Trenton, N.J. – Governor Chris Christie conditionally vetoed a bill on Monday designed to spur New Jersey’s boat-building industry by reducing the sales tax paid on expensive vessels, as originally reported in a story on Press of Atlantic City.
Christie wants changes to the bill and is willing to sign a revised version, as long as owners of smaller vessels will also get a tax break.
As written, the bill 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. This would effectively cap the sales tax at $20,000 and give the state’s boat-building industry a chance to compete with other states that have already adopted similar measures.
While some criticize it as a tax break for luxury yacht buyers, other says the tax structure hurts blue-collar workers building and working on such boats.
Christie’s proposal would revise the bill to provide a 3.5 percent sales tax and use tax on all boats and other vessels sold in the state, and there would till be a $20,000 cap. The governor also proposed ensuring that the grace period for the use tax exemption be lowered from 90 to 30 days.
Assembly Republican Sam Fiocchi applauded the governor’s conditional veto of the bill. In the General Assembly on June 25, Fiocchi proposed an amendment to the bill. Democrats blocked the expansion of the bill’s benefits, tabling the motion with a 44-29 vote along party lines.
“This bill just didn’t go far enough. The governor did exactly what I tried to do on the floor of the Assembly,” said Fiocchi, R- Cape May, Cumberland and Atlantic. “Governor Christie used much of the language I fought to have added into the bill. Now, instead of this being a tax break for a small segment of the market, we can have a real tax break that will boost boat sales and help New Jersey’s boat-related industries.”
Senators Jeff Van Drew, D-Cape May, Cumberland and Atlantic, and Bob Andrzejczak, D-Cape May, Cumberland, Atlantic sponsored the Assembly version of the bill and said the proposed changes were acceptable to them. They welcomed Christie’s support for legislation that could boost the marina industry. The bill could help marinas because boats purchased in other states can still be subject to the tax if brought here for fishing tournaments or docked here.
The senators will 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.