A proposal that would cap the sales tax on boats sold in Florida was recently passed, as part of a larger tax-incentive package, by both houses of the state’s legislature and could become law by this summer.
Under the plan, all boats purchased in Florida would be subject to the state’s 6 percent sales tax, until the tax reached $18,000 – the amount assessed on a $300,000 boat – at which point no more tax would be levied, no matter the cost of the vessel.
In a story last week, The Miami Herald reported that $18,000 is roughly the amount some boat owners currently spend to create offshore corporations as a means to avoid paying Florida’s sales tax altogether. Backers of the measure believe it would actually create revenue by making it more attractive for buyers to just pay the tax and avoid the hassles involved with ownership as foreign corporation.
Leaving aside the question of whether or not this measure would help the state of Florida generate more tax revenue, how much do you think it would help the boating industry?
The general manager of a Chris Craft dealership in St. Petersburg, Fla., was interviewed for the story and told the newspaper the cap would help his business, but said dealers who sold less expensive boats would be disappointed that their buyers were not getting any tax relief. (To read the full article, click here.)
Any plan that works to spur boat sales is a welcome one and deserves consideration, but does this legislation make it more likely that someone on the fence about buying a boat that costs more than $300,000 is going to finally decide to take the plunge? Possibly, but if those customers are already able to avoid paying more than $18,000 in taxes, how much does this really do for them and, by extension, the boating industry?
And where are the plans to boost sales of boats under $300,000? Are there any in your state? What other steps do you believe should be taken, if any? Let us know what you think.