ALBANY - A Long Island boat dealer defended a state sales tax break on yacht sales Tuesday, saying it isn’t so much about helping the wealthy but helping New York compete with Florida for the luxury boat business.
Florida caps the amount of sales tax a boat purchaser can pay at $18,000, said Jeff Strong of Strong’s Marine, a company with four Long Island locations. A provision tucked into the 2015-16 state budget would essentially match that, he said, crediting Gov. Andrew M. Cuomo for “listening to the Marine Trades Association and trying to keep New York competitive.”
“You might at first think it’s a benefit for the rich,” Strong said. “But what is happening is that we are losing larger boat sales. A lot of people who are in that buying category are buying them in Florida, keeping them there in winter time and bringing them up here in summer. And the result is, New York dealers are losing sales and New York state is losing sales tax.”
Liberal and labor groups drew attention to the sales-tax credit Monday, just as state lawmakers began voting on the budget. Tucked into the proposed budget, the provision said sales tax would only be applied to the first $230,000 of a yacht’s purchase price. Any amount above that would be tax-free.
Another provision would exempt general aviation aircraft from state sales tax.
Ron Deutsch of the labor-backed Fiscal Policy Institute called it an example of “misplaced priorities,” noting legislators took a pass on the minimum wage and a “circuit breaker” approach to property-tax credits that would help the middle class and working poor.
“It appears our legislative leaders could not agree to provide tax relief to struggling homeowners and renters through a middle-class property tax circuit breaker but managed to find the political will to provide sales tax exemptions for people buying luxury yachts?” Deutsch said.
Strong, a member of the New York Marine Trades Association, said, right now, someone buying a $500,000 yacht in Florida would pay $18,000 in sales tax. In New York? Around $43,000.
“A customer says ‘Same boat. I’m going to buy it in Florida,’” Strong said. He said his company employs 55 full-time and 18 part-time employees at its four locations and that the tax credit could help job seekers.
“If I’m selling more boats, I’m employing more people,” he said.