Plan to Expand Jet Fuel Tax Bad for Business, Economy, Consumers

Legislation to expand jet fuel taxes imposed on commercial airlines in New Jersey will lead to higher airfare costs for consumers and businesses, and make New Jersey’s already challenging business tax climate even worse, according to the New Jersey Business & Industry Association.
The bill is scheduled for a vote in the Assembly today.

Currently, the state’s 4-cent Petroleum Products Gross Receipts Tax (PPGRT) is only levied on jet fuel used by commercial planes during taxiing and takeoffs, not during flight. The bill, S-2892/A-4392, would subject all aviation fuel purchased in New Jersey to the 4-cent tax.

“This change to the aviation fuel tax formula would make New Jersey less competitive and hurt efforts to encourage economic growth,” said NJBIA Vice President of Government Affairs Andrew Musick. “The expanded tax will cost commercial airlines millions of dollars, and that will drive up the cost of doing businesses in New Jersey, as well as the cost of airfare.”

The bill would raise $36 million to $40 million in new taxes that would be used to fund the extension of PATH train service to Newark airport, as well as other airport capital improvement projects in New Jersey, according to a fiscal estimate from the NJ Office of Legislative Services.

“All told, it is the cumulative impact of policies like these that contribute to the ever-increasing cost of doing business in New Jersey,” Musick said.