Gov. Sherrill backs sales tax hike during World Cup matches as ‘tourism fee’

Gov. Mikie Sherrill endorsed a controversial plan that would hike sales taxes around the Meadowlands and raise other fees across the state in a bid to build revenue off World Cup games New Jersey will host this summer.

The proposal would add a 3% sales tax surcharge on certain purchases within the Meadowlands district, an area encompassing roughly 30 square miles; tack an additional 2.5% surcharge on some hotel rooms; and levy a 50-cent surcharge on ride-hail trips originating in New Jersey and ending in the Meadowlands.

“We’re looking to make sure we can defray the cost of hosting the FIFA World Cup — which we’re very excited about — and ensure that New Jerseyans don’t pay for it. This is a tourism fee,” Sherrill said on WNYC’s “Ask the Governor” show Wednesday.

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The legislation would also levy a 10% tax on the money bet on World Cup events — less any payouts to gamblers — with any New Jersey casino, sports book, or race track. Takings from that tax would flow into the state’s casino revenue fund, while collections from the three consumer-facing proposals would be deposited into the state’s general fund.

Each of the heightened taxes would be in effect from June 12 to July 21, and New Jersey residents would be permitted a credit against their gross income tax liability for costs they faced due to the added taxes.

It’s not clear what sort of documentation state tax officials would require to grant New Jersey residents the tax credits, which are non-refundable.

New Jersey Republicans have criticized the proposal, saying it would foist new costs onto state residents in the Meadowlands — which covers Secaucus and parts of Kearny, Jersey City, and East Rutherford, among other municipalities — without leaving them a clear way to get their money back.

“I don’t understand how you’re practically going to implement this in the next 90 days, so we’re going to do this on a back end and expect everybody to save their receipts?” said Assemblyman Al Barlas (R-Essex). “I don’t know anybody who saves their receipts, and I don’t know who’s going to know what receipts to save.”

Sherrill said the proposals were meant to cover states costs associated with hosting the eight World Cup matches this June and July.

She likened it to Florida policy that offers state residents discounts when they present a Florida driver’s license.

“This is how you run, kind of, a tourism economy, and that’s what we’re working on to defray the costs and make some money for New Jerseyans,” she said.

Unlike in Florida, the tax credits to counter the costs of the World Cup tax hikes would not be applied at the point of sale.

“The sales tax increase is supposed to apply to almost everything that the sales tax applies to, so if I live in and around the Meadowlands and I go to Home Depot in Secaucus or I go to Costco in Carlstadt, I’ve got to pay an extra 3% sales tax and then what? Hold my receipt for eight months?” Barlas said.