Morrison: No Sales Tax on Boats

Morrison: No Sales Tax on Boats

Rep Richard Morrison is on a campaign to stop the one percent sales tax from being applied to boat and vessel manufacturing sales as well as the storage, maintenance, and repair of boats.

Morrison, whose district is home to several boat-building companies, service companies and marinas, first took a stand earlier this year to oppose the application of Governor Chafee’s proposed 6 percent sales tax to the boating industry, but is still unhappy with the current budget proposal’s one percent tax.

He issued a statement yesterday reaffirming his opposition, saying he had recently met with met with the Chairman of the House Committee on Finance, Rep. Helio Melo, to make his case against the tax.

“Some might suggest that a one percent tax is better than a six percent tax,” said Morrison, D-Bristol, Warren. “But neither would provide an amount of benefit for the state equal to the damage it would cause to the boat industry in Rhode Island.”

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‘Trickle down, ripple effect’

According to Morrison, these damages would result from a “trickle-down, ripple effect” causing repair service companies, equipment, paint, replacement parts, and storage to become more expensive, further depressing and industry that has already suffered from economic downturn.

Morrison cited semi-annual reports from the East Bay Economic Initiative and Rhode Island Marine Trades Association dating back to 1992, the year that RI sales tax on boats was repealed. The reports shoe that job growth in the industry exceeded 55 percent from 1992 to 2005, and that repealing the tax added $130 billion to the state’s economy over those 13 years.

“Why, especially in an economy that is already sluggish, would we want to jeopardize that?” Morrison asked. “Why would we want to risk reversing the trend and potentially dismantling the industry just so that we might slightly increase the state’s tax collections?”

Affects 6,600 workers

Morrison expressed concern that the effects of the tax will extend beyond the 6,600-person workforce of marine-based businesses to all RI boat owners and employees of related industries.

“I will continue to make it my priority to fight any efforts to tax the marine industry,” Morrison concluded. “I am confident legislative leaders can find ways to save money without putting a burden on an industry that is so important to the Ocean State’s economy.”

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