Is a tax cut on yachts.
As some lawmakers look high and low for money to ease cutbacks in education and human services, the House Ways and Means Committee has approved a tax break for big yachts.
The committee voted 8-3 Thursday for House Bill 2187, which Rep. John Davis, R-Houston, casts as an effort to preserve the economic activity that goes along with having big yachts purchased and kept here.
Other states — most notably Florida — have limited their yacht taxes and Davis said that means Texas is losing out on sales and service.
Davis’ bill initially would have limited the the amount of boat tax to $15,625 — the amount normally due on a $250,000 vessel — regardless of sales price. He changed that to match Florida’s $18,000 maximum.
The bill next goes to the full House, where Davis said he’s optimistic about its chances.
Voting against the bill in committee were Reps. Wayne Christian, R-Center; Trey Martinez Fischer, D-San Antonio; and Mike Villarreal, D-San Antonio.
Here’s some background on this ludicrous piece of legislation. According to the fiscal note attached to HB2187, it will cost the state $2,782,000 over the next biennium. (That works out to just over 25 teachers, at $55K per year, for the biennium.) Without any way to pay for it, of course, because tax cuts always pay for themselves. It’s a law of the universe, I believe. Anyway, if you’re in the market for a new yacht, as most of us are, be sure to wait till this new law passes so you can save yourself a few bucks. It’s the economy-boosting thing to do. A statement from the “flabbergasted” Rep. Villarreal is here. Hair Balls has more.
Read the comment by glynda.(9th one) She claims that “there is an economic study that shows Texas would glean an additional $36 million on revenue by keeping these boat sales in Texas with a sales tax cap of $15,625.” Anybody seen this economic study? She also claims this: “I have a business in Title transfer. I use to receive a lot of business from Florida dealers and brokers who sold boats to Texas residents. I don’t get that business anymore because those Texas buyers are finding it more cost-effective to keep their million dollar yacht in Florida. If you think about it – they are saving $45,500 to keep their boat in Florida – that pays for a lot of fuel, retail and services. Texas gets nothing.”
http://juanitajean.com/2011/04/18/oh-lord-wont-ya-buy-me-a-used-yacht/
Hmmm, couldn’t the same thing be said regarding the Texas Horseracing and Breeding Industry (many of them have left Texas for NM, OK and LA) in Texas due to not passing gambling legislation?
Yep, we’re in a race to to bottom with Florida! Woo hoo! Go, Texas!
The truly rich can go anywhere they want to when they are are in the market for a boat. This legislation may make it more attractive to middle class buyers to buy a boat here, but they were probably unlikely to shop out of state anyway. If someone is depending upon a sales tax cut to afford the boat of his or her dreams, then he or she likely doesn’t have the money to enjoy it to the fullest or maintain it properly.
The 2 happiest days in a boat owner’s life: The day they buy the boat and the day they sell it.
It’s not a matter of the sales tax cut making the boat affordable, it’s a matter of the economics of not paying $600k on a $10 million boat. If I were rich enough to afford a boat that size, I would probably want to keep it close to home, However, $600k buys a lot of plane tickets to Florida, which has to be considered.
Tax law changes aren’t a zero sum game, and it’s stupid to say that capping the tax at $250k sales price will cost the State money if that assumption is made using historic boat sale figures. We can’t know what buyers might have done, or will do, until after the changes are in effect.
LOL. You simply cannot make this stuff up! Tax cut on yachts? Hilarious! Too bad dumb ideas like this are not on a TV sitcom like Parks and Recreation – where they could be woven into an outrageous plot-line – and are instead affecting people in real life.
What will the Republicans think up next?!
The Florida cap went into effect on July 1, 2010. What effect has it had? They wanted it to keep sales from moving off shore. Are numbers even available for legislation that has been in effect for less than a year?
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