Home » Lawmakers hear testimony on houseboat industry concerns

Lawmakers hear testimony on houseboat industry concerns

Issues include collection of personal property taxes on boats

FRANKFORT, Ky. (July 18, 2014) — Kentucky’s multimillion-dollar houseboat industry is being threatened by the unintended consequences of several public policy changes, industry leaders told state legislators on Thursday in Jamestown.

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Issues including the collection of personal property taxes on boats are sending Kentucky’s houseboat industry into choppy waters, said Kentucky Marina Association President Bill Jasper.

Houseboating is one of Lake Cumberland’s biggest claims to fame, with the lake’s many tranquil coves and inlets providing great places to anchor.
Houseboating is one of Lake Cumberland’s biggest claims to fame, with the lake’s many tranquil coves and inlets providing great places to anchor.

Members of the Interim Joint Committee on Economic Development and Tourism and Interim Joint Committee on Labor and Industry traveled to Lake Cumberland State Resort Park to hear the concerns firsthand and take a houseboat tour of the lake.

Concerns in the industry grew a couple years ago when cash-strapped Kentucky started aggressively pursuing and collecting its personal property tax on houseboats, said Jasper, who operates the State Dock at the state resort park.

While the state’s tax is only 1.5 cents per $100 of assessed value, schools, counties and special taxing districts are now imposing additional taxes on boats.

“Tourists have become very angry as they were assessed large tax bills to pay for schools and other services in counties where they did not and could not use services,” said Jasper. “For example, it is illegal to live on the lake so they could not be residents and live on a boat yet they pay school taxes.”

He said the taxing scheme is unfair.

“Since it is up to the county to charge on the boats or not, rates vary drastically between marinas on the same lake depending on what county they are located,” Jasper said. “The tourist does not receive more services in the county with high taxation than they do in the one with low taxation.”

He said the tax on a $200,000 houseboat docked at his marina is $1,900 per year while the owner of the same houseboat would pay $578 less if they docked their boat at Grider Hill Marina in neighboring Clinton County.

Marinas located on waterways that cross state lines have an additional problem. Tennessee, for example, has no personal property tax on boats.

“We need a solution that will provide a fair and reasonable tax or fee on boats for the services that the tourists could use, that is not so high as to force tourists out of boating and that provides a fair and consistent tax rate of these moveable items around Kentucky,” Jasper said.

Jerry Harden, president of houseboat manufacturer Stardust Cruisers of Monticello, told the legislators that houseboat owners drive through Kentucky from southeast Michigan to dock their boat in Tennessee.

“Our policies are driving people to drive through Kentucky,” he said.

The state marina organization proposed replacing the personal property tax on boats with a registration fee similar to Tennessee, Ohio, Indiana and Florida.

Jasper said another option would be to make houseboats only subject to state taxation or establishing a standard tax rate for counties and taxing districts.

“We believe that we can achieve solutions that protect tourism – Kentucky’s third largest industry – while meeting the goals of the commonwealth,” he said. “We are suggesting that a task force be appointed to work with the (marina association) to develop a new taxing and registration strategy that would be revenue neutral while protecting the marina and boating industry.”

Carolyn Mounce, executive director of the Somerset-Pulaski Convention and Visitors Center, told the legislators that early school start dates have also negatively affected Lake Cumberland resorts, marinas and attractions since the school year was expanded in Kentucky.

“It’s causing use to lose tourists,” she said.

She said most Kentucky schools began summer vacation in May, before the weather was conducive for houseboat vacations, and will end in early August when it’s still hot outside.

The final concern the marina association had was proposed legislation to prohibit swimming within 50 yards of a boat docked or marina where houseboats receive electrical power.

“Marinas that installed electrical systems prior to 2010 would be forced to replace much of the equipment,” Jasper said.