Read my lips, no new tax!
Earlier this summer the Marine Trades Association of New Jersey (MTA/NJ) launched a Sink the Boat Tax initiative in hopes of defeating a proposal by New Jersey Governor Phil Murphy to double the sales tax on boats in the state’s 2026 budget. “A tax increase on boats will have a devastating impact on countless small businesses in the state that will damage the recreational boating industry perhaps beyond repair,” MTA/NJ said in a recent bulletin.
As I previously wrote (“It’s The Economy, Stupid”) Governor Murphy proposed repealing New Jersey’s Boat Sales Tax Cap and Reduction in his FY 2026 Budget. That 2015 reduction bill was sponsored by four state democrats and ultimately signed into law by then governor Chris Christie, cutting the sales tax on boats from 7% to 3.5% while capping total sales tax collected at $20,000. This bipartisan effort made New Jersey competitive with neighbor states like Connecticut (2.99%), Delaware (0%) and Virginia (2%) in terms of boat sales tax, while helping stem the exodus of registered boats going to states like Florida ($18,000), Maryland ($15,000), North Carolina ($1,500) and New York ($18,975) by lowering the tax cap threshold.
On Saturday, June 28th, the MTA/NJ sent a new bulleting announcing “We are very pleased to share that we have successfully stopped the repeal of the Boat Sales Tax Cap & Reduction as the tax increase was not included in the final FY 2026 NJ Budget approved by the committee last night.” According to the state’s boating trades association, the tax on buying a boat remains at half the applicable Sales Tax rate (3.3125%), up to a maximum of $20,000.
“This is a win for the boating community and marine businesses across the state,” MTA/NJ noted, while going on to give praise to legislative leadership for recognizing the economic importance of recreational boating in New Jersey. It was that bipartisan leadership that helped see through the many myths of implementing yet another “luxury” style tax aimed at boaters and anglers.
MYTH: The tax increase is designed to make sure people who buy “yachts” pay their fair share.
FACT: MTA/NJ sales analysis and Motor Vehicle Commission data are clear that the average size boat sold in New Jersey is only 23 feet. The average boat owners in New Jersey are from the middle class who simply want an affordable way to spend time on the water or fish. Increasing the sales tax won’t impact the wealthy but it will hurt New Jersey working families.
MYTH: The current Sales Tax and Cap Tax on boats is an unfair benefit.
FACT: Nearly every state from Connecticut to Florida has a reduced sales tax and tax cap on boat purchases. Those who can purchase large boats will simply buy them and keep them out of state, while the average boater will either buy their boat somewhere else or decide the added cost is one they can’t absorb. Either way, the small business owners that make up the marine trades industry in New Jersey will see lost sales, lost customers and lost jobs.
MYTH: The tax will raise much needed revenue for the State.
FACT: Industry analysis shows the state will lose $43 million in boat sales if this tax increase is approved. While the state will potentially raise only $12 million in new revenue from this tax increase, it will lose 20% of its potential sales to more tax friendly States. A 20% loss in boat sales equates to $55 million in sales and taxes.
Fishing and boating are a major part of the state’s tourism industry, and Trenton relies heavily on our community to continually provide funding for their state budget. Thankfully, common sense prevailed in this budget debate. Big thanks to MTA/NJ on behalf of the boating anglers of New Jersey for helping dispel these taxing myths in Trenton.
