House approves tax
breaks for yachts, travel trailers
PAMELA
HAMILTON Associated
Press
COLUMBIA, S.C. - 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. |