New Jersey has passed a law that will cut the amount of taxes paid on new boats in half.
The state’s marine industry celebrated last Wednesday after Gov. Chris Christie signed a bill that they say aligns the state with neighboring states’ tax laws and gives them hope after the industry was battered by the recession and devastated by Hurricane Sandy.
The New Jersey sales tax of 7 percent will be reduced after February 1 by 50 percent for every boat sold or berthed in the state. This effectively makes the sales and use tax 3.5 percent across the board, regardless of the price of the boat, with a cap of $20,000. The bill also includes a 30-day grace period for use tax imposition.
The bill was sponsored by Democratic Sens. Jeff Van Drew and James Whelan, and Democratic Reps. Robert Andrzejczak and Gordon Johnson.
Rick Weber, of South Jersey Marina, said he was grateful to his local legislative team for supporting the boating industry in the state.
“It has been a long haul from the recession to Sandy, but this gives us a lot of hope,” Weber told Trade Only Today. “All we have ever asked for was a level playing field.”
Advocates have said this move helps New Jersey compete with states such as Florida, New York and Maryland, which also have modified tax laws and have said the resulting sales boosted local economies.
“This is a monumental moment for boat buyers and the industry,” Lou Piergross, of South Jersey Yacht Sales in Cape May and Point Pleasant, said in a statement.“This will help revive the yacht sales business in our state by making us competitive again. For several years, New Jersey boat dealers have worked with a disadvantage because of these tax caps in other states. We will now be on a level playing field. Not only will the industry grow, but New Jersey will reap the benefit of returning tax revenue.”
Melissa Danko, director of the Marine Trades Association of New Jersey, called it “a tremendous victory for the industry and boating in New Jersey.”
“Our industry has been struggling for many years following the economic downturn, the devastation of Hurricane Sandy and competition from other states with many lost sales,” MTA/NJ president Don Ditzel, of Comstock Yacht Sales & Marina, said in a statement. “This new law will help us rebuild our industry by increasing boat sales, increasing service work and much more, which will ultimately create jobs and grow the industry.”
“The production of boats and other vessels has declined in recent years due to a range of factors, including the economic recession and the impact of Superstorm Sandy,” Van Drew said in a statement.
“This new law will help to revive the industry through changes to our tax structure. It will allow us to compete with states like Pennsylvania, Maryland, Delaware, and Florida. Ultimately it will help to bring back consumers to our state for these purchases, supporting our shore-area businesses and growing local jobs.”
Consumers buying an average-sized center console for $250,000 will see a tax savings of nearly $9,000, according to South Jersey Marina.
Those who purchased boats in Florida and paid the cap of $18,000 will only be liable for $2,000 upon returning to New Jersey.
This post originally appeared in Trade Only Today and can be found here.