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Proposal for a toll tax reduction for NJ E-ZPass has long been on hold
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Proposal for a toll tax reduction for NJ E-ZPass has long been on hold

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In 2012, two bills were introduced in the New Jersey Legislature to help commuters by allowing them to deduct a portion of their E-ZPass toll costs from their state income taxes, but neither proposal advanced through the process and stalled in Trenton.

In the next five legislative sessions, the bills were reintroduced five more times, and each attempt was unsuccessful.

This year, the same bills were introduced for the seventh time in January. The question of whether these bills will move forward and become laws remains open.

The first bill was introduced in the Senate and would allow motorists to deduct $1,000 from their state income taxes for E-ZPass tolls paid in the state, including tolls on bridges and tunnels between New Jersey and other states. This bill is sponsored by Senators James Holzapfel (R-Ocean) and Patrick Diegnan (D-Middlesex).

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The other bill originates in the Assembly and would allow motorists to deduct 50% of tolls paid through E-ZPass from their income taxes. Rep. Robert Karabinchak (D-Middlesex) is the lead sponsor of this bill.

In addition to those two old bills, there is also a newer one — which will be introduced for the first time in 2023 and again in 2024 — that would give E-ZPass account holders who record 35 or more toll transactions in a calendar month a credit equal to 50% of the amount paid in that month. Sponsored by Reps. Gregory McGuckin and Paul Kanitra, both R-Ocean, that bill would provide $250 million to the New Jersey Turnpike Authority and $250 million to the South Jersey Transportation Authority to fund the 50% discount credit. If passed, the bill would only be in effect for one year, the bill states.

When all three of these bills were introduced last January, they were each referred to the appropriate legislative committees for hearings. However, those hearings never took place and have not been scheduled for a later date.

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Currently, Massachusetts is the only state that allows toll expenses to be deducted from state income taxes. At the federal level, the Internal Revenue Service does not accept deductions for toll expenses unless the expenses are related to business travel.

MPs Karabinchak, Diegnan and Holzapfel could not be reached for comment.

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