New Jersey Gas Tax Just Increased: Here's What You Need to Know

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last updated 1 January 2025

New Jersey motorists will receive a less-than-exciting New Year’s present: a gas tax increase. As of January 1, 2025, the state’s gas taxes increased by 2.6 cents a gallon.

Due to a bill signed earlier in the year by Gov. Phil Murphy, the fuel tax limit (the amount that can be legally charged on gas) has shot up from $1.948 billion to $2.032 billion. The limit will increase gradually until reaching $2.366 billion in 2029.

“We are pleased that this dedicated funding stream continues to provide billions of dollars across the State to support our critical transportation infrastructure needs,” said State Treasurer Elizabeth Maher Muoio, in a press release.

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But how will the gas tax impact you? And what can motorists commuting between New Jersey and New York expect? Read on.

New Jersey gas tax 2025

New Jersey has two taxes that are colloquially referred to as “the gas tax.” They are:

The Petroleum Products Gross Receipt Tax (PPGRT)
The Motor Fuels Tax

The new law increases the PPGRT rate by 2.6 cents. That means, as of January 1, 2025, the PPGRT rates rise from:

31.8 cents to 34.4 cents per gallon of gas
35.8 cents to 38.4 cents per gallon of diesel fuel

The above taxes are added to the Motor Fuels Tax (a fixed rate) to calculate the total tax New Jersey motorists pay. Those totals for 2025 are:

44.9 cents per gallon of gasoline
51.9 cents per gallon of diesel

New Jersey gas tax rate increase in January

New Jersey’s gas taxes finance the state’s transportation trust fund (TTF), which supports roads, bridges, and other projects. The program will provide nearly $11 billion in infrastructure improvements over the next five years.

The PPRT rate will be adjusted annually to support the TTF’s revenue goals. For instance:

If fuel demand falls, the tax rate will go up
If fuel consumption rises, the tax rate may decline

New Jersey and New York: Trouble at the border?

While New Jersey motorists pay more for gas, some will likely pay more for their road use, too.

Beginning January 5th, New York City will implement a congestion toll for commuters. Manhattan motorists will be charged a $9 fee to enter the city during peak driving times.

And the toll will increase gradually — sound familiar?

As reported by Kiplinger, Gov. Murphy filed a lawsuit against the congestion toll, stating, “It could not be a worse time.” And that it puts “unfair burdens upon hardworking New Jersey commuters.” Murphy urged New York’s Gov. Kathy Hochul to reconsider the plan.

But whether the toll is adjusted or not, New Jersey gas taxes will keep the Garden State among the top 10 states with the highest gas taxes. Residents wanting an electric vehicle in the state will no longer get a sales tax break on New Jersey EVs.

Overall, New Jersey motorists will bite the bullet on these new tax laws. With 2025 just beginning, costly tidings of taxes are rising.

Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.