N.J. Legislation Proposes Tax Break for E-ZPass Toll Payers | Tax Relief for Commuters

Acting on the proposal set forth by lawmakers, New Jersey drivers who utilize E-ZPass for toll payments could potentially enjoy a tax break on their state income tax, according to proposed legislation.
Tax Break for Toll Payers
Several bills introduced in the state legislature aim to provide relief to drivers who have faced consecutive toll increases on state toll roads by allowing them to deduct toll expenses from their state income tax returns. Although the deducted amounts differ among the proposed bills, the concept of toll write-offs has had a challenging journey in the legislative process, both in New Jersey and other states.
Repeal of Tax Deductions
Notably, New Jersey recently repealed its state tax deductions for E-ZPass toll payers, making it one of only two states in the nation to do so in 2021.
Variety in Proposals
The proposed bills encompass various provisions, all of which highlight that E-ZPass expenses categorized as business costs or reimbursed by employers cannot be eligible for deductions under the legislation.
Benefits of the Proposed Bill
If passed by the legislature and signed into law, New Jersey would pioneer a tax benefit for commuters by allowing them to deduct their toll expenses, a practice that few states uphold and the IRS typically does not allow.
Bipartisan Initiative
A bipartisan bill spearheaded by state Senators Patrick Diegnan and James Holzapfel seeks to grant drivers the opportunity to deduct up to $1,000 from their state income tax for travel on any toll road in the state or bi-state bridges and tunnels connected to New Jersey.
Support for Commuters
Diegnan emphasized the bill's intent to assist individuals who bear the burden of commuting costs, especially in light of toll increases and escalating gas taxes.
Legislative Developments
Governor Phil Murphy recently approved legislation renewing the state Transportation Trust Fund, allocating $15.6 billion over five years to support transportation projects through a gradual increase in gas taxes.
Addressing Toll Costs
The proposed bills aim to alleviate toll costs for commuters, particularly those traveling to New York City, where toll expenses can be substantial.
Advocacy for Fairness
Assemblyman Gregory McGluckin highlighted the need to ensure commuters are not disproportionately burdened by toll expenses, proposing measures to provide relief and fairness in toll payment.
Seeking Relief
Assemblyman Robert J. Karabinchak and other legislators introduced a bill that would allow drivers to write off 50% of their E-ZPass tolls on specific toll roads, with a provision for a one-year toll relief program.
Efforts for Transparency
Organizations like the National Motorists Association advocate for greater transparency in toll rate setting, suggesting legislative constraints as a solution to address toll disparities.
Challenges Ahead
Despite the proposed bills' objectives, past attempts to advance similar legislation have faced challenges in progressing beyond legislative committees.
Outlook on Passage
Lawmakers remain hopeful for the approval of the proposed bills, citing potential support from key government figures.
National Landscape
Similar initiatives in states like Maine, New York, and Indiana mirror New Jersey's efforts, albeit with varying degrees of success.
Unique Tax Deductions
West Virginia and Massachusetts stand out as states that have offered deductions for E-ZPass tolls, with Massachusetts maintaining this practice since 2006.
Conclusion
As New Jersey navigates the debate on toll deductions, the legislative landscape reflects a concerted effort to address commuter concerns and provide tax relief where possible.