Assemblymember Ruskin's Response to Republicans Failure to Close the Yacht Tax Loophole

SACRAMENTO - Assemblymember Ira Ruskin today expressed outrage and disappointment that Republican Assemblymembers refused to support a bill that would have closed a tax loophole on the purchase of yachts and private planes.

The intent of SB 8x3 was to discourage tax avoidance on expensive purchases, such as yachts, through offshore delivery arrangements in which the delivery takes place outside the state's waters and the yacht is berthed for a few months in a foreign country before being brought back to California.

"It is regrettable with our current budget crisis that Republican Assemblymembers are unwilling to close a tax loophole that benefits a select few citizens bent on avoiding taxes at the expense of the rest of the state's population," said Assemblymember Ruskin.

SB 8x3 was initially proposed as one method to help ease the state's huge budget deficit. The bill required a two-thirds vote of the Assembly to pass. It received all the Democrats' votes, but needed an additional seven votes from Republican members to pass.

"While there is a real possibility that many of our parks will be closed to families and schools that need updated textbooks for our children will be denied, yacht owners are given a pass," Ruskin said. "I find it inexcusable that my Republican Assemblymember colleagues couldn't push the aye button on this one."

The State Board of Equalization and the Department of Finance estimate that SB 8x3 would have increased general fund revenues by $21 million in 2008-09 and annually thereafter.