Starting October 1st, New Jersey’s gas tax will increase by 0.9 cents per gallon.
The Department of the Treasury said its due tax collections that fell short this past year. A 2016 law requires a steady stream of revenue to support the State’s Transportation Trust Fund (TTF) program. The program is required to provide approximately $16 billion over eight years to support critical infrastructure improvements to the state’s roadways and bridges. In order to ensure the State has the funds necessary to support these projects, the law dictates that the Petroleum Products Gross Receipt tax rate must be adjusted accordingly to generate roughly $2 billion per year.
“Because actual consumption in Fiscal Year 2023 was slightly below our projections made last August, primarily due to lower diesel use, and because consumption in the current fiscal year is projected to be just above last fiscal year’s levels, our analysis of the formula dictates a 0.9 cent increase this coming October,” said State Treasurer Elizabeth Maher Muoio. “As mandated by the 2016 law, this dedicated funding stream continues to provide billions of dollars across the state to support crucial transportation infrastructure needs.”
What is generally called the “gas tax” or the “highway fuels tax” is actually two separate taxes on gasoline and diesel fuel – the Motor Fuels tax and the Petroleum Products Gross Receipts (PPGR) tax.
The tax rate will increase on October 1, 2023 from 30.9 cents to 31.8 cents for gasoline and from 34.9 cents to 35.8 cents for diesel fuel. When combined with the Motor Fuels Tax, which is fixed at 10.5 cents for gasoline and 13.5 cents for diesel fuel, the total tax rates that motorists will pay for gasoline and diesel fuel will be 42.3 cents and 49.3 cents, respectively.
While consumption of gasoline and diesel fuel in FY2024 is projected to be 11.3 percent lower than FY 2016 levels due to remote work and increasing fuel efficiency, it is expected to be 1.4 percent above FY2023 levels.