Karma Yacht Sales leading fight against luxury taxPosted on
Karma Yacht Sales has started a grassroots campaign on behalf of sailboat dealers and the sailing community of Illinois against a proposed bill that would impose a 5 percent luxury tax on a broad range of consumer products, including boats costing more than $200,000.
The proposed bill comes at a time when most businesses in the marine industry have seen a slowdown in sales due to the economy, the company said in a statement.
Many marine manufacturers in the United States have gone to pulse production or reductions in work force to bridge this slow economic period. On the dealer level, many of the businesses are small, family-owned and have also been hit hard by decreased revenue, increased cost of goods, and tightening credit terms by banks, the company said.
Currently boat sales are subject to state, county and local city taxes. As an example, boats sold to a resident of Chicago are subject to a 7.25 percent tax for the state, 0.75 percent tax for Cook County, and 0.25 percent for the City of Chicago.
With this bill, the state would be increasing its share to 12.25 percent.
Placing a selective tax on boat sales, car sales or any retail business in this economy has the potential to further the slowdown in sales Karma Yacht Sales co-owner Lou Sandoval said in a statement. Coupled with decreased consumer confidence in a slow economy and the net effect will be the opposite of what our national leadership is trying to stimulate job retention.
A similar proposal was made in December in New York.