Negative impact of state taxes and regulations

James Nolan runs marketing specialist company James Nolan Associates James Nolan runs marketing specialist company James Nolan Associates

One subject that receives little public attention is the negative impact of individual state taxes and regulations on their recreational nautical activities. Take California for example.

The California Yacht Brokers Association gave a presentation in February this year at the California Boating Congress.

 It showed California, currently the fourth largest state in boat registrations, levies state sales tax on new boats and use tax on used or brokerage boats.

They are the same rate which varies by county from 7.25% to 9.75%. An entry level trailer boat costing $50,000 is taxed at $4,875 (at the highest local rate) and a mid-range family cruiser costing $500,000 is taxed at $48,750.

Compare these to Florida, the top state in boat registrations, where taxes will be $3,000 and $18,000 respectively. Florida caps their maximum sales tax at $18,000.

 Then there is state income tax. In California, a married couple earning $103,060 will pay $9,584 versus $0 in Florida while a couple earning $526,444 will pay $54,223 versus $0 in Florida.

Add to that certain areas of California have the highest slip rental rates in North America, virtually no onshore storage (rack) facilities, limited launch ramps for trailer boats and the state has some of the highest fuel costs in the country.

No wonder the state nautical industry is worried.

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