Legislation Introduced to Provide Sales Tax Cap on Non-Commercial Boats

TRENTON – In order to promote economic activity in the state’s shore regions and protect area businesses, Senator Jeff Van Drew and Senator Jim Whelan introduced legislation yesterday that would impose a limit to the state sales and use tax on non-commercial boats.
“We cannot afford to lose consumers and their tax dollars to Florida, or any other state, particularly given the condition of our local economies,” said Senator Van Drew (D-Atlantic/Cape May/Cumberland). “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,” said Senator Whelan (D-Atlantic). “This not only harms boat dealers but also ancillary businesses that boaters patronize along our shores. 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 provide 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 motorboats, sailboats, yachts and cruisers. It would also establish a limited grace period to impose the tax for specific boats and vessels that were purchased out-of-state. Under the current law, boats and other vessels are subject to a seven percent sales tax, according to the State of New Jersey Department of Treasury.
A recent article from the Press of Atlantic City highlighted the concerns residents and businesses held over New Jersey’s sales and use tax on boats. According to the report, states like Florida provide a lower sales tax along with a sales cap of about $20,000. New Jersey has no cap in place, which creates a significant price difference for consumers, particularly when purchasing larger and more expensive vessels. The new bill seeks to level the playing field for both businesses and residents actively involved in the boating industry.