New Jersey considers tax cap on boats - Trade Only Today

New Jersey considers tax cap on boats

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Two New Jersey lawmakers introduced legislation that would impose a limit on the state’s sales and use tax on non-commercial boats.

Democratic state Sens. Jeff Van Drew and Jim Whelan introduced the bill on Wednesday.

“We cannot afford to lose consumers and their tax dollars to Florida, or any other state, particularly given the condition of our local economies,” Van Drew told the Cape May County Herald. “Implementing a more competitive system for taxing these purchases would not only encourage customers of non-commercial boats to do business in the state, but bring in out-of-state residents to do the same. This is incredibly important for fishing and boating industries, which depend on non-commercial boaters for their success. The bill would help to even the playing field with other states.”

“Consumers have found that because of more competitive sales tax laws in other states they are able to save tens of thousands of dollars by purchasing a boat outside of New Jersey. Continuing to limit businesses and consumers with our current sales and use tax will only ensure that they are driven out of the state,” Whelan said.

“This not only harms boat dealers, but also ancillary businesses that boaters patronize along our shores,” he said. “By providing a cap on the sales and use tax, businesses and residents involved in the boating industry, from fishing to competitions, will thrive.”

The bill would set a maximum limit of $20,000 on the amount of sales and use tax that can be imposed and collected on a non-commercial boat or other vessel, including powerboats, sailboats, yachts and cruisers.

It also would establish a limited grace period to impose the tax on boats and vessels that were purchased out of state. Under the current law, boats and other vessels are subject to a 7 percent sales tax, according to the state Treasury Department.

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