Maryland legislature passes vessel tax cap
After looking like it was dead in the water a week ago, a cap on Maryland’s vessel excise tax is a step away from becoming law.
The Maryland General Assembly voted Monday to cap the tax at $15,000 for three years, a move the industry says will help keep more vessels in Maryland and create more jobs. The bill just needs to be signed by Gov. Martin O’Malley to take effect.
“It makes Maryland competitive with other states on the East Coast,” George Dunigan, president of the Marine Trades Association of Maryland told Boating Industry.
Despite Maryland’s strong nautical culture, the state ranks only No. 26 in the country in boat sales. Proponents of the change say that’s because owners of large vessels choose to register their boats in other states with lower taxes, such as tax-free Delaware or Virginia, which has a 2 percent tax and a cap of $2,000.
Boaters are required to pay Maryland’s 5 percent tax if they buy the boat in Maryland or keep it in the state for more than 90 days a year. With the $15,000 cap, the tax break will apply to vessels worth $300,000 or more.
Because of that price tag, one of the challenges the industry had to deal with was the perception that it was a tax break for the rich, said Susan Zellers, executive director of the Marine Trades Association of Maryland. While opponents made that argument, MTAM was able to point to the benefit of bringing more boats to Maryland to create more jobs in the marine industry, she said.
The news of the cap is already making a difference, with the association hearing from people who are excited about the opportunity of bringing their boat to the state, Zellers said.
Once the governor signs the bill, the industry will also work on getting the word out to draw more boats to Maryland.
“We can really promote up and down the East Coast,” Zellers said. “Come to Maryland – we’re a tax-friendly state and we have these great yards.”