Longer trips in store for new boat owners

MIKE WHITEHEAD

Ahoy.

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

Newport Harbor.

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

airline tickets.

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

20 years.

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 mike@boathousetv.com or visit http://www.boathousetv. com.

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