Yacht Sales Tax Break In Connecticut?

Scott Frantz, a Republican Connecticut state senator, who sails his yacht in major ocean races, has introduced legislation that would cut the sales tax on boat purchases and give yacht buyers a $1,000,000 a year break.

A private-equity millionaire, Frantz has refused to take a legislative salary in an attempt to cut state expenses, wants to cut the 6% sales tax to 4% for yacht sales in an attempt to aid the ailing yachting industry in his state.

“Connecticut has a long, rich history in building, maintenance and selling yachts,” said Frantz, a whose district includes parts of Stamford and New Canaan. “A few years back, the yachting industry supported 12,000 jobs in the state, and now that’s down to 4,500. You hate to see that happen. A once-lucrative, wonderful industry is literally on its tail.”

Frantz said that if the state fosters more transactions, tax revenue will rise accordingly.

The state Department of Revenue Services reported Thursday that in the fiscal year that ended last June 30, retail sales and some yachting services totaled $78.2 million, bringing in about $2.97 million in taxes. Reducing the taxes by 1/3 would save boat buyers $1 million.

In recent years, Connecticut boat dealers have been heavily hit by the recession. In the fiscal year ending June 30, 2007, yacht sales totaled about $190 million, bringing in nearly $6.3 million in tax revenue. The following year, $144 million in yacht sales produced $5 million in taxes. In the 2009 fiscal year, boat sales plummeted further to $96 million, with about $3.3 million in taxes.

The Connecticut DMV reported 108,094 yachting vessels registered in the state.

Marc Rogg, sales manager at Echo Bay Marina on the banks of Candlewood Lake in Brookfield, said the boating industry needs help to survive.

“Certainly in this climate anything to give customers incentives is going to help spur boat sales. This could make us more competitive and keep yachting businesses from closing.”

Frantz, who sailed his first ocean race in 1976 at age 16, estimated that he has participated in over 20 similar blue-water yachting contests. He currently owns a 1936 72′ wooden, wind-propelled sailing ketch called Ticonderoga.

Frantz admitted the tax-cutting proposal could be discounted as an elitist proposal. He has also proposed reducing rates for corporate and personal income taxes. The bills await action in the Finance, Revenue and Bonding Committee.

“I know everybody is going to point fingers and maybe laugh that I have three bills to cut tax rates,” Frantz said. “But if you reduce taxes and keep the commitment to keeping them down, it’s amazing the way revenue can grow. Boating brings together families and could maybe bring a dramatic increase in revenues to the state of Connecticut.”

Source: CTpost.com

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