Senate OKs Tuna Boat Tax Exemption

Owners of large tuna boats would be able buy helicopters without paying sales taxes under legislation that was passed by the state Senate, 23-7, and was sent back to the Assembly for concurrence.

The bill by Assemblyman Peter Chacon (D-San Diego) declares that a helicopter used exclusively in deep-sea fishing operations is a “component part” of a fishing vessel and, therefore, exempt like other equipment from the state’s 6% sales tax.

If enacted by the Assembly and signed by Gov. George Deukmejian, the bill will settle a years-long dispute between the tuna industry and the state Board of Equalization.

Tuna boat owners, who stand to save $15,000 on the purchase of a new $250,000 helicopter, had been trying to persuade the tax agency since 1984 that it should exempt helicopters, which are used to spot schools of fish.

Deukmejian vetoed a similar bill by Chacon last year. But Chacon said this year’s bill is “much narrower” because the exemption expires in five years and there are no provisions for tax refunds to fishermen who have already purchased helicopters.