New Jersey Governor Looks To Repeal Boat Tax Cap

New Jersey Governor Murphy has proposed a repeal of the Boat Sales Tax Cap and Reduction in his revised 2021 Budget.  In addition, Senator Vin Gopal of District 11 introduced similar legislation, S2847, to repeal it as well.

These are separate efforts and the Marine Trades Association of New Jersey is asking its members to take action, making calls and sending emails.

In 2015, an overwhelming bipartisan vote to reduce and cap the sales tax on boats was passed to help support the recreational boating industry in New Jersey after the severe economic downturn and the devastation to the industry from Hurricane Sandy and to help ensure that New Jersey did not continue to lose revenue to other states. New Jersey is surrounded by or within easy travel to states that cap the sales tax on boats and raising the tax again makes our State much less competitive as a result.

New Jersey had lost over 90,000 registered boats from 2000 to 2015 when the tax cap was enacted.  Following the passage and implementation of the boat sales tax reduction and maximum cap, there was an increase in the number of registered boats and the decline slowed to 0.3% for the years of available data. The annual registration decline was reduced by 90%.

The MTA/NJ believes that if the boat sales tax cap and reduction is repealed, fewer boats will be sold and registered in the state of New Jersey. Those boats will be purchased and docked in other states with more competitive tax rates and also all of the revenue from the purchase of accessories, services and maintenance will be lost. The association acknowledges the serious financial condition the State finds itself in due to the COVID-19 pandemic, but believe that greater economic benefit will come from maintaining the reduced tax and cap than would be realized from increasing the tax.