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

2026-2027 Regular Session Introduced by Dawn Fantasia and 2 co-sponsors

New Jersey would allow a gross income tax deduction for sales and use tax and societal benefits charges paid on electric and gas utility bills.

Introduced, Referred to Assembly Telecommunications and Utilities Committee

Summary of Bill A 5230 (New Jersey, Session 222)

Purpose and intent

This bill aims to provide a gross income tax deduction for certain charges that utility customers pay on their electric and gas utility bills. Specifically, it allows a deduction for sales and use tax and societal benefits charges (SBCs) that are charged by utilities and passed through to customers.

Key provisions and changes

Establishes a deduction against New Jersey gross income tax for:

Sales and use tax paid on electric and gas utility bills.
Societal benefits charges (SBCs) included in those utility bills.

The deduction would apply to amounts paid by the taxpayer who itemizes or claims the deduction related to those charges on their annual gross income tax filing.

The exact mechanics (e.g., calculation method, phase-in, interaction with other deductions, and eligibility criteria) would be specified in the bill’s text, including where the deduction is claimed (likely Schedule A or equivalent) and any required documentation or attestation.

Who would be affected

Individual taxpayers paying New Jersey gross income tax who have electric or gas utility bills that include sales and use taxes and SBCs.

Potentially affects households with higher utility bills or those in which SBCs constitute a noticeable portion of the total bill.

Utilities and tax preparers could be involved indirectly, as they would need to ensure proper reporting of amounts eligible for deduction.

Procedural and timeline aspects

The bill proposes changes to the state income tax code to authorize the deduction.

It would require passage by the New Jersey Legislature and approval by the governor to become law.

Effective date, tax year applicability (e.g., starting in a future tax year) and any transitional rules would be specified in the bill text.

Potential impact considerations

Tax burden: The deduction would reduce taxable income for eligible taxpayers, providing a potential tax savings proportional to the amount of sales and use tax and SBCs paid.

Equity and targeting: The benefit depends on the magnitude of SBCs and sales tax on utility bills, which can vary by rate changes and household consumption.

Administrative practicality: State tax authorities would need to administer the deduction, verify eligible amounts, and provide guidance to taxpayers and preparers.

Notes

The bill lists Brian Rumpf as a co-sponsor.

Specific numerical thresholds, effectiveness dates, and any limitations (e.g., caps, income phase-outs, or interaction with federal deductions) would be detailed in the bill’s full text.