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Florida representative says it’s time to fix antiquated law

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U.S. Congresswoman Lois Frankel (D-FL) told a story at the Palm Beach International Boat Show that inspired her to push for a way to enhance the financial impact of the yachting industry.

“For many years, every year I was in the state legislature, it would coincide with our budget meetings, so I would miss so many boat shows,” Frankel said during a press conference near the waterfront on Friday.

“When I retired from the legislature to run for mayor of West Palm Beach, I came down to this boat show and what amazed me was how many thousands of people were here,” Frankel said as she pointed to the crowds. “That is what really inspired me.”

Frankel introduced a bill in 2011 that is gaining strength with bi-partisan support.

“We have an idea we’re cooking up in Congress, we have a way to bring more boats and more jobs not only to South Florida, but to the country,” she said.

The bill would allow foreign-flagged yachts to come into the United States year-round, not just at boat shows, to sell their yachts and then pay the tax, according to Frankel.

“We have an antiquated law that requires foreign-flagged yachts, even before the sale is made, to pay upfront a tax, the duty,” Frankel said. “We believe this is discouraging lots of them from coming here to sell their yacht.”

Frankel said that there are about 400 yachts offshore that would want to come into the United States with approval of the bill.

U.S. Congresswoman Lois Frankel (D-FL) explains her bill at the Palm Beach International Boat Show. Photo by Dorie Cox

U.S. Congresswoman Lois Frankel (D-FL) explains her bill at the Palm Beach International Boat Show. Photo by Dorie Cox

Jeff Erdmann, chairman of Florida Yacht Brokers Association (FYBA)’s Legislative Affairs Committee said the world was a different place when the original law was enacted.

“It was put in place in 1908 when world was an isolationist place here in the U.S.,” Erdmann said. “Right after World War I it was a very different economy, a very different environment,” he said. “Today trade is so important to our economy and we want to bring more to the United States.”

Ermann said, “If we could get yachts to be able to come to the United States, offer their boats for sale and then pay the duty afterwards it would not cost the federal government a single penny.”

The move would bring more revenue to the state of Florida, he said.

“But the additional impact, $2.46 billion in economic impact, that’s just going to build the economy overall,” Ermann said.

“When we talk about jobs,” Frankel said. “We think this bill will do it.”

Click for full detail of bill H.R.4065 – “To amend the Tariff Act of 1930 to provide for a deferral of the payment of a duty upon the sale of certain used yachts, and for other purposes.”
Dorie Cox is associate editor of Triton Today. Comments on this story are welcome at editorial@the-triton.com.

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4 thoughts on “Florida representative says it’s time to fix antiquated law

  1. Grace Abel

    It would never work. Most of the boats for sale at the Palm Beach Boat show and even the Ft Lauderdale Intl Boat Show are foreign flagged with foreign crew. Boats can advertise they are for sale in the US waters with restrictions that they are “Not for sale in US waters to US citizens”. Yet the main purpose of being in a boat show is to have an open house to sell the boat. To make the sale these boats go a few miles off shore to sign the paperwork and make the sale tax free in international waters or closer to the Bahamas. Because of this loophole no foreign flag boat will willingly pay the duty or sales tax. Bringing more foreign Flagged boats in may help the yacht industry grow in South FL and benefit some contractors, but most foreign flag boats have insurance policies that don’t allow them to hire Americans or have restrictions to hire only 1 or 2 Americans per boat.
    I don’t see this Bill bringing any more tax revenue to FL or any jobs to Americans.

  2. Michael Riley

    Foreign flags vessels have no interest in paying U.S. Taxes and most will actively do whatever they can to avoid paying them, even to the point of committing fraud. This bill would never work. If Frankel is really interested in bringing more jobs for AMERICANS into the yachting industry she should help encourage The Department of State to STOP issuing B1/B2 visas to foreigners who fraudulently enter the U.S. As a tourist then hit the streets looking for work and stealing jobs from tax paying Americans.

  3. Grace Abel

    If any other Americans in the yachting industry feel that this Congresswomen does not have all the facts with pushing this bill, please email her with your concerns at http://frankel.house.gov/contact/contactform.htm?zip5=33462&zip4=6002
    Her interview is troubling and does not reflect the reality of the yachting industry. I personally wold like to know who she expects these newly created jobs will benefit because it doesn’t sound like it would benefits American workers or increase FL tax revenue at all. Foreign flag boats are already granted cruising permits to the US and can come here for repairs and to be listed for sale in boat shows. I have worked for many American boat owners who have registered their yachts in tax haven countries such as Isle of Man, Cayman Islands and Marshall Islands…these boats have never been to these countries and the paperwork was filed in Ft Lauderdale by a representative for these flag states.
    I have been turned down for jobs before even interviewing because I am American, I have mostly been the only American allowed to work on the yacht because of insurance purposes.
    This bill will not create jobs for Americans or generate tax revenue for FL, this only benefits rich yacht owners and yacht brokers. Foreign Flag boats are already allowed cruising permits and extended permits to have maintenance done at US shipyards. This will only eliminate the need to register a boat with an American Flag, to hire Americans who pay taxes on their income, it also degrades the whole US Coast Guard Captain’s License system and makes the British ticket/MCA the new standard to be hired on a foreign flag boat.
    This is a very misleading bill and the small community of Americans in yachting need to write this Congresswoman Frankel.

  4. Jeff Erdmann

    American yachting crew who want more opportunities to work on all yachts including U.S. flagged yachts should reach out in support of Representative Frankel’s bill.
    Currently foreign flagged yachts with cruising licenses cannot offer their boat for sale to U.S. residents in U. S. Waters before being imported & paying duty. If they are caught offering for sale to a U.S. resident, they risk seizure and fines. The boat show bond exemption allows vessels 80′ & larger to show their boats to U.S. residents only during boat shows and expires after 6 months then the boat must leave the U.S.
    Representative Frankel’s bill would allow yachts with a cruising license to be offered for sale & then if sold to a U.S. resident would import & pay the duty at closing.
    This would encourage more yachts to come to the U.S. and offer their boats for sale in the best market in the world.
    There are in excess of $2.0B worth of foreign flagged boats for sale that cannot be offered for sale to U.S. residents. When boats are sold to U.S. residents while in U.S. waters there will be more U.S. Flagged boats for you to work on!
    The $18k tax cap has resulted a record number of boats over 40’ to be sold in Florida & fly a U.S. flag.

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