A state tax rate glitch let groundfish trawlers off the hook for more than $10 million of fishery taxes in the last half decade, and there’s no concrete fix just yet.
The fishery resource landing tax taxes groundfish based on ex-vessel price. Processors turn flatfish caught as bycatch into low-value fishmeal, so the only known ex-vessel price for certain flatfish species is artificially low. Nine species have this price uncertainty, but most flatfish volume comes from yellowfin sole and Atka mackerel.
By only having an ex-vessel value based on the price paid for bycatch turned into fishmeal, the state has no idea what the ex-vessel value is for the direct flatfish fishery that has annual harvests measured in hundreds of thousands of metric tons.
According to state research estimates, the state has lost out on $1.8 million to $2.5 million per year, or more than $10 million over the last five years. Researchers haven’t yet looked back further due to paucity of data, but the fishery resource landing tax has existed since 1994.
Lori Swanson, assistant executive director of groundfish trawler group Groundfish Forum, did not say whether the industry knew it had been underpaying since the tax’s birth.
“They pay what the state tells them to pay,” she said.
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