Sponsored by:
Senator LATHAM TIVER
District 8 (Atlantic and Burlington)
Senator JOSEPH PENNACCHIO
District 26 (Morris and Passaic)
Co-Sponsored by:
Senators Corrado and Amato
SYNOPSIS
Suspends sales and use tax and societal benefits charge on electric and gas public utility bills during one year period beginning January 1, 2026 and ending December 31, 2026.
CURRENT VERSION OF TEXT
As introduced.
An Act suspending certain charges on electric and gas public utility bills for one year.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For the purposes of this section, “electric or gas public utility” means a public utility, as that term is defined in R.S.48:2-13, that distributes electric or gas service to end users.
b. Notwithstanding any provision of law, rule, or regulation to the contrary, beginning on January 1, 2026 and through December 31, 2026, the sale or use of electric or gas utility service shall be exempt from the tax imposed pursuant to the “Sales and Use Tax Act,” P.L.1966, c.30 (C.54:32B-1 et seq.), and no seller of electric or gas utility service may include any tax imposed pursuant to the “Sales and Use Tax Act” within the purchase price of electric or gas utility service during that period.
c. Notwithstanding any provision of law, rule, or regulation to the contrary, beginning on January 1, 2026 and through December 31, 2026, an electric or gas public utility shall not be permitted to charge customers any amount for the societal benefits charge otherwise imposed pursuant to section 12 of P.L.1999, c.23 (C.48:3-60).
2. This act shall take effect immediately and shall expire on January 1, 2027.
STATEMENT
This bill temporarily suspends the imposition of the sales and use tax, as well as the societal benefits charge, on customer bills for electric and gas utility service. Under the bill, the temporary suspension applies beginning on January 1, 2026 and through December 31, 2026.
This bill is intended to provide electric and gas utility ratepayers with relief from recent increases in electric and gas utility charges. The average residential customer is estimated to save between $170 and $233 on their electric bill and between $178 and $308 on their gas bill as a result of the bill.
Starting in June 2025, electricity rates for residential customers increased from 17.2 percent to 20.2 percent, depending on the supplier. Consequently, the State anticipates $1.15 billion in Fiscal Year 2026 sales and use tax collections from energy and utility sales, an increase of $155.9 million, or 15.7 percent, from the amount the collected in Fiscal Year 2024.
Revenues generated by the societal benefits charge are primarily used to finance the State’s Clean Energy Program, the Charge Up New Jersey Electric Vehicle Incentive Program, and energy assistance programs through the Universal Services Funds. According to the FY 2026 Governor’s Budget, the State anticipates $637.5 million in social benefits charge revenues in FY 2026.