Three months after a New Jersey law halved the sales tax on boats, some dealerships are reporting an uptick in sales and are promoting the tax break as the spring selling season gets underway.
Jack Ryan, sales manager of Sheltered Cove Marina, said he believes his increase in sales is attributable to the reduction in the tax from 7 percent to 3.5 percent.
Ryan was at the Atlantic City Boat Show in February, and he said his sales increased 35 percent from the previous year’s show. He expects to see increased foot traffic at his shop and others now that the tax break is in place.
“Absolutely — especially along the coast, for obvious reasons,” Ryan told the Press of Atlantic City. “Boating is a major contributor to the economy, and this reduction in sales tax will have long-term results.”
He said he is expecting a 20 percent increase in sales for the quarter, compared with a year earlier, and is surprised by how many customers are aware of the halved tax.
The break was designed to help New Jersey boat sellers compete with states such as New York and Maryland that offer tax breaks.
Opponents said the legislation aids only the wealthiest people. The tax is capped at $20,000, which means the biggest breaks are on the highest-priced luxury yachts.
Charles Nelson, general manager of MarineMax Lake Hopatcong in Morris County, said more people are coming to his shop.
“Year over year, I’m up at my store at least 50 percent in sales, and I don’t know if it is solely from the sales tax, but I guarantee it has a lot to do with it,” Nelson said. “It’s a great incentive. It’s amazing how many people still don’t even know about it.”
Mentioning the tax break is Nelson’s new closing tool in a deal.
“It definitely is when we sit down and talk numbers, and it’s definitely pushing some people over that edge,” he said.
Tuckerton Marine’s Robert Nylund said he thinks customers need time to learn about the tax cut.
“I guess it’s early in the law, but I’m sure it’s helping some people. But I don’t necessarily see it yet,” Nylund said. “But I’m sure it’s going to make a big difference.”