Bill
Bill > A4411
summary
Introduced
02/19/2026
02/19/2026
In Committee
02/19/2026
02/19/2026
Crossed Over
Passed
Dead
Introduced Session
2026-2027 Regular Session
Bill Summary
This bill increases the interest paid on overdue tax refunds subject to the State Uniform Tax Procedure Law and New Jersey Gross Income Tax Act. The purpose of this bill is to make the interest rate paid on tax refunds the same as the interest rate paid on tax deficiencies. While the interest rate imposed on back taxes accrues at three percentage points above the Federal Reserve's Bank Prime Loan Rate, the interest rate allowed on overdue refunds is paid without the benefit of a three-point adjustment. In recent practice, this has meant that tax deficiency interest has been imposed at 6.5 percent and tax refund interest has been allowed at just 3.5 percent. This bill imposes a measure of equity and symmetry to the State's tax system by making the interest rate owed by tax collectors on refunds identical to the interest rate owed by taxpayers on deficiencies. The bill also includes emergency regulatory authority for the Director of the Division of Taxation to implement the bill.
AI Summary
This bill aims to create fairness in New Jersey's tax system by ensuring that the interest rate paid on overdue tax refunds is the same as the interest rate charged on tax deficiencies. Currently, taxpayers who owe back taxes are charged interest at a rate of three percentage points above the Federal Reserve's Prime Loan Rate (the benchmark interest rate banks charge their most creditworthy customers), while those owed refunds receive a lower interest rate. For example, this has resulted in taxpayers paying 6.5% on deficiencies but only receiving 3.5% on refunds. This bill, effective immediately but applying to returns due on or after July 1, 2026, will adjust the interest rate on overdue refunds to match the deficiency rate, meaning taxpayers will receive three percentage points above the prime rate on their refunds. It also grants the Director of the Division of Taxation emergency regulatory authority to implement these changes quickly.
Committee Categories
Government Affairs
Sponsors (1)
Last Action
Introduced, Referred to Assembly State and Local Government Committee (on 02/19/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.njleg.state.nj.us/bill-search/2026/A4411 |
| BillText | https://pub.njleg.gov/Bills/2026/A4500/4411_I1.HTM |
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