Gov. Chris Christie on Monday conditionally vetoed a bill designed to spur New Jersey’s boatbuilding industry by reducing the sales tax paid on expensive vessels.
The veto, according to bill sponsor Sen. Jeff Van Drew, is not necessarily bad news. Christie wants changes and is willing to sign a revised version, although it won’t be done for this boating season.
The good news is that the owners of smaller vessels also would get a tax break under the conditions Christie wants.
The bill as written would cap the state’s 7 percent sales tax to only apply to the first $286,000 of the purchase price of a new boat or work done on an existing vessel, according to the Press of Atlantic City.
That would effectively cap the sales tax at $20,000 and give the state’s boatbuilding industry a chance to compete with other states, including New York, that have adopted similar measures.
Although some criticize it as a tax break for those buying luxury yachts, others say the tax structure only hurts blue-collar workers who build and work on such boats.
Christie on Monday proposed revising the bill by providing a 3.5 percent sales and use tax on all boats and other vessels sold in New Jersey. Van Drew said there would still be a $20,000 cap. The governor also proposed ensuring that the grace period for the use tax exemption be lowered from 90 to 30 days.
“The most important thing here is getting this bill done and doing what we can to boost New Jersey’s boating and marina industry. Politics is the art of compromise, and working together to get things done that benefit the 1st Legislative District is always a priority. I look forward to this bill becoming law in the near future,” Van Drew told the Press of Atlantic City.
Van Drew, a Democrat, sponsored the Senate version of the bill; Democratic Assemblyman Bob Andrzejczak sponsored the Assembly version.
Van Drew and Andrzejczak on Monday welcomed the compromise and Christie’s support for their legislation, which could boost the marina industry. The bill could help marinas because boats purchased in other states can still be subject to the tax if brought to New Jersey for fishing tournaments or docked in the state.
Van Drew and Andrzejczak said the proposed changes are acceptable to them and that they will work to revise the bill and get it back onto the governor’s desk.