Last month, Connecticut Governor Dannel Malloy signed a revised state budget that reduces the state sales tax on boats, engines and trailers. The new sales tax rate of 2.99 percent, a reduction from the previous 6.35 percent, goes into effect July 1, 2018.
“This will be a turbo-boost for our industry,” said Kathleen Burns, Executive Director of the Connecticut Marine Trades Association (CMTA). “The leadership in both chambers, Democratic and Republican, knew the lower sales tax would help keep boats here in Connecticut and lead to job growth in the marine trades sector. The playing field with our neighboring states will indeed be leveled.”
According to the CMTA, boat sales in Connecticut dropped nine percent from 2016 to 2017. Last year, 1,125 new boats were sold in the state. In 2007, that number was 3,021. Many Connecticut residents bought boats in neighboring states and often kept them there to avoid the state’s sales tax, creating a loss for the state’s coffers as well as marinas, marine services and ancillary businesses such as restaurants.
“This is going to keep business here in Connecticut,” said Hal Slater, President of Brewer Yacht Sales, which has offices in Mystic, Deep River, Westbrook, Branford and Stamford. Slater said he’s seen a decline in brokerage sales over the last several years, much of it from people buying and keeping their boats in Rhode Island or New York. “It’s going to increase business here in Connecticut and it’s actually going to create an increase in sales tax revenue that will wind up as a net gain for the state, I’m sure.”
Susan Haigh with the Associated Press contributed to this report.