Frustration over Washington State’s 10 per cent tax laws on yachts was given fresh stimulus in the form of data revealing it is the USA’s current biggest yacht building state, yet sees little to no revenue from yachts after they are built.

Seattle’s Business Journal this week quoted figures in The Superyacht Annual Report’s 2013 order book to show that Washington is the biggest builder of superyachts in America. It has 19 in build compared to the rest of the USA’s 12 and takes a good proportion (203 yachts) of the number of all superyachts delivered ever (283 yachts).

Local industry is harnessing this statistic to drum up local support and highlight the negative effects of the 10 per cent tax rate, which applies to yachts both in the water and in refit in Washington State after 60 days, or 180 if the yacht is privately owned.

Speaking to SuperyachtNews.com before his interview with local radio on the tax and how it relates to the build figures, Peter Schrappen of the Northwest Marine Trade Association explained how tax is "driving away" business from Washington State in refit, marina tourism, cruising and provisioning.

“We funded an economic impact study and we had a sense our tax policy was driving yachts away – we’re doing a pretty good job of sending business up North (to Vancouver, British Columbia, Northwest Passage),” said Schrappen, who is a board director at the United States Superyacht Association (USSA).


"Unbelievable cruising areas" : Olympic National Park, Washington

The economic study showed that even by just extending the limit to 180 days for all superyachts, it would result in $US 17 million dollars in direct spending. Schrappen says a bill was taken to Congress last year but rejected, and he intends to make a second push in January 2014.

“It seems like the boat business is getting singled out - key legislators didn’t like the bill because they didn’t like the optics [seeing it] as ‘giving fat cats a tax break’ - the fiscal note that said the bill would cost the state money – we were not able to overcome that.”

Marina operators object to the tax because they see Washington as ideally located at the gateway to cruising in the Northwest Pacific and despite a lot of recreation - fishing and local culture - to offer yacht owners, they aren't able to capitalise on it.

 “You can go way up into Canada and Alaska here, there’s thousands of miles of different lakes and islands - unbelievable cruising areas. These boats generate a huge amount, but if they’re only allowed to stay [for a fixed amount of time] we don’t get anything,” said Joe Weibler at Elliott Bay Marina, where Lady Lola is currently berthing.


Elliott Bay Marina

Refit yards are also feeling the brunt of the tax, mostly on long term projects. Phil Riise, President at Seaview boatyard in Bellingham, said:

“Boat owners are hesitant to bring long term repair projects into Washington State and those who do they feel pressure to leave as the 60 day deadline approaches.”

He added that: “Local restaurants, chandleries, marinas, hotels and marine tradesmen lose customers to areas with less punitive tax regulations, including Oregon and Canada. Without the tax all the parties could do business and not have the clock ticking.”

Profile links

The Superyacht Report