For those in Pennsylvania and New York, who used to "fill up" in New Jersey to take advantage of lower gasoline prices, some of that advantage will be lost when the tax on gasoline will go up $.23 per gallon November 1, 2016. And the people of New Jersey are not happy, especially those in South Jersey.
Unlike many areas in North Jersey and in nearby states, southern New Jersey has little public transit, so most of the residents rely on their automobiles to take them shopping, as well as to and from work.
The tax legislation, signed by Gov. Chris Christie in October, will benefit residents 62 and older with a state income tax exclusion on their retirement income that will increase each year until 2020, according to NJ.com. The limit for a married couple filing jointly will increase from $20,000 to $40,000 in 2017, to $60,000 in 2018, to $80,000 2019 and $100,000 in 2020. For a married couple filing separately, it will increase gradually from $10,000 to $50,000, and, for an individual filing as a single taxpayer, from $15,000 to $75,000. The total tax break is expected to be about $1.4 billion.
According to officials, it is hoped that the favorable tax break for retirees will encourage them to remain in New Jersey instead of relocating to states that have a more favorable tax system. It's estimated that the state lost almost $21 billion in adjusted gross income from residents who moved to other states over the past 11 years due to high taxes.
Also included in the legislation is a decrease in the sales tax from the current 7% to 6.875% in 2017 and 6.625% in July of 2018. Estates will be taxed on a value beginning at $2 million (currently $675,000) in 2017 and the estate tax will be eliminated entirely in 2018. And veterans will be eligible for a $3,000 personal exemption from state income taxes under the new measure beginning January 1, 2017.
The higher gas tax is expected to raise at least $1 billion annually, which will be used for bridge, road and other transit projects that have been on hold. That's the good news. The bad news is that New Jersey's gas tax, which was formerly the second lowest in the nation (only Alaska's was lower), is now the seventh highest at 37.5 cents per gallon. The national average is 21 cents per gallon.