Tax-saving Tips In A Tough Economy: Dock your $7M yacht in RI, save $500K in MA taxes! USA! USA!

Sen. Kerry docks yacht in R.I., saves on taxes
Lawmaker saves $500k in taxes on $7 million yacht

http://www.msnbc.msn.com/id/38378992/ns/politics/



"Isabel," the 76-foot yacht owned by Democratic Sen. John Kerry of Massachusetts, is undergoing repairs at the Hinckley shipyard in Portsmouth, R.I., Friday, July 23, 2010.

BOSTON — Massachusetts Sen. John Kerry is docking his family's new $7 million yacht in neighboring Rhode Island, allowing him to avoid paying roughly $500,000 in taxes to his cash-strapped home state.

If the Isabel were kept at the 2008 Democratic presidential nominee's summer vacation home on Nantucket or in Boston Harbor near his city residence, he would be liable for $437,500 in one-time sales tax. He would also have to pay $70,000 in annual excise taxes.

Rhode Island repealed those taxes in 1993. That has made the state something of a nautical tax haven.

Kerry spokesman David Wade said Friday the boat is being kept at Newport Shipyard not to evade taxes, but "for long-term maintenance, upkeep and charter purposes."

Wade noted the vessel was designed by Rhode Island boat designer Ted Fontaine and purchased in the state. It was built in New Zealand by Friendship Yachts.

A Department of Revenue spokesman said Kerry would be liable for Massachusetts taxes if he berthed the boat in the Bay State within six months of its purchase. If the Isabel were brought to Massachusetts after that period, the state would have to decide if it wanted to pursue the taxes.

Massachusetts, like most other states, has been grappling with plunging tax revenues. Last year's budget deficit was $600 million, and officials are bracing for a $1 billion deficit this year.