On January 27, 2016 Andrea Mansfield, on behalf of MACo, testified to the Senate Budget and Taxation Committee in support of SB 58, Natural Resources – Vessel Excise Tax Cap – Repeal of Termination.
During the economic downturn, Maryland experienced a significant reduction in the number of boats registered in Maryland, negatively affecting the boating industry and funds going into the Waterway Improvement fund (WIF). The WIF finances projects that promote, develop, and maintain Maryland’s waterways and provides matching grants to counties for the construction of facilities, vessels, and equipment.
To spur the industry and increase revenue going into the WIF, the General Assembly enacted Chapter 180, Acts of 2013, that imposed a $15,000 cap on the vessel excise tax. Data indicates that the imposition of this cap has spurred the sale of higher-end vessels and is having a positive effect on the boating industry in Maryland.
Prior to the 2013 legislation, Maryland’s vessel excise tax required boat owners to pay 5 percent of the value of their boat if they bought it in the state or keep it here longer than 90 days a year. This bill would permanently keep in place the vessel excise tax cap of $15,000, which is due to terminate as of June 30, 2016.
MACo’s written testimony states:
The study found that the number of higher-end boats registered in Maryland during the two years the cap was in place increased significantly. Although the additional revenue didn’t fully offset the amount of revenue that would have been generated without the cap, the study indicates that the cap has had a positive effect on the boating industry in Maryland and that it should be continued.
An identical cross-filed bill, HB 14, was heard on January 27 in the House.
For more on MACo 2016 legislation, visit the Legislative Database.