April 18, 2008

Dear South Jersey Industries Shareholder:

Thank you for your continued investment in and support of South Jersey Industries. We value the trust you have placed in us and appreciate the fact that you have chosen South Jersey Industries as one of your investments.

We wanted to take the opportunity to talk about the current tax treatment associated with your dividend payments. In 2003, the federal tax rate on corporate dividends paid to individual taxpayers was reduced to a maximum rate of 15 percent. This reduction was originally effective through December 31, 2008. In 2006, President Bush signed legislation that extended this lower tax rate through December 31, 2010.

As you are no doubt aware, dividends are taxed twice, once at the corporate level and then again at the individual taxpayer level. Dividend-paying companies and their shareholders are, therefore, penalized in relation to many other types of investments. Reducing the tax on dividends was intended in part to address this inequitable double taxation.

If the reduced dividend tax rate expires in 2010 as currently scheduled, shareholders receiving dividend payments will likely be subject to higher tax rates, negatively impacting their investment returns. South Jersey Industries intends to work actively with the American Gas Association and other interested organizations to support necessary extension legislation. It is not known at this time what, if any, legislation will be advanced that would make permanent the 15 percent maximum tax rate on dividends. Because of this, we would encourage you to become engaged in the political process now, either by individually contacting your elected federal officials or by joining other shareholders or shareholder associations. Let your members of Congress know that the double taxation of dividends is unfair and encourage them to support the 15 percent tax rate. Enclosed in this packet we have provided a sample letter for you to send to your local Congressmen.

Please know that we will continue to advocate for the permanent reduction in the dividend tax rate and communicate with you on the progress that is being made in this important area and how you can help. Thank you again for your investment in South Jersey Industries.

Edward J. Graham
Chairman, President and CEO

David A. Kindlick
Chief Financial Officer

 

Sample Letters You May Utilize to Contact your Representatives       

  Sample shareholder letter (PDF)
  Sample shareholder letter (MS Word)
  Sample retiree letter (PDF)
  Sample retiree letter (MS Word)

Click here to find your US Representative
Click here to find your US Senator

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www.defendmydividend.org

Defend My Dividend is a national campaign sponsored by the American Gas Association and the Edison Electric Institute that gives utility investors a voice to make permanent the 15% dividend tax rate beyond 2010.