New York drops luxury tax proposal

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New York officials are not going ahead with a proposed 5 percent tax on boats of more than $200,000, which was included in Gov. David Paterson’s original budget proposal.

“We’re pleased that the legislature and the governor realized that this boat tax would not only fail to bring in revenue, but would significantly damage many marine businesses,” said David Dickerson, NMMA director of state government relations, in a statement.

The NMMA, along with the New York Marine Trades Association and other allies worked to have this proposal eliminated from the budget. Hundreds of letters and e-mails were sent to the governor warning of the consequences such a tax could have on the marine industry, the NMMA said.

“The impact of the proposed tax would hit New York marine dealers most immediately. About 38 percent of their sales are of boats 30-39 feet long, most of which retail for more than $200,000,” the NMMA said in a letter to the governor.

“Loss of even 20 percent of these sales to neighboring states, or to decisions to not purchase a vessel rather than pay the tax, would lead to even greater layoffs than already experienced in the New York market,” the letter stated.

The NMMA notes that area dealers also have experienced significant sales declines since the New York National Boat Show had its dates moved to December. In 2001, attendance was 95,000 and, at the most recent show, it dropped to less than 50,000.

NYMTA executive director Christopher Squeri said the tax would do nothing to increase the state’s coffer because consumers will simply buy fewer boats or purchase them out of state. That will hurt everyone, from dealers to marinas and other waterfront businesses.

“It’s a domino that’s just going to be horrible,” Squeri said when the proposal was announced.

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Comments

3 comments on “New York drops luxury tax proposal

  1. Michael Braynt

    It seems that government never learns the lesson that trying to tax a certain group of people only hurts another group of people that the tax was intended to affect. Such was the case of the Luxury Tax on US new boat manufacturers impossed by congress a few years back and only forced buyers to looks outside the country for new boats to purchase while thousands of middle and lower income people were layed off from  factories throughout the USA.
    I am glad to see that New York could reverse itself before it made the same mistake again.

  2. Kevin Mahoney

    Deja Vu…?? Did the NY officials bother to ask why the luxury tax didn’t work about 20 years ago…when it was imposed on a national level??
    The people that could afford the boats subject to the tax….simply said “no”…I can afford the boat, but due to principle…I will not pay the tax, and willl not buy the boat until the tax goes away. In the meantime, our industry shutdown better than half of it’s operations that produced these “luxury” boats…..and laid off thousands of workers that were penalized because of the tax. The small amount of taxes collected could never compensated for the devastation it cost our industry.
    NY recinded the proposal, as did another state already….and I hope it sends a message to all of the other states….this idea is NOT good for our industry….it is NOT a good idea for your state….it is NOT a good idea in general. The government got nothing for it…other than to pay increased unemployment for the working class in our industry.
    Hope other officials do their homework!!!
     
     

  3. Lou Sandoval

    Speaking from our experience in Illinois. This will become part of the ever emerging state of ‘hyper-taxation’ by our local and federal government.  It will require that as an industry we are aware, active and vocal.
    More battles like this to follow, I am sure.

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