New Jersey Senate Bill S2960

New Jersey 2024-2025 Regular Session

• Introduced: 3/14/24
• Refer: 3/14/24

Caption

Exempts fuel used for operation of certain school buses from petroleum products gross receipts tax and motor fuel tax.

Impact

The enactment of S2960 will have direct implications on state tax revenues, particularly by reducing the tax burden on organizations operating school buses. Supporters argue this measure will ease financial constraints on these organizations, potentially improving the availability and affordability of school transportation. Moreover, the bill clarifies the definition of 'school buses' to ensure compliance with state regulations, aligning with existing definitions in law and thereby ensuring uniformity in application.

Summary

Senate Bill 2960, introduced on March 14, 2024, seeks to exempt fuel used for the operation of certain school buses from both the petroleum products gross receipts tax (PPGRT) and the motor fuel tax. This exemption will apply to fuel used specifically for transporting pupils to and from school or school-sponsored activities by religious or charitable organizations, or under contract with public agencies. The bill outlines that consumers must first pay tax on the fuel and then apply for a refund from the Division of Taxation, thereby maintaining a system for verification of tax payment before refunds are issued.

Contention

While there is strong support for the exemption aimed at assisting educational and charitable organizations, some stakeholders may be concerned about the implications for state revenue. The proposed exclusion from the review process by the three-member review council, which monitors revenue impacts, has raised questions among legislators about the long-term sustainability of state tax policies. Detractors may argue that exempting these costs from taxation could result in financial shortfalls for state-funded programs, which rely heavily on fuel tax revenues for operations and infrastructure maintenance.