Tax Vote Lets Fish Industry Off the Hook

Reversing an earlier vote, the Senate has sent Gov. George Deukmejian a bill to forgive half a century of back taxes that were never collected from seafood wholesalers, processors and brokers.

If signed by the governor, the action would end a two-year fight by Assemblywoman Doris Allen (R-Cypress) to force state Fish and Game officials to collect the so-called privilege taxes.

Based on a state audit conducted at her request last year, Allen estimates that seafood enterprises owe $13 million in back taxes for the past 10 years alone.

The tax forgiveness bill by Assemblyman Gerald N. Felando (R-San Pedro), a former fisherman, became one of the most heavily lobbied during the frantic end of the two-year legislative session. After being voted down a day earlier, the measure won the necessary two-thirds approval shortly before 11 p.m. Friday after four roll calls.

Enforcement Held as Difficult

Representatives of California’s $2-billion-a-year seafood industry said seafood prices would rise and they would face a severe economic hardship if state officials began collecting the tax. Fish and Game officials, who supported the industry position, said inadequate or non-existent records would make the tax collection effort expensive and difficult.

Although statutes calling for the tax have been in effect for 51 years, industry spokesmen said the Legislature never intended for anyone other than fishermen to pay it.

Allen, a persistent critic of the state Fish and Game Department, began insisting nearly two years ago that the tax be collected each time fish caught in California waters change hands. But the Orange County assemblywoman’s complaint was largely ignored until a state audit last December and an attorney general’s opinion last month confirmed that her interpretation of existing law was correct.

Also awaiting Deukmejian’s signature are bills that would extend the commercial fishing industry’s sales tax exemption on boat fuel until 1987, and another measure that would give fishermen a similar exemption from sales taxes when they purchase helicopters to be used in deep-sea fishing operations.