Tennessee’s Boaters are already being penalized by the State of Tennessee when they pay the $.20 cent per gallon Tennessee Road Tax even though they are not running their boats on the road, they are running them on the water
Nashville, TN (PRWEB) February 24, 2012
With gasoline prices on the rise, the travel, tourism, and recreational boating industry is very concerned about the negative affect the higher prices will have on the tourism business in Tennessee this year.
“The cost of getting fuel to marinas is much higher than distributing gasoline on land,” says Mitch Jones, President of the Tennessee Marina Association(TMA). Adding “Fuel” to the “Fire” so to speak is the relatively unknown fact that the U.S. Army Corps of Engineers (USACE) Rental Fee System that the government uses to collect rent from marinas, can cause the cost of fuel on the water to be as much as $.25 cents per gallon higher than it should be. Jones says that marina owners are outraged that the U.S. Army Corps of Engineers, Nashville District, has refused to lower the rental payments on gasoline sales to a flat 1% fee even though the USACE is mandated by congress to consider the best interest of the boating public as part of their “Recreation Mission”.
The Tennessee Valley Authority (TVA) recently worked with marina owners on TVA waterways and implemented a reasonable 1% fee on gasoline sales. However, according to TMA’s Executive Director Michele Edwards, “The USACE has refused to respond to the concerns about this “unfair tax” on boaters who use Tennessee’s Waterways. When gasoline prices were low (years ago), the USACE fee did not cause such a negative impact but with today’s volatile gas prices, boaters are paying as much as $.25 cents per gallon just to cover the unreasonable USACE rental fee. As the price of gasoline rises, the USACE rental system adds more to the cost of each gallon and therefore, the boaters get penalized.”
For over ten years, the Tennessee and Kentucky Marina Association, which represents over 300 marinas in the two states, has requested that the Army Corps lower the rental fee on gasoline and food sales to a flat 1% fee because these items are very low margin items. The USACE allows marinas to pay a flat 1% rental fee on the sales of boats and motors due to the very low profit margin and marina operators are asking for the same consideration on food and fuel sales. The low profit margin on fuel and food sales is primarily the result of the very short season, (only 3 to 5 months), that marinas have to generate revenue. Edwards says that the USACE’s reluctance to consider this after 10 years of cooperative, diplomatic negotiating, is causing many marina owners to consider eliminating food and fuel sales because the rent paid to the USACE from these items is higher than the profit that these items generate. The USACE charges marinas from 2.5% to 4.5% of gross sales on all retail sales and services that marinas provide.
Tennessee’s Marinas do not sell the high volume of gasoline that gas stations on land sell and therefore, marinas cannot negotiate low gasoline rates with their supplier. Furthermore, the marinas must provide an attendant at the gas dock to catch boats and insure safety of the fueling procedure – so marinas essentially offer full service instead of self-service. Additional expenses that the marinas incur which increase the price of fuel on the water are such costs as; underwater piping, extensive environmental insurance, break-away valves, emergency spill kits for water use, and much higher fines and penalties if a gas spill occurs on the water versus on land.
According to Jones, “Tennessee’s Boaters are already being penalized by the State of Tennessee when they pay the $.20 cent per gallon Tennessee Road Tax even though they are not running their boats on the road, they are running them on the water. Now the federal government (USACE) insists on continuing an “antiquated tax” on boaters who buy gasoline on Tennessee’s Waterways. “President Obama is touring the country promoting tourism and yet our own federal government is slowing and impeding tourism and recreational boating by putting the interest of the public behind their own interest of maintaining the status-quo.”
As the Executive Director of both the Kentucky and Tennessee Marina Associations and a former marina owner herself, Michele Edwards has listened to boaters criticize marina owners for years about the high cost of fuel. Edwards says the boating public needs to become educated about how the state and federal government is essentially “double taxing” fuel sold on the water and should contact their State and Federal Representatives and ask them to stop this “unfair taxation”. State and Federal taxes on gasoline totals $ 39.4 cents per gallon and this is used to build and maintain roads. On top of this, Edwards continues, “the USACE rental fee adds up to $.25 cents per gallon which causes the boating public to complain that marinas are gouging the public.” TMA President Jones adds, “It is the government that is doing the gouging and the public needs to wake up and demand accountability.”
Edwards says; “The USACE depends on the U.S. Congress for funding and the Nashville District contains 10 of the most visited lakes in the entire United States. The USACE takes these visitation numbers to congress and uses this data to get more and more funding for USACE projects. It is the marinas which generate the visitation – not the USACE. However, the Nashville District returns none of the rent that marinas pay to improve the roads, ramps or parking areas on the land that marinas rent/lease from the USACE. The USACE disregards the fact that it is the marinas which generate over 78% of the visitation to the Nashville District’s Lakes and therefore congress should seriously re-think the USACE’s “Recreation Mission” and allow the USACE to focus on flood control and navigation, areas that the USACE is also struggling to manage.”