Governor Chris Christie has signed legislation sponsored by Senator Anthony Bucco (R-Morris) to provide tax refunds to fuel distributors that have accrued bad debt from uncollectible accounts.
Sen. Anthony Bucco’s bill covers the cost of bad debt accrued from uncollectible accounts, such as a gas station that closed before paying the tax fronted by the fuel distributor. (Flickr)
“Motor fuel and heating oil distributors are required by law to pay the state petroleum tax when they purchase fuel, and then pass the cost of the taxes on to their customers,” Senator Bucco explained. “This becomes a huge financial burden for distributors if the local shop who bought the fuel goes out of business before they have paid that tax.”
“This is exactly the kind of anti-business policy that is forcing entire industries to leave New Jersey,” Senator Bucco added. “Hopefully, providing a tax credit to cover the bad debt distributors should never have been forced to pay in the first place will keep the fuel industry from taking invaluable jobs out of state.”
Senator Bucco’s bill, S-1091, allows a distributor who has an account that becomes uncollectible to claim a state tax refund to cover the bad debt, instead of being forced to swallow the cost of the state petroleum taxes that should have been covered by the entity to which they sold fuel. A seller could also take the refund in the form of a deduction on their tax returns.
“At a time when fuel distributors are facing new taxes and added financial burdens, we have to provide some incentive to keep this industry from leaving the state,” Senator Bucco added. “I thank the Governor for recognizing our efforts to alleviate this burden by signing my bill into law.”
The bill was signed by Governor Christie on November 21, 2016. The legislation will take effect immediately and apply to fuel sold on or after the first day of the third month following the date of enactment.
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