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A Good Time to Buy a Boat in New Jersey


 Maximum sales tax if purchased in New Jersey: $20,000.

A new partial sales and use tax exemption and maximum sales and use tax imposition amount for new and used boats and vessels was enacted in New Jersey late last year. The law also changed the use tax policy for vessels purchased out-of-state by New Jersey residents.

Effective January 1, 2016:

Boats and other vessels purchased in another state by a New Jersey resident to be used in New Jersey are not subject to use tax, so long as the following all apply:

  • The vessel is used in New Jersey for less than 30 days in a calendar year.
  • The vessel is legally operated by the resident purchaser and meets all current operating requirements.
  • The resident purchaser is not engaged in or carrying on in New Jersey any employment, trade, business or profession in which the boat or vessel will be used.

Effective February 1, 2016:

  • The sale of new and used boats and other vessels (including but not limited to cruisers, motorboats, sailboats, and yachts) is subject to a 50% sales and use tax exemption. The sales and use tax rate for qualifying purchases drops from 7% to 3.5%.
  • The amount of sales and use tax imposed and collected is capped at $20,000.

Yes

The new policies apply to the following:

  • New and used, and commercial and non-commercial vessels
  • The lease or rental of vessels and boats
  • Accessories and motors affixed to the boat at the time of purchase

No

The new partial sales tax exemption does not apply to the following:

  • Trailers (trailers must be separately stated on invoices)
  • Charges for services (maintenance, repairs, etc.), parts and supplies

Additional information is available through the New Jersey Department of the Treasury.

So it’s a good time to buy a boat or vessel in New Jersey.


Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.