An amendment to New Jersey’s Sales & Use Tax Act went into effect on February 1, 2016, reducing the sales tax rate on all boats and water vessels (including jet skis and wave runners) to 3.5%, with a cap of $20,000. This represents a 50% exemption from the previous 7% tax rate. There is no further reduction of the sales and use tax rate on sales in an Urban Enterprise Zone or in Salem County. Because rental/lease transactions are treated as retail sales under the Sales & Use Tax Act, these changes also apply to rentals and leases of boats or other vessels.
In addition to the exemption and cap, for uses on or after January 1, 2016, the law allows boats or other vessels purchased out-of-State by a New Jersey resident to be used in New Jersey for up to 30 days in a calendar year without triggering use tax so long as:
1.the boat or other vessel is legally operated by the resident purchaser and meets all current requirements pursuant to applicable federal law or pursuant to a federally-approved numbering system for boats and vessels adopted by another state; and
2.the resident purchaser is not engaged in or carrying on in this State any employment, trade, business or profession in which the boat or vessel will be used in this State.For more information, please visit the New Jersey Department of Treasury website at http://www.state.nj.us/treasury/taxation/.