Exempts fuel used for operation of certain school buses from petroleum products gross receipts tax and motor fuel tax; clarifies tax treatment of certain dyed fuel thereunder; clarifies determination of taxable estates of certain decedents.

A168

ASSEMBLY, No. 168

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblywoman DAWN FANTASIA

District 24 (Morris, Sussex and Warren)

Assemblyman MICHAEL INGANAMORT

District 24 (Morris, Sussex and Warren)

SYNOPSIS

���� Exempts fuel used for operation of certain school
buses from petroleum products gross receipts tax and motor fuel tax; clarifies
tax treatment of certain dyed fuel thereunder; clarifies determination of
taxable estates of certain decedents.

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act

providing an exemption from the petroleum
products gross receipts tax and the motor fuel tax for fuel used for the
operation of certain school buses,
clarifying
the tax treatment of certain dyed fuel thereunder, and clarifying the
determination of taxable estates of certain resident decedents, amending
various parts of the statutory law
.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.��� Section 7 of P.L.1991,
c.181 (C.54:15B-2.1) is amended to read as follows:�

���� 7.� a.� "Gross
receipts," as otherwise defined by section 2 of P.L.1990, c.42
(C.54:15B-2), shall not include
:� (1)
receipts from sales of petroleum
products used by marine vessels engaged in interstate or foreign commerce
[
and
]

; (2)
receipts
from sales of aviation fuels used by common carriers in interstate or foreign
commerce other than the "burnout" portion which shall be taxable
pursuant to rules promulgated by the director
; and (3) receipts from sales
of dyed fuel as defined by section 2 of P.L.2010, c.22 (C.54:39-102), unless
used in a motor vehicle for operation on the public highways
.

���� b. �Highway fuel used for the
following purposes is exempt from the tax imposed by section 3 of P.L.1990,
c.42 (C.54:15B-3), and a refund of the tax imposed by that section may be
claimed by the consumer providing proof the tax has been paid and no refund has
been previously issued:

���� (1)�� autobuses while being
operated over the highways of this State in those municipalities to which the
operator has paid a monthly franchise tax for the use of the streets therein
under the provisions of R.S.48:16-25 and autobuses while being operated over the
highways of this State in a regular route bus operation as defined in
R.S.48:4-1 and under operating authority conferred pursuant to R.S.48:4-3, or
while providing bus service under a contract with the New Jersey Transit
Corporation or under a contract with a county for special or rural
transportation bus service subject to the jurisdiction of the New Jersey
Transit Corporation pursuant to P.L.1979, c.150 (C.27:25-1 et seq.), and
autobuses providing commuter bus service which receive or discharge passengers
in New Jersey.� For the purpose of this paragraph "commuter bus
service" means regularly scheduled passenger service provided by motor
vehicles whether within or across the geographical boundaries of New Jersey and
utilized by passengers using reduced fare, multiple ride, or commutation
tickets and shall not include charter bus operations for the transportation of
enrolled children and adults referred to in subsection c. of R.S.48:4-1 and
"regular route service" does not mean a regular route in the nature
of special bus operation or a casino bus operation;

���� (2)�� agricultural tractors
not operated on a public highway;

���� (3)�� farm machinery;

���� (4)�� ambulances;

���� (5)�� rural free delivery
carriers in the dispatch of their official business;

���� (6)�� vehicles that run only
on rails or tracks, and such vehicles as run in substitution therefor;

���� (7)�� highway motor vehicles
that are operated exclusively on private property;

���� (8)�� motor boats or motor
vessels used exclusively for or in the propagation, planting, preservation and
gathering of oysters and clams in the tidal waters of this State;

���� (9)�� motor boats or motor
vessels used exclusively for commercial fishing;

���� (10)� motor boats or motor
vessels, while being used for hire for fishing parties or being used for
sightseeing or excursion parties;

���� (11)� fire engines and
fire-fighting apparatus;

���� (12) stationary machinery and
vehicles or implements not designed for the use of transporting persons or
property on the public highways;

���� (13)� heating and lighting
devices;

���� (14) �motor boats or motor
vessels used exclusively for Sea Scout training by a duly chartered unit of the
Boy Scouts of America;
[
and
]

���� (15) �emergency vehicles used
exclusively by volunteer first-aid or rescue squads
; and

����
(16)� school buses operated
for the transportation of pupils to or from school or a school-sponsored
activity or event by a religious or other charitable organization or
corporation or by a person under contract with a public or governmental agency
or a religious or other charitable organization or corporation.� For the
purpose of this paragraph �school buses� means �school bus� as that term is
defined by R.S.39:1-1
.

(cf: P.L.2016, c.57, s.13)

���� 2.��� Section 12 of P.L.2010,
c.22 (C.54:39-112) is amended to read as follows:

���� 12.� a.� Fuel used for the
following purposes is exempt from the tax imposed by the "Motor Fuel Tax
Act," P.L.2010, c.22 (C.54:39-101 et seq.), and a refund of the tax
imposed by subsection a. of section 3 of P.L.2010, c.22 (C.54:39-103) may be
claimed by the consumer providing proof the tax has been paid and no refund has
been previously issued:

���� (1)�� Autobuses while being
operated over the highways of this State in those municipalities to which the
operator has paid a monthly franchise tax for the use of the streets therein
under the provisions of R.S.48:16-25 and autobuses while being operated over the
highways of this State in a regular route bus operation as defined in
R.S.48:4-1 and under operating authority conferred pursuant to R.S.48:4-3, or
while providing bus service under a contract with the New Jersey Transit
Corporation or under a contract with a county for special or rural
transportation bus service subject to the jurisdiction of the New Jersey
Transit Corporation pursuant to P.L.1979, c.150 (C.27:25-1 et seq.), and
autobuses providing commuter bus service which receive or discharge passengers
in New Jersey.� For the purpose of this paragraph "commuter bus
service" means regularly scheduled passenger service provided by motor
vehicles whether within or across the geographical boundaries of New Jersey and
utilized by passengers using reduced fare, multiple ride or commutation tickets
and shall not include charter bus operations for the transportation of enrolled
children and adults referred to in subsection c. of R.S.48:4-1 and
"regular route service" does not mean a regular route in the nature
of special bus operation or a casino bus operation,

���� (2)�� agricultural tractors
not operated on a public highway,

���� (3)�� farm machinery,

���� (4)�� aircraft,

���� (5)�� ambulances,

���� (6)�� rural free delivery
carriers in the dispatch of their official business,

���� (7)�� vehicles that run only
on rails or tracks, and such vehicles as run in substitution therefor,

���� (8)�� highway motor vehicles
that are operated exclusively on private property,

���� (9)�� motor boats or motor
vessels used exclusively for or in the propagation, planting, preservation and
gathering of oysters and clams in the tidal waters of this State,

���� (10) motor boats or motor
vessels used exclusively for commercial fishing,

���� (11)� motor boats or motor
vessels, while being used for hire for fishing parties or being used for
sightseeing or excursion parties,

���� (12)� cleaning,

���� (13)� fire engines and
fire-fighting apparatus,

���� (14) stationary machinery and
vehicles or implements not designed for the use of transporting persons or
property on the public highways,

���� (15)� heating and lighting
devices,

���� (16) motor boats or motor
vessels used exclusively for Sea Scout training by a duly chartered unit of the
Boy Scouts of America,

���� (17) emergency vehicles used
exclusively by volunteer first-aid or rescue squads,
[
and
]

���� (18)� three cents per gallon,
the difference between the rate of tax on diesel fuel and the rate of tax on
gasoline, for diesel fuel used by passenger automobiles and motor vehicles of
less than 5,000 pounds gross weight
, and

����
(19) �school buses operated
for the transportation of pupils to or from school or a school-sponsored
activity or event by a religious or other charitable organization or
corporation or by a person under contract with a public or governmental agency
or a religious or other charitable organization or corporation.� For the
purpose of this paragraph �school buses� means �school bus� as that term is
defined by R.S.39:1-1
.

���� b.��� Subject to the
procedural requirements and conditions set out in the "Motor Fuel Tax
Act," P.L.2010, c.22 (C.54:39-101 et seq.), the following uses are exempt
from the tax imposed by section 3 of P.L.2010, c.22 (C.54:39-103) on fuel, and
a deduction or a refund may be claimed by the supplier, permissive supplier or
licensed distributor:

���� (1)�� fuel for which proof of
export, satisfactory to the director, is available and is either:

���� (a)�� removed by a licensed
supplier for immediate export to a state in which the supplier has a valid
license;

���� (b)�� removed from a terminal
by a licensed distributor for immediate export as evidenced by the terminal
issued shipping papers; or

���� (c)�� acquired by a licensed
distributor and which the tax imposed by P.L.2010, c.22 (C.54:39-101 et al.)
has previously been paid or accrued either as a result of being stored outside
of the terminal transfer system immediately prior to loading or as a diversion
across state boundaries properly reported in conformity with P.L.2010, c.22
(C.54:39-101 et al.) and was subsequently exported from this State on behalf of
the distributor.

���� The exemption pursuant to
subparagraphs (a) and (b) of this paragraph shall be claimed by a deduction on
the report of the supplier which is otherwise responsible for remitting the tax
upon removal of the product from a terminal or refinery in this State. The
exemption pursuant to subparagraph (c) of this paragraph shall be claimed by
the distributor, upon a refund application made to the director within six
months of the licensed distributor's acquisition of the fuel;

���� (2)�� undyed kerosene sold to
a licensed ultimate vendor - blocked pumps; if the licensed ultimate vendor -
blocked pumps does not sell the kerosene through dispensers that have been
designed and constructed to prevent delivery directly from the dispenser into a
motor vehicle fuel supply tank, the ultimate vendor - blocked pumps shall be
responsible for the tax imposed by section 3 of P.L.2010, c.22 (C.54:39-103) at
the diesel fuel rate.� Exempt use of undyed kerosene shall be governed by rules
and regulations of the director.� If rules or regulations are not promulgated
by the director, then the exempt use of undyed kerosene shall be governed by
rules and regulations of the Internal Revenue Service.� An ultimate
vendor-blocked pumps who obtained undyed kerosene upon which the tax levied by
section 3 of P.L.2010, c.22 (C.54:39-103) had been paid and makes sales
qualifying pursuant to this subsection may apply for a refund of the tax
pursuant to an application, as provided by section 14 of P.L.2010, c.22 (C.54:39-114),
to the director provided the ultimate vendor-blocked pumps did not charge that
tax to the consumer;

���� (3)�� fuel sold to the United
States or any agency or instrumentality thereof, and to the State of New Jersey
and its political subdivisions, departments and agencies;

���� (4)�� aviation fuel sold to a
licensed aviation fuel dealer;

���� (5)�� liquefied petroleum gas
except when delivered to the tank of a highway vehicle;

���� (6)�� motor fuel on which tax
has been paid under this act that is later contaminated in a manner making it
unsuitable for taxable use.� This credit or refund is limited to the remaining
portion of taxed fuel in the contaminated mixture and is conditioned upon
submitting to the director adequate documentation that the contaminated mixture
was subsequently used in an exempt manner;

���� (7)�� fuel on which tax has
been paid pursuant to P.L.2010, c.22 (C.54:39-101 et al.) that is either
subsequently delivered back into the terminal transfer system for further
distribution or delivered to a refinery for further processing;

���� (8)�� fuel on which tax has
been previously imposed and paid pursuant to section 3 of P.L.2010, c.22
(C.54:39-103) and which is either subsequently exported, sold or distributed in
this State in a manner which would result in a second tax being owed.� If there
is a second taxable distribution or sale, the party responsible for remittance
of the second tax shall be the party eligible for claiming the refund or
deduction;

���� (9)�� Fuel grade alcohol,
biobased liquid fuel, or biodiesel fuel when sold to a licensed supplier and
delivered to a qualified terminal.

(cf: P.L.2015, c.101, s.2)

���� 3.� R.S.54:38-1 is amended to
read as follows:

���� 54:38-1.� a.� In addition to
the inheritance, succession or legacy taxes imposed by this State under
authority of chapters 33 to 36 of this title (R.S.54:33-1 et seq.), or
hereafter imposed under authority of any subsequent enactment, there is hereby
imposed an estate or transfer tax:

���� (1)�� Upon the transfer of the
estate of every resident decedent dying before January 1, 2002 which is subject
to an estate tax payable to the United States under the provisions of the
federal revenue act of one thousand nine hundred and twenty-six and the amendments
thereof and supplements thereto or any other federal revenue act in effect as
of the date of death of the decedent, the amount of which tax shall be the sum
by which the maximum credit allowable against any federal estate tax payable to
the United States under any federal revenue act on account of taxes paid to any
state or territory of the United States or the District of Columbia, shall
exceed the aggregate amount of all estate, inheritance, succession or legacy
taxes actually paid to any state or territory of the United States or the
District of Columbia, including inheritance, succession or legacy taxes
actually paid this State, in respect to any property owned by such decedent or
subject to such taxes as a part of or in connection with the estate; and

���� (2)� (a)� Upon the transfer of
the estate of every resident decedent dying after December 31, 2001, but before
January 1, 2017, which would have been subject to an estate tax payable to the
United States under the provisions of the federal Internal Revenue Code of 1986
(26 U.S.C. s.1 et seq.) in effect on December 31, 2001, the amount of which tax
shall be, at the election of the person or corporation liable for the payment
of the tax under this chapter, either

���� (i)��� the maximum credit that
would have been allowable under the provisions of that federal Internal Revenue
Code in effect on that date against the federal estate tax that would have been
payable under the provisions of that federal Internal Revenue Code in effect on
that date on account of taxes paid to any state or territory of the United
States or the District of Columbia, or

���� (ii)�� determined pursuant to
the simplified tax system as may be prescribed by the Director of the Division
of Taxation in the Department of the Treasury to produce a liability similar to
the liability determined pursuant to clause (i) of this paragraph reduced
pursuant to paragraph (b) of this subsection.

���� (b)�� The amount of tax
liability determined pursuant to subparagraph (a) of this paragraph shall be
reduced by the aggregate amount of all estate, inheritance, succession or
legacy taxes actually paid to any state or territory of the United States or
the District of Columbia, including inheritance, succession or legacy taxes
actually paid this State, in respect to any property owned by such decedent or
subject to such taxes as a part of or in connection with the estate; provided
however, that the amount of the reduction shall not exceed the proportion of
the tax otherwise due under this subsection that the amount of the estates's
property subject to tax by other jurisdictions bears to the entire estate
taxable under this chapter.

���� (3)� (a)� Upon the transfer of
the estate of each resident decedent dying on or after January 1, 2017, whether
or not subject to an estate tax payable to the United States under the
provisions of the federal Internal Revenue Code (26 U.S.C. s.1 et seq.), the
amount of the taxable estate, determined pursuant to section 2051 of the
federal Internal Revenue Code (26 U.S.C. s.2051),
but without the deduction
of any estate inheritance, legacy, or succession taxes actually paid to any
state or territory of the United States or the District of Columbia pursuant to
the provisions of section 2058 of the federal Internal Revenue Code (26 U.S.C.
s. 2058) in effect on January 1, 2017,
shall be subject to tax pursuant to
the following schedule:

On any amount up to $100,000
.................................................0.0%

���� On any amount in excess of
$100,000, up to $150,000� . . . . 0.8% of the excess over $100,000������

���� On any amount in excess of
$150,000, up to $200,000. . . . . . $400 plus 1.6% of the excess over $150,000

���� On any amount in excess of
$200,000, up to $300,000. . . . . . . . .� $1,200 plus 2.4% of the excess over
$200,000

���� On any amount in excess of
$300,000, up to $500,000. . . . . . . . .� $3,600 plus 3.2% of the excess over
$300,000

���� On any amount in excess of
$500,000, up to $700,000. . . . . . . . .� $10,000 plus 4.0% of the excess over
$500,000

���� On any amount in excess of
$700,000, up to $900,000. . . . . . . . .� $18,000 plus 4.8% of the excess over
$700,000

���� On any amount in excess of
$900,000, up to $1,100,000. . . . . . . .� $27,600 plus 5.6% of the excess over
$900,000

���� On any amount in excess of
$1,100,000, up to $1,600,000. . . . $38,800 plus 6.4% of the excess over
$1,100,000

���� On any amount in excess of
$1,600,000, up to $2,100,000. . . . . $70,800 plus 7.2% of the excess over
$1,600,000

���� On any amount in excess of
$2,100,000, up to $2,600,000. . . . . $106,800 plus 8.0% of the excess over
$2,100,000

���� On any amount in excess of
$2,600,000, up to $3,100,000. . . . $146,800 plus 8.8% of the excess over
$2,600,000

���� On any amount in excess of
$3,100,000, up to $3,600,000. . . . . $190,800 plus 9.6% of the excess over
$3,100,000

���� On any amount in excess of
$3,600,000, up to $4,100,000. . . . . $238,800 plus 10.4% of the excess over
$3,600,000

���� On any amount in excess of
$4,100,000, up to $5,100,000. . . . . $290,800 plus 11.2% of the excess over
$4,100,000

���� On any amount in excess of
$5,100,000, up to $6,100,000 . . . . $402,800 plus 12.0% of the excess over
$5,100,000

���� On any amount in excess of
$6,100,000, up to $7,100,000 . . . . . $522,800 plus 12.8% of the excess over
$6,100,000

���� On any amount in excess of
$7,100,000, up to $8,100,000 . . . . . $650,800 plus 13.6% of the excess over
$7,100,000

���� On any amount in excess of
$8,100,000, up to $9,100,000 . . . . .� $786,800 plus 14.4% of the excess over
$8,100,000

���� On any amount in excess of
$9,100,000, up to $10,100,000 . . . . $930,800 plus 15.2% of the excess over
$9,100,000

���� On any amount in excess of
$10,100,000. . . . . . . . . . . . . . . . . . . $1,082,800 plus 16.0% of the
excess over $10,100,000

���� (b)�� A credit shall be
allowed against the tax imposed pursuant to subparagraph (a) of this paragraph
equal to the amount of tax which would be determined by subparagraph (a) of
this paragraph if the amount of the taxable estate were equal to the exclusion
amount.

���� For the transfer of the estate
of each resident decedent dying on or after January 1, 2017, but before January
1, 2018, the exclusion amount is $2,000,000.

���� (c)�� The amount of tax
liability of a resident decedent determined pursuant to subparagraphs (a) and
(b) of this paragraph shall be reduced by the aggregate amount of all estate,
inheritance, succession or legacy taxes actually paid to any state
or
territory
of the United States
or the District of Columbia
,
including inheritance taxes actually paid this State, in respect to any
property owned by that decedent or subject to those taxes as a part of or in
connection with the estate; provided however, that the amount of the reduction
shall not exceed the proportion of the tax otherwise due under this subsection
that the amount of the estate's property subject to tax by other jurisdictions
bears to the entire estate taxable under this chapter.

���� (4)�� For the transfer of the
estate of each resident decedent dying on or after January 1, 2018, there shall
be no tax imposed.

���� b.� (1)� In the case of the
estate of a decedent dying before January 1, 2002 where no inheritance,
succession or legacy tax is due this State under the provisions of chapters 33
to 36 of this title or under authority of any subsequent enactment imposing
taxes of a similar nature, but an estate tax is due the United States under the
provisions of any federal revenue act in effect as of the date of death,
wherein provision is made for a credit on account of taxes paid the several
states or territories of the United States, or the District of Columbia, the
tax imposed by this chapter shall be the maximum amount of such credit less the
aggregate amount of such estate, inheritance, succession or legacy taxes
actually paid to any state or territory of the United States or the District of
Columbia.

���� (2)�� In the case of the
estate of a decedent dying after December 31, 2001, but before January 1, 2017,
where no inheritance, succession or legacy tax is due this State under the
provisions of chapters 33 to 36 of this title or under authority of any
subsequent enactment imposing taxes of a similar nature, the tax imposed by
this chapter shall be determined pursuant to paragraph (2) of subsection a. of
this section.

���� (3)�� In the case of the
estate of a decedent dying on or after January 1, 2017 the tax imposed by this
chapter shall be determined pursuant to paragraphs (3) and (4) of subsection a.
of this section.

���� c.���� For the purposes of
this section, a "simplified tax system" to produce a liability
similar to the liability determined pursuant to clause (i) of subparagraph (a)
of paragraph (2) of subsection a. of this section is a tax system that is based
upon the $675,000 unified estate and gift tax applicable exclusion amount in
effect under the provisions of the federal Internal Revenue Code of 1986 (26
U.S.C. s.1 et seq.) in effect on December 31, 2001, and results in general in
the determination of a similar amount of tax but which will enable the person
or corporation liable for the payment of the tax to calculate an amount of tax
notwithstanding the lack or paucity of information for compliance due to such
factors as the absence of an estate valuation made for federal estate tax
purposes, the absence of a measure of the impact of gifts made during the
lifetime of the decedent in the absence of federal gift tax information, and
any other information compliance problems as the director determines are the
result of the phased repeal of the federal estate tax.

(cf: P.L.2016, c.57, s.7)

���� 4.� Section 19 of P.L.2016,
c.57 (C.52:18A-257) is amended to read as follows:

���� 19.� a.� The State Treasurer,
and the Legislative Budget and Finance Officer, together with a third public
member who shall be jointly selected thereby, shall constitute the review
council.

���� b.��� The review council
shall, on or before January 15, 2020, provide the Governor and the Legislature
with an advisory report of their consensus estimate of the increase or decrease
in State revenues pursuant to each section of P.L.2016, c.57 (C.54:15B-13 et
al.), and pursuant to this act as a whole, during the preceding three State
fiscal years, including a comparison of those estimates to the legislative
fiscal estimate or fiscal note published contemporaneous with the enactment of
this act prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).

���� c.���� The review council
shall conduct an ongoing review of the application of each section of P.L.2016,
c.57 (C.54:15B-13 et al.).

���� The review council shall, not
later than five days after any Legislative action that halts, delays, or
reverses the implementation of those sections as scheduled on the date of
enactment of P.L.2016, c.57 (C.54:15B-13 et al.), certify
for the purposes of subparagraph (h) of paragraph (1) of subsection a. of
section 3 of P.L.1990, c.42 (C.54:15B-3) to the Director of the Division of
Taxation that the scheduled implementation of P.L.2016, c.57 (C.54:15B-13 et
al.) had been impeded.

����
The provisions of this
subsection shall not apply to sections 1, 2, and 3 of P.L.��� , c.�� (C.������
) (pending before the Legislature as this bill.

(cf:� P.L.2016, c.57, s.19)

���� 5.��� This act shall take
effect immediately; provided however that sections 1 and 2 shall apply to
highway fuel and fuel used on or after the first day of the first month next
following the date of enactment and section 3 shall apply retroactively to the
estate of each resident decedent dying on or after January 1, 2017.

STATEMENT

���� This bill provides an
exemption from the petroleum products gross receipts tax (PPGRT) and the motor
fuel tax for fuel used for the operation of certain school buses clarifies the
tax treatment of certain dyed fuel under the PPGRT, and clarifies the determination
of taxable estates of certain resident decedents for purposes of the estate
tax.�� The bill also excludes the exemptions and these clarifying changes from
the review of legislative actions by the three-member review council
established by P.L.2016, c.57, to prevent a cessation in the imposition of one
of the components of the petroleum products gross receipts tax.

���� Fuel Used for Certain
School Buses.
� The bill provides an exemption from the petroleum products
gross receipts tax and the motor fuel tax for fuel used for the operation of
certain school buses.� Under the bill, the exemption applies to fuel used for
school buses operated for the transportation of pupils to or from school or a
school-sponsored activity or event by a religious or charitable organization or
corporation or by a person under contract with a public or governmental agency
or a religious or other charitable organization or corporation.

���� To receive the benefit of the
exemption, purchasers of fuel used to operate a school bus for the
transportation of pupils to or from school or a school-sponsored activity or
event must pay tax at the point of purchase and seek a refund of the taxes paid
by the filing of a claim with the Director of the Division of Taxation in the
Department of the Treasury.� As is required under current law for certain other
exempt uses of fuel, the claim for refund must be filed with the director by
the purchaser providing proof that the tax has been paid, and the director must
confirm that a refunds has not been previously issued.

���� The bill defines �school
buses� by reference to the definition of �school bus� under R.S.39:1-1.� Under
that section of law, a �school bus� is any motor vehicle operated by, or under
contract with, a public or governmental agency, or religious or other charitable
organization or corporation, or privately operated for the transportation of
children to or from school for secular or religious education, which complies
with the regulations of the New Jersey Motor Vehicle Commission affecting
school buses, and includes �School Vehicle Type I� and �School Vehicle Type
II.���

���� Under current law, consumers
of fuel that are eligible for an exemption from the petroleum products gross
receipts tax and the motor fuel tax must pay the tax at the point of purchase
and seek a refund of the taxes paid by the filing of a claim with the Director
of the Division of Taxation in the Department of the Treasury.� The law
provides that the claim for refund must be filed by the consumer providing
proof that the tax has been paid and a refund has not been previously issued.

����
Treatment of Dyed Fuel
under PPGRT.
� The bill clarifies the tax treatment of certain dyed fuel
under the petroleum products gross receipts tax.� Under the bill, dyed fuel is
excluded from the definition of �gross receipts� so that receipts from sales of
dyed fuel (unless used in a motor vehicle for operation on the public highways)
are explicitly exempt from tax and recognized in a similar form and manner as
dyed fuel is recognized for purposes of the motor fuel tax.

���� Under the motor fuel tax, dyed
fuel is dyed diesel fuel or dyed kerosene that is required to be dyed pursuant
to United States Environmental Protection Agency rules or is dyed pursuant
Internal Revenue Service rules or any other requirements set by those federal
agencies.� Fuel is dyed to easily identify fuel that has not been subjected to
federal highway tax.� The motor fuel tax recognizes that dyed fuel can
generally only be used for an exempt public purpose, and prohibits dyed fuel
sold for an exempt purpose from being used in a taxable manner through the
imposition of certain fines and penalties.

����
Determination of Taxable
Estates of Resident Decedents.
� The bill clarifies the determination of
taxable estates of certain resident decedents for purposes of the estate tax.�
Under the bill, the taxable estate of each resident decedent dying on or after
January 1, 2017, but before January 1, 2018, is to be determined based upon the
taxable estate of the decedent for federal estate tax purposes but without the
deduction of any estate, inheritance, legacy, or succession taxes actually paid
to any state or territory of the United States or the District of Columbia as
is otherwise allowed pursuant to section 2058 of the federal Internal Revenue
Code in effect on January 1, 2017.

���� The disallowance of the
deduction will limit the potential of a tax benefit that estates of resident
decedents dying on or after January 1, 2017, but before January 1, 2018, might
claim for any estate, inheritance, legacy, or succession taxes actually paid to
any state or (territory of the United States or District of Columbia).�
Currently, the law directs the estate tax to be determined based upon the
federal taxable estate (which is the decedent�s gross estate minus certain
deductions, including the deduction for estate, inheritance, legacy, or
succession taxes actually paid to any state or territory of the United States
or the District of Columbia), and provides that the resident decedent�s tax
liability is to further be reduced by a credit for a proportion of those same
taxes actually paid to any state in respect to property in another state owned
by the decedent or subject to those taxes as part of or in connection with the
estate.

����
Exclusion from Review by
the Review Council.
� The bill excludes the exemptions and the clarifying
changes from the review of the three member review council established by
P.L.2016, c.57 to prevent a cessation in the imposition of one of the
components of the PPGRT.� Under the bill, the provisions of current law that
direct the three-member review council to review legislative actions and issue
certifications to the Director of the Division of Taxation and the scheduled
implementation of P.L.2016, c.57 might otherwise be impeded will not apply to
those sections of the bill that exempt fuel used for certain school buses and
clarify treatment of dyed fuel and the determination of taxable estates of
resident decedents.�

���� Under current law, the three
member review council (i.e. the State Treasurer, Legislative Budget and Finance
Officer, and a third public member) is directed to monitor the actions of the
Legislature on an ongoing basis for interference with the implementation of
P.L.2016, c.57.� If the implementation is impeded, the council is to certify
this interference to the Director of the Division of Taxation and the director
is to effectuate the cessation of the imposition of one of the components of
the PPGRT.

����
Effective
Date.
� The bill is scheduled to take effect immediately upon enactment, but
provides for the exemption and clarification to the treatment of dyed fuel to
apply to the fuel used on or after the first day of the first month next
following enactment.� The bill provides for the clarification of the
determination of taxable estates to apply retroactively to estates of resident
decedents dying on or after January 1, 2017.