Sales tax cap works in Florida
Kudos to the Florida Yacht Brokers Association, first for pushing positive legislation and, second, for taking time to show that it works as predicted.
Like the recent victory in California (see Dealer Outlook on Sept. 24) that stopped the boater’s Harbor and Watercraft Revolving Fund from being hijacked for non-boating uses, the Florida Yacht Brokers Association offers still another illustration that getting lawmakers to pass pro-boating legislation isn’t a pipe dream.
Research conducted by the Florida Yacht Brokers Association in 2009 revealed Florida’s marine industry was losing business to nearby states and/or foreign countries with lower or no sales and use taxes. So the state was also losing potential revenue. In testimony before the Florida Legislature, the Florida Yacht Brokers Association’s public affairs chairman Jeff Erdmann argued that the state’s existing 6 percent sales or use tax was keeping larger vessels out of the state and Florida’s $17 billion marine industry that employs more than 200,000 Floridians was losing business.
The result was passage of a bipartisan bill in 2010 that capped the state’s sales/use tax on boats at $18,000. Since then, the number of larger recreational vessels registered in the state has done exactly what the Florida Yacht Brokers Association told lawmakers it would — it climbed.
The latest analysis of Florida boat registrations by the Florida Yacht Brokers Association shows the number of 65- to 110-foot boats registered has increased 28 percent from 807 in 2010 to 1,032 in 2012. In addition, the number of yachts over 110 feet rose by 7 percent, up for the first time after annually falling since 2007.
“The overall increase in larger vessels (65-foot plus) registered is especially significant as the number of boats registered under 65 feet declined during the same period,” Erdmann says. “Equally important, with superyacht expenses averaging $4.75 million per year for everything from fuel to crew salaries to maintenance and repair, increasing their presence in Florida’s waters was a top priority.”
There’s a twofold bottom line in all this. First, while Florida is somewhat unique in its ability to attract “superyachts,” it’s not unique in pursuing legislation that can enhance the boating industry. In recent times, several state marine trade associations have been very successful in gaining favorable boating tax or growth legislation, among them Ohio, North Carolina, Michigan and Rhode Island, to note a few. Indeed, every marine trade group should have a list of pro-boating business legislation and getting it done should be among the the organization’s highest priorities.
Second, every dealer, marina operator and local supplier to the industry should be an active member of their local marine association. If you never get anything else for your membership dues, positive legislation that helps grow your business will be reward enough.