New Jersey Governor Chris Christie Signs Legislation Extending Sales and Use Tax Benefits for Boats and Vessels

Dec 15, 2015, 14:33 ET from Ryan

DALLAS, Dec. 15, 2015 /PRNewswire/ -- On December 9, 2015, New Jersey Governor Chris Christie signed legislation that will provide for boats and vessels 1) a partial exemption from sales and use tax, 2) a maximum amount of sales and use tax that may be imposed, and 3) a 30-day grace period for use tax imposition. 

New Jersey Public Law 2015, Chapter 170 (S-2784/A3856), provides a 50% sales and use tax exemption for sales of boats and other vessels. Thus, only 50% of the sales price of a boat or vessel will be subject to New Jersey's sales and use tax. Also, Chapter 170 establishes a limit of $20,000 as the maximum amount of sales and use tax that may be imposed for each sale of a boat or vessel. Both of these provisions will take effect February 1, 2016.

Chapter 170 also establishes a temporary presence exemption for certain boats and vessels. The use of a boat or vessel for temporary periods, totaling 30 days or less in a calendar year, will be exempt from New Jersey's compensating use tax. In order to qualify under the 30-day grace period use tax exemption, the boat or vessel must have been purchased outside of New Jersey by a New Jersey resident for use outside of New Jersey. Further, the boat or vessel must be legally operated by the resident purchaser and meet requirements pursuant to federal law or federally approved numbering system, applicable to boats or vessels, adopted by another state. Finally, the resident purchaser cannot be engaged in any employment, trade, business, or profession within New Jersey where the boat or vessel will be used in New Jersey. All of the requirements must be met in order for the 30-day grace period to be applicable. This temporary presence exemption will take effect on January 1, 2016.

The New Jersey Office of Legislative Services has estimated that for the first few years New Jersey will lose $8 million to $12.3 million per year in revenue from the 50% partial exemption alone. New Jersey will also lose revenue from the other provisions of the legislation, but it is unclear as to the total amount of loss. One can conclude that this legislation is intended to bring New Jersey closer to New York's updated exemptions regarding the purchase of boats and vessels passed effective June 1, 2015.

About Ryan
Ryan is an award-winning global tax services firm, with the largest indirect and property tax practices in North America and the seventh largest corporate tax practice in the United States. With global headquarters in Dallas, Texas, the Firm provides a comprehensive range of state, local, federal, and international tax advisory and consulting services on a multi-jurisdictional basis, including audit defense, tax recovery, credits and incentives, tax process improvement and automation, tax appeals, tax compliance, and strategic planning. Ryan is a three-time recipient of the International Service Excellence Award from the Customer Service Institute of America (CSIA) for its commitment to world-class client service. Empowered by the dynamic myRyan work environment, which is widely recognized as the most innovative in the tax services industry, Ryan's multi-disciplinary team of more than 2,100 professionals and associates serves over 12,000 clients in more than 40 countries, including many of the world's most prominent Global 5000 companies. More information about Ryan can be found at


Jeremiah T. Lynch

Available Topic Expert: For information on the listed expert, click appropriate link.
Jerry Lynch
ProfNet -

Logo -