Tax breaks ahoy! N.J. sales tax limit on luxury yachts sails through Legislature

TRENTON — The only thing now standing between an expensive yacht buyer and a sales tax break is Gov. Chris Christie.

A bill (S2784) to cap the amount of sales tax New Jersey can collect on boat purchases at $20,000 coasted through both the state Senate, where it passed 36-0 and Assembly, where it passed 65-5 with 4 abstentions. It now lands to Christie’s desk.

The bill’s sponsor, state Sen. Jim Whelan (D-Atlantic), said earlier this month the intent is to boost New Jersey’s boat industry by keeping New Jerseyans from buying boats in neighboring states.

The bill is similar to a budget measure recently passed in New York.

New Jersey’s sales tax is 7 percent, meaning that a buyer would have to spend $285,715 on a boat to pay $20,000 in sales tax. But under the bill, there would be no difference between how much that buyer would pay versus someone buying a $1 million boat.

The liberal think tank New Jersey Policy Perspective has criticized the bill as “just another tax break for the wealthy.”

State Assemblyman Sam Fiocchi (R-Cumberland) suggested expanding the tax break to a larger segment of boaters.

“This bill targets a certain section of the boating community for tax breaks but unfortunately leaves most of the other boaters in its wake,” he said.

But sponsors said it would keep afloat New Jersey’s threatened boat building industry.

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Matt Friedman may be reached at mfriedman@njadvancemedia.com. Follow him on Twitter @MattFriedmanSL. Find NJ.com Politics on Facebook.


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