New Jersey Assembly Bill A3402

New Jersey 2022-2023 Regular Session

• Introduced: 3/7/22
• Refer: 3/7/22

Caption

Excludes paraffin used in manufacture of candles from petroleum products gross receipts tax.

Impact

If enacted, A3402 would exempt paraffin from being taxed under the petroleum products gross receipts tax, which currently imposes a tax on raw materials utilized in candle production. This legislative change is expected to enhance the viability of local candle manufacturers by reducing the cost of production, fostering an environment where they can compete evenly against their counterparts from states with no such taxes or foreign manufacturers who benefit from lower costs.

Summary

Assembly Bill A3402 proposes an amendment to New Jersey's current petroleum products gross receipts tax by excluding paraffin used in the manufacture of candles. The goal of this bill is to eliminate the tax burden on New Jersey candle manufacturers, who suffer from competitive disadvantages compared to manufacturers in other states and countries, particularly China. As the market for home décor candles has grown, this bill aims to bolster local manufacturing and preserve jobs in the state.

Contention

Debate around A3402 may arise concerning the implications of tax exemptions on state revenue and how such measures could entice other manufacturing sectors to seek similar exemptions. Some legislators might argue that this bill leads to potential losses in tax revenue, while proponents will likely highlight the long-term benefits of job preservation in New Jersey's candle manufacturing industry. The historical context of foreign competition and national trade policies may also influence discussions, as the federal antidumping duty against China's candle products has been a critical factor in this sector.