State/National/WorldNews Briefs

New Jersey governor proposes boat sales tax increase

TRENTON, NEW JERSEYNew Jersey Governor Phil Murphy has proposed repealing a boat sales tax reduction and boat sales tax cap in the state. Senator Vin Gopal also introduced a bill, Senate Bill 2847, which would repeal both. If approved, boat buyers would pay the full sales tax rate of 6.625 percent on boat sales and the $20,000 sales tax cap would be removed.

In 2015, New Jersey elected officials reduced the sales tax on boats to 3.5 percent, and implemented a $20,000 tax cap on boat sales.

The move came in response to the economic downturn, Hurricane Sandy and surrounding states having lower tax rates and incentives to boat buyers, which resulted in the state losing more than 90,000 registered boats between 2000 and 2015. Following the passage of the tax reduction and cap, new boat sales and registrations increased, with New Jersey experiencing an 8 percent increase in new boat sales over the last five years.

The proposed repeal is part of the governor’s revised 2021 budget. The tax increases are part of an effort to support spending after the novel coronavirus sent revenue plunging.

The tax, as well as the budget itself, must be approved before Oct. 1

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