Kerry to pay any taxes 'owed' on R.I.-berthed yacht
BOSTON — Sen. John Kerry, D-Mass., will pay his cash-strapped state the applicable tax on a luxurious 76-foot yacht "if any taxes are owed," according to a spokesman for the 2004 Democratic presidential candidate.
The Boston Herald on Saturday quoted David Wade, Kerry's chief of staff, as stating: "Sen. Kerry and his family always comply with tax law, and if any taxes are owed, of course, they will be paid."
Kerry came under scrutiny Friday when the newspaper reported that he has docked his family's new $7 million yacht, Isabel, in neighboring Rhode Island, allowing him to avoid paying about $500,000 in taxes to Massachusetts.
Coast Guard registration records show the vessel is owned by Great Point LLC, a limited liability corporation based in Pittsburgh, longtime home of Kerry's wife, Teresa Heinz Kerry, heiress to the Heinz ketchup fortune.
If the Isabel were kept at Kerry'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 and $70,000 in annual excise taxes to the state and to Nantucket, according to the Herald.
Rhode Island repealed those taxes in 1993, making the Ocean State something of a nautical tax haven.
Kerry's spokesman said Friday that the boat was kept at Newport Shipyard "for long-term maintenance, upkeep and charter purposes." The senator said it was designed by a Rhode Island boat designer, built in New Zealand, and purchased in Rhode Island.
A state 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, the state would have to decide if it wants to pursue the taxes.
Massachusetts, like most other states, is grappling with plunging tax revenues. Last year's budget deficit was $600 million, and officials are bracing for a $1 billion deficit this year.
Massachusetts Republican Party Chairwoman Jennifer Nassour criticized Kerry, declaring that if the state's taxes "are too high for someone as rich as Sen. Kerry, they are absolutely too high for working-class taxpayers who are being squeezed at every turn."
The Herald described the 76-foot sloop as a "super-luxe ... Edwardian-style" yacht with "glossy varnished teak interior, two VIP main cabins and a pilothouse fitted with a wet bar and cold wine storage."
According to the Herald, former Massachusetts gubernatorial candidate Christy Mihos earlier paid $23,000 in Bay State sales tax and $1,320 in excise taxes after being criticized for avoiding both by berthing a motor yacht in Rhode Island.
The newspaper reported that the state tried to force a New Hampshire tire retailer to pay use taxes it claimed were owed by Massachusetts motorists who bought tires in the tax-free neighboring state. Massachusetts lost that case in the state Supreme Court, the newspaper said.
