A6037

An Act imposing taxes on certain non-essential flights in the State, amending P.L.1980, c.105, and supplementing Title 54 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. (New section) As used in sections 1 through 3 and section 5 of P.L. , c. (C. through C. and C. ) (pending before the Legislature as this bill):

“Airport” means a designated area of land, water, or both, which is licensed by the Department of Transportation for the landing and takeoff of airplanes, helicopters, seaplanes, and other aircraft, and which may provide facilities for shelter, security, and service of aircraft.

“Emergency medical transportation” shall have the same meaning as provided in section 1 of P.L.1986, c.106 (C.26:2K-35).

“Helicopter” means a rotary wing aircraft that depends principally upon the lift generated by engine-driven rotors rotating on a substantially vertical axis for its primary means of propulsion.

“Heliport” means a dedicated area of defined dimensions, either at ground level or elevated on a structure, designated for the landing or takeoff of helicopters and used solely for that purpose.

“Helistop” means an area of defined dimensions, either at ground level or elevated on a structure, designated for the landing or take off of helicopters, but not limited in use to that sole purpose.

“News agency” means a commercial organization that collects and supplies news to subscribing newspapers, magazines, periodicals, and news broadcasters.

“Non-essential flight” means any flight on a non-essential helicopter or seaplane, other than flights:

(1) providing emergency medical transportation;

(2) providing heavy-lift operations in support of construction or infrastructure maintenance;

(3) operating for research, experimental, or educational purposes; or

(4) operated or chartered by an organization that is exempt from federal taxation pursuant to paragraph (3) of subsection (c) of section 501 of the federal Internal Revenue Code of 1986, 26 U.S.C. s.501(c)(3), or by a wholly-owned subsidiary of an exempt organization, in furtherance of the exempt organization’s mission.

“Non-essential helicopter or seaplane” means any helicopter or seaplane, other than those owned or operated by, or on behalf of, a federal or military authority, the State or a political subdivision thereof, a news agency, or a licensed hospital or healthcare provider.

“Seaplane” means any aircraft defined or classified as such by federal law, rule, or regulation.

2. (New section) a. There is imposed on the patron of a non-essential flight a tax in an amount equal to $100 per seat or $400 per flight, whichever is greater, on a non-essential flight departing from, or arriving at, any aviation facility licensed by the State, including, but not limited to, airports, heliports, and helistops.

b. The tax imposed under this section shall be collected by the owner or operator of a non-essential helicopter or seaplane that operates a non-essential flight, and shall be separately stated on the retail sales receipt provided to the patron of the non-essential flight pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).

c. Each owner or operator of a non-essential helicopter or seaplane that operates a non-essential flight shall be personally liable for the tax imposed, collected, or required to be collected under this section. Any such person shall have the same rights with respect to collecting the tax from a patron as if the tax were a part of the sales price and payable at the same time.

d. In carrying out the provisions of this section, the Director of the Division of Taxation in the Department of the Treasury shall have all the powers and authority granted in P.L.1966, c.30 (C.54:32B-1 et seq.). The tax shall be filed and paid by the owner or operator of the non-essential helicopter or seaplane that operates a non-essential flight on a quarterly basis in a manner prescribed by the director. The director shall promulgate such rules and regulations as the director determines are necessary to effectuate the provisions of this section.

e. The tax imposed by this section shall be governed by the provisions of the “State Uniform Tax Procedure Law,” R.S.54:48-1 et seq.

3. (New section) Within 48 hours following the completion of a non-essential flight, the owner or operator of the non-essential helicopter or seaplane shall provide the patron of the non-essential flight with an electronic receipt, which shall include:

a. the points of origin and destination of the non-essential flight;

b. the total time and distance of the non-essential flight;

c. an itemization of the total number of seats purchased for the non-essential flight; and

d. the amount of the tax imposed pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill).

4. Section 23 of P.L.1980, c.105 (C.54:32B-8.11) is amended to read as follows:

23. a. As used in this section:

“Emergency medical transportation” shall have the same meaning as provided in section 1 of P.L.1986, c.106 (C.26:2K-35).

“Helicopter” means a rotary wing aircraft that depends principally upon the lift generated by engine-driven rotors rotating on a substantially vertical axis for its primary means of propulsion.

“Heliport” means a dedicated area of defined dimensions, either at ground level or elevated on a structure, designated for the landing or takeoff of helicopters and used solely for that purpose.

“News agency” means a commercial organization that collects and supplies news to subscribing newspapers, magazines, periodicals, and news broadcasters.

“Non-essential flight” means any flight on a non-essential helicopter or seaplane, other than flights:

(1) providing emergency medical transportation;

(2) providing heavy-lift operations in support of construction or infrastructure maintenance;

(3) operating for research, experimental, or educational purposes; or

“Seaplane” means any aircraft defined or classified as such by federal law, rule, or regulation.

b. Receipts from charges for the transportation of persons or property are exempt from the tax imposed under the “Sales and Use Tax Act,” except for delivery charges; [and] the transportation of energy; and charges for non-essential flights departing from, or arriving at, any aviation facility licensed by the State, including, but not limited to, airports, heliports, and helistops.

(cf: P.L.2017, c.27, s.3)

5. (New section) a. There is established in the Department of the Treasury a special nonlapsing fund to be known as the “Non-Essential Flight Tax Fund.”

b. The State Treasurer shall annually deposit into the “Non-Essential Flight Tax Fund:”

(1) all revenue derived from the tax imposed on the patrons of non-essential flights pursuant to section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

(2) an amount equivalent to all revenue derived from the tax imposed under the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.) on charges for non-essential flights, as provided in section 23 of P.L.1980, c.105 (C.54:32B-8.11).

c. Notwithstanding any provision of law to the contrary, the Legislature shall annually appropriate all funds deposited into the “Non-Essential Flight Tax Fund” to the New Jersey Transit Corporation for the support of its annual operating expenses.

6. (New section) Notwithstanding the provisions of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt, immediately upon filing with the Office of Administrative Law, such rules and regulations as the director determines to be necessary to effectuate the purposes of P.L. , c. (C. ) (pending before the Legislature as this bill), which rules and regulations shall be effective for a period not to exceed 360 days following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.).

7. This act shall take effect immediately but shall remain inoperative until the adoption of the rules and regulations pursuant to section 6 of this act.

STATEMENT

This bill imposes a tax on the patrons of non-essential flights departing from, or arriving at, any aviation facility licensed by the State. The bill also imposes the sales and use tax on charges for non-essential flights departing from, or arriving at, any aviation facility licensed by the State.

Specifically, the bill imposes a tax on the patron of a non-essential flight in an amount equal to $100 per seat or $400 per flight, whichever is greater. This tax would apply to any non-essential flight departing from, or arriving at, any aviation facility licensed by the State, including, but not limited to, airports, heliports, and helistops.

Under the bill, a non-essential flight includes any flight on a non-essential helicopter or seaplane, except for flights: (1) providing emergency medical transportation; (2) providing heavy-lift operations in support of construction or infrastructure maintenance; (3) operating for research, experimental, or education purposes; or (4) operated or chartered by an organization that is exempt from federal taxation pursuant to section 501(c)(3) of the federal Internal Revenue Code, or a wholly-owned subsidiary thereof, in furtherance of the exempt organization’s mission. The bill defines a “non-essential helicopter or seaplane” to include any helicopter or seaplane, except for those owned or operated by, or on behalf of, a federal or military authority, the State or a political subdivision thereof, a news agency, or a licensed hospital or healthcare provider.

Under the bill, the owner or operator of a non-essential helicopter or seaplane operating a non-essential flight (owner or operator) is required to collect the tax imposed on the patron of the non-essential flight and separately state the tax on the retail sales receipt provided to the patron. The owner or operator is to have the same rights with respect to collecting the tax from a patron as if the tax were a part of the sales price and payable at the same time. The bill also requires the owner or operator to provide an electronic receipt to the patron. The bill requires the owner or operator to file the tax with, and pay the tax to, the State on a quarterly basis in a manner prescribed by the Director of the Division of Taxation in the Department of the Treasury.

Additionally, the bill imposes the sales and use tax on charges for non-essential flights departing from, or arriving at, any aviation facility licensed by the State. Under current law, charges for transportation services, including non-essential flights, are generally exempt from the sales and use tax. The bill eliminates this sales and use tax exemption as it relates to certain non-essential flights departing from, or arriving in, the State.

The bill also establishes the “Non-Essential Flight Tax Fund” (fund) as a special nonlapsing fund in the Department of the Treasury. Under the bill, the State Treasurer is required to annually deposit into the fund: (1) all revenue derived from the tax imposed on the patrons of non-essential flights; and (2) an amount equivalent to all revenue derived from the imposition of the sales and use tax on charges for non-essential flights. The bill requires the Legislature to annually appropriate all monies deposited into the fund to the New Jersey Transit Corporation for the support of its annual operating expenses.