Yacht Builders Hail Tax Repeal Plan : Impact: The 10% levy on big-ticket items has cut deeply into the county boat industry, with many longtime operators forced out of business.

It doesn’t take a math wizard to calculate what a repeal of the 10% tax on luxury boats would do for MacGregor Yacht Corp. Before the tax went into effect last year, the Costa Mesa company sold two-thirds of its boats in the United States; now it sells none here.

Repeal of the tax “would probably triple our business,” said Laura Sharp, vice president. “All of our sales are overseas now. We’re at one-third of our volume.”

MacGregor, whose yachts sell for $169,000 and up, is one of the few boat builders remaining in the county. Several local yacht builders have gone out of business, and others have switched to boat repair.

The tax applies to boats costing $100,000 and up, as well as to big-ticket cars, furs, jewelry and private planes. The tax was expected to generate about $1.5 billion in new revenue through 1995 as part of a five-year effort to cut the federal budget deficit.

Its repeal, urged by President Bush in Tuesday’s State of the Union address, is one of several tax-cutting proposals Bush said are needed to speed a recovery.

Industry experts said the tax and the recession have put many companies out of business in the country’s three largest boat-building areas: Maine, Florida and Southern California. They estimate that more than 19,000 jobs have been lost.

The 10% tax applies only to yachts selling for more than $100,000. So, for example, a buyer of a $200,000 yacht has to pay an extra $20,000.

Sales of small boats--powerboats, small sailboats and the like--dropped 27% in 1991, while sales of the $100,000-plus boats were down 71%, according to the Southern California Marine Assn., a trade group based in Orange.

The association, whose membership has dropped by about 100 companies to 850 during the past year, is opening its annual show in Los Angeles Friday. Spokesman Harry Monahan said he hopes that promise of a repeal will boost attendance, which on a good year hits 90,000 people. Attendance at other major boat shows this winter has been down by 10% to 15%, he said.

Other factors are also weighing against the county industry: the recession, the high cost of labor and environmental and worker safety regulations.

In the past year, several companies have gone out of business: Newport Pacific, a Bayliner dealer in Newport Beach; Cabo Boats, a custom boat builder in Anaheim; and Erickson Yachts, an Irvine firm that had built its own brand of small boats since the 1960s. Carver Yachts in Newport Beach changed ownership.

Others are doing what they can to get by. Bud Taplin, owner of Worldcruiser Yacht Co. in Costa Mesa, said his repair business has grown 50% since last year.

“You have to go where the customers are, and they are not having their boats built from the ground up,” he said. Many have opted instead to refurbish or maintain their boats.

In a good year, Taplin would build 15 custom yachts, but he has had no orders since the tax went into effect.

Jim Cabral, owner of American Marine in Anaheim, a dealer, reported a similar trade-off: Sales were down 50% in 1991, but his repair business grew by 55%.

Because the 10% tax does not apply to commercial craft, MacGregor Yacht has been building more boats for charter operators.

The boating industry has been urging repeal of the tax since it became law. Ironically, Monahan said, the expectation that the tax might be lifted may have caused some potential buyers to delay purchases.

“We’ve been teased along,” he said. “It’s been a taxpayers’ revolt of a new kind.”

The Associated Press contributed to this report.