October 25, 2016

DETAILS ON 23˘ GAS TAX INCREASE
GOES INTO EFFECT ON NOVEMBER 1, 2016!

What Motor Fuel Retailers Need to Know

• The petroleum products tax (PPT) will increase from 4˘ a gallon to 27˘ a gallon on November 1^st, 2016.
• When you close your shop on the night of October 31, 2016, you must take an inventory of all the gasoline you have in the ground
  • What if I am open 24 hours a day?
    • In that case, your “close of business” is Oct. 31, 2016 at 11:59:59 pm.
    • When the clock strikes midnight, you will owe 23˘ a gallon for the gasoline in your tanks.
      • NJGCA recommends you stop pumping gas for a minute or two in order to take stock of your gasoline supplies, and print out a time stamped audit report.
    • You need to immediately raise the price of your gasoline 23˘ a gallon.
  • If you do not raise your price, and your markup is less than 23˘ a gallon, you will be guilty of below cost selling.
    • We do not yet have confirmation how this relates to the 24-hour rule regarding price changes.
    • To be safe, you should ‘save’ your daily price change for 12:01am on November 1^st.

• The NJ Department of the Treasury, Division of Taxation is still in the process of approving the final language for the two forms you will be required to fill out.
  • Both of these forms will be posted online, and NJGCA will email links to them as soon as they are publically available.
  • The Division of Taxation will include instructions on how to fill out the form as well.
  • It has not been determined whether or not you will receive a paper form in the mail. Given the timing, you will almost certainly not receive the form before November 1^st, when you will have to record the information.
• You will owe the difference between the old PPT you already paid when the gas was delivered (4˘) and the new PPT (27˘), which equals 23˘ a gallon.
  • Dead space
    • The law allows for a deduction of fuel which is stuck in “dead space”
    • The form will include a line to deduct these gallons after you list the amount of gallons in storage at the close of business on Cotober 31.
    • A tank with fewer than 10,000 gallons capacity will be able to deduct 200 gallons.
    • A tank with 10,000 gallons capacity or more will be able to deduct 400 gallons.
  • The first form, which details the amount of gallons of gasoline that need to be taxed, will be due December 16, 2016.
  • The second form, and the money that accompanies it, will be due February 1, 2017.

• The tax increase for diesel will be phased in. There will be NO increase in the tax on diesel fuel on November 1^st.
• The tax on diesel will increase at midnight on January 1, 2017. The increase will be 16.1˘ per gallon.
  • There will be a floor stocks tax on diesel that will function the same as the floor stocks tax on gasoline.
  • The report detailing how much fuel was in the ground at 11:59 pm on Dec. 31, 2016 will be due on Jan. 31, 2017.
  • The second form, and the money that accompanies it, will be due June 1, 2017.
• The tax on diesel will increase again at midnight on July 1, 2017. The increase will be a further 10.9˘ per gallon.
  • There will be a floor stocks tax on diesel that will function the same as the floor stocks tax on gasoline and the previous floor stocks tax on diesel.
  • The report detailing how much fuel was in the ground at midnight on June 30, 2017 will be due on July 31, 2017.
  • The second form, and the money that accompanies it, will be due December 1, 2017.