Million-dollar question about million-dollar boats:

Those enormous yachts that populate Charleston-area marinas sure look nice, but guess how high the tax bills must be.

Now guess lower. Much lower.

Charleston County sent personal property tax bills to more than 20,000 boat owners last year, but not a single boat worth more than $1 million was on the list, an analysis of the county records by The Post and Courier has found.

It’s a curious situation in a county where rows of seven-figure pleasure boats and high-profile mega-yachts can be seen at the docks on any given day.

“People are going to say, why should I pay my taxes when they don’t?” said David Coe, a local boat owner and retired yacht captain who repeatedly has called upon Charleston County Council to investigate.

Boats registered in South Carolina are easy to tax because the auditor’s office gets a list from the state every year, and every boat on the list worth at least $500 gets a bill. It’s the boats registered elsewhere that are at issue because the county can tax them only if they were in the state for at least 180 days.

The 180-day rule was meant to encourage out-of-state boaters to dock and spend money in South Carolina without fear that a short-term stay would trigger a tax bill. The hard-to-enforce rule also rewards local residents with valuable boats, who can afford to register them elsewhere and dock them out of state half the year to avoid taxation.

Still, a number of county officials, boat owners and the manager of the City Marina were surprised to learn there wasn’t even one million-dollar or multi-million-dollar boat on the county tax rolls.

“I’m surprised because there are a lot of boats in town that are bigger than mine,” said Beach Company President John Darby after learning from a reporter that his 2008 boat-tax bill for $18,514 was the second highest in the county. The top bill went to a sport-fishing charter in Mount Pleasant.

Darby, whose company operates Charleston’s City Marina through a subsidiary, owns the sport-fishing boat Artemis, valued at $733,700.

“I have a 50-foot boat, which is a big boat, but it’s not a mega-yacht, and there are a lot of sport-fishing boats bigger than 50 feet,” Darby said.

County Auditor Peggy Moseley said her office has been taking all the right steps to see that taxes are properly levied on boats, particularly those that aren’t titled in South Carolina and can be taxed only if they spend at least 180 days in the state.

“I certainly don’t think that any are sliding through,” she said.

But Moseley’s small office faces a difficult challenge.

With one person assigned to the task, her office must not only figure out which boats are docked in a county with countless miles of rivers and coastline but also must keep track of exactly how many days they are there.

How? By sending an auditor’s office employee out in a boat with a camera, over and over again.

“We’re out there every day, looking,” Moseley said.

The boats can come and go, so determining which boats are here for 180 days is no easy task.

Coe also has been going out in a boat with a camera and has given files full of photographs to county officials and Moseley’s office.

“Every one of these boats has been in our harbor more than 180 days, and they are not paying taxes,” Coe told council members at a meeting this month. “We’re turning down millions of dollars in personal property tax.”

Moseley and her staff say they’ve reviewed Coe’s photographs and found no surprises.

“We went through his list, and a lot of the ones we could identify, we already had on the tax roles,” said Thomas Cox in Moseley’s office. “I went out personally to some of the marinas looking for these boats.”

At the same time, the auditor’s office is hard-pressed to say exactly how long some of the yachts have been in the county.

“It’s hard for us to say these boats have been here for six months,” Cox said. “Unfortunately, the marinas don’t have to tell us how long the boats have been there.”

The law only requires marinas to tell the county who owns the boats. Boat owners are required to turn over log books on demand.

“It seems to me we need to figure out how to get the marinas to better work with us,” county Councilman Paul Thurmond said.

Thurmond credits Coe’s efforts with helping the county identify some untaxed boats, but Moseley said Coe’s information hasn’t put any vessels on the tax rolls.

Robbie Freeman, managing partner at the City Marina Co., said marinas comply with the law but also need to respect their client’s privacy. He also said the City Marina would not necessarily have records on how many days a boat was there.

“Just because they rent a slip from us doesn’t mean the boat was there,” he said. “When you get into those kinds of boat values, they often have professional crews and are always coming and going.”

Boat taxes in Charleston County totalled just under $4 million last year, shared among the county, municipalities and the Charleston County School District. Property taxes on real estate and vehicles bring in far more money and tend to get more attention.

Local, county and school district property taxes on a $10 million boat would amount to about $120,000, so there’s plenty of incentive for wealthy yacht owners to move a boat out of state before hitting the 180-day limit, and it’s perfectly legal to do so.

The limit before taxes kicked in previously was 90 days in total, or 60 consecutive days, after the Legislature lowered it in 2006, but marina operators said the rule was costing them business and hurting local economies. The state then gave counties the right to switch back to the 180-day rule, and Charleston County did so this year.

Russ Campbell, also in the auditor’s office, said a number of bills were sent last year to the owners of boats identified from Coast Guard records and marina surveys. In several of those cases, the bills later were voided after it was shown the boat did not meet the criteria for being taxed.

Moseley said she’s spoken with tax officials from other coastal counties, and it’s her impression that Charleston County is the most proactive in looking for boats that should be taxed.

“They don’t have a boat that goes out and searches the rivers,” Moseley said. “We’re kind of the leader in this.”

This year’s boat-tax bills went out at the end of September. Coe and some members of County Council will be curious to see if any million-dollar-plus yachts will be on the list.

Source: The Post and Courier