Bill
A 5688
Imposes a $3 per-occupied-room daily hotel surcharge in Newark to fund the city's fire services via a dedicated fund, with use limits and hiring caps.
Status and timeline
- Introduced: May 15, 2025 (Sponsor: Asm. Jodi Giglio)
- Assembly committee report with amendments: June 26, 2025
- Passed both houses: June 30, 2025 (Assembly 49–30–1; Senate 30–8)
- Enacted: Approved as P.L.2025, c.158 on November 13, 2025
- Effective date: first day of the second month after enactment
Purpose
- To create a dedicated revenue stream to support firefighting services in a qualifying municipality (a city of the first class containing an international airport). In practice the provision applies to the City of Newark.
Key provisions
- Surcharge: Imposes a $3.00 per-occupied-room, per-day surcharge on hotel occupancies that are taxable under existing law and located in a qualifying municipality (city of the first class with an international airport).
- Collection and remittance: The Director of the Division of Taxation collects the surcharge (using powers under the Sales and Use Tax Act), certifies amounts monthly to the State Treasurer, and the State Treasurer—upon warrant from the Director of the Division of Budget and Accounting—pays the amounts monthly to the municipality in which the hotel is located.
- Dedicated use: All surcharge receipts must be deposited into a municipal “fire services trust fund” and used solely for firefighting services: hiring, retention, and training of fire personnel; acquisition of equipment; and capital improvements benefiting the municipal fire service.
- Budget condition: The trust fund revenues may be appropriated and included in the municipality’s budget only if the municipality’s total appropriations for firefighting services in the current fiscal year are greater than those in the prior fiscal year (excluding any amounts previously appropriated from the trust fund). The surcharge is intended to supplement, not replace, existing general revenues supporting firefighting.
- Hiring cap: For 2026–2028, expenditures from the trust fund for hiring and retention of fire employees may not exceed 37% of surcharge revenues deposited in the fund. Beginning January 1, 2029, the Director of the Division of Local Government Services (DCA) may set the maximum percentage for such uses.
Who is affected
- Primary fiscal recipient: City of Newark (the only New Jersey municipality meeting the city-of-first-class + international airport test).
- Payors: Hotel guests staying in taxable hotel rooms in the qualifying municipality (surcharge added to occupancy charge).
- State agencies: Division of Taxation (collection), State Treasurer/Division of Budget and Accounting (certification and disbursement), Division of Local Government Services (future cap-setting authority).
Fiscal impact (Office of Legislative Services estimate)
- Projected municipal revenue (Newark):
- CY 2025 (partial year): $960,000 – $1.1 million (assumes enactment by July 1 and effect Sept. 1)
- CY 2026 & 2027 (full years): $2.9 million – $3.4 million annually
- Estimate basis: ~4,400 hotel rooms in Newark and assumed occupancy rates of 60–70%. Surcharge is in addition to existing hotel taxes/fees.
Other notes
- The surcharge is additional to any other state or local taxes or fees on hotel occupancy.
- Committee amendments clarified appropriation language (subject to Division of Budget and Accounting approval) and added the hiring/retention percentage cap and transfer provisions.
- Companion legislation: S4475 (and several prior-session related bills).
Compiled from official sources — confirm details with the bill’s official record.
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