LEGISLATIVE FISCAL ESTIMATE
[First Reprint]
SENATE, No. 429
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: MAY 23, 2022
SUMMARY
Synopsis: Provides corporation business tax and gross income tax credits for
purchase and installation of electric vehicle charging stations and for
commercial zero emission vehicle fleet conversions.
Type of Impact: Annual State revenue loss over lifetime of tax credit program.
Agencies Affected: Department of Environmental Protection;
Department of the Treasury
Office of Legislative Services Estimate
Fiscal Impact FY 2023 and Each FY Thereafter
Annual State Revenue Loss Indeterminate
 The Office of Legislative Services (OLS) concludes that the bill will result in indeterminate
annual State revenue losses over the lifetime of the tax credit program.
 The OLS estimates that the cost of the tax credits for the electric vehicle charging stations
component of the program could range from $500,000 to $1 million annually.
 The OLS cannot quantify the annual revenue loss of the tax credit for qualified commercial
zero emission vehicles. However, the OLS notes that the tax credit awards for eligible
commercial vehicle purchases are capped at $25,000, $50,000, and $100,000, depending on
vehicle weigh. If 1,000 taxpayers claim the maximum credit amount of $100,000 per year, the
annual cost of this component of the tax credit program would be $100 million.
BILL DESCRIPTION
This bill provides corporation business tax and gross income tax credits for the purchase and
installation of electric vehicle charging stations and for the purchase of commercial zero emission
vehicles.
The first component of the credit is based on the amount a taxpayer pays to purchase and install
an electric vehicle charging station at a business, trade, or occupation, at the taxpayer’s primary
residence, or at a multi-family or mixed-use property for use by tenants or guests. The credit is
Office of Legislative Services Legislative Budget and Finance Office
State House Annex Phone (609) 847-3105
P.O. Box 068 Fax (609) 777-2442
Trenton, New Jersey 08625 www.njleg.state.nj.us
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capped at 50 percent of the amount paid towards the purchase and installation of the electric vehicle
charging station during a privilege period or taxable year, or $1,000 per station, whichever amount
is less.
The second component of the credit is based on the difference in the amount paid by a taxpayer
for a qualified commercial zero emission vehicle compared to what the taxpayer would have paid
for a comparable conventionally fueled vehicle. This credit is capped at 50 percent of the
difference between the amount paid towards the purchase of a qualified commercial zero emission
vehicle and the amount that would have been paid for a comparable conventionally fueled vehicle.
The credit cannot exceed $25,000 if the qualified commercial zero emission vehicle weighs less
than 14,000 pounds, $50,000 if the vehicle weighs 14,001 to 26,500 pounds, and $100,000 if the
vehicle weighs more than 26,500 pounds.
These tax credits are non-refundable, but may be carried forward for seven years after the
privilege period or taxable year during which the credit are initially earned. The credit would be
available for a five-year period commencing on January 1 next following the effective date
of the bill.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS concludes that the bill will result in indeterminate annual State revenue losses over
the lifetime of the tax credit program.
Tax Credits for Electric Vehicle Charging Station Installations
The bill’s tax credits for the purchase and installation of electric vehicle charging stations are
limited to up to $1,000 per privilege period per taxpayer. Based on data published by the United
States Department of Energy, roughly 20,000 public and private electric vehicle charging stations
were installed across the United States in 2019.1 The number of electric vehicle charging stations
attributable to New Jersey would be about 540 based on population. The OLS notes that electric
vehicle charging station installations are likely to continue to increase over time, as the adoption
of electric vehicles becomes more prevalent. If the number of installations is roughly 500 – 1,000
annually, the tax credits could reduce State revenues by as much as $500,000 to $1 million for
each year of the tax credit program.
Tax Credits for Qualified Commercial Zero Emission Vehicles
The bill’s tax credits for the purchase of qualified zero emission vehicles are dependent upon
the weight of the vehicle being purchased. The OLS does not have data on the number of qualified
zero emission vehicles being purchased annually, but can provide context as to the magnitude of
individual tax credits that may be awarded under this program. For this example, the OLS assumes
1
https://www.energy.gov/eere/vehicles/articles/fotw-1174-february-22-2021-over-20000-new-electric-vehicle-
charging-outlets
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an electric semi-truck costing $180,000 and weighing in excess of 26,500 pounds. A comparative
diesel semi-truck would be roughly $120,000. The difference in cost would be $60,000, which
yields a potential tax credit of $30,000 (50 percent of the difference).
The commercial electric vehicle industry is not as robust as the passenger electric vehicle
industry at this time, so the OLS does not expect this tax credit program to yield significant tax
credit awards during the initial years of the program. However, as the production and adoption of
commercial electric vehicles ramps up, the tax credit program could increase substantially in cost.
Based on the example provided previously, if 1,000 taxpayers each claimed $30,000 in tax credits
from this program in a year, the cost of the program would be $30 million for that year. If those
1,000 taxpayers claimed the maximum tax credit award of $100,000 in a given year, the cost of
the program would be $100 million for that year.
Section: Revenue, Finance, and Appropriations
Analyst: Jordan M. DiGiovanni
Revenue Analyst
Approved: Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).