Connecticut dealers testify against tax hike on boat sales

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The Hartford Courant reported that boating industry officials, including dealers, came to the state Capitol in Hartford last Friday to complain about potential tax hikes on new-boat sales. Connecticut Gov. Ned Lamont has proposed about $1 billion in tax increases across different industries. A 6.35 percent sales tax would not only impact boat dealers, but also legal, accounting, architectural, veterinary, and engineering companies.

More than 150 people signed up to speak at the hearing, which lasted more than seven hours.

Wearing blue T-shirts, boat dealers testified at a hearing on the proposed tax increases on Friday. They told the paper they wanted to let legislators know that the tax cut on boat sales last year has lifted sales and the industry. Boat sales in Connecticut have been up an average of 41 percent per month since the tax was lowered to 2.99 percent, according to industry officials. The increase in sales has also led to a jump in slip rentals and winter boat storage. Boatyards, marinas and service dealers have also hired new employees as a result.

Bob Petzold of Petzold’s Marine Center told the paper that he has hired three additional employees because of stronger boat sales. He attributes those sales to the tax cut.

Petzold, like others at the hearing, said if taxes on boat sales are raised, people would buy their boats in Rhode Island, which has no tax on boat sales. “The sales would decrease,” Petzold said. “Employment would decrease. We’re happy with the 2.99 percent at this point. We know where we were [with the higher tax] and it didn’t help.”

State Rep. Holly Cheeseman, R-East Lyme, said sales tax revenue to the state had increased when lawmakers dropped the boat sales tax rate to 2.99 percent last July.

Rob Blanchard, a spokesman for Lamont, told the paper that the proposed taxes are a “matter of equity” as the state tries to balance the two-year, $43 billion budget.

“These proposals are designed to level the playing field and create an equal tax treatment of both goods and numerous services," Blanchard told the paper. “Our state imposes a tax on public relations, lobbying and consulting — so why should services in the state house be taxed but not in the courthouse? Connecticut’s attorneys and accountants certainly understand the fiscal situation our state is in, and what needs to be done to get our state on the path toward growth again.”

Lamont’s tax plan would generate $371 million in revenue in 2020 and $652.6 million in 2021.

In 2011, Connecticut instituted a “luxury tax” on boats costing more than $100,000. Kathleen Burns, executive director of the Connecticut Marine Trades Association, told the paper that tax “failed miserably” and was repealed 18 months later. Burns said the tax cut last July has led to a “resurgence” in boat sales. 

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