New Jersey Lawmakers Back Jet-Fuel Tax Hike to Pay for Train Service

(Bloomberg) -- New Jersey lawmakers gave preliminary approval to a jet-fuel tax that would force United Continental Holdings Inc. and other airlines to pay for expanded passenger rail at Newark Liberty International Airport.

Airlines are exempt from the state's gross-receipts tax on petroleum products, with the exception of the fuel used during taxiing and take-off. A bill approved by the Senate budget committee would change that by taxing all the fuel used at Newark. The proceeds would pay for a train service operated by the Port Authority of New York and New Jersey.

An earlier version of the bill affected only Chicago-based United, with 14.6 million passengers boarding at Newark annually, according to its website. The amended version dropped an 8 million passenger minimum, exposing the rest of the carriers to the potential higher costs.

The bill must be passed by the legislature and signed by the governor to become law. New Jersey's Democratic-controlled legislature in June approved a $37.4 billion budget that raised or placed new taxes on corporations, those with incomes exceeding $5 million and companies that provide car-sharing services and liquid nicotine. Governor Phil Murphy, a Democrat who took office in January, signed the budget.

To contact the reporter on this story: Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editors responsible for this story: Flynn McRoberts at fmcroberts1@bloomberg.net, William Selway

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