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Date: 11-06-2017

Luxury houseboat owners get a big tax break in Kentucky. Fishermen pay 30 times more 

 State property tax rate on fishing boats is 30 times higher than the tax rate on $250,000 houseboats State property tax rate on fishing boats is 30 times higher than the tax rate on $250,000 houseboats

Dozens of high-end houseboats float at Burnside Marina on this sunny October afternoon, not far from where Mark Lunsford loads his 21-foot Skeeter bass boat after a few hours of tournament fishing.

Lunsford and many of the other fishermen competing on Lake Cumberland know that these luxury houseboats — some 100 feet long with hardwood floors and full kitchens — might cost more than $250,000 to buy or more than $500 a night to rent.

What these anglers don’t realize is that the state property tax rate on their fishing boats is 30 times higher than the tax rate on documented houseboats — meaning they’re registered with the U.S. Coast Guard. That means the state allows people to pay less state property tax on a $150,000 houseboat than on a $25,000 fishing boat.

“I’m shocked,” says Lunsford, who lives in Lexington. “Something don’t seem fair.”

The state property tax rate on bass boats, runabouts and pontoons is 45 cents per $100 of value, while the rate on documented houseboats and cabin cruisers is just 1.5 cents per $100.

So, the state property tax bill on a $25,000 bass boat would be $112.50, while the state would receive $22.50 on a documented houseboat worth $150,000.

“That’s unbelievable,” Lunsford says. “I believe in paying my taxes, but it should be the same across the board.”

In 2016, the total assessed value of documented boats in Kentucky was $139.1 million, according to the state Department of Revenue, but the owners paid just $20,869 in property taxes to the state.

The owners would have paid the state $626,056 if taxed at the same rate as undocumented boats.

Local officials, though, think even that is a low-ball number.

That’s because they suspect that many owners aren’t filing any tax returns on their floating vacation homes.

State Rep. C. Wesley Morgan is one high-profile example. The Richmond Republican acknowledged to the Herald-Leader in August that he had not paid state or local property taxes on his luxury houseboat for more than a decade.

One court document put the value of the 112-foot-long boat at $350,000.

Morgan said the manufacturer who sold him the boat in 2004 told him that if he filed paperwork on the vessel with the U.S. Coast Guard, he wouldn’t owe property taxes on it.

In fact, owners must either register houseboats with the Coast Guard or get a state title on them, and pay taxes on the value of the vessel in either case.

But local tax assessors in several counties on Kentucky’s lakes and rivers told the Herald-Leader that some houseboat owners avoid paying property taxes.

Christie Cruce, the PVA in Lyon County, said that when state Department of Revenue officials helped her check on the number of documented houseboats moored in her county in 2011, only 10 percent to 15 percent of the owners were filing tangible property tax returns.

Cruce said compliance with the law among houseboat owners in her county is no more than 25 percent, based on the number of tax returns she received this year.

“The rest are not paying anything,” she said.

The compliance rate in Clinton County is probably less than 90 percent, said Pat Campbell, the PVA there.

When houseboat owners fail to file tax returns, it costs local governments far more than it does the state.

Counties and local taxing districts, such as school boards and libraries, typically set tax rates on documented boats far above the state rate.

“It is costing the counties, the local governments,” Cruce said.

Hard-to-find houseboats

There is not an easy system to catch owners of houseboats and cabin cruisers who don’t file tax returns on their boats, according to state and local officials.

Unlike with smaller boats, there is nothing on the outside of a houseboat to show whether the owner has paid taxes.

On smaller boats, which must have a state title, there is a number and a sticker on the hull that shows whether the registration is current, similar to the stickers on vehicle license plates. Officers from the state Department of Fish and Wildlife Resources can see whether a registration is expired.

Coast Guard rules require a documented houseboat to have a name and a hailing port on the outside of the hull, but not an exterior identification number.

The Coast Guard maintains a database of documented boats in the United States, but the hailing port listed in the database doesn’t have to match the location of the boat, and there isn’t a way for tax authorities in Kentucky to search and find all documented boats on a lake or river, officials said.

“It is extremely hard to find these boats,” said Jeff Feese, the PVA in Adair County and a former regional field representative for the state Department of Revenue.

State revenue officials can compare tax returns to see whether a person filed one year but not the next, but if the owner has never filed a tangible return on the boat, it wouldn’t show up.

“There’s so many of them that never file the first one,” Feese said.

Some marina operators have pushed back hard at times when county tax assessors wanted to walk around the docks to look for documented houseboats not on their rolls.

The state Attorney General’s Office said in a May 2012 opinion that several marinas refused access to their docks to property assessors. The opinion said that in most cases, PVAs have the authority to go on docks to assess boats.

Boosting tourism?

Many houseboat owners argue that they face a high property tax burden, even with the state tax break, because of local taxes.

Wayne County PVA Bobby Upchurch said the total property tax bill there on a houseboat valued at $200,000 would be $2,312.

School taxes are a particular sore point. One reason is that they are considerably higher — ranging from 42.6 cents to 54.1 cents per $100 in the counties around Lake Cumberland, for instance.

Another is that many houseboat owners live in other states or in areas of Kentucky far from the lakes where their boats are moored, so they’re supporting schools they don’t use and feel they have no say in the rates.

Jerry Harden, who has a houseboat at Burnside Marina and has been involved in manufacturing houseboats, said the high taxes have been a factor in boats being moved from Lake Cumberland, hurting the tourism economy.

“In my view, the schools are stealing jobs and economic benefit from the local community and Kentucky tourism overall,” Harden said.

Raising state taxes on houseboats in Kentucky would cause some owners to take their boats to other states, said Michelle Edwards, executive director of the Kentucky-Tennessee Marina Association.

Marina operators in Kentucky look nervously toward Tennessee, which has no property tax on boats owned for individual use.

They say Kentucky’s reduced state tax rate on houseboats makes it easier for people to buy them and keep them, and that boosts tourism and helps the economy.

“Everyone looks at the cost of ownership,” said J.D. Hamilton, who owns Lee’s Ford Marina Resort in Pulaski County and is head of the marina association on Lake Cumberland.

“You do want to encourage people to buy houseboats,” Hamilton said. “They’re made here.”

Former state Sen. Chris Girdler, a Republican from Somerset who has been involved in the houseboat industry, said each houseboat owner spends thousands of dollars annually in the community where the vessel is moored.

“So, a lower tax rate is definitely a selling point to individuals and would help entice houseboat owners to choose Kentucky to spend that money, rather than say, Tennessee,” Girdler said.

‘There’s something unfair about that’

For some people, the much higher state tax rate on fishing boats and other watercraft raises an issue of fairness.

Owners of non-documented boats — sometimes referred to as registered boats — must get a state title on them, just like owners of cars and trucks.

“Nobody else that has a registered boat has that break,” said Campbell, the PVA in Clinton County, home to sections of both Lake Cumberland and Dale Hollow Lake.

Local officials also said that the tax rate for cars doesn’t change based on a vehicle’s size or value. Those who drive expensive sports cars pay the same tax rate as those who drive clunkers.

The legislature carved out the tax break for documented watercraft in 1998. Then, as now, the concern was over owners taking their expensive boats and money elsewhere.

Bill Gary, with Green Turtle Bay Resort & Marina on Lake Barkley, told members of the House budget committee in March 1998 that he lost 15 percent of his slip-rental business after a county tax assessor began enforcing the levy more aggressively the year before.

Lowering the tax rate on houseboats would help his business and keep tourism dollars in Kentucky, he told lawmakers.

A lawmaker questioned Gary about the fairness of the proposal, since it would keep the higher tax rate on smaller boats that are more typically owned by Kentucky residents.

“It seems like we’re lowering the taxes on the people that got the money and keeping the higher taxes on Kentuckians,” said Harry Moberly, a Richmond Democrat who chaired the committee.

Moberly then joined in voting to approve the bill.

Some local officials are not convinced that there is any justification for the tax break.

“What’s the use of it?” said Tony Lindauer, the property valuation administrator in Jefferson County. “I think it’s just a way of getting out of paying taxes on your boat.”

Lawmakers also made local taxes optional on documented boats, unlike on smaller boats. So while many counties, schools and local taxing authorities levy a tax on documented boats, not all do.

Former state Sen. Ken Winters, a Republican from Murray, said he was troubled as a lawmaker by the state’s differing tax rates on boats that share the same waters.

“There’s something unfair about that, isn’t there?” Winters said.

‘A much smarter way’

Winters sponsored a bill in 2012 that local officials said would have made it much easier to catch houseboat owners who shirk their tax payments altogether.

The bill would have required marina operators to report information about who rents their slips, mirroring a state law that requires anyone who rents space for a mobile home to report the name of the homeowner and the type and size of the trailer to the county PVA annually so they can be assessed.

It would have required anyone renting space to dock a federally documented boat to give county PVAs a list of renters annually, with the names and addresses of boat owners and information on the vessel.

Winters said marina operators strongly opposed the bill, which died in the Senate budget committee.

Some marina operators, including Hamilton, think the state should do away with property taxes on houseboats and instead require every boat that uses a Kentucky waterway to pay an annual fee, perhaps based on the size of the boat, and require a state identification number. That would be more uniform and would create a way to enforce collections, Hamilton said.

“Everybody pays something. I think that’s a much smarter way to do it,” he said.

 

Good Afternoon!

Winter is upon us and I just wanted to remind golfers to please call ahead to check golf course conditions. With the colder tempts, frost and even chance of snow, we are not sure what to expect up here on the ridge!

Missy KennedyMissy Kennedy

The golf course and pro shop are open year around, WEATHER PERMITTING!

Pro Shop hours are 8:00 a.m. to 4:00 p.m., every day.  

Winter Rates

Weekday, $20.00 per player

Weekend, $25.00 per player

All golf carts must be in by 5:30 p.m. due to darkness.

As a reminder, the golf course and pro shop will be CLOSED on November 23, Thanksgiving Day!

Enjoy your black Friday on the course, if the weather permits!

It’s not too early to start thinking about Christmas!!!  If you spend $50.00 on pro shop merchandise you will receive a gift certificate for a FREE round of golf to be used in 2018!!  This promotion will begin TODAY through December 21st.    

See you at the course!!

Missy Kennedy,

PGA Head Golf Professional/Park Manager

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Eagle Ridge Golf Course

Yatesville Lake State Park

(606) 673-4300 Golf Pro Shop

(606) 673-1492 Business Office

(606) 673-4301 fax

 

 

October 19, 2017

We have recently received several inquiries about the Low number of squirrel in the Louisa-Lawrence county area this year so we sent a message to the Ky. Fish and Wildlife Resources center in Frankfort.

 

Ky. F&W,

I have been getting calls to my website (thelevisalazer.com) asking about why there doesn’t seem to be many squirrel in our county this year. Is it related to the Blue Tongue disease in deer?

Also, I would like to have the name and contact info for the Conservation officer for Lawrence County.

Thanks in advance,

Mark

Eastern Grey Squirrel Eastern Grey Squirrel

The following message came back today explaining what the state F&W folks think may be the problem; 

 

Dr. Grayson,

We have also had some reports of locally low squirrel populations in E KY, and some of those were as early as last fall. It’s not unusual to go through highs and lows of small game species like squirrels. There is no known connection between EHD (blue-tongue) in deer and squirrel populations.

At this time, we don’t believe there is reason for great concern, but we will be monitoring the situation. Last fall was exceedingly dry (spurring all the wildfires), and this likely had a negative impact on squirrel survival (drought not the fire). The drought likely aborted hard mast production which is a critical component of a squirrel’s diet in the fall and winter.

For those that survived, their reproductive success was likely adversely affected. So, you can see a multi-year carryover from unfavorable weather conditions. Please don’t hesitate to send any additional questions my way. If you are receiving reports of observations of dead squirrels, then please send them my way as well.

Thanks for the inquiry!

John J. Morgan, Certified Wildlife Biologist
Small Game Program Coordinator
KY Department of Fish and Wildlife Resources
#1 Sportsman's Lane
Frankfort, KY 40601

 

(NOTE: BTW, there is no Conservation Officer stationed in Lawrence County at the present time.)

 

Date: 10-25-2017

Three new nature preserves totaling 2,000 acres on Pine Mountain in Letcher County will connect the Kingdom Come State Park to the Hensley-Pine Mountain Wildlife Management area, and the E. Lucy Braun State Park Nature Preserve to the Kentenia State Forest.

The connections will create 7,000-acre and a 6,000-acre protected areas respectively, and will make available almost 50 percent of the land needed for the Pine Mountain Trail.The connections will create 7,000-acre and a 6,000-acre protected areas respectively, and will make available almost 50 percent of the land needed for the Pine Mountain Trail.

The connections will create 7,000-acre and a 6,000-acre protected areas respectively, and will make available almost 50 percent of the land needed for the Pine Mountain Trail.

The Kentucky Natural Lands Trust, which buys property from private owners to preserve it, announced the purchases last week. The land includes 27 separate tracts.

Hugh Archer, executive director of the land trust, said nearly all of the land is on the North face of the mountain in Letcher County. The largest individual tract, in which the trust bought a one-quarter share, is on the South side. Archer said that share was bought from Kentucky River Properties, which had bought it from a member of the Eversole Family, which owns the remainder of the tract.

“It’s the first land they (Kentucky River) have sold in 100 years except for a couple of horse farms” in central Kentucky, Archer said.

The purchases cover about nine miles of Little Shepherd Trail from U.S. 160 at Hurricane Gap (Sand Hill) to Eddie Saltess Overlook on the Devil’s Backbone section of Little Shepherd Trail. The land is on both sides of Kingdom Come State Park, and includes more than 100 cave openings, some only large enough for bats, but other large enough for a person. He said while the bats will be protected, the caves will not be completely off limits to people.

“ We’re not going to gate them,” Archer said. “We’ll probably enlist the local cavers to help manage them.”

The caves include Crystal Cave and the Linefork Caverns, Archer said. He said the Eastern section of the purchase also includes a small section of uncut forest at least 125 years old. The Eastern Section begins at Creech Overlook and goes toward Whitesburg.

“This has been my most important target in the 25 years I’ve been working on it,” Archer said.

The Pine Mountain Trail will eventually run from the Breaks of the Big Sandy at Elkhorn City to Pineville Jellico, TN Pine Mountain Trail Conference president Shad Baker said he was pleased that the KNLT was able to buy the property.

“I think it’s wonderful news for the trail,” Baker said. “It’s all property that the trail runs alongside or through.”

Pine Mountain Trail is part of the larger Great Eastern Trail, a planned 1,800- mile wilderness trace that will run from New York to Alabama, roughly parallel to the Appalachian Trail.

Archer said with the old-growth forests and rare plants, the Pine Mountain Trail will be the “prettiest section in the whole 1,800 miles.”

Pine Mountain is home to at least 100 rare and endangered species of plants, fish and animals, one-seventh of all of the monitored plants and animals in Kentucky, Archer said. Blanton Forest alone, in Harlan County, is “only equaled by one other site in the world, and that’s in China,” he said.

The three preserves created by the new purchases will be called the Linefork Preserve, the Hurricane Gap Preserve, and the Kingdom Come Preserve.


By Sam Adams
The Mountain Eagle

Date: 10-18-2017

The biologist overseeing the Kentucky Department of Fish and Wildlife’s deer and elk program said the Epizootic Hemorrhagic Disease, or EHD, outbreak could possibly result in more hunting restrictions next year in Floyd County.

Fish and Wildlife Biologist Gabe Jenkins said the outbreak has slowed down recently and he expects it to end soon, but officials won’t know exactly how it has impacted the county’s deer population until later this winter.

“The end is in sight,” he said. “We were getting reports of 700 to 800 a week. But for the past couple of weeks, it slowed down to half of that statewide.” 

Floyd County has been at the top of the list of counties statewide in the number of deer that have been reported to have EHD. When the outbreak started in July, officials described several Floyd County
communities as the “epicenter” of the outbreak. The number of cases in Floyd Country doubled and tripled almost weekly since the department started issuing reports, but the number has increased only by four since Oct. 3. 

As of Oct. 10, there were 429 reports of the disease in Floyd County, and the county had the second highest number of cases reported, with Pike County having 563. 

Jenkins said Fish and Wildlife officials take these EHD reports with a “grain of salt” because they do not have the staff to “ground truth” them, and it’s likely some deer with EHD have been reported more than once while others have not been reported at all. Because of that, he said the number of EHD cases are likely higher than reported. 

As of Oct. 10, there have been 4,288 EHD reports statewide — around the same number of cases reported during the state’s last significant EHD outbreak in 2007. Jenkins said there were only 12 reports of EHD in Floyd County that year, which is why the outbreak is so devastating to the county’s deer herd this year. 

Deer can survive EHD, and when they do, they can pass that genetic resistance to their offspring. Jenkins said since Floyd County did not have a large number of EHD cases previously, the county’s deer herd is more susceptible to contracting it now. 

The EHD outbreak has spawned several conspiracy theories from residents and hunters, including allegations about the outbreak being purposely caused to reduce the number of vehicle crashes caused by deer or to make more room for elk to roam in Eastern Kentucky.

“I read it all over the Internet. It cracks me up, but there are conspiracy theories,” Jenkins said. “I guess the odd thing for folks there who are in the know of EHD is that we really weren’t in drought conditions this year in the eastern part of the state, and that’s usually how EHD gets started.”

The midge, or gnat, that transports EHD lives near shallow water, and drought conditions that leave muddy areas around water holes create a good breeding ground for the insects. Jenkins compared EHD to the flu virus, explaining that people can take a flu shot for one strain of the flu, but still get another type of flu that season, at the same time that they are resistant to the strain in flu shot they received. 

He then talked about EHD in Harlan County, which, on Oct. 3 and Oct. 10, only had nine reported EHD cases and is the only Eastern Kentucky county with fewer than 10 EHD cases. 

“For the longest time we had no reports in Harlan County,” he said. “So I looked into it. I wanted to know why Harlan County was its own island down there. I called the staff there and nobody had reports. Then I went back through our data and I saw that Harlan County had an outbreak in 2015 as well. So, some of the deer there died in 2015 with EHD, but a lot of them were exposed and survived. So, that group of deer in Harlan County is less susceptible to EHD than those in Floyd County.” 

He doesn’t yet know how the EHD outbreak has impacted the overall number of deer in Floyd County. He said the number of deer harvests reported during archery season, which is already underway, are usually lower than gun harvest reports, so the archery harvest data is not a good indicator of how many deer have been killed. Fish & Wildlife will compile data from the gun season harvest, as well as data from the EHD reports if changes need to be made to Floyd County’s hunting season next year.

“It is possible,” he said, when asked if EHD will cause more hunting restrictions for Floyd County next year. “We’re not going to change anything that is in place for this season ... We’ll let the outbreak run its course and, if we need to make restrictions or reduce the hunting season, then we’ll make that decision.” 

He said he will analyze the number of deer harvested and the deer deaths related to EHD while also comparing the number of does and bucks impacted. He’s most concerned about the number of does that have died because “they drive the population.” He said the decision about next year’s hunting season won’t come until later this winter after gun season is over. 

He said outbreak is heartbreaking, particular because state officials were considering increasing the deer hunting opportunities in Floyd County.

“That area has been growing significantly in deer population,” he said. “We were hoping to increase hunter opportunities by moving the hunt up, but now, we don’t know if that is possible ... You went from, 20 years ago, harvesting a couple of hundred deer to harvesting almost 1,000, so the herd has grown significantly.” 

Floyd County’s herd is estimated at 9,000 deer. 

Jenkins also confirmed reports that scavengers like coyotes won’t eat deer that have died of EHD. 

“It’s something that’s ingrained in nature,” he said. “They know that this thing died from a sickness, so it’s something they will not eat, so the deer just lie there and rot.”

He reiterated comments the department previously made about deer that have survived EHD being safe to eat, talking about a deer that survived EHD in 2015 that he harvested the following year. 

“In 2015, I had a deer that definitely had EHD, but he survived. He had it pretty rough, but he survived,” he said. “I harvested that deer in 2016 and I never thought twice about feeding it to my family.” 

He encourages hunters not to harvest deer that appear to be sick and asked them to be mindful of the EHD outbreak if they chose to hunt this year, particularly in areas like Floyd County that have had large numbers of EHD cases.

He said, “The biggest thing I’m trying to tell, especially to our hunters, if you’re in area that has a bad EHD outbreak, I would say if you’re feeding your family with venison, then by all means, take a deer, but if you’re shooting deer for antlers or a trophy and don’t need it, then practice little self-restraint and hold back, especially on those does. The bucks will be okay, but the does, they’re the ones that drive the population.” 

Local residents are encourage to report suspected EHD cases by visiting the department’s website, fw.ky.gov.


By Mary Meadows
Floyd County Chronicle