It’s a full court press for the Marine Trades Association of New Jersey to keep the critical Boat Sales Tax Cap and Reduction in place as an effort to scuttle it is gaining momentum.
In the Garden State, Gov. Phil Murphy has proposed a repeal of the tax cap and reduction in his revised 2021 budget. The pertinent legislation — S2847 — has been introduced in the state Senate by Vin Gopal.
Specifically, the repeal bill proposes to eliminate the $20,000 sales tax cap and 50 percent sales tax exemption on sales of boats.
“We have been meeting with our legislative leaders,” MTA/NJ executive director Melissa Danko explains, “but we need every MTA/NJ member, as well as every manufacturer or marine industry supplier doing business in our state, to reach out and take action. This is an attack on our industry, and we must all be engaged now.”
After the severe economic downturn of 2008-09, followed by the devastation of Hurricane Sandy on the boating industry, a bill to establish the tax cap and partial exemption was overwhelmingly passed. It’s goal was to make N.J.’s dealers competitive and help stem the flood of lost revenue to nearby states with tax advantages, like Delaware, New York, Maryland and Connecticut as well as Florida and North Carolina.
Historically, N.J. boat registrations had been plummeting, losing over 90,000 registered boats from 2000 to 2015 when the tax cap was finally enacted. Following passage, the annual registration decline was reduced by 90 percent, and “we just can’t go backwards again,” says Danko, who accentuates that leading such a fight to remain competitive for her state’s marine industry is an undeniable example of why membership in and support of the state trade association is so critical.
Like many other states, N.J. faces serious financial problems from Covid-19. But believing this action will increase revenues misses the history lesson and makes it easy to predict the future — less revenue!
“If the boat sales tax cap and reduction is repealed,” Danko contends, “we know less boats will be sold and registered in our state. Those boats will be purchased and docked in other states with more competitive tax rates. Not only will the sales tax revenue be lost but also all of the revenue from the purchase of accessories, services and maintenance.”
“On the other hand,” she continues, “when the vessel is purchased, registered and kept here, it’s outfitted, upgraded and maintained by New Jersey small businesses that employee New Jersey residents. This is not a tax break for people who buy yachts. This is about ensuring that boating is accessible to everyone, the revenue remains in New Jersey and jobs and the small businesses that sell and service boats can compete.”
The need to engage is urgent. The New Jersey boating industry is being asked to call and email their state senator and representative, especially a member of the Senate and Assembly budget committees, ASAP to make known your opposition to repealing the sales tax cap in the 2021 Budget. It wouldn’t hurt to also contact Senator Gopol to oppose S2847, Danko notes.
What can you say? MTA/NJ has these helpful suggestions:
· Introduce yourself and your business