THE HARBOR COLUMN: Yacht club beneficial to state’s economy

The newly adopted state budget contains good news for the marine industry and our local economies with the restoration of the 90-day yacht club. Now hold on a minute before you start screaming this “club” will only let the wealthy glide past the sales tax.

I have explained in numerous columns about how the 90-day yacht club is good for California’s boating industry, generating jobs and in the end generating more sales taxes. This provision is written in the tax code where if you purchase a yacht in California and remove the vessel out of the state for over 90 days, then you will not have to pay sales tax. A couple of years ago, the legislation increased the time from 90 days to one year, and this affected yacht sales in California because buyers simply brought out of state.

Fifty-footers can easily sell for a $1 million or more, so, if I purchased a $1-million yacht, then I would pay an additional $77,500 in sales tax (7.75% in Orange County). Hey wait, I can purchase my boat in Washington, Texas or Florida, without paying an additional $77,500. That just makes good sense and you would, too.

The major problem of purchasing outside California is not the loss of that one-time sales tax, but the actual net loss to our local economy of the whole package including marina rents, fuel purchases, electronic sales, restaurants and more. Let’s not forget the brokers, bottom cleaners, mechanics, electronic technicians, captains, cleaning crews and others who make their living by servicing these vessels are losing too.

New yachts have to be rigged and equipped with tens of thousands of dollars worth of additional items, and the buyers will spend money around town, eating, shopping and sleeping in hotel rooms. Let’s not forget after 90 days, when these vessels return home, they are subject to personal property tax, which a $1-million yacht pays over $10,000 annually. I will have more next week.

Tip of the week is we all knew him and there is a race in his honor. The Corona Del Mar one-mile Don Burns Swim is 10 a.m. Saturday. A fun event. You can find out more information by calling (949) 640-5350.

Remember to tune in every Saturday at noon to the No. 1 boating radio talk show in the nation, “Capt. Mike Whitehead’s Boathouse Radio Show” on AM 830 broadcasting from our studios inside Angel Stadium.

Mike Whitehead is the Pilot’s boating columnist. Send marine-related thoughts and story suggestions to mike@boathousetv.com or go to www.boathousetv.com.