Feedman
12-26-2006, 05:09 PM
I thought it odd that they hired a Democratic law firm to fight this tax.
Boat owners may have to pay millions in state taxes
BY THE ASSOCIATED PRESS
FRANKFORT — The state has sent tax bills totaling $2.5 million to Kentuckians who own ritzy houseboats and cabin cruisers.
About 3,500 people could have to begin paying state and local property taxes on their houseboats and cabin cruisers now that tax collectors from the Kentucky Department of Revenue know who they are.
The boats — generally more than 25 feet long and often worth hundreds of thousands of dollars and up — have gone untaxed for years because they were registered with the U.S. Coast Guard and not the state.
However, the state got approval from the Coast Guard to use its files to identify the boats and their owners. The Department of Revenue began notifying boat owners last summer that they were behind in their tax payments.
The average boat tax bill so far is about $700.
Revenue Department spokeswoman Jill Midkiff said the state has the right to collect up to five years in unpaid taxes. Some boat owners oppose paying even a year of taxes. Many have filed formal protests with the Revenue Department, challenging the assessments.
“It’s an impact on your cash flow that you’re not expecting and takes away from your hobby that you budget for every year,” boat owner Jamie Donohue said.
He and other Louisville-area owners have formed a committee and hired the Lexington law firm of former Kentucky Democratic Party Chairman Terry McBrayer to persuade state lawmakers to exempt them from most of the tax.
Taxing the big boats will be “catastrophic” for Kentucky’s houseboat industry because they already cost so much to dock, operate and maintain, said Karen Chrisman, a lawyer with McBrayer Mcginnis Leslie & Kirkland.
It also will negate the millions of dollars the state spends on promoting water-based tourism, Chrisman said, causing owners to dock their boats in neighboring states or at their Florida homes.
State tax law says owners who register their boats with the Coast Guard have to pay local taxes unless county government specifically exempts them. The boat owners are willing to let the state have its share, but they want the local tax exemption made mandatory.
Debbie Dayton and her husband received tax bills in September totaling $1,600 for their two houseboats. The Prospect couple live on one of the boats. Instead of fighting the taxes, Dayton decided to pay them.
“Say I had to pay attorney fees and stuff — you think your going to win that lawsuit, going up against the state?” she asked. “The interest and penalties and late charges are going to accumulate — it’s just going to get worse.”
Boat owners may have to pay millions in state taxes
BY THE ASSOCIATED PRESS
FRANKFORT — The state has sent tax bills totaling $2.5 million to Kentuckians who own ritzy houseboats and cabin cruisers.
About 3,500 people could have to begin paying state and local property taxes on their houseboats and cabin cruisers now that tax collectors from the Kentucky Department of Revenue know who they are.
The boats — generally more than 25 feet long and often worth hundreds of thousands of dollars and up — have gone untaxed for years because they were registered with the U.S. Coast Guard and not the state.
However, the state got approval from the Coast Guard to use its files to identify the boats and their owners. The Department of Revenue began notifying boat owners last summer that they were behind in their tax payments.
The average boat tax bill so far is about $700.
Revenue Department spokeswoman Jill Midkiff said the state has the right to collect up to five years in unpaid taxes. Some boat owners oppose paying even a year of taxes. Many have filed formal protests with the Revenue Department, challenging the assessments.
“It’s an impact on your cash flow that you’re not expecting and takes away from your hobby that you budget for every year,” boat owner Jamie Donohue said.
He and other Louisville-area owners have formed a committee and hired the Lexington law firm of former Kentucky Democratic Party Chairman Terry McBrayer to persuade state lawmakers to exempt them from most of the tax.
Taxing the big boats will be “catastrophic” for Kentucky’s houseboat industry because they already cost so much to dock, operate and maintain, said Karen Chrisman, a lawyer with McBrayer Mcginnis Leslie & Kirkland.
It also will negate the millions of dollars the state spends on promoting water-based tourism, Chrisman said, causing owners to dock their boats in neighboring states or at their Florida homes.
State tax law says owners who register their boats with the Coast Guard have to pay local taxes unless county government specifically exempts them. The boat owners are willing to let the state have its share, but they want the local tax exemption made mandatory.
Debbie Dayton and her husband received tax bills in September totaling $1,600 for their two houseboats. The Prospect couple live on one of the boats. Instead of fighting the taxes, Dayton decided to pay them.
“Say I had to pay attorney fees and stuff — you think your going to win that lawsuit, going up against the state?” she asked. “The interest and penalties and late charges are going to accumulate — it’s just going to get worse.”