Posted on Tue, Apr. 26, 2005


House approves tax breaks for yachts, travel trailers


Associated Press

People who own yachts or other large recreational boats would pay less in property taxes for the costly watercraft under a bill that got key approval in the House on Tuesday.

The proposal was part of a flurry of legislation passed by the House as members worked to beat a May 1 deadline. Bills that don't pass at least one chamber by the end of the week would need a two-thirds vote to be considered on the other side of the Statehouse.

Supporters said the property tax cut for owners of large boats would bring South Carolina's tax rate in line with other coastal states. Currently, some boat owners dock much of the year in South Carolina but escape for a few months each year to avoid paying taxes here, said Rep. Bobby Harrell, R-Charleston.

"The bottom line is do we want to let our counties collect those taxes or allow other counties in other states to collect those taxes," Harrell said.

But Rep. Walt McLeod, D-Little Mountain, said the bill gives a tax break to "people of means," while House members have provided none for the rest of the state's citizens.

"We're accomodating the needs of persons who have wealth and we need to look out for everybody," McLeod said.

McLeod proposed an amendment that would have reduced property taxes by increasing the state's nickel-on-the-dollar sales tax, but House members did not consider it.

The bill caps at $1,500 property taxes on boats that qualify as second homes - those with a bathroom, bedroom and living or eating space. The bill was amended Tuesday to include travel trailers used as second homes.

Boats and travel trailers are now taxed at 10.5 percent of their value. The bill would lower that to 6.5 percent. Current law already allows property tax on motorhomes to be taxed at that rate.

The state will lose nearly $5.6 million in the 2006 fiscal year from taxes collected on those boats, according to a fiscal impact study. The loss will be shifted to other property owners, according to the study.

Adding travel trailers to the bill will cost $2.2 million when fully implemented, said Rep. Joe Mahaffey, R-Lyman.

The initial losses will eventually mean a profit for the state as people who seek out lower tax rates come to South Carolina, supporters say.

"We figure that 100 percent of 6 percent is better than 100 percent of nothing," said Rep. Vida Miller, D-Pawleys Island.





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