New Jersey Cuts Sales Tax On Boat Sales

The state of New Jersey has announced it will half the sales tax payable on the purchase of all new boats in an effort to support the state’s recreational boating industry.

Last week Governor Chris Christie signed a bill halving the 7 percent tax on boats to just 3.5 percent, and further capping the total tax payable on boat purchases at $20,000. The bill passed 35-1 in the state Senate, and 64-0 in the Assembly.

The new law, endorsed by a large swath of South Jersey groups from the Recreational Fishing Alliance to the Marine Trades Association of New Jersey, is widely considered to be a reaction to tax breaks offered by states such as Maryland, Florida and New York that were driving many customers out-of-state to make their big ticket purchases. Each of those states has seen a significant surge in new boat sales following the implementation of tax relief measures.

While critics suggest the New Jersey government is simply pandering to its wealthiest residents by making yachts more affordable, Sen. Jeff Van Drew, who supported the bill, said the move is designed to protect hundreds of jobs in the state’s boating industry, including marine employees, repair technicians, retailers and bait and tackle shops. The state expects the measure will cost between $8 million and $12 million in annual sales taxes initially, which will be offset by an expected surge in boat sales which is expected to generate higher taxes overall while injecting cash into the local economy.

“This is a tremendous victory for the industry and boating in New Jersey,” says Melissa Danko, executive director for the New Jersey Marine Trades Association. “We are very thankful to everyone that helped make this happen, including our legislative sponsors Senator Van Drew and Assemblyman Andrzejczak, and especially Governor Christie for expanding the tax savings on all boats, signing this important legislation into law and supporting the boating industry in New Jersey. This new law will not only get more people out on the water enjoying our waterways, but will ensure the future health and growth of the New Jersey recreational boating industry by increasing revenues and creating jobs.”