Connecticut dealers benefiting from sales tax reduction

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Dealers are reporting brisk sales in Connecticut after the state reduced the sales tax on boat, engine and trailer purchases from 6.35 percent to 2.99 percent. The move puts Connecticut among other states in the Northeast that have reduced taxes on boats.

“Boating in Connecticut has become more affordable with the passage of this bill, and it couldn't have come at a better time for Connecticut marinas and dealers, who have been losing customers and jobs to neighboring states,” Kathleen Burns, Connecticut Marine Trades Association executive director, said in a statement.

Social media outlets were buzzing with comments from dealers and others.

"The buying activity that is taking place right now is amazing,” said Don MacKenzie, Boats Inc. vice president and general manager, two days after the bill went into effect. “The success of the new lower tax rate has been a bit overwhelming.”

“With the new tax rate, we are back to being competitive with boat dealers in our surrounding states,” said Candlewood East Marina vice president Mitch O’Hara Jr.” We are looking forward to finishing out the season strong.”

Burns said the tax reduction will help re-create marine trade jobs that were lost in Connecticut. "When our tax rate was above 6 percent and higher than every other state on the East Coast without a cap, about 40 percent of our boat sales left the state, taking with them their service work, slip, mooring and storage,” she said.

“The calculations show that for every 16 Connecticut boat registrations lost, the equivalent of one full-time job in the marine trades is also lost, and the decline has been impactful," Burns added.

The cut reduces the sales tax by 53 percent, with savings of around $1,000 per $30,000 purchased. The reduction helps Connecticut be more competitive with neighboring states, such as Rhode Island, New Hampshire, and New York.

"We are pleased to be able to welcome back boaters who may have left the state in recent years, as well as encourage new boaters to experience our waterways for the first time,” said Burns.

Bob Petzold of Petzold’s Marine Center in Portland, Conn., said a customer walked into the dealership and said the tax cut changed his mind about buying a boat.

"We have been buying inventory from other dealers and went to Virginia and Maine to pick up boats” to keep up with demand, Petzold said.

The National Marine Manufacturers Association reports that in 2016 there were 93,364 registered boats in Connecticut, with $157.7 million in sales of new boats, engines and accessories.