The megayacht refit yards in and around Savannah, Georgia are about to get more competitive. Come July 1, a refit tax cap law goes into effect.
On May 1, Governor Nathan Deal signed a bill that originated in the state’s House of Representatives. Known as HB 125, it proposed amending the tax code to set a threshold for refits exceeding $500,000. The maximum sales and use tax applies to “tangible property,” meaning parts or other equipment necessary for the refit. Given that the tax rate in Savannah is seven percent, the refit tax cap amounts to $35,000.
Rep. Ron Stephens, who represents Savannah, initiated the bill. It passed the House on February 16 and the state Senate on March 30. It then went to the governor for his signature in April. The goal of the bill was to stimulate more business particularly for Thunderbolt Marine (above) and the in-development Savannah Yacht Center, both within Stephens’ district.
While Savannah has long faced competition from Florida-based refit yards, Florida gained an edge two years ago. That’s when the state legislature passed a bill capping state sales tax on refits worth $1 million or more. It became law on July 1, 2015, making the maximum tax paid total $60,000.
Since the new Georgia law caps tax on refits worth half as much, there’s industry belief that owners and captains may choose Savannah for the savings. Located just outside of Savannah, Thunderbolt Marine sits on 25 acres. Metal and fiberglass work, rigging, electrical work, cabinetry, and interior outfitting are among its services. It has a Syncrolift with a 1,150-ton capacity and a TraveLift with a 150-ton capacity, too. Captains’ offices and a crew lounge are on site as well. Thunderbolt Marine is further in the midst of an expansion. It’s adding more than 1,000 feet of dock space. That’s in addition to extra berths for megayachts up to 197 feet (60 meters).
Meanwhile, Savannah Yacht Center is opening a 459-foot-long (140-meter-long) dry dock this quarter. That dry dock also has a deep draft of 24 feet (7.32 meters). Speaking of deep, there’s 40 feet (12.2 meters) of depth in the channel on approach to Savannah Yacht Center. Like other refit yards, has dedicated shops for services like joinery and machinery, plus painting sheds. It plans to puts its Syncrolift into operation later this year, along with a 1,200-foot-long (365.8-meter-long) floating dock. Savannah Yacht Center’s parent company, Colonial Group, is reportedly investing $50 million to make it fully operational. The site previously housed Global Ship Systems, which ceased operations in 2007, and Palmer Johnson from 2003 to 2004.