BRIAN IANIERI, Staff Writer
Buying a boat in
New Jersey may soon get less expensive after the state Assembly on
Thursday unanimously passed a bill cutting sales tax on most boats by 50
percent.
And the most expensive yachts--those worth more than $571,000--would get even larger sales tax breaks.
The legislation, which was previously passed by the Senate, heads to Gov. Chris Christie’s desk, where it will likely be signed.
“The fact is that we can’t expect
to increase sales and expand production of boats in the state if we
don’t make our laws and ultimately the final purchasing price more
attractive to buyers,”said state Sen. Jeff Van Drew, D-Cape May, Cumberland, Atlantic.
Van Drew said the policy will
allow New Jersey to better compete with states such Florida, Delaware
and Maryland and will encourage more boaters to buy in the state.
State Sen. Jim Whelan, D-Atlantic, said it will “reignite our state’s boating industry."
The bill cuts the state’s 7 percent sales tax to 3.5 percent on non-commercial boats.
It also caps total tax collection at $20,000, which applies to the most expensive boats and yachts sold for more than $571,000.
But the New Jersey Policy
Perspective, a liberal think tank, said the tax break benefits the
wealthy at the expense of others. It will also harm the state from
reduced tax collection that could have gone to other measures, the group
said
“While New Jersey’s working
families continue to suffer in a stagnant economy with rising costs of
essentials like transportation, housing and higher education, New
Jersey’s leaders have decided that the folks who really need help are
those buying pleasure boats for their weekends,” group President Gordon
MacInnes said.
The Office of Legislative
Services estimates the 50 percent tax break will cost the state
somewhere between $8 million and $12.3 million in revenue.
That figures could grow higher if boat buying returns to pre-recession levels.
On the other side, the office
said it could not measure if the tax exemptions will prompt more boats
to be sold in New Jersey “or if the individual measures will simply
reward recreational boating enthusiasts for doing something they would
have done anyway regardless of the tax breaks provided by the bill.”
The bill had support of South
Jersey based fishing groups and businesses including luxury yacht maker
Viking Yachts in New Gretna, southern Ocean County.
The bill passed by the Assembly on Thursday now heads to Gov. Chris Christie’s desk.
Christie had conditionally vetoed
an earlier version that included the $20,000 sales tax cap,
recommending the bill also include a 3.5 percent sales tax on all
non-commercial boats.
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