Well, my earlier prediction is coming true, and unfortunately, it
is a prediction that is not good news for the California yacht
industry. I always try to look at the bright side of things, so on
the bright side, it looks like I will be increasing my yacht
deliveries from the Pacific Northwest to Southern California.
What am I talking about? Our state legislators are changing the
rules to increase the time one must keep airplanes, boats and motor
homes out of state, so the buyer does not have to pay sales tax. As
of Oct. 1, the time the item must be out of California will increase
from 90 days to a year.
How many airplanes do you think are sold in California now because
of the sales tax? Almost none, zip, zero. Why? Simply because you can
buy the airplane in another state that does not have any sales tax or
personal property tax, and you leave the airplane in that state until
the time period is up.
I have already been contacted by a family who wants to sell its
boat and buy a larger yacht valued at a couple-million dollars. The
family's original plans were to buy the larger yacht locally and do
an offshore delivery for the 90 days. However, the new one-year wait
has changed its plans.
As of now, the family's most likely going to buy its yacht in
Portland. In the year's wait period, they will have a perfect
vacation condo on the water, and in that time period, their plans
include cruising to Seattle, the San Juan Islands and into Canadian
waters. The final cruising leg is for me to deliver the yacht to
The interesting part to this story is that they will still save
money with this plan by not paying the sales tax in favor of the
Northwest's lower slip rates, cheaper labor costs and inexpensive
The good part of this plan for me is that I get paid trips to
teach them how to operate their boat. In lieu of me delivering the
yacht to and from Ensenada, now I will be performing a much longer
delivery to Newport.
The bad part is that the California yacht industry loses. Locally,
we will not have the sale plus no shipyard time, no upgrades to the
vessel, no rigging, no slip rent, no electronics sales, no dinghy
with davit sale, no lifejacket sale, no bottom cleaning, no topsides
cleaning, no canvas work and, once again, no local personal property
tax for one year.
The city of Ensenada actually has plans to build a new marina,
because its slip space may become a premium when boats will be
staying for a year versus 90 days. Soon, I expect to see yacht
advertisements from brokers in other states showing how they can save
the buyer money, plus have a floating vacation home for one year.
I would think that our state legislators would be trying to think
up ways to increase yacht sales and bring back airplane sales to
California. In contrast, Florida has recognized the value of the
boating industry, as the Miami Boat Show alone adds $600 million to
$1 billion to Florida's economy. The marine industry in the Florida
has more than doubled the economic output of the citrus industry.
California's Department of Boating and Waterways' 2000 report on
the Economic Impacts of Boating in California listed boating impacts
on gross state product (annual) as $16.5 billion with boating
contributions to state and local tax revenues (annual) totaling $1.6
billion. In addition, the number of boats in California is expected
to increase by between 13,337 and 23,092 boats per year over the next
Recognized as the No. 1 boating talk radio show in the nation,
"Capt. Mike Whitehead's Boathouse Radio Show" airs every Saturday
from noon to 1 p.m. on KCBQ-AM (1170). You can join me, Chandler Bell
and Eric Hovland on my radio show by calling the listener line at
(888) 344-1170, and you can listen worldwide at http://
www.BoathouseRadio.com. Remember, let me know if you have boating
news or information for my weekly show.
* MIKE WHITEHEAD is the Pilot's boating and harbor columnist. Send
him your harbor and marine-related thoughts and story suggestions by
e-mail to firstname.lastname@example.org or visit http://www.boathousetv. com.