Sen. John Kerry, D-Mass., said he would voluntarily pay $500,000 in taxes to the state of Massachusetts for his new $7 million yacht after the states Department of Revenue began looking into claims that he docked the new yacht in Rhode Island to avoid Massachusetts taxes.
Weve reached out to the Massachusetts Department of Revenue and made clear that, whether owed or not, we intend to pay the equivalent taxes as if the boats home port were currently in Massachusetts, Kerry said on Tuesday, according to the Boston Globe. That payment is being made promptly.
Kerry had dismissed the allegations in recent days after the Boston Herald first broke the story last Friday, claiming that he had berthed the New Zealand-built 76-foot yacht in Newport, R.I., for maintenance work (see Kerry Gets Flak over Yacht Taxes). However, critics have pointed out that Rhode Island repealed its boat sales and use tax in 1993, making it an appealing location to dock luxury yachts.
In Massachusetts, boat owners must file a form within 20 days of buying a vessel and pay a use tax of 6.25 percent of the purchase price, plus an annual excise tax to the city or town where the boat is docked. Kerry would have saved an estimated $437,500 on the sales and use tax, and an excise tax of approximately $70,000, by keeping it in Rhode Island.
However, the Massachusetts Department of Revenue could have subpoenaed the ships log to determine the truth behind claims that the yacht had been seen several times in Massachusetts since Kerry and his wife, ketchup heiress Teresa Heinz, registered it in March. Kerry might have been subject to paying the Massachusetts taxes even if he had sailed the yacht on just a few occasions to his home in Nantucket.
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