by Shawn Clayton
on Tuesday, September 15th, 2015 at 2:25pm.
The way it is now in New Jersey, the purchase of a yacht amounting to $1 million or more sees at least $70,000 going to the tax man. Governor Chris Christie is looking to cut that 7% tax in half.
Christie was quick to emphasize middle-class savings but it’s the buyers of super yachts along the Jersey Shore coastline that would make out the best. With the proposed measure, no yacht buyer would pay more than $20,000 in tax, no matter the price of the boat.
Aiding the Road to Recovery
The proposal is expected to get Senate approval this month and is backed by boating groups throughout the Jersey Shore. The proposed measure is in support of continued efforts to recover from the devastation caused by Hurricane Sandy, the powerful super storm that devastated the New Jersey Atlantic coastline and the many Jersey Shore communities in 2012.
“This bill is not about tax breaks,” says Melissa Danko, executive director of the Marine Trades Association of New Jersey. “It is about supporting an industry that has faced significant losses in the last decade from the economic downturn and devastating impacts of Hurricane Sandy.”
According to a boat manufacturers group, the boating industry in New Jersey contributes $2.2 billion annually to the state's economy, and employs 12,000 people.
Taking Cues From Neighboring States
According to the National Marine Manufacturers Association, New Jersey has seen a 38 per cent drop in registered vessels, to just 154,200. Since 2000, many other states such as New York, Maryland and Florida have enacted similar restrictions on boat taxes with positive results. It’s hoped that a reduction in tax will encourage New Jersey residents to purchase more boats.
“By keeping boats in the state you far expand the tax base,” says Kevin McGettigan, currently a broker with Sandy Hook Yacht Sales. He was also a board member of the Yacht Brokers Association of America when Florida enacted an $18,000 sales tax limit in 2010. “We had a whole industry of lawyers and tax accountants closing boat deals offshore, moving boats around to avoid state sales taxes. The marinas are now full and real-estate values have gone up!”