Appropriation Revenues

Motor Fuel Taxes

The Motor Fuels Tax, which is levied primarily on the sale of gasoline and diesel fuel, and collected by the Division of Taxation at the wholesale level from distributors.

The original Transportation Trust Fund statute (N.J.S.A. 27:1B-1, et seq.) was passed into law on July 10, 1984. Major amendments occurred in 1988, 1991, 1995, 2000, 2006, 2012, and 2016. Article VIII, Taxation and Finance, Section II, Paragraph 4, of the New Jersey State Constitution was amended effective December 6, 1984 to dedicate 2.5 cents of the motor fuels tax to transportation purposes. Effective December 7, 2000, it was amended to dedicate 9 cents of the motor fuel tax, petroleum products gross receipts taxes, and a portion of the Sales and Use Tax to transportation purposes. Effective December 7, 2006, it was amended to dedicate all 10.5 cents of the existing motor fuel tax for transportation purposes. Effective December 8, 2016, it was amended to dedicate all the revenue derived from the collection of the tax imposed on the sale of motor fuels and all the revenue derived from the collection of the tax on the gross receipts of the sale of petroleum products (PPGRT) to transportation purposes. As of November 1, 2016 the gasoline tax paid by motorists at the pump increased to 37.1 cents per gallon (44.2 cents on diesel). Effective October 1, 2018 the tax paid by motorists at the pump increased to 41.4 cents per gallon (48.5 cents on diesel), reflecting an increase in the tax rate as outlined by a provision of the 2016 legislation allowing the State to adjust the rate contingent upon having met budgeted fiscal year motor fuel tax revenue targets. Owing to the Covid-19 emergency and subsequent declines in fuel consumption, the tax paid by motorists at the pump was increased to 50.7 cents per gallon (57.7 cents on diesel) effective October 1,2020, reflecting an adjustment in the tax rate as outlined by the 2016 legislation.

Revenues collected from this tax, as reflected in the State’s Comprehensive Annual Financial Report (CAFR), have been as follows:

* estimate based on Governor's FY Budget

** estimate based on FY 2023 Appropriation Act

Petroleum Products Gross Receipts Tax

The Petroleum Products Gross Receipts Tax (PPGRT) is imposed on all companies engaged in refining and/or distributing petroleum products for distribution in New Jersey. It applies to the first sale, not for export, of petroleum products within the state.  Prior to the enactment of L. 2016, c. 57, the original PPGRT rate of 2.75% on gross receipts from the refining or distribution (or both) of highway fuel converted to 4 cents per gallon at the retail level.  L. 2016, c. 57, increased the PPGRT.  Beginning on November 1, 2016, the PPGRT increases: (i) on highway fuel and aviation fuel from 2.75% to 12.85% of gross receipts; (ii) on petroleum products other than highway fuel and aviation fuel from 2.75% to 7% of gross receipts; and (iii) by July 1, 2017, on diesel fuel from 4 cents per gallon to 8 cents per gallon.  In accordance with Chapter 57, the PPGRT on highway fuel and on petroleum products other than highway fuel and aviation fuel are converted to a cents-per-gallon.  For petroleum products, gross receipt taxes on highway fuel converts to a rate of 22.6 cents per gallon. The existing Motor Fuel Tax is 10.5 cents-per-gallon and the existing PPGRT imposed on gasoline, blended fuel that contains gasoline, liquefied petroleum gas and aviation fuel is 4 cents-per-gallon. As of November 1, 2016, the PPGRT paid by motorists at the pump was increased to 26.6 cents per gallon. Effective October 1, 2018 the PPGRT paid by motorists at the pump was increased to 30.9 cents per gallon, reflecting the provision in the 2016 legislation allowing for adjustments in the motor fuel tax rate dependent upon the State's meeting budgeted motor fuel tax revenue targets.

Owing to the Covid-19 emergency and subsequent declines in fuel consumption, the PPGRT paid by motorists at the pump increased to 40.2 cents per gallon effective October 1,2020. However, the PPGRT decreased to 31.9 cents per gallon effective Ocober 1, 2021, reflecting the adjustments in the tax rate as outlined by the 2016 legislation.

The current tax includes a variety of exemptions. Home heating oil (including #2, #4, and #6 heating oils) and propane gas and kerosene used for residential heating are exempt from tax. Also exempt from tax are receipts from sales of petroleum products used by marine vessels engaged in interstate or foreign commerce; receipts from sales of aviation fuels used by airplanes in interstate or foreign commerce other than burnout portion; receipts from sales of asphalt and polymer grade propylene used in the manufacture of polypropylene; receipts from sales to nonprofit entities qualifying for exemption under the Sales and Use Tax Act; and receipts from sales to the United States or the State of New Jersey. Effective January 1, 2001, L. 2000, c. 156, phased out, over a three-year period, the PPGRT for fuel used by any utility, co-generation facility, or wholesale generation facility to generate electricity sold at wholesale or through certain retail channels.

Revenues collected from this tax as reflected in the State’s Comprehensive Annual Financial Report (CAFR),  have been as follows:

Petroleum Products Gross Receipts Tax
Revenues Collected
(Millions of Dollars)

(A) Beginning in FY 2017, amounts reflected are net of Capital Reserves

* estimate based on Governor's FY Budget

** estimate based on FY 2023 Appropriation Act

Sales and Use Tax

 New Jersey imposes a Sales and Use Tax, which applies to receipts from retail sale, rental, or use of tangible personal property; retail sale of producing, fabricating, processing, installing, maintaining, repairing, storing, and servicing tangible personal property; maintaining, servicing, or repairing real property; certain direct mail services; sales of restaurant meals; rental of hotel and motel rooms; certain admission charges; and telecommunications services. A rate of 7% had been in effect since July of 2006. L. 2016, c. 57, reduced the Sales and Use Tax from 7% to 6.875% on January 1, 2017 and from 6.875% to 6.625% on January 1, 2018.

Article VIII, Section II, Paragraph 4 of the New Jersey State Constitution dedicates no less than $200 million annually from the Sales and Use Tax to transportation capital improvement purposes. Although not specified in the constitutional language, the Transportation Trust Fund statute identifies sales tax receipts from new vehicle purchases as the sales tax component intended to generate revenues for the Transportation Trust Fund to pay debt service on the Transportation System Bonds and the Transportation Program Bonds.                                                                                                                                                                                 

Revenues collected from this tax, as reflected in the State’s Comprehensive Annual Financial Report (CAFR), have been as follows:

Sales and Use Tax
(Millions of Dollars)

(a) net of Sales Tax Dedication beginning in 2007

* estimate based on Governor's FY Budget

** estimate based on FY 2023 Appropriation Act

Good Driver Vehicle Registration Surcharge

During the early 1990s the State of New Jersey collected surcharges on all motor vehicle registrations to help alleviate a large deficit in the New Jersey Automobile Guarantee Fund. The surcharge rate was $15 on pre-1989 vehicles, $40 on post 1989 vehicles, and $75 on commercial vehicles. The surcharges were originally targeted to sunset in 1997 when they were no longer needed for automobile insurance purposes. However, the Transportation Trust Fund Renewal legislation in 1995 revised the statute to gradually reduce the surcharges but statutorily dedicate the proceeds to the Transportation Trust Fund. The "good driver surcharge" fee is $7.50 on passenger vehicle registrations and $37.50 on commercial vehicle registrations.

Actual revenues collected from this tax, as reflected in the State's CAFR have been as follows:

Good Driver Registration Surcharge
(Millions of Dollars)

* estimate based on Governor's FY Budget

** estimate based on FY 2023 Appropriation Act

Heavy Truck Registration Fees

As indicated in the Appropriation Revenues chart above, the Legislature has not appropriated Heavy Truck registration fees to the Authority since FY 2001.

The Motor Vehicle Commission does not track and report on the impact of rate increases in specified weight categories from the 1985 Legislation. The decal fee was eventually ruled unconstitutional. The diesel differential is still collected and is estimated to yield approximately $24.5 million.

Toll Road Contributions

The 1984 Transportation Trust Fund legislation included a requirement that the three highway toll road authorities enter into a contract with the State Treasurer to contribute $24.5 million annually for state transportation purposes. Of that amount, the New Jersey Turnpike Authority was to contribute $12 million annually, the New Jersey Highway Authority (Garden State Parkway) $10 million annually and the South Jersey Transportation Authority (“SJTA”) $2.5 million annually.

The New Jersey Turnpike Authority subsequently merged with the New Jersey Highway Authority and became responsible for one $22 million annual payment. While the contribution rate for the authorities has not changed since 1985, the $22 million Turnpike contribution was forgiven by the State Treasurer for FY 2005 and FY 2006 in order to facilitate advancement of the critical high-cost Driscoll Bridge Replacement project. For FY 2007, the New Jersey Turnpike contributed an additional $27.5 million to the State for a total of $49.5 million. Combined with the SJTA contribution of $2.5 million, a total of $52 million was contributed by the toll road authorities. Of that amount, $12 million was appropriated to the Transportation Trust Fund Authority (TTFA) and the remaining $40 million for NJDOT operations and maintenance. This $12 million was appropriated to the TTFA through FY 2013.

Beginning in FY 2012, a separate agreement was established with the New Jersey Turnpike Authority to provide for additional contributions of pay-as-you-go funding to the Authority. In FY 2012, $66 million was provided. There were no additional contributions from FY 2013 through FY 2018.