The Alabama House of Representatives on Thursday passed legislation to give ad valorem tax breaks for commercial fishermen.
House Bill 10 is sponsored by State Rep. Chip Brown (R-Hollinger’s Island).
Rep. Brown said that “This would only apply to about 1800 commercial seafood fishermen in the state of Alabama.
“Seafood is a $591 million a year industry in Alabama,” Brown says. “This puts us in-line with agriculture. The fishermen are the farmers of the seas after all.”
State Rep. Artis “A.J.” McCampbell (D-Livingston) said, “I would like to thank you for tightening this up. We don’t want this applying to anybody who goes to the Bass Pro Shop and buys a rod and reel and we don’t want this applying to somebody who takes people out to go fishing.”
Brown said that this is only fair as Alabama’s commercial fishermen feed so many of us and support Alabama businesses like restaurants and fish markets.
“They are facing tremendous competition from overseas,” Brown said.
According to the synopsis, the bill would, “Exempt all commercial fishing vessels and equipment from ad valorem taxation; relating to sales and use tax.”
The bill would also “Provide for an exemption for bait and all materials and equipment used by commercial fishermen; and to levy a rate differential of one and one-half percent on the purchase and storage of vessels and machinery used for commercial fishing.”
People with charter vessels or personal sportfishing boats would not be able to get the tax exemption because they do not have a commercial fishing license.
According to the fiscal note, legislative services could not determine how much giving the commercial fishermen these tax breaks was going to cost the state.
“House Bill 10 as amended and reported by the Committee on Ways and Means General Fund would (1) exempt bait, equipment, and materials used in the process of commercial fishing by commercially-licensed fishermen from sales and use tax and (2) decrease the sales and use tax rate levied on vessels and machinery that are used in the process of commercial fishing from 2% for vessels and 4% for machinery to 1.5%. These provisions would decrease receipts to the Education Trust Fund, State General Fund, and county and municipal funds by an undetermined amount dependent upon the cost of bait, materials, equipment, vessels, and machinery purchased by commercially-licensed fishermen for use in the process of commercial fishing and the applicable state or local sales or use tax that would otherwise have been levied.
“Further, this bill would also exempt all vessels and equipment used in the process of commercial fishing by commercially-licensed fishermen from ad valorem tax, which would decrease receipts to the State General Fund, Public School Fund, Veterans Assistance Fund, and county and municipal funds by an undetermined amount depending upon the value of vessels and equipment used in the business of commercial fishing and the applicable state or local ad valorem tax that would otherwise have been levied.
“The Department of Conservation and Natural Resources reports that 1,831 commercial fishing licenses were purchased during Fiscal Year 2021.”
HB10 passed the Alabama House of Representatives by a margin of 101 to 0.
The bill now goes to the Alabama Senate for their consideration.
HB10 has been assigned to the Senate Finance and Taxation General Fund Committee.
Tuesday will be day seven of the 2022 Alabama Regular Legislative Session.
