COMPROMISE EXTENDS BOAT TAX BREAK TO SMALLER VESSELS
Gov. Chris Christie on Monday conditionally vetoed a bill designed to spur New Jersey’s boat-building industry by reducing the sales tax paid on expensive vessels.
The veto, according to bill sponsor state Sen. Jeff Van Drew, is not necessarily bad news. Christie wants changes and is willing to sign a revised version, though it won’t be done for this boating season, he said.
“I don’t think this season can be salvaged,” said Van Drew, D-Cape May, Cumberland, Atlantic.
The good news is for the owners of smaller vessels that will also get a tax break under the conditions Christie wants.
The bill as written would cap the state’s 7 percent sales tax to apply only to the first $286,000 of the purchase price of a new boat or work done on an existing vessel. That would effectively cap the sales tax at $20,000 and give the state’s boat-building industry a chance to compete with other states, including New York, that have adopted similar measures.
The bill sailed through the state Senate and Assembly. While some criticize it as a tax break for those buying luxury yachts, others say the tax structure hurts blue-collar workers building and working on such boats.
Christie on Monday proposed revising the bill by providing a 3.5 percent sales-and-use tax on all boats and other vessels sold in New Jersey. Van Drew said there would still be a $20,000 cap. The governor also proposed ensuring that the grace period for the use tax exemption be lowered from 90 days to 30.
The state Senate version of the bill was sponsored by Van Drew, while Bob Andrzejczak, D-Cape May, Cumberland, Atlantic, sponsored the Assembly version.
Van Drew and Andrzejczak on Monday welcomed the compromise and Christie’s support for their legislation, which they say could boost the marina industry because boats purchased in other states can still be subject to the tax if brought here for fishing tournaments or docked here.
Van Drew and Andrzejczak said the proposed changes were acceptable and that they would work to revise the bill and get it back on the governor’s desk.
“The most important thing here is getting this bill done and doing what we can to boost New Jersey’s boating and marina industry. Politics is the art of compromise, and working together to get things done that benefit the 1st Legislative District is always a priority. I look forward to this bill becoming law in the near future,” Van Drew said.
Andrzejczak said the bill could add jobs to the district, which has numerous marinas and several boat-building companies. With the current tax structure he noted people aren’t buying boats in New Jersey, so nobody benefits.
“I’m very pleased that we’re moving forward with this bill under an agreement to get this into law,” Andrzejczak said. “Boosting the marina and boating industry and the jobs and economic development they create is a top priority in our region, and is something everyone should support. I’m excited about the new jobs and economic growth this bill will create.”
Van Drew said the legislation was spurred by other states reducing taxes.
“Seven percent of nothing is nothing, and that is what was happening. Tens of thousands of people were registering boats in Florida, New York, Maryland and other states,” Van Drew said.
Article Author: Richard Degener