Will the NJ Gas Tax Affect Home Heating Oil?
You’ve probably noticed that the state of New Jersey has recently hiked the taxes on the gas pump. It is the first time in more than 26 years that we’re seeing the gas tax in NJ go up. The next change could happen in less than two months. The state tax increase (known as the Petroleum Products Gross Receipts Tax, or PPGRT) is meant to fund transportation projects in the state such as improving roads and bridges. It will affect petroleum products including gasoline, blended fuel and diesel. So, you may be wondering, “Will the new NJ gas tax affect home heating oil?”
Gas Tax: What to Expect
Before we answer your question, here’s what you can expect.
Gasoline tax increased by 22.6 cents-per-gallon on November 1, 2016, climbing from 14.5 cents per gallon (the second-lowest in the nation), to 37.1 cents per gallon (now the seventh-highest in the nation). The new law sets the petroleum products gross receipts tax of 12.85% on retail gasoline.
PPGRT for diesel fuel used on roads and highways is set to increase on January 1, 2017 and again on July 1, 2017. The final increase for diesel yet to be announced, however. Beginning in 2017, the NJ Division of Taxation will adjust the PPGRT for gasoline and diesel on a quarterly basis. This will be at the start of January, April, July and October.
Unlike other states, the recent New Jersey’s gas tax is fixed to consumption, rather than the price of a gallon of gasoline. The tax rate will not rise or fall automatically as gas prices rise or fall. If gas consumption is up and more gasoline is sold in the state, the tax rate will decrease. If consumption is low, the tax rate will increase to make up for the slow revenue.
Does the New Gas Tax Affect Home Heating Oil?
Ready for the good news? The oil you use for heating your home will not be affected by the new gas tax.
Home heating oil is exempt from this tax.
Take a look at our recent blog, “Trends in Home Heating Oil Prices,” for more information about what to expect this winter and how to be prepared. And call the experts at Point Bay Fuel at 732-349-5059 with any questions. Any regarding the New Jersey gas tax affecting home heating oil.