Marine industry cheers Florida’s cap on sales tax for yacht repair

South Florida’s boating industry is celebrating a new state law that caps the sales tax paid for repairs on a yacht at $60,000.

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The Marine Industries Association of South Florida championed the measure aimed to boost repair and overhaul work in the area and create jobs. Signed into law this week, the cap takes effect July 1, aiming to help Florida better compete with other states and nations that offer refits with little or no sales tax.

“This gives us a shot at the bigger refits being done around the world,” said Phil Purcell, executive director of the South Florida marine group. By limiting Florida’s sales tax to the first $1 million of a refit, new work lured should benefit “tens of thousands of people in Broward County alone, everyone from electricians, carpenters, welders, plumbers, seamstresses and carpet layers to sellers of TVs.”

Proponents say the new law takes a cue from the aviation industry, where Florida is a leader in repairs.

The state long has exempted payment of sales tax on engines, parts, equipment and labor used in maintenance and repair of larger aircraft. Two years ago, it expanded that exemption to smaller craft, making Florida the region’s “go-to state” for repairs of small private planes too, Purcell said.

A 2010 law that caps Florida sales tax on boats at $18,000 — or the first $300,000 of the price — also has helped boost boat sales, and it increased sales tax revenue on boats sold in the state, industry studies show. New York this year placed a cap on its sales tax on boats to better compete with Florida.

Yet Florida lawmakers were not unanimous in supporting the tax break.

In debate Monday, Sen. Geraldine Thompson, a Democrat from Orlando, said the measure helps “the wealthy and the very wealthy and does nothing for the little guy.”

But Sen. Jack Latvala, a Republican from Clearwater, countered that the tax break was “not about saving millionaires money” but rather “getting jobs for people who aren’t millionaires.”

Boatyards in South Florida active in refits on larger yachts and likely to gain from the new law include Derektor, Rybovich, Dania Cut Superyacht Repair and Rolly Marine Services, among others., 305-810-5009, @dhemlock on Twitter

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