Texas weighs capping sales tax on yachts - Trade Only Today

Texas weighs capping sales tax on yachts

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Time is running out for a bill that would cap the sales tax on yachts purchased in Texas.

Thursday is the deadline for bills to be heard on the House floor, and no date for HB 2187 has been set, the Houston Chronicle newspaper reported.

Rep. John Davis sponsored the bill, which would impose an $18,000 sales tax cap on the purchase of a yacht in Texas. The bill sailed through the Ways and Means Committee on April 28.

Davis' bill originally would have capped the sales tax on a boat at $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 amount normally due on a $288,000 yacht under Texas' existing rate, the newspaper reported.

Clayton Reaser said he's enjoying the $1 million yacht he bought last year in Seabrook and he plans to purchase a larger yacht in the $3.5-million range. But this time, he said, he'll be heading to Florida to make his purchase unless Texas passes the sales-tax cap bill.

"I'm definitely going to buy my boat in Florida if this legislation doesn't pass," he told the newspaper. "I would love to give my money back to Texas. My next boat will have Florida on the back of it instead of Texas if this thing doesn't pass."

Rep. Mike Villarreal said the measure is "crazy," given the state's two-year budget shortfall of $15 billion to $27 billion.

"We're helping yacht owners while we are cutting our public schools by 21 percent and nursing homes by 33 percent," Villarreal told the Chronicle. "We're helping yacht owners ... while we're eliminating all scholarships for college freshmen in 2012-13."

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