Research Summary
The objectives of this research were to assess the current revenue generation and economic activity due to yachts and the relating activities in Washington State. Additionally, this research provided a quantitative estimate of the total economic impact in the state of Washington from yachts, including effects on employment and tax base. Secondary information along with survey data were used in an input-output economic model to estimate the economic impact of a new development and to assess the "ripple effects" caused by increasing or decreasing expenditures in various parts of an economy. The following are the major conclusions of this research:
- Including secondary effects, yachts valued at over $300,000 generate a total of $434.1 million in economic activity each year for Washington. This spending creates a total of 1,923 jobs, and $110.2 million in labor income.
- The State of Washington collects a total of $31.5 million in tax income from yachts, including sales and use taxes, annual fees, and taxes on direct and secondary business activity.
- 784 yachts that are being kept in British Colombia and California would likely relocate to Washington if taxes were reduced. This would bring in about $70 million per year for the state due to ownership and operating costs.
- Capping the sales tax on vessel purchases is expected to generate at least $9.4 million per year in additional yacht sales revenue.
- If entity-owned vessels were allowed to obtain cruising and use permits, 241 vessels would be expected to participate, spending $17.1 million per year in Washington.
- The proposed legislation is expected to generate $32.1 million per year in direct spending, $47.1 million in total economic activity, 370 total jobs, and $19.6 million in labor income per year. Over the next three years the legislation would create a cumulative increase of $18 million in tax revenues.
Tax and fee policies vary widely among coastal states in the United States however Washington has some of the most restrictive yacht tax and fee policies in the nation. Numerous states have embarked on efforts to reform the taxes and fees they assess on recreational boats. This research indicates that Washington State would benefit from reformed tax policies on the yachting industry.
