Boat Tax
Governor Malloy’s Proposed Budget: Tax Boaters More?
BoatUS Says Boaters Need to Speak Up Now
HARTFORD, Conn. April 20, 2011 – Do boaters in the Constitution State deserve to be taxed more? Governor Dan Malloy’s proposed 2012 budget adds significant new tax levies for boaters and proposes to eliminate the state boating fund and divert boating registration fees and tax dollars – paid by boaters – into the state’s general fund. BoatUS says these changes could threaten the state’s vibrant boating industry, and lead many cash-strapped residents to quit boating. Connecticut boaters are urged to send a message to their state legislator this week by going to BoatUS.com/gov/ctaction.
“We recognize that Connecticut is facing budget problems,” said BoatUS Vice President of Government Affairs Margaret Podlich. “However, this proposal has the potential to have a significant impact on recreational boating. The Connecticut Legislature is under a deadline to act on the Governor’s budget bills (House Bill 6387 and Senate Bill 1007) by April 26.”
As written, the Governor’s proposed budget would:
Impose new sales taxes on marine services including repairs and winter storage;
Impose a new 3% luxury tax on boats costing more than $100,000;
Impose a new $20 per $1000 of assessed value annual personal property tax on boats (For example, a 1985 Pearson 30 valued at $20,000 would be taxed $400/year);
Eliminate the existing sales tax exemption for the value of a trade-in boat;
Increase the existing state sales tax, imposed on both new and used boat sales, from 6% to 6.35%.
In Connecticut, boaters already pay an array of taxes on parts and accessories, on wet or dry summer storage, on freight, on a summer slip fees or moorings, and 6% sales tax when a boat is sold. There is also 6% “use” tax on a boat purchased out of state and which is subsequently registered in Connecticut (less taxes paid elsewhere).
“Three out of four boat owners have a household income under $100,000. History has shown that the proposed changes are likely to create a heavy burden on middle-class boat owners while failing to raise the expected revenue for the state,” added Podlich. As an example, she points to the federal luxury tax on boats imposed in 1991 that cost thousands of marine manufacturing jobs nationwide while raising an insignificant amount of revenue. (BoatUS helped repeal this tax in 1993.)
For Connecticut’s marine industry businesses and employees such as boat mechanics, riggers, marina staff and dealers, these proposals could easily cause boaters to move their boats (and maintenance dollars) to lower cost states like Rhode Island. While Connecticut boats are currently exempt from personal property tax, the state’s boaters already pay some of the highest state registration fees in the nation. (Current registration fees for the Pearson 30 example are $135/year in Connecticut as opposed to $50/year in Rhode Island, and $12/year in Maryland.)
By proposing to eliminate the state’s boating fund and divert boating registration fees and tax dollars into the general fund, the monies boaters pay for boating will not go directly back into boating infrastructure, safety education and enforcement. Boating programs would be competing with all other state programs for support from the general fund.
“Help your state legislators understand that boating is not the Hollywood stereotype of ‘rich yachtsmen’, but is a wholesome outdoor activity enjoyed by hardworking families that keep over 500 Connecticut businesses in operation employing over 4,500 people,” added Podlich.
To learn more about these proposals, please visit DoNotSinkAnIndustry.com.
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