NJ’s Boat and Yacht Industry Hopes for Rising Tide From Tax Break
New Jersey halved the sales tax on boats and yachts sold in the state to 3.5 percent this year, and capped sales taxes on boat sales at $20,000. The boating industry says it is a much-needed break in a state that used to have the highest tax on boats.
Yet it remains unclear yet whether the tax breaks are in fact helping turn around Jersey's struggling boat sales and service industry. Melissa Danko, executive director of the New Jersey Marine Trade Association, says it is still too early to tell about the cut, signed into law by Gov. Chris Christie last December, but it was "something that was long overdue and really needed."
"We are hearing a lot of positive reports from boaters and from our dealers that it is having a good impact on our industry," she said. "We are hearing that people are returning back to New Jersey, where they had their boats registered out of state. They are now bringing them back and registering them here."
New Jersey boat builders and marinas were first hit by the big recession. Then Superstorm Sandy wrecked boats and equipment, causing enormous losses. Boat registrations have been on a severe decline, with a loss of almost 100,000 fewer boaters over the years.
Danko says neighboring states have also enacted similar tax breaks on boat purchases, and that lured business away from New Jersey. She says it's not just a tax break for someone who can afford a boat.
"It is a benefit for those people who sell boats and have marinas that are all small businesses who are struggling."
At Viking Yachts in New Gretna, spokesman Peter Frederiksen says they employ 1,100 people manufacturing yachts that are sold in states all along the east coast and overseas. He says they employ New Jersey workers and crafts people and use materials from New Jersey.
Danko says they hope to have some solid numbers about the impact of the tax breaks as they look towards the end of the year.