. As we go to print, the Legislature is actively debating the bill, but the Senate President expects the votes to pass this compromise legislation. The bill is the result of bipartisan agreement, revises the New Jersey Transportation Trust Fund (TTF) Authority Act, and provides both tax cuts and a gas tax increase. Noteworthy items include:
- On January 1, 2017, the sales tax will go from 7% to 6.875% and will be further reduced to 6.625% on January 1, 2018. This is the first statewide sales tax decrease in more than 20 years.
- Gas tax will increase by 23 cents a gallon.
- Beginning in Tax Year 2016, the Earned Income Tax Credit for working poor will be increased to 35% of the federal benefit amount.
- The gross income tax exclusion on pension and retirement income is increased over four years to $75,000 for individuals and $100,000 for joint filers.
- The estate tax will be phased out over the next 15 months, and on January 1, 2017, a $2 million dollar exclusion will replace the current $675,000 threshold. The estate tax will be fully eliminated on January 1, 2018.
Under the new TTF plan, 100% of the gas tax revenue is constitutionally dedicated to the repair and replacement of New Jersey roads and bridges for the next eight years. It is hoped that the tax cuts enacted will, to an extent, offset the additional tax cost New Jersey drivers will soon be facing at the pump. We will continue to monitor this development and update you if any changes occur.
