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DEP Tips, Tax Increases

June 19, 2025

Notes from DEP

The NJGCA Spring Conference was two weeks ago, and weโ€™re pleased to say that participants are still reaching out to ask follow-up questions about the material covered in the various presentations.

Last week we touched on a few of the notable (and surprising) items presented by the Office of Weights & Measures (W&M). For those members who may have missed the Conference, this week we thought to touch on a few items that were conveyed by state officials from the NJ Department of Environmental Protection (DEP).

Nearly everyone reading this knows DEP and the role they play throughout the state. Our members frequently dread seeing DEP officials visiting their shops. There is typically lots of worry and anxiety over what might happen, and how much a potential fine might cost them.

This is understandable, but you can reduce your anxiety and worry with a bit of insight and preparation. While we cannot reproduce the entire presentation to you in this week’s newsletter, we did think to highlight the following comments and takeaways you may not be aware of, including:

  • Most DEP infractions stem from administrative-related issues; with registrations commanding over half of violations. That is, station owners who incorrectly submit their registrations (or forget about them altogether) receive most of the penalties handed out.  
    • Remember, the UST Facility Certification Questionnaire (FCQ) is the form that we colloquially call a โ€œtank registrationโ€ and is the central document through which so many violations originate. DEP officials have stated that they do not enjoy enforcing these types of violations, since they are not truly โ€œharmingโ€ the environment or causing damage to their local communities. However, they are mandated to enforce them from other sections within DEP who report that a station owner has been delinquent.
  • While most DEP site visits are to assure that station owners are in compliance, DEP also spot checks your compliance company and contractors while they are working at your location. Meaning, state officials who are tasked with compliance and enforcement are looking over the shoulders of the professionals you’ve hired to keep you out of trouble.  DEP has stated that part of their job is to “protect” small business owners from compliance companies and contractors that don’t do their job properly. After all, you hire the compliance company to help you avoid fines and violationsโ€”but not all compliance companies and contractors are rigorously professional. If a DEP official visits your location to spot-check your compliance company or contractor, they will invite you along to listen in on what they are seeing. If that happens, you should take advantage of the offer and observe what happens. You might not only learn a few things, but could potentially find out first hand if the professionals you’ve hired are up to snuff (and might need to be replaced).
  • Site inspections are comprehensive, but there is a bit of a checklist you can keep on hand to help you figure out what they’re looking for. When DEP officials visit, the highlights of what they are investigating are:
    • Valid Registration,
    • Current Insurance,
    • Release Detection Monitoring,
    • Cathodic Protection,
    • Internal lining,
    • Spill Prevention,
    • Overfill Prevention, and
    • Air Permitting/Compliance. 
    • Is there more?  Sure, but this at lease gets you in the ballpark.  
  • You know about submitting your yearly registration, but did you know an FCQ should also be submitted for “non-renewal” reasons?  What could those reasons be? 
    • You should submit an updated registration form 30 days prior to:
      • a pending sale / transfer,
      • new installation into service, and
      • a change from out-of-service to in-use status. 
    • You should submit an updated registration form within 7 days for:
      • taking a tank out-of-service, or
      • removing a tank
    • You should submit an updated registration form within 30 days for:
      • a change in owner or operator,
      • changes in substances stored,
      • and a change in designating your A/B Operator.

The above are some useful notes. Some of them are good reinforcements and others a bit surprising. Yet, it is safe to say there was plenty more, which members who participated at the conference were able to fully realize and absorb in real-time.

Did you know all of these highlights? Do you have any questions? Please let us know!

Tax Increases Coming

It’s decision time for our state lawmakers, as New Jersey must sign into law a balanced budget by the end of the day on Monday, June 30th. This year they are putting college students to shame with their delays. It looks like the final vote will be just hours before a shutdown, and the all-important Senate and Assembly Budget Committee hearings, which were targeted for earlier this week, will be meeting today, or today and tomorrow, or maybe Saturday, depending on when they finish their work. 

In times like these there are a lot of rumors floating around about what may be shoved into the overall package in the final days. Back in late February, Governor Murphy proposed a budget with about 20 different tax increases. Legislators pushed back, but ultimately they felt they needed some of them in order to afford the spending they want to do, especially in a year when all 80 Assemblymembers are on the ballot for reelection. 

There are three taxes that affect our industries that look like they will be in the final package. One is an increase in the tax on cigarettes from $2.70 to $3.00 a pack. Another is an increase in the tax on vaping cartridges, from 10ยข per milliliter to 30ยข (which will increase the cost of a cartridge by between 14ยข and 50ยข depending on the exact product). 

While we have steadfastly opposed these increases since they were first proposed, ultimately legislative leadership insisted they needed the increase. Cigarette taxes have not increased since 2009. There was a proposal introduced to increase the tax by $1.30 per pack, but we were successful in keeping the rate of increase to just 30ยข. NJ will be 40ยข higher than Pennsylvania per pack, which is hopefully close enough to limit the loss of sales. 

In the last few days, we also had to fight off a last minute proposal to dramatically increase the tax on the new nicotine pouch products, of which Zyn is the most popular brand. Currently, those products are taxed 30% of the wholesale price, a tax which is paid by the distributor and passed on to retailers. This proposal suggested replacing that tax with one that would be 30ยข per pouch, which means a can of Zyn would have a $4.50 tax. This would increase the retail cost of the product by about 40%. Thankfully, we were able to prevent any change in the tax rate.

These tax increases would go into effect August 1st. Retailers of cigarettes and vapes will have to pay a “floor stocks tax”, which means taking an inventory of all of these products they have in their store at midnight August 1, and then paying the additional tax due by September 1. We will have more details on that process soon. It does mean there is no incentive for anyone, including big chains with big warehouses, to stockpile product to avoid the tax, if they do they will just be creating more headaches for themselves. 

The other of the taxes we are concerned with is a plan to increase the tax on the purchasers of property (residential and commercial) over $1 million. The Governor’s plan was to double the tax to 2% for property between $1 million and $2 million, and triple it to 3% for property over $2 million. The Legislature’s proposal is not as bad, leaving property between $1 million and $2 million at 1%, then increasing to 2% for property $2 million-$2.5 million, 2.5% for property between $2.5 million and $3 million, 3% for property between $3 million and $3.5 million ,and 3.5% for property over $3.5 million. 

Still, it’sover the a sharp increase for businesses like service stations, which because of their location and the massive increase in property values the last five years, sell on average for over $2 million and reach as high as $4 million. Selling off their location is the retirement plan for many small business owners, and the fact that the purchaser has to pay $25,000-$50,000 more in taxes will affect what they can pay for the location. 

You can read the statements we submitted on the cigarette tax HERE, on the vaping tax HERE, and on the real estate tax HERE

Big Upset in NYC Mayor’s Race–Vision of the Future in NJ?

On Tuesday night, Democratic primary voters decisively selected Zohran Mamdani to be their nominee for Mayor of New York City, decisively defeating former Governor Andrew Cuomo. Mamdani was polling just 1% when he started his campaign. While Cuomo was attached to a variety of scandals and ran a poor campaign, the willingness of the electorate to elect a self-proclaimed socialist could be a vision of the future elsewhere, potentially even in New Jersey.

There were two ideas that were a core of Mamdani’s message that would be of particular concern. One is his call for an increase in the minimum wage to $30 an hour. The NJ minimum wage has already doubled over the last decade, and now politicians are promoting it to be doubled again. During our primary two weeks ago, one candidate ran on an $18 minimum wage, and Gov. Murphy has called for a $20 wage. 

The other concern is a proposal for government-run grocery stores. Imagine having to compete directly with a business owned by the government, that not only does not have to mark up its items but also doesn’t have to pay any taxes. If it loses money, it can just be subsidized with other revenue. It could run local small businesses out of town, and then consumers will have no option to turn to when mediocrity sets in. Imagine the quality of stores operated by unionized workers and managers who have no interest or stake in the store, who can’t be fired and make the same amount of money no matter their job performance. 

It may seem at first too silly to spread, but just recently there was a hearing in Trenton on a bill to prevent increases in the price of food more than once a day. Once they’re micromanaging a business like that, it becomes a slippery slope. You can read our testimony on that bill HERE

Rack Averages

Date Rack Avg Avg w Taxes Low Rack
06/19 223.80 $2.8710 214.93
06/20 225.27 $2.8857 217.38
06/23 215.61 $2.7891 205.59
06/24 203.92 $2.6722 193.71
06/25 203.22 $2.6652 193.74
Date Avg Retail Avg Margin Diesel Rack Avg
06/19 $3.09 0.22 261.98
06/20 $3.11 0.24 260.13
06/23 $3.14 0.26 242.70
06/24 $3.15 0.37 234.43
06/25 $3.17 0.50 235.15

**Rack pries have fallen fast since the ceasefire in Iran, last night they were at their lowest level since June 4th, dropping 20c in a week.**

News Worth Knowing:

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Available Real Estate

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Contact: Jerry 609-425-8837 capeharborshell@comcast.net 

Our Road Warrior newsletter is brought to you by the following Member Benefit Partners:

New Jersey 
Gasoline-Convenience-Automotive Association
615 Hope Road, Bldg. 2, 1st Floor
Eatontown, New Jersey 07724

 

Phone: 732-256-9646
eMail: info@njgca.org


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