Return of marine industry taxes unwelcome in Conn. and RI as boat business begins to improve

STONINGTON, Conn. (AP) — Boating season hasn’t begun yet and Mason’s Island Marina owner Eileen Morehouse has already felt the ill effects of Gov. Dannel P. Malloy’s proposed increases to marine-related taxes — a move that industry veterans claim will repeat mistakes that proved economically devastating.

A customer recently told Morehouse she was moving her sailboat and Boston Whaler from the Mystic marina to neighboring Rhode Island, about 15 minutes away.

“She’s afraid that so many people are going to be running to Rhode Island,” said Morehouse, who has customers from as far away as Pennsylvania. “If you’re going to travel all the way from Philadelphia, what’s another 6 miles to Rhode Island? We will lose. Connecticut will lose.”

States across the U.S. are embracing increasingly creative ways to bail out budgets mired by years of sinking revenue. But in New England, where boating traditions date back centuries, marine business owners say talk of taxing boaters will cripple an already struggling industry and send boaters looking for better harbors in lower-tax states.

Rhode Island’s marine industry is hardly exuberant about the possibility of higher taxes in Connecticut luring boaters across the border. Boat builders and repair companies are fighting a tax battle of their own, against Gov. Lincoln Chafee’s call to impose a 1 percent sales tax on boat sales and repairs.

For nearly two decades, Rhode Island has enjoyed a reputation as a tax haven for boaters, including U.S. Sen. John Kerry, D-Mass., who made news last year for docking his family’s new $7 million yacht in the Ocean State, allowing him to avoid paying roughly $500,000 in taxes in Massachusetts. Rhode Island removed its tax on boat sales in 1992. Kerry ultimately moved the boat across the border and paid Massachusetts tax.

Now those in Rhode Island’s marine industry are afraid business won’t come back if the state begins taxing again.

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