Allows gross income tax deduction for sales and use tax and societal benefits charges paid on electric and gas utility bills.

S4410

SENATE, No. 4410

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 4, 2026

Sponsored by:

Senator� CARMEN F. AMATO, JR.

District 9 (Ocean)

SYNOPSIS

���� Allows gross income tax deduction for sales and use
tax and societal benefits charges paid on electric and gas utility bills.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

allowing gross income tax deduction for certain
taxes paid for utility service, supplementing Title 54A of the New Jersey
Statutes, and amending P.L.1966, c.30 and P.L.1999, c.23.

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

���� 1.��� (New section) A taxpayer
shall be allowed to deduct from the taxpayer�s gross income an amount equal to the
sales and use taxes and societal benefits charges paid by the taxpayer during
the taxable year for electricity and natural gas utility service provided to
the principal residence of the taxpayer.

���� 2.��� Section 14 of P.L.1966,
c.30 (C.54:32B-14) is amended to read as follows:

���� 14.� (a)� Every person
required to collect any tax imposed by this act shall be personally liable for
the tax imposed, collected or required to be collected under this act.� Any
such person shall have the same right in respect to collecting the tax from
that person's customer or in respect to non-payment of the tax by the customer
as if the tax were a part of the purchase price of the property or service,
amusement charge or rent, as the case may be, and payable at the same time;
provided, however, that the director shall be joined as a party in any action
or proceeding brought to collect the tax.

���� (b)�� Where any customer has
failed to pay a tax imposed by this act to the person required to collect the
same, then in addition to all other rights, obligations and remedies provided,
such tax shall be payable by the customer directly to the director and it shall
be the duty of the customer to file a return with the director and to pay the
tax to the director within 20 days of the date the tax was required to be paid.

���� (c)�� The director may,
whenever the director deems it necessary for the proper enforcement of this
act, provide by regulation that customers shall file returns and pay directly
to the director any tax herein imposed, at such times as returns are required
to be filed and payment over made by persons required to collect the tax.

���� (d)�� No person required to
collect any tax imposed by this act shall advertise or hold out to any person
or to the public in general, in any manner, directly or indirectly, that the
tax is not considered as an element in the price, amusement charge or rent payable
by the customer, or except as provided by subsection (f) of this section that
the person required to collect the tax will pay the tax, that the tax will not
be separately charged and stated to the customer or that the tax will be
refunded to the customer.� Upon written application duly made and proof duly
presented to the satisfaction of the director showing that in the particular
business of the person required to collect the tax it would be impractical for
the seller to separately charge the tax to the customer, the director may waive
the application of the requirement herein as to such seller.

���� (e)��
[
All
]
�
Beginning no later than the January 1 of the year next
following the effective date of P.L. ,
c. (C. )
(pending before the Legislature as this bill), all
sellers of energy
or utility service shall
[
include
the
]

separately
state, in each periodic bill issued to a customer, the amount of
tax
imposed
[
by
]

under

the "Sales and Use Tax Act"
[
within
]

on
the
purchase price of the tangible personal property or service
, which amount
shall be listed separately from all other charges imposed by the seller on the
customer
.

���� (f)�� A
seller
[
other
than a seller subject to subsection (e) of this section
]
making retail
sales of tangible personal property or sales of services may advertise that the
seller will pay the tax for the customer subject to the conditions of this
subsection. �

���� (1)�� The advertising shall
indicate that the seller is, in fact, paying the tax for the customer and shall
not indicate or imply that the sale or charge is exempt from taxation.

���� (2)�� Notwithstanding the
provisions of section 12 of P.L.1966, c.30 (C.54:32B-12) to the contrary, any
sales slip, invoice, receipt or other statement or memorandum of the price or
service charge paid or payable given to the customer shall state that the tax will
be paid by the seller; provided however that such record shall be otherwise
subject to the provisions of section 12 of P.L.1966, c.30 (C.54:32B-12).

���� (3)�� The seller shall pay the
amount of tax due on the retail sale or service receipt, as determined pursuant
to section 4 of P.L.1966, c.30 (C.54:32B-4), as trustee for and on account of
the State, and shall have the same liability for that amount of tax pursuant to
the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), as
for an amount collected from a customer.

���� (g)�� No person required to
collect any tax imposed by this act shall be held liable for having charged and
collected the incorrect amount of sales and use tax by reason of reliance on
erroneous data provided by the director with respect to tax rates, boundaries
or taxing jurisdiction assignments or contained in the taxability matrix.

���� (h)�� In connection with a
purchaser's request from a seller of over-collected sales or use taxes, a
seller shall be presumed to have a reasonable business practice, if in the
collection of such sales or use taxes, the seller: (1) uses either a provider
or a system, including a proprietary system, that is certified by the State;
and (2) has remitted to the State all taxes collected less any deductions,
credits, or collection allowances.

���� (i)��� No purchaser shall be
held liable for any tax, interest or penalty for failure to pay the correct
amount of tax by reason of:

���� (1)�� the reliance of the
purchaser's seller or certified service provider on erroneous data provided by
the director with respect to tax rates, boundaries or taxing jurisdiction
assignments or contained in the taxability matrix;

���� (2)�� the reliance of the
purchaser holding a direct pay permit on erroneous data provided by the
director with respect to tax rates, boundaries or taxing jurisdiction
assignments or contained in the taxability matrix;

���� (3)�� the reliance of the
purchaser on erroneous data provided by the director with respect to the
taxability matrix; or

���� (4)�� the reliance of a
purchaser using databases of taxing jurisdiction assignments on erroneous data
provided by the director with respect to tax rates, boundaries or taxing
jurisdiction assignments, provided however that, to the extent that the
director provides or certifies an address-based database for assigning tax
rates and jurisdictions and upon appropriate notice, no relief from liability
shall be allowed for errors resulting from reliance on a zip code database for
assigning tax rates and jurisdictions.

���� Provided however, that as to
the relief from liability for tax, the relief from liability for tax by reason
of reliance on the taxability matrix shall be limited to the director's
erroneous classification in the taxability matrix of terms "taxable"
or "exempt," "included in sales price" or "excluded
from sales price" or "included in the definition" or
"excluded from the definition."

���� (j)��� If the director
provides less than 30 days between the date a rate change is enacted and the
date that change takes effect, the director shall relieve the seller of
liability for failing to collect tax at the new rate if:� (1) the seller
collected tax at the immediately preceding effective rate; and (2) the seller's
failure to collect tax at the newly effective rate does not extend more than 30
days after the date of enactment of the new rate.

���� (k)�� Notwithstanding the
provisions of subsection (j) of this section, if the director establishes that
a seller fraudulently failed to collect tax due at the new rate or solicits
purchasers based on the immediately preceding effective tax rate, this relief from
liability shall not apply.

(cf: P.L.2011, c.49, s.12)

���� 3.��� Section 12 of P.L.1999,
c.23 (C.48:3-60) is amended to read as follows:

���� 12.� a. Simultaneously with
the starting date for the implementation of retail choice as determined by the
board pursuant to subsection a. of section 5 of this act, the board shall
permit each electric public utility and gas public utility to recover some or all
of the following costs through a societal benefits charge that shall be
collected as a non-bypassable charge imposed on all electric public utility
customers and gas public utility customers, as appropriate:

���� (1)�� The costs for the social
programs for which rate recovery was approved by the board prior to April
30, 1997.� For the purpose of establishing initial unbundled rates pursuant to
section 4 of this act, the societal benefits charge shall be set to recover the
same level of social program costs as is being collected in the bundled rates
of the electric public utility on the effective date of this act.� The board
may subsequently order, pursuant to its rules and regulations, an increase or
decrease in the societal benefits charge to reflect changes in the costs to the
utility of administering existing social programs.� Nothing in this act shall
be construed to abolish or change any social program required by statute or
board order or rule or regulation to be provided by an electric public
utility.� Any such social program shall continue to be provided by the utility
until otherwise provided by law, unless the board determines that it is no
longer appropriate for the electric public utility to provide the program, or
the board chooses to modify the program;

���� (2)�� Nuclear plant
decommissioning costs;

���� (3)�� The costs of demand side
management programs that were approved by the board pursuant to its demand side
management regulations prior to April 30, 1997.� For the purpose of
establishing initial unbundled rates pursuant to section 4 of this act, the
societal benefits charge shall be set to recover the same level of demand side
management program costs as is being collected in the bundled rates of the electric
public utility on the effective date of this act.� Within four months of the
effective date� of this act, and every four years thereafter, the board shall
initiate a proceeding and cause to be undertaken a comprehensive resource
analysis of energy programs, and within eight months of initiating such
proceeding and after notice, provision of the opportunity for public comment,
and public hearing, the board, in consultation with the Department of
Environmental Protection, shall determine the appropriate level of funding for
energy efficiency and Class I renewable energy programs that provide
environmental benefits above and beyond those provided by standard offer or
similar programs in effect as of the effective date of this act; provided that
the funding for such programs be no less than 50% of the total Statewide amount
being collected in public electric and gas utility rates for demand side
management programs on the effective date of this act for an initial period of
four years from the issuance of the first comprehensive resource analysis
following the effective date of this act, and provided that 25% of this amount
shall be used to provide funding for Class I renewable energy projects in the
State.� In each of the following fifth through eighth years, the Statewide
funding for such programs shall be no less than 50 percent of the total
Statewide amount being collected in public electric and gas utility rates for
demand side management programs on the effective date of this act, except that
as additional funds are made available as a result of the expiration of past
standard offer or similar commitments, the minimum amount of funding for� such
programs shall increase by an additional amount equal to 50 percent of the
additional funds made available, until the minimum amount of funding dedicated
to such programs reaches $140,000,000 total.� After the eighth year the board
shall make a determination as to the appropriate level of funding for these
programs.� Such programs shall include a program to provide financial
incentives for the installation of Class I renewable energy projects in the
State, and the board, in consultation with the Department of Environmental
Protection, shall determine the level and total amount of such incentives as well
as the renewable technologies eligible for such incentives which shall include,
at a minimum, photovoltaic, wind, and fuel cells.� The board shall
simultaneously determine, as a result of the comprehensive resource analysis,
the programs to be funded by the societal benefits charge, the level of cost
recovery and performance incentives for old and new programs and whether the
recovery of demand side management programs' costs currently approved by the
board may be reduced or extended over a longer period of time.� The board shall
make these determinations taking into consideration existing market barriers
and environmental benefits, with the objective of transforming markets,
capturing lost opportunities, making energy services more affordable for low
income customers and eliminating subsidies for programs that can be delivered
in the marketplace without electric public utility and gas public utility
customer funding;

���� (4)�� Manufactured gas plant
remediation costs, which shall be determined initially in a manner consistent
with mechanisms in the remediation adjustment clauses for the electric public
utility and gas public utility adopted by the board; and

���� (5)�� The cost, of consumer
education, as determined by the board, which shall be in an amount that,
together with the consumer education surcharge imposed on electric power
supplier license fees pursuant to subsection h. of section 29 of this act and
the consumer education surcharge imposed on gas supplier license fees pursuant
to subsection g. of section 30 of this act, shall be sufficient to fund the
consumer education program established pursuant to section 36 of this act.

���� b.��� There is established in
the Board of Public Utilities a nonlapsing fund to be known as the
"Universal Service Fund."� The board shall determine:� the level of
funding and the appropriate administration of the fund; the purposes and
programs to be funded with monies from the fund; which social programs shall be
provided by an electric public utility as part of the provision of its
regulated services which provide a public benefit; whether the funds
appropriated to fund the "Lifeline Credit Program" established
pursuant to P.L.1979, c.197 (C.48:2-29.15 et seq.), the "Tenants' Lifeline
Assistance Program" established pursuant to P.L.1981, c.210 (C.48:2-29.31
et seq.), the funds received pursuant to the Low Income Home Energy Assistance
Program established pursuant to 42 U.S.C. s. 8621 et seq., and funds collected
by electric and natural gas utilities, as authorized by the board, to offset
uncollectible electricity and natural gas bills should be deposited in the
fund; and whether new charges should be imposed to fund new or expanded social
programs.

����
c.���� Beginning no later
than the January 1 of the year next following the effective date of
P.L. ,
c. (C. )
(pending before the Legislature as this bill), a electric public utility or
natural gas public utility shall separately state, in each periodic bill issued
to a customer, the amount of the societal benefits charge imposed on that
customer, which amount shall be listed separately from all other charges
imposed on the customer for electric or natural gas utility service.�

(cf: P.L.2025, c.136, s.7)

���� 4. This act shall take effect
immediately and apply to taxable years beginning on or after January 1 of the
year next following the date of enactment.�

STATEMENT

���� The bill allows taxpayers to
deduct from their gross income all sales and use tax and societal benefits
charges paid on electric and natural gas utility bills for their principal
residence during the taxable year.

���� The bill also requires that electric
and natural gas public utility suppliers include the amount of the tax imposed
by the �Sales and Use Tax Act� and the amount of the societal benefits charge
attributable to each customer as separately stated items on the customer�s
periodic electric and gas utility bills.