Yacht-tax loophole stays open

Contra Costa Times (2008-02-19) Josh Richman

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By Josh Richman
Tuesday, February 19th, 2008 at 4:31 pm in Assembly, Fabian Nunez, General, Guy Houston.

Assembly Republicans voted down a bill today which would’ve closed a tax loophole letting those who buy yachts and aircraft avoid paying California taxes.

The Assembly voted 47-18 for SBX3-8, but because tax matters require a two-thirds vote for passage, it failed. All Assembly Democrats voted for it, while 18 Republicans voted against it and 13 more Republicans failed to vote on it despite being present at the State Capitol today.

The bill would extend from 90 days to a full year the amount of time a new yacht or aircraft bought out of state must be stored outside California in order to avoid the state’s sales and use tax. Closing the loophole would bring in an estimated $5 million this year and $21 million next year.

Some might say that’s chump change, and in the context of the state’s $146 billion budget, it’s hard to argue. But critics would argue that while payments to schools are delayed, Medi Cal provider reimbursements are slashed, welfare cost-of-living increases are postponed, judicial vacancies go unfilled and far more draconian measures are considered to close the state’s enormous budget deficit, why would a fiscal conservative vote to maintain ANY tax loophole for ANYBODY? It’s not about the dollar amount, it’s about the philosophy, about the message it sends to the state.

“We have just had to make serious cuts in health care and education to keep the state solvent,” Assembly Speaker Fabian Núñez, D-Los Angeles, says in his news release. “For Assembly Republicans to then turn around and cover up for wealthy yacht owners who hide their boats so they’ll pay less tax is nothing short of reckless and callous. The fact that even some Republicans who had previously supported this measure didn’t vote for it today is particularly troubling. Instead of closing ranks Republicans should be closing the yacht loophole. Be assured this matter is not finished: closing the ‘sloophole’ will be the top item I bring up in every budget discussion before any further cuts are to be considered.”

The 18 Assembly Republicans who voted against closing the loophole are Joel Anderson, R-La Mesa; John Benoit, R-Palm Desert; Tom Berryhill, R-Modesto; Mike Duvall, R-Brea; Ted Gaines, R-Roseville; Martin Garrick, R-Carlsbad; Guy Houston, R-San Ramon; Bob Huff, R-Diamond Bar; Kevin Jeffries, R-Riverside; Rick Keene, R-Chico; Doug La Malfa, R-Biggs; Bill Maze, R-Visalia; George Plescia, R-San Diego; Jim Silva, R-Huntington Beach; Cameron Smyth, R-Santa Clarita; Todd Spitzer, R-Orange; Audra Strickland, R-Camarillo; and Mimi Walters, R-Laguna Niguel.

And the 13 Assembly Republicans who Nunez said didn’t vote on the bill despite being in the State Capitol on Tuesday are Republican Leader Mike Villines, R-Clovis; Anthony Adams, R-Hesperia; Greg Aghazarian, R-Stockton; Sam Blakeslee, R-San Luis Obispo; Paul Cook, R-Yucaipa; Chuck De Vore, R-Irvine; Bill Emmerson, R-Redlands; Jean Fuller, R-Bakersfield; Shirley Horton, R-San Diego; Alan Nakanishi, R-Lodi; Roger Niello, R-Sacramento; Sharon Runner, R-Lancaster; and Van Tran, R-Costa Mesa.