New Jersey’s sales tax on electric vehicles may have you thinking about other savings options

Vaseline1 week ago

0 3 minutes read

New Jersey’s sales tax on electric vehicles may have you thinking about other savings options

As electric vehicle (EV) sales increase in New Jersey, so do resident taxes. Earlier this year, Gov. Phil Murphy (DN.J.) signed a phaseout of the sales tax exemption for zero-emission electric vehicles.

New Jerseyans already pay some of the highest taxes in the country. According to the Fiscal Foundation, the Garden State has the eighth highest gas tax rate in the country. And, as Kiplinger previously reported, New Jersey is one of the most expensive states for homeowners to live in

So how will the phase-out affect you and what are some things you can do to put tax savings back in your wallet? Read on.

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New Jersey Electric Vehicle Incentive

You may have heard of the NJ Electric Vehicle Tax Exemption and the Federal Electric Vehicle Tax Credit. But it is important to note that they are two different things.

EV tax exemption in New Jersey was a complete sales tax exemption for zero emission vehicles (ZEVs). The law was put into effect 20 years ago.

Since then, New Jersey has provided millions of dollars in funding for similar electric vehicle programs, such as Load New Jersey rebate program and other charging station-oriented projects.

In this year budget summaryGovernor Murphy’s administration reported minimal spending of $215 million on these programs alone.

However, the federal EV tax credit:

Offers up to $7,500 in savings on qualifying new “clean vehicles” purchased
Unlike New Jersey’s ZEV sales tax exemption, it applies to qualified new or used electric vehicles, including plug-in hybrids

Rest assured, because these are separate incentives, you may be eligible for the IRS EV tax break, although eligibility is subject to income limits.

For more information see How the EV tax credit works.

Are electric vehicles exempt from sales tax in NJ?

A colleague of mine once joked, “New Jersey taxes anything that moves.” And depending on your car situation, there might be some truth to that.

As the number of electric vehicles on NJ roads went from 68,000 to 140,000 in two short yearsa new law was passed to tax the growing consumer base.

“Personal vehicles have long been a significant portion of the sales tax base,” the state of New Jersey said in its 2025 budget. short released earlier this year. The report adds that “with new registrations of electric vehicles approaching 10% of new vehicle registrations, it is responsible to recognize these vehicles as a regular part of the market”.

But what does this mean for you, the taxpayer?

For starters, New Jersey repeal warrants:

A provision to phase out electric vehicles in the state
A 3.3125% sales tax on ZEVs purchased on and after October 1, 2024
Sales of electric vehicles on or after July 1, 2025 will have a sales tax of 6.625%

However, you may not need to buy an electric vehicle in New Jersey to get tax breaks in the state. There are other state programs you may still be eligible for.

NJ Rebate Checks: Who Qualifies?

For example, you may be eligible for New Jersey’s ANCHOR Program. As reported by Kiplinger, this program offers property tax relief to both eligible renters and homeowners through checks in the mail or direct deposit into your bank account.

For more information, see NJ sends millions of ANCHOR paychecks.

Another program you may be eligible for is NJ’s “Senior Freeze” Property Tax Program. Open to residents over 65, this program effectively refunds you any tax paid over a certain amount.

To learn more, see NJ “Senior Freeze” Property Tax Checks Mailed.

But if you want to apply, act soon: both programs have an application deadline.

Finally, you can hit the ballot box in November. In addition to several key tax issues that will be debated during and after the election, the 2024 the election could have an impact on the EV tax credit.

So, be informed and, if appropriate, vote.

Vaseline1 week ago

0 3 minutes read

Vaseline

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