Senate passes Christie plan to slash sales tax on yachts
TRENTON, N.J. (AP) -- A proposal to slash the 7 percent sales tax on boats sailed through the state Senate Thursday as lawmakers touted the measure as a way to help marinas that have struggled to recover from Superstorm Sandy.
The Democrat-led Senate voted 37-1 in favor of the proposal, with one Democrat opposed.
Sen. Shirley Turner was the lone no vote. She called the measure unfair and said it would do nothing to help lower-income residents. She paraphrased Pope Francis, who is currently visiting the United States, in a speech from the Senate floor.
"He said, `Above all take care of those in need,"' she said.
But other Democrats say those are exactly the people who would benefit from the proposal.
Sen. Jeff Van Drew said he believes a lower sales tax would help mechanics, boat manufacturers and marina workers who suffer from slumping sales lost to other states with lower rates, like Florida and the Carolinas.
"This is a job creator," he said.
Gov. Chris Christie proposed the sales tax reduction after vetoing a previous bill that capped the tax at $20,000, benefiting those who bought boats that cost more than $285,000. The National Marine Manufacturers Association says such high-priced boats were only a slim fraction of the $160 million in new boat sales made in the state last year.
The tax break under the vetoed legislation could have cost the state between $1 million and $4 million, according to the latest legislative estimates. Estimates for Christie's proposal are not yet available, but he said it was better because it would also help middle-class residents who buy smaller vessels.
The original bill also included a change to the 7 percent tax on use of boats that were bought in other states but operated in-state. The Legislature's bill would have waived the tax on boats used in the state for fewer than 90 days per year.
Christie proposed changing the period to 30 days to ensure the use tax is enforceable.
Thursday's vote marked a rare occurrence when Democrats and Christie, a Republican seeking his party's nomination for the White House, have agreed on a tax policy. He has pointed out on the campaign trail that he's vetoed some 400 bills, and earlier this year he vetoed a Democratic budget proposal to raise taxes on millionaires.
Political experts say it's impossible to look at a potential tax cut without applying the filter of the presidential race.
Christie, though, cast the issue as a boost to the state's struggling economy.
"Lowering taxes on New Jersey residents and supporting the continued economic growth of our shore communities following the impact of Superstorm Sandy are laudable goals," Christie said in a statement.
The Assembly still must weigh in on the tax.
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