Bill Text: NJ S3157 | 2014-2015 | Regular Session | Introduced
Bill Title: Provides reduced rate and maximum sales and use tax imposition amount for sales and uses of boats and vessels; establishes use tax exemption for temporary use of certain boats and vessels by resident purchasers.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2015-09-24 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S3157 Detail]
Download: New_Jersey-2014-S3157-Introduced.html
Sponsored by:
Senator JEFF VAN DREW
District 1 (Atlantic, Cape May and Cumberland)
SYNOPSIS
Provides reduced rate and maximum sales and use tax imposition amount for sales and use of boats and vessels; establishes use tax exemption for temporary use of certain boats and vessels by resident purchasers.
CURRENT VERSION OF TEXT
As introduced.
An Act providing a reduced rate and a maximum sales and use tax imposition amount for sales and uses of boats and vessels and establishing an exemption from use tax for the temporary use of certain boats and vessels by resident purchasers, supplementing P.L.1966, c.30 (C.54:32B-1 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Notwithstanding the provisions of section 3, 4, and 6 of P.L.1966, c.30 (C.54:32B-3, 54:32B-4, and 54:32B-6) to the contrary, the sales tax and the use tax which shall be paid pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), shall be imposed and collected at the rate of 3.5% on receipts from the sale or use of a boat or other vessel, and the maximum amount of sales tax and use tax imposed and collected on the sale or use of a boat or other vessel shall not exceed $20,000.
2. a. In addition to any use of property exempt from tax pursuant to section 11 of P.L.1966, c.30 (C.54:32B-11), the use within this State of a boat or other vessel for temporary periods, not totaling more than 90 calendar days in a calendar year, shall not be subject to the compensating use tax imposed by section 6 of P.L.1966, c.30 (C.54:32B-6), provided that:
(1) the boat or other vessel was purchased by a resident of the State of New Jersey outside of this State for use outside of this State,
(2) 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
(3) 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.
b. If any of the conditions specified by subsection a. of this section have not been met, or after having been met fail to continue to be met, the exemption provided by subsection a. of this section shall not apply.
3. Notwithstanding the provisions of the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to the contrary, the Director of the Division of Taxation in the Department of the Treasury may adopt immediately upon filing with the Office of Administrative Law such rules and regulations as the director determines to be necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), which rules and regulations shall be effective for a period not to exceed 360 days following the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) and may thereafter be amended, adopted, or readopted by the director in accordance with the requirements of P.L.1968, c.410 (C.52:14B-1 et seq.).
4. This act shall take effect immediately, provided that section 1 shall apply to sales made and uses occurring on or after the first calendar day of the first calendar quarter beginning at least 30 calendar days next following the date of enactment and that section 2 shall apply to uses occurring on or after January 1 next following the date of enactment.
STATEMENT
This bill provides a reduced rate and a maximum sales and use tax imposition amount for sales and uses of boats and other vessels, and establishes a use tax exemption for the temporary use within this State of certain boats and other vessels by resident purchasers.
The bill provides for a reduced sales and use tax rate to apply to select sales and uses of boats and other vessels. Under the bill, the Statewide sales and use tax rate is reduced from 7% to 3.5% for sales and uses of boats and other vessels, such as motorboats, sailboats, yachts, and other cruisers that are not eligible for the exemption granted for commercial ships and vessels under current law.
In addition, the bill provides for a maximum sales and use tax imposition amount to apply to sales and uses of those noncommercial boats and other vessels. Under the bill, the maximum amount of tax that can be imposed and collected on the sale or use of a boat or other vessel in this State is limited to $20,000.
The bill also establishes an exemption from use tax for the use within this State of a boat or other vessel for temporary periods, not totaling more than 90 calendar days in a calendar year. The bill provides that for the tax exemption to apply:
-- the boat or other vessel used within this State must have been purchased by a resident of the State of New Jersey outside of this State for use outside of this State,
-- the boat or other vessel must be legally operated by the resident purchaser and must meet 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
-- the resident purchaser must not be 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.
The bill authorizes the Director of the Division of Taxation in the Department of the Treasury to adopt rules and regulations necessary to effectuate the purposes of the bill, and allows for the immediate filing of those rules and regulations with the Office of Administrative Law, effective for a period not to exceed 360 days following the bill's effective date.
The bill takes effect immediately, but provides for the reduced rate and the maximum limitation on tax to apply to sales made and uses occurring on or after the first calendar day of the first calendar quarter beginning at least 30 calendar days next following the date of enactment and provides for the use tax exemption to apply to uses occurring on or after January 1 next following the date of enactment.
The purpose of this bill is to provide support to the boating industry in this State by encouraging sales of recreational boats and vessels, and to allow New Jersey residents an annual window, of a limited duration, to use boats and other vessels, that are purchased and ordinarily kept and maintained at an out-of-State location, in this State without incurring a tax liability. Currently, boats and other vessels that are acquired by residents of this State from a dealer outside this State for use outside this State are subject to use tax at the time the boat or other vessel is first used in this State, unless the sale or use of the boat or vessel is exempt from tax or the resident is eligible to claim a credit for sales tax paid to another state or jurisdiction.
