Boating generates $3.9 billion a year in economic activity for Washington state, a new study concludes.

Reducing some of Washington’s high boating-related taxes could actually generate millions more in revenue for state coffers by making it more attractive for people to keep and maintain a boat here, an economic study concludes.

That’s just one of the findings of the study by Bellevue-based Hebert Research, Inc. on the economic impacts of boating in Washington.

Boating generates a staggering $3.9 billion a year in economic activity in Washington, the study found, including manufacturing, boat ownership and operating costs, as well as revenue from businesses in boating-related industries.

Boats worth $300,000 and more, which comprise less than 10 percent of boats in Washington, are alone responsible for $244.2 million in direct economic activity, the study notes.

“While we knew anecdotally and with firsthand experiences that boating means business, the study provided the data needed to make our case in a more compelling manner,” said Peter Schrappen, director of government affairs for the Northwest Marine Trade Association (NMTA), which co-funded the study.  

The recreational boating industry is also a major source of family-wage jobs, the study found, employing some 28,000 people in a variety of marine trades with an average salary of $56,000.

But as lucrative as the state’s marine industry is, the study concludes that millions more could be generated. Among its key findings is that Washington has some of the nation’s highest boat taxes, prompting many recreational boat owners to keep their boats — and the dollars associated with them — in British Columbia, while discouraging other boats from cruising in Washington for extended periods.

For example, the study notes that several states including Hawaii, Alaska and Oregon do not charge sales or use tax on boat purchases. Others have taken steps to amend boating taxes: Rhode Island eliminated sales and use taxes on boats in 1993, and Maine, South Carolina and Florida have undertaken boat tax reforms more recently.

But in Washington, boaters are charged a sales tax when they purchase their boats, plus an annual excise tax and fuel taxes. Visiting boats owned by businesses entities from outside of the state, as many megayachts are, must leave Washington waters after 60 days or be subject to being taxed 10 percent of the boat’s value.

Based on surveys of marinas and interviews with recreational boating experts, the study projected that a total of 784 recreational boats would move from B.C. and California to Washington, resulting in spending of about $70 million annually, if not for the state’s tax policies.

Additionally, entity-owned boats would remain in Washington an additional 14,460 days annually and bring in more than $17 million in revenue, the study concluded.

“As we all know, recreational boating is part of our state’s past,” Schrappen said. “Now we know what it means for our state’s present and what it could mean in the future.”

The study was funded by the NMTA and the Northwest Yacht Brokers Association. It is a key tool for association members and their lobbyists as they advocate for passage of legislation dubbed the Marine Tourism Bill.

House Bill 1904 would allow visiting boats owned by business entities to remain in the state longer without paying exorbitant fees. An NMTA document in support of the bill notes that boats “are floating economic stimulus packages” that keep money where they are.

“Marinas, boatyards, electricians, welders, painters, carpenters benefit when that boat is moored in our state’s waters,” it notes, “not to mention grocery stores, hotels, bait shops, restaurants, jewelry shops … if that boat pulls up anchor and goes to Canada (or never visits to begin with), then THEIR tradesmen and small communities benefit.

“British Columbia’s marinas are full, ours are empty.”

Jim Hebert, the study’s author, said there’s a persistent perception among Washingtonians that boats are owned mostly by wealthy people who don’t deserve a tax break.

“The reality of it is this — the boater is a very average-income type of person who sacrifices to have that lifestyle. A boat becomes a vacation in itself. They actually keep money in the state.”

From a tax policy standpoint, Hebert said, it makes economic sense to create a more welcoming and appealing environment for boaters.

“We ought to look at our tax policies as a rudder,” he said. “How do we want to steer our economy? Do we want to steer it to where jobs, revenues and incomes go elsewhere? Or do we want to have policies that direct those boats back here?”

About Deborah Bach

Deborah Bach is the editor and co-founder of Three Sheets Northwest. She is an avid sailor and long-time professional journalist. You can find Deborah aboard Three Sheets, an Island Packet 38, with her husband Marty and their cat Lily.

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