STATE OF NEW JERSEY
218th LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2018 SESSION
Sponsored by:
Assemblyman ERIK PETERSON
District 23 (Hunterdon, Somerset and Warren)
Assemblyman CRAIG J. COUGHLIN
District 19 (Middlesex)
Assemblywoman MARLENE CARIDE
District 36 (Bergen and Passaic)
Assemblyman GARY S. SCHAER
District 36 (Bergen and Passaic)
SYNOPSIS
Excludes paraffin used in manufacture of candles from petroleum products gross receipts tax.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
An Act excluding paraffin used in the manufacture of candles from the petroleum products gross receipts tax, amending P.L.1990, c.42.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 2 of P.L.1990, c.42 (C.54:15B-2) is amended to read as follows:
2. For the purposes of this act:
"Company" includes a corporation, partnership, limited partnership, association, individual, or any fiduciary thereof.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"First sale of petroleum products within this State" means the initial sale of a petroleum product delivered to a location in this State. A "first sale of petroleum products within this State" does not include a book or exchange transfer of petroleum products if such products are intended to be sold in the ordinary course of business.
"Gross receipts" means all consideration derived from the first sale of petroleum products within this State except sales of:
a. asphalt;
b. petroleum products sold pursuant to a written contract extending one year or longer to nonprofit entities qualifying under subsection (b) of section 9 of P.L.1966, c.30 (C.54:32B-9) as evidenced by an invoice in form prescribed by subsection b. of section 3 of P.L.1991, c.19 (C.54:15B-10);
c. petroleum products sold to governmental entities qualifying under subsection (a) of section 9 of P.L.1966, c.30 (C.54:32B-9) as evidenced by an invoice in form prescribed by subsection b. of section 3 of P.L.1991, c.19 (C.54:15B-10); [and]
d. polymer grade propylene used in the manufacture of polypropylene; and
e. paraffin used in the manufacture of candles.
"Petroleum products" means refined products made from crude petroleum and its fractionation products, through straight distillation of crude oil or through redistillation of unfinished derivatives, but shall not mean the products commonly known as number 2 heating oil, number 4 heating oil, number 6 heating oil, kerosene and propane gas to be used exclusively for residential use.
"Quarterly period" means a period of three calendar months commencing on the first day of January, April, July or October and ending on the last day of March, June, September or December, respectively.
"Retail gasoline price survey" means a Statewide representative random sample of retail gasoline prices conducted by the Board of Public Utilities, Office of the Economist, or its successor, that shall be completed for the month of November and May of each year.
"Retail price per gallon" means the price posted by gasoline retailers in the State for unleaded regular gasoline.
"Unleaded regular gasoline" means gasoline of the octane rating equal to the lowest octane rated gasoline offered for sale at a majority of the gasoline retailers in the State.
(cf: P.L.1991, c.181, s.1)
2. This act shall take effect immediately and apply to first sales of petroleum products made on or after the first day of the quarterly period next beginning after the date of enactment.
STATEMENT
This bill exempts the paraffin used to manufacture candles from New Jersey’s petroleum products gross receipts tax, to eliminate a competitive disadvantage to New Jersey candle manufacturers.
At the same time that the home décor market for candles has been expanding, United States manufacturers have been under assault from foreign production: a federal antidumping duty has been in effect since 1986 on candles manufactured in China, to combat aggressive “dumping” in the U.S. market by Chinese manufacturers.
The petroleum products gross receipts tax puts New Jersey candle manufacturers at a particular disadvantage in this market. Candles are typically composed of paraffin wax, a petroleum product subject to the New Jersey tax, so candles made in New Jersey are made of paraffin that has been taxed, whether the candles are sold in New Jersey or elsewhere. Candles themselves are classified by regulation as a finished manufactured product, and so a candle manufactured outside of the New Jersey is not subject to the tax, even if sold in New Jersey. New Jersey manufacturers must compete while carrying a tax burden that their competition does not bear.
There are still several hundred candle manufacturing jobs in New Jersey; this bill will end the tax disadvantage to New Jersey manufacturing before those last few are driven out of the State.