From the Boathouse: Any old port with a low tax rate


As California struggles financially and sales tax generated from boat sales is dramatically down, yet another state has taken a step to increase its sales tax revenue. Maryland's legislature voted this week to cap the state's vessel tax at $15,000, following suit with Florida.

Now before you start emailing me that this only helps the wealthy, let us review the aftermath of the tax cap in Florida. In 2010, Florida capped vessel sales tax at $18,000, which brought offshore and out-of-state sales back into the state, thus increasing revenues overall. The rationale was that not only would the state receive sales tax that otherwise would not exist, but, for example, local shipyards, marinas, fuel docks, marine supply outlets, restaurants and workers would gain the business from these vessels that otherwise would have been elsewhere.

A study conducted by Thomas J. Murray & Associates revealed that the state's tax revenues overall increased and people were buying more expensive boats with the extra buying power.

One has to remember that most of the tax revenue generated was from new money coming into the state from local sales. Additionally, I repeat, the local economy benefited by having the boats outfitted, serviced and moored locally.

So, Maryland is closer to establishing a vessel tax cap that would bring sales back to the state from residents who would then not be buying boats in neighboring Virginia and Delaware, as they do now. Do not believe me? Then maybe you will believe the actions taken by John Kerry, who is not alone in moving his assets to save money.

I wrote in my Oct. 12 column, "If you still wonder how high fees and taxes have an effect on boating, ask Sen. John Kerry, who berthed his new $7-million, 75-foot yacht in Rhode Island, and not in his home state of Massachusetts. He would have saved almost $500,000 on sales tax, but he finally paid the sales tax to Massachusetts when he caved under the public pressure. But there is more to the story, as keeping the yacht in Rhode Island will save him about $70,000 per year by avoiding Massachusetts' annual excise tax."

Kerry has a multimillion-dollar yacht. The annual maintenance and upkeep for a megayacht is usually 15% of the vessel's value. So that equates to just over $1 million in annual expenditures that will be spent somewhere.

Remember that the vast majority of boaters are middle-class, hard-working people and that the average boat size is less than 26 feet. However, many families in Southern California do purchase larger vessels known as floating condos that they use as their weekend getaways in lieu of a vacation home in the local mountains or desert regions.

A vessel sales tax cap would help our local and state economies by bringing the larger vessel sales back to California. I constantly ask these two questions: "How many megayacht sales are in California versus other states that have low or no sales tax? As a followup question, how many megayachts do you see berthed locally with the county's property tax assessment on vessels?"

The wealthy will always have the option to purchase yachts and other items where it makes financial sense, and California should be looking to attract megayacht sales and the berthing of these yachts here to help our economy.

Update of the week is from last week's column, where I mentioned that I will have the opportunity of driving a new Subaru BRZ that has been tricked out by Edge Motorworks at a course setup at the ex-El Toro Marine base. The event was the 2013 Tire Rack SCCA ProSolo Series, where I was coached by communication manager Heyward Wagner and Edge's driving team on how to use the drag racing's Christmas tree lights to get the fastest time off the start line. The start lights are called the Christmas tree lights in racing, and these vertically mounted lights count down in sequence by flashing three yellow lights and then the green light for go.

The best time a driver can do in leaving the start line is a perfect half-second time recorded on the start clock; if one is under a half-second, then the driver will be red-lighted for crossing the start line too soon. Additionally, any time recorded over a half-second increases the driver's overall tract time, which you want as low as possible because these races can be won with a difference of 100ths of a second.

I will be have detailed perspective on the event in an upcoming magazine column. See you at the next races.

Lastly, keep April 26 on your calendar for the start of the Lexus Newport to Ensenada Yacht Race. I will be announcing the starting classes at the end of the Balboa Pier while lounging on the upper deck of Ruby's Diner.

Tune in to the No. 1 boating radio talk show in the nation, "Boathouse Radio Show," broadcasting live coast to coast on the CRN Digital Talk Radio syndicated network at noon Saturdays and replaying throughout the weekend. See times at, and

Safe voyages!

MIKE WHITEHEAD is a boating columnist for the Daily Pilot. Send marine-related thoughts and story suggestions to or go to

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