Missouri SAVES Tax Loophole For Yachts, Considers Cutting School Budgets

[babylonsister]

In a time of budget cuts, yacht sales sail through untaxed in Missouri
By MIKE McGRAW
The Kansas City Star


Cash-strapped legislators have recommended spending cuts for Missouri schools and shelters for battered women, but so far the yachting class can enjoy another season of clear sailing.

Thanks to a longstanding tax exemption, Missouri’s marina set can opt to pay a small fee in lieu of sales taxes and shave as much as $30,000 off the purchase of a $500,000 boat.

That tax exemption alone is depriving state and local coffers of more than $6 million a year, according to some estimates. It’s just one of more than 130 untaxed transactions that are getting renewed attention in Jefferson City because of the state’s continuing budget crisis.

For now, however, yachts are treated like baby formula for the poor, tickets to the state fair and even newsprint —all are exempt from state and local sales taxes.

But if you’re buying a small bass boat or runabout, forget about any tax breaks. You’ll pay the full load.

“One person’s tax exemption is another person’s loophole,” said Ted Farnen, a spokesman for the state’s Department of Revenue, which takes no position on the issue.

more...

http://www.kansascity.com/2010/02/20/1762573/in-a-time-of-budget-cuts-yacht.html

[Hannah Bell]

1. that's pretty damned obscene, actually.

[FBaggins]

5. I suspect that it isn't obscene as it appears on its face

Luxury taxes on boats have an interesting history of being ineffective.

If there were a $30,000 tax on the sale of such a boat (in MO), people would simply change their purchasing behavior (by driving across the state line and buying one elsewhere). People rich enough to afford such boats can easily afford to transport them a short distance.

The net effect would be: No income from the tax... a few in-state boat sellers out of business (and thus not paying other taxes) and a few hundred employees out of work (and this not paying state taxes, but instead on the unemployment roles).

A better idea might be to raise usage fees/taxes on these boats.

[n2doc]

7. States tax cars bought elsewhere

I bought a car in Oregon, no sales tax, but I paid tax on it in California , where I was living. I see no reason why this can't be done for boats as well.

[FBaggins]

9. Sales taxes are a bit easier than luxury taxes

And even then it's difficult to do effectively. You could perhaps implement a program where getting the required tags (etc) involves bringing I. The sales paperwork... But the costs if the program could exceed the income from it.

[liberal N proud]

2. That frames the state of America

It is all about those who have it all, at the cost of those who do not have it all.

[mrcheerful]

3. Got to love a state that will cut education welfare and any other thing to help the

poor and middle class just so they can give welfare to the rich. Yep, the american dream where the streets are paved with gold if you happen to have been born with a gold spoon in your mouth.

[ThomCat]

6. Obama is hinting about cutting Social Security and Medicare.

He has to cut the social safety net for the poorest. He has to pay for that huge give-away to the banks that helps the Investor class.

So it's not just one state. It's the entire nation too. :(

[leveymg]

4. Missouri. Yacht heaven!

Cruisin' the Missouri from Nebraska to Jefferson City.

[davidpdx]

8. Truman is rolling over in his grave

[Orsino]

10. For anyone asking, "How did we get here?"...

...this is how we got here.

[Mithreal]

11. Don't think that is the only state with a heap of loopholes

and tax breaks for the wealthy while taking an axe to schools.

WA state, yeah, I am talking about you.

http://www.eoionline.org/

http://www.eoionline.org/tax_reform/reports/RevenuesForWashington-Feb10.pdf

[branders seine]

12. we should have a telethon for the rich

if each unemployed, working or middle-class person could just scrape together $5 a week, we could buy those yachts for them.

gOD bless Murika.

[CaliforniaPeggy]

13. California does it too...

It infuriates me.

Bastards, all of 'em.

:grr: