NJ lawmakers aim to boost local sales tax by 45 percent for World Cup

It's been four years since New Jersey found out it would be hosting the 2026 World Cup — but with only two months until the first game, lawmakers in Trenton are trying to push a 45% spike in local sales taxes.

State Senate Budget Chair Paul Sarlo wants to temporarily increase sales taxes from 6.6% to 9.6% in the Meadowlands District — the 30-square-mile area centered around the MetLife Stadium complex that includes mostly commercial and industrial parts of 14 towns in Bergen and Hudson counties.

Sarlo’s measure would also create a new 50-cent surcharge on every ride-share trip in the district. It would add a new 2.5% surcharge on hotel bookings around the state, with an exception for the Jersey Shore. Casinos and sports books operating out of New Jersey would also be charged 10% for every World Cup bet they receive.

The tax increases and new fees would be effective from June 12 through July 21, ending a couple of days after the World Cup final. A new tax credit would be created for Garden State residents who have to pay the temporary taxes.

"The state of New Jersey is incurring significant costs for public safety and security for hosting the World Cup games in the Meadowlands,” Chris Eilert, Sarlo’s chief of staff, said in a statement. “If the state can recoup those costs by assessing fees on the entities sponsoring and producing the games, and on the people attending the games, then that should be something the administration pursues.”

Gov. Mikie Sherrill’s office did not directly address the bill when asked by Gothamist, saying only that the governor would “work with the Legislature to ensure the FIFA World Cup brings real economic benefits for the state of New Jersey.”

Republican lawmakers are calling on Sherrill to oppose the bill, which they argue would break her campaign promises not to raise taxes on New Jerseyans.

“In October, the governor said she would not raise the sales tax. That’s exactly what this does,” Assemblymember Christopher DePhillips, a Bergen County Republican, said in a statement. “If we truly want to make New Jersey a destination, we should be lowering taxes, not raising them during one of the biggest international events we’ve ever hosted.”

DePhillips said the state should focus on maximizing economic activity around the World Cup to make its money back, rather than raising taxes.

East Rutherford Mayor Jeff Lahullier said his community is facing significant local costs related to the World Cup, including police overtime pay that he already had to ask Sarlo for state help covering. Lahullier said he supports the bill’s goal of raising money to pay for the World Cup, but he’s unclear how much of the revenue generated by the proposed taxes and fees would ultimately benefit his borough.

“The biggest revenue for me in East Rutherford is the hotel tax,” Lahullier said. “Three percent of [the existing tax] goes to East Rutherford. The rest of that money goes to the state and to the New Jersey Sports and Exposition Authority. What I don't know from the bill is, is my 3% going to get raised? Or is the state and just the New Jersey Sports and Exposition Authority’s amount going to be raised. That's what I don't know.”

Daniel Klem, the president of the New Jersey Restaurant and Hospitality Association, said his group was monitoring the bill. Klem said potentially affected restaurants would have to deal with tacking the adding taxes on top of credit card interchange fees and other expenses.

“The small business winds up paying more on things like gratuity and sales tax because that increase also increases the amount they have to pay in interchange fees,” Klem said.

The New Jersey Business and Industry Association has also yet to take a position on the bill. Michelle Siekerka, the industry group’s president, said the group understands the need for the state to offset costs.

“We would also want to ensure that any temporary sales tax stays temporary, that the funds go to their intended target and that our residents are as insulated as possible from it,” Siekerka said. “But we look forward to discussing it with the bill sponsors and the administration.”

New Jersey is scheduled to host eight World Cup games at MetLife stadium, starting with Brazil versus Morocco on June 13 and ending with the World Cup Final on July 19.

It’s unclear what the total cost will be for New Jersey to host the World Cup, though documents analyzed by NorthJersey.com indicate the state has already committed more than $300 million to the event. FIFA has said the tournament is expected to bring $3 billion in economic impact to New Jersey and New York; the New York New Jersey host committee declined to comment on the new bill.

That economic impact is projected to include $432 million in state and local tax revenue across New Jersey and New York — even without the proposed tax hike. It’s unclear how that projection splits between the two states.

Brian Tyrrell, a tourism professor at Stockton University, said he wasn’t aware of other instances in which a state hiked local taxes to take advantage of a major event.

“Normally we look at the influx of additional visitors and income as a net bonus,” Tyrrell said. “You're going to be getting more tax revenues because there's going to be more spending.”

Philadelphia is also hosting World Cup games, and that city’s host committee expects a $770 million economic impact to the region. New Jersey stands to benefit at least partially from that as well, Tyrell said. The bill would affect hotel stays and sports betting in South Jersey, but that region would not see sales tax or ride-share fee increases.