Next Story

Atlanta science march leaders claim ‘endorsement’; Deal’s office says no

Yacht tax break survives close call in Georgia Senate committee


Legislation narrowly stayed alive Monday that would give tax breaks to the owners of giant yachts who have their vessels retrofitted at a new facility owned by a politically connected Savannah company.

The Senate Finance Committee voted 6-5 to approve House Bill 125, with Senate Finance Chairman Chuck Hufstetler, R-Rome, breaking a tie vote. Some of Hufstetler’s fellow Republicans on the committee, including Senate Majority Bill Cowert, R-Athens, voted against it, making its chances of winning final passage iffy.

Under the legislation by state Rep. Ron Stephens, R-Savannah, a boat owner would have to spend more than $500,000 on a retrofit, repair or maintenance job before getting any break on sales taxes on parts, engines or equipment.

While Stephens said there are boat repair businesses in Savannah, none can do a big retrofit, repair or maintenance jobs on massive yachts. The tax break is designed to help spur a big-boat retrofit business, and he said since such work isn’t currently being done in Georgia, the tax break wouldn’t cut into any revenue the state currently receives.

The bill passed the House last month.

Stephens said the owner of the Savannah Yachting Center — Colonial Group — is planning to invest $50 million to $60 million into the big-boat business and is promising to create hundreds of jobs.

Stephens said it will be down the Savannah River from a massive luxury hotel project that lawmakers approved a multimillion-dollar tax credit for in 2015.

Colonial Group operates a collection of shipping, and oil and gas businesses, including Enmark gas and convenience stores. Forbes Magazine last year ranked it the 146th-largest private company in the country, with $3 billion in revenue the previous year.

The company and its president, Robert Demere, have been active in state politics, donating more than $33,000 to the campaigns of lawmakers over the past two years, including $2,500 to House Speaker David Ralston, R-Blue Ridge, and $1,500 to Senate President Pro Tem David Shafer, R-Duluth.

Demere has donated $6,500 to the campaigns of Lt. Gov. Casey Cagle, the Senate’s president.

Ten lobbyists are registered to work for the company this session, including former Georgia Senate leader and gubernatorial candidate Eric Johnson of Savannah.

Demere, who served on Gov. Sonny Perdue’s Energy Policy Council, has been vocal in opposing construction of a petroleum pipeline along the Savannah River and coastal Georgia by energy giant Kinder Morgan. Lawmakers passed a temporary pipeline moratorium last session and are working on another pipeline bill this year.

Stephens said the tax break for retrofits of the massive yachts would give Georgia businesses the chance to perform work now done in other states, such as Florida.

“This is all about making sure our businesses are competitive,” Stephens said. Because the state currently doesn’t have a big-boat retrofitting business, “Georgia has nothing to lose,” he added.

State Sen. Bill Heath, R-Bremen, a member of the Senate Finance Committee, has expressed concern that the tax break would only be part of the state’s investment. Stephens is a champion of such bills, including the tax break for the luxury hotel complex that passed in 2015, and he promotes expanded tax breaks pretty much every legislative session.

State Sen. Nan Orrock, D-Atlanta, another member of the committee, asked Stephens, “Have you considered the optics to this bill?”

Even if the tax break helps spur a new business, Orrock said, the public “will see that Georgia is giving tax breaks to people with $25 million yachts.”

“They,” Orrock said, “will say, ‘Here the rich folks are walking away with a tax cut.’ “

The bill now moves to the Senate Rules Committee, which will decide whether it goes to the full chamber for a vote.

Legislative session coverage

The Atlanta Journal-Constitution has the largest team covering the Georgia Legislature. To see more of its legislative coverage, go to http://www.myajc.com/georgia-legislature/. To track particular bills and resolutions, check out the Georgia Legislative Navigator at http://legislativenavigator.myajc.com/. You can also follow the proceedings on Twitter at http://twitter.com/GAPoliticsNews or on Facebook at http://facebook.com/gapoliticsnewsnow.

Subscribe to our newsletter for more news about Georgia politics. Subscribe to politics news alerts in the AJC news app.


Reader Comments ...

Next Up in Georgia Politics

Proposal would prohibit local government bans on Airbnb in Georgia
Proposal would prohibit local government bans on Airbnb in Georgia

With Airbnb and other short-term rental services becoming a rapidly growing industry, a Marietta lawmaker wants to make sure the flourishing businesses aren’t regulated out of business in Georgia. State Rep. Matt Dollar said since the industry is not going away, legislators need to define a statewide framework for how the businesses should...
Georgia’s immigration enforcement panel draws scrutiny
Georgia’s immigration enforcement panel draws scrutiny

When Georgia lawmakers passed a sweeping law cracking down on illegal immigration in 2011, they created a board to hold state and local government officials accountable. Over the next six years the Immigration Enforcement Review Board received 20 complaints to investigate, according to documents obtained through Georgia’s Open Records Act. And...
Why Donald Trump is more like Ronald Reagan than most other Republicans
Why Donald Trump is more like Ronald Reagan than most other Republicans

A roundup of editorials Monday looks at the economy as Donald Trump and the Republicans work on a tax cut bill. Opinions from the Right  From NBC News: Trump’s active leadership style and his combination of populism with market economics is far closer to Reagan’s words and deeds than anything House Speaker Paul Ryan of Wisconsin...
Presidents George W. Bush and Barack Obama remind us of who we are as a country and other opinions from the Left
Presidents George W. Bush and Barack Obama remind us of who we are as a country and other opinions from the Left

Here’s a roundup of editorials that remind us of the values we should cherish as a country and how our democracy needs to recover.  Opinions from the Left: From CNN: “We know, deep down, that repression is not the wave of the future. We know that the desire for freedom is not confined to, or owned by, any culture; it is the inborn...
Georgia blocks $100 million in fraudulent tax returns, so far, in 2017
Georgia blocks $100 million in fraudulent tax returns, so far, in 2017

Despite major data breaches such as the one at Equifax, tax agencies — including the Georgia Department of Revenue — are reporting increasing success in the war to stop fraudulent returns from turning into big money for crooks. Department of Revenue Commissioner Lynne Riley said the state has blocked $108 million worth of fraudulent returns...
More Stories