State lawmakers are poised to approve a bill tailored to benefit a state senator’s constituent who operates a fishing and guide business using boats and motors he does not own – under a promotional demonstration arrangement with a boat manufacturer and marine engine maker – to take paying customers out on fishing excursions on Long Island Sound.
The state Department of Energy and Environmental Protection, which is in charge of boating regulations, is opposed to the bill – which passed in the House on Friday by a 143-1 vote and could come up in the Senate as early as Monday. DEEP says that Capt. Dan Wood is operating his fishing excursion business out of Niantic in a manner that deprives the state of thousands of dollars in tax revenue and fees – because he never owns or registers the craft, but in effect uses “dealer plates” of a local boat dealership.
The new bill would make it legal to operate a commercial fishing boat with a marine dealer registration, instead of owning the boat outright. Wood may be the only one affected by it; he said in an interview Monday he doesn\’t know of anyone else who would be affected by it.
The measure is being pushed by Wood’s local state senator, Andrea Stillman, D-Waterford, co-chair of the legislative education committee. She and other local legislators have supported the measure, saying it would preserve an unusual situation that benefits the local economy.
The DEEP does not agree.
“This bill, if passed, has the potential to remove about $500,000 in revenues from sales tax on such vessels …. Clearly he [Wood] is taking a broad interpretation of regulations and is doing so illegally,” Eleanor Mariani, state boating law administrator and director of DEEP’s boating division, wrote in an email Friday to the department’s legislative liaison, Robert LaFrance.
However, Wood said in a telephone interview on Monday that Mariani’s estimate is unrealistic, because it’s based on a scenario in which all 170 or so the holders of party-boat or charter-boats entered a promotional arrangement such as his, to demonstrate boats for a manufacturer.
So far, no one else has been able to find this unusual niche as a fishing guide and product demonstrator, Wood said.
He said he is a small businessman – he’s the only employee – with an enterprise that benefits the local economy and all he wants to do is continue with what he’s been doing since the 1990s.
The DEEP came after Wood in 2009 over the “demo” arrangement that had existed since 1995, and Wood went to Stillman for help. He said that Stillman was able to get a bill passed extending his ability to keep operating in the same manner until this coming May 27. Now, he said he needs the new bill to keep operating in the same way he has been.
Wood described his business this way in written testimony in favor of the bill, which was submitted for a public hearing in March: “I have been operating a light tackle fishing guide service since 1980 out of Niantic, Conn. [although he owned his own boat until starting the demo arrangement in 1995 with Atlantic Outboard, a boat and motor dealership in Westbrook]. I am the only full-time fishing guide in the state of Connecticut. … This is a very unique situation in that on a daily basis I demonstrate and promote the products of Hydra-Sports boars and Evinrude motors to potential clients of Atlantic Outboard,” a Hydra-Sports and Evinrude dealer. The arrangement “is advantageous to product sales, due to the high number of days the boat is on the water, bearing the signage prominently displayed on the boat for Atlantic Outboard, Hydra-Sports and Evinrude.\”
Wood said the boat he will use this year – if the bill passes and he can continue to operate – is 30 feet long and is powered by twin, 300-horsepower Evinrude outboard motor prototypes.
He said that operating with the “demo” boats and engines does not deprive the state of any tax revenue – because at the end of each year, the boats and motors he uses are sold through dealer that gives him use of them during the fishing season; thus, Wood said, the state ultimately collects sales taxes and registration fees from the eventual buyers.
Wood said his situation is “unique,” and “I am a square peg trying to fit into a round hole, and they don’t want to accommodate me.” That’s why Wood, 51, said he needs the bill to enable him to stay in business. Wood said that by using the boats and motors on a “demo” basis to take people fishing from mid-May to Nov. 1, the Westbrook boat dealership sells several boats a year to people who’ve gone out fishing with him.
Those boat and motor sales benefit the local economy, he said, adding that his paying customers who stay in local hotels and eat at restaurants in the area.
The bill has received almost no attention during the bustle of the legislative session, and the only people to submit testimony about it at a March public hearing were Wood – who calls his business the Connecticut Woods and Water Guide Service – and Randy Jernigan, the Pennsylvania-based regional sales manager for Hydra-Sports, the boat manufacturer. Both supported it.
Although DEEP submitted no testimony at the public hearing, “We’ve been opposed to this measure because of the revenue loss and issues of fairness,” DEEP spokesman Dennis Schain said Monday. He said the bill is so narrowly written that it gives Wood, and perhaps a few others who could avail themselves of it, “tax advantages that aren’t available to others” who are required to pay licensing fees and taxes on boats they own outright to operate fishing businesses.
“Instead of purchasing a vessel to operate a Charter/Party Fishing Guide Service, these businesses could now simply demo a boat for a dealer” – as Wood does for Hydra-Sports – therefore removing that tax base,” Mariani wrote in her Friday email to LaFrance.
Wood provided a copy of an email from Atlantic Outboard\’s owner, Paul Cusson, for use in talking to local legislators about the bill. In it, Cusson said: \”We have been working with Dan Wood for over 10 years, and in that time have sold dozens of large boats as a direct result of this relationship. The ability to sea trial potential customers, anglers seeing the boat in action and research and development have been instrumental in our ability to be one of the top selling outboard fishing boat dealers in Connecticut.
\”While both Hydra-Sports and Evinrude could use captains and dealers anywhere in the country they chose Atlantic Outboard and captain Dan Wood, and have continued this relationship due to the retail success of this endeavour. Every year, at the end of the season we sell the boat, and replace it with another new one. Without the ability to do this Dan Wood would keep the same boat for years and that would cost all of revenue, including the sales tax.
\”Dan Wood has a commercial fishing license therefore he would not pay sales tax when he buys a boat, so this is in no way an attempt avoid paying sales tax. In fact I\’ve seen the additional sales this opportunity has given us over the years, and of course with that we have generated more sales tax. Our boat sales have increased 400% since we started this program. While I can\’t give all the credit to our \”pro staff\” program it certainly has been a major contributing factor. I am asking for your support on this bill as in this tough economic time we all need every opportunity to maintain our businesses and keep our employees working. \”