Connecticut To Cut Sales Tax on Boats

Connecticut will cut its sales tax on marine vessels starting July 1, 2018. The sales tax rate will drop from 6.35 percent to 2.99 percent on vessels, motors and trailers. The cut is in response to pressure from the Connecticut Marine Trades Association and area marine businesses that demonstrated how the marine industry was losing business to neighboring states, Rhode Island and New Hampshire that don’t charge tax, and to New York and New Jersey where a sales tax cap was enacted. Not only were boaters not buying in Connecticut, but they weren’t keeping their boats in-state either, meaning a loss to marinas, marine service providers and ancillary businesses, such as restaurants and gas stations.

Connecticut boat sales dropped by 9 percent, from 2016 to 2017, according to the marine trades association. There were 1,125 new boats sold in Connecticut in 2017. Ten years ago, that number was 3,021. Meanwhile, boat registrations in Connecticut dropped by 2,300 this past year.

The legislature’s nonpartisan Office of Fiscal Analysis estimates the tax reduction will create an annual revenue loss of about $2.3 million for the state’s main spending account, the general fund.