemptions are in addition to pre-existing exemptions for clear fuel such as use in home heating or in vessels engaged in interstate and foreign commerce. A person who purchases highway fuel for an exempt use may claim a refund of the PPGRT if it was previously paid.

    Finally, the notice describes the reporting process to allow for the transition of the new law. For the 4th quarter of 2016, there will a form that will allow reporting under both the old (October 2016) and new (November and December 2016) rates. Beginning with the 1st quarter of 2017 a new form will be issued and all taxpayers will be required to file that form to report and remit the tax.
  • For me detail please click on the link below >New Jersey Publishes Guidance on Petroleum Products Gross Receipts Tax Increase