House committee gives yachts a tax break, rejects tax on bottled water

The House Finance and Tax committee won bi-partisan support for an amendment to give a tax break to purchases of luxury planes and yachts on a sweeping sales tax bill moving through the committee Monday.

The amendment, by Rep. Tom Grady, R-Naples, would cap the sales tax on boats and planes that cost more than $300,000. Called the Aviation and Maritime Full Employment Act, it was seen by members as an economic development initiative.

The estimated cost of the tax break -- $8.3 million -- further puts the bill off balance, making it cost more than it raises. The bill includes two sales tax holidays, for hurricane supplies and back-to-school needs, at a cost to the state of $29 million in lost tax revenue. 

An attempt to replace that lost revenue, by imposing the sales tax on bottled water for products 4 gallons and less, was rejected by the committee in a party-line vote of 10 to 4. An amendment to reduce the tax to products 1 gallon or less was also rejected.

Grady, R-Naples, argued that Florida residents are avoiding the sales taxes now by buying their planes and boats in other states and then storing it in another state or registering a vessel in the Cayman Islands or some other tax-friendly location.

The state loses tax revenue and any ancillary services, such as plane and boat repairs, Grady said. 

Rep. Perry Thurston, D-Plantation, supported the yacht and plane tax break, saying the economic development will help his district even though few of his constituents can afford to own them. He offered the bottled water amendment, excluding containers of more than 4 gallons but imposing the sales tax on smaller bottles because "it is a convenience item.''

Rep. Ellyn Bogdanoff opposed the bottled water amendment. "Water is a necessity of life and I don't care what size bottle it comes in.''

Democrats also failed at an attempt to remove a tax from the bill that would tax magazine subscriptions and newspapers that are received by mail. Bogdanoff and other Republicans argued that these same magazines are taxed when they are sold at a convenience store so why shouldn't they be when shipped via mail.

The upshot: we'll keep taxing magazines at convenience stores but not bottled water.

 

Grady, R-Naples, argued that Florida residents are avoiding the sales taxes now by buying their planes and boats in other states and then storing it in another state or registering a vessel in the Cayman Islands or some other tax-friendly location.

The state loses tax revenue and any ancillary services, such as plane and boat repairs, Grady said. 

Rep. Perry Thurston, D-Plantation, supported the yacht and plane tax break, saying the economic development will help his district even though few of his constituents can afford to own them. He offered the bottled water amendment, excluding containers of more than 4 gallons but imposing the sales tax on smaller bottles because "it is a convenience item.''

Rep. Ellyn Bogdanoff opposed the bottled water amendment. "Water is a necessity of life and I don't care what size bottle it comes in.''

Democrats also failed at an attempt to remove a tax from the bill that would tax magazine subscriptions and newspapers that are received by mail. Bogdanoff and other Republicans argued that these same magazines are taxed when they are sold at a convenience store so why shouldn't they be when shipped via mail.

The upshot: we'll keep taxing magazines at convenience stores but not bottled water.