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House Rejects Tax Break for Pricey Boats

Lawmakers have soundly rejected a bill to cap the state sales tax on certain boat purchases worth more than $250,000. State Rep. Greg Bonnen, R-Friendswood, said his measure was about helping the struggling recreational marine industry.

State Rep. Greg Bonnen, R-Friendswood, at a Texas Tribune symposium in April, 2013

*Correction appended

The Texas House on Wednesday demonstrated that its support for tax relief has limits when it voted down a measure to cap sales taxes on expensive boats.

In a lopsided 45-91 vote, lawmakers soundly rejected House Bill 619, which would have capped the state sales tax on certain boat purchases at $15,625, the approximate amount levied for a $250,000 boat under the current state sales tax. The bill would also exempt a boat from state sales tax if it was being purchased for use in another state.

The bill’s author, state Rep. Greg Bonnen, R-Friendswood, said it was aimed at helping boat sellers along the Texas coast who are losing business to their counterparts in states that already cap sales taxes on boat purchases, particularly Florida. The bill had the support of several coastal business groups and the city of Corpus Christi.

The Legislative Budget Board estimated that Bonnen's bill would cost the state $3.5 million in sales tax revenue over the next two years. Bonnen argued his measure would make up for that loss tax revenue by increasing overall activity in the recreational boating industry.

“This is about the men and the women in the small businesses and their employees on the Texas Gulf Coast and allowing them to be competitive,” Bonnen said.

Several House Democrats decried the measure as a giveaway for rich people, though many Republicans also voted against it.

“A pig is still a pig no matter how you dress it up, and this is a big fat pig for wealthy people,” state Rep. Roland Gutierrez, D-San Antonio, said. “The mere notion that we’re doing this to save jobs is a joke.”

State Rep. Sylvester Turner, D-Houston, told fellow House members that if they voted for Bonnen’s bill, they would be obligated to vote on a hypothetical future bill exempting sales taxes on helicopters.

“What about the airplanes? Don’t they provide an economic stimulus?” Turner asked Bonnen. “The major problem that I have with your bill is that it picks winners and losers within our existing tax structure.”

Bonnen said critics were ignoring the recreational marine industry workers who are losing business to other states.

“You can just be jealous of wealthy people who can afford to go to another state and buy the vessel, but for the men and women who work and live in this state, who don’t have the expensive vessels but rather depend on those vessels so they can have a job and they can earn a living and they can support their families, this is important legislation to them,” Bonnen said.

Correction: This story was corrected to clarify that boats purchased for out-of-state use would be exempt from sales tax.

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