Tax break for New Jersey yacht buyers
by Malcolm Maclean
A bill that would limit the amount of sales tax New Jersey can collect on boat purchases to $20,000 has been passed by a state Senate committee.
New Jersey's sales tax is 7%, meaning that a buyer would have to spend $285,715 on a boat to pay $20,000 in sales tax. But there would be no difference between how much that buyer would pay versus someone buying a $1+ million yacht. New York state recently instituted a similar yacht sales tax cap.
The bill's sponsor, senator Jim Whelan said it is needed to keep New Jersey residents from buying boats across the bay in Delaware instead. Delaware is recognised as having a favourable tax climate: the state has no sales tax, personal property tax, intangible property tax or stock transfer tax, amongst other tax breaks.
“We have a very viable boat building industry in south Jersey, closer to the shore communities. But that is not what it once was," Whelan said. "So we can keep the higher tax in place and have no one buy their boats in New Jersey. Even those who build boats in New Jersey go across the bay to Delaware to buy them.”