HomeNovember 16, 2016
New Jersey BPU Issues Direction To Retail Suppliers On Decrease In Sales And Use Tax
Copyright 2016 EnergyChoiceMatters.com.
The New Jersey BPU has issued a letter to retail suppliers regarding implementation of a decrease in the sales and use tax
The BPU said in the letter to suppliers that it has received a number of inquiries regarding the effect of the upcoming reduction in the New Jersey sales and use tax.
Pursuant to N.J.S.A. 54:32B-14, "all sellers of energy or utility service shall include the tax imposed by the 'Sales and Use Tax Act' within the purchase price of the tangible personal property or service."
Pursuant to P.L.2016, c.57, the sales and use tax to be charged to customers for utility service has been changed from 7% to 6.875% effective January 1, 2017.
"Therefore, you are required by operation of law to reduce your rates and charges to reflect the lower Sales and Use Tax," the BPU told suppliers
"You are required to change your billing system and/or EDI computer system to reflect the lower Sales and Use Tax rate in the fixed and variable rates and charges that you charge for gas and electric service effective with service rendered on and after January 1, 2017. Customer bills that include electric or gas service provided both before and after January 1st shall be prorated based on the number of billing days in the billing period before January 1st and the number of days on and after January 1st, unless a customer’s bill is derived from actual hourly or daily meter reads. This is the same proration method that was used when the Sales and Use Tax rate was increased effective July 15, 2006," the BPU directed
"Although it should be clear, the Board emphasizes that the Third Party Suppliers are responsible for ensuring that the amount of sales taxes that they collect from their customers is both the amount that is owed to the State pursuant to the Sales Tax Act and the amount that is actually paid to the State. In no event shall the Third Party Suppliers collect more from their customers for the Sales and Use Tax than is actually paid to the State," the BPU said
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