The Morris Yacht company in Trenton today celebrated some successes: a contract with the U.S. Coast Guard, along with an award from Cruising World Magazine for Boat of the Year. But the company's hopes for continued success rest, in part, on a reduction in the boat sales tax, which goes into effect this week.

Morris Yachts has won six Boat of the Year awards from Cruising World Magazine, this most recent one for its M52-foot daysailer. "We build one at a time, attention to detail, heirloom quality bespoke yachts," says company president Cuyler Morris.

Morris and his 80 employees are celebrating two achievements: the award and a contract to build four leadership training vessels for the U.S. Coast Guard. "Those are 44-foot training vessels, and they are replacing 46-year-old first-generation fiberglass sailboats that have a lot of miles on them," Morris says. "And this will be a serious upgrade for the Coast Guard Academy."

Money to buy the boats without taxpayer dollars was raised privately by a group called the Coast Guard Auxiliary, and the pricetag has not been released. Morris Yachts was selected for the contract over several other companies, some of whom are also Maine-based. But another announcement could prove beneficial to all Maine boatbuilders.

"We changed the sales tax so that we could better compete with Rhode Island and Florida," says Gov. John Baldacci, who reminded the crowd at Morris Yachts that the sales tax on new boat purchases made by nonresidents has been reduced -- from 5 percent to 2 percent. That law goes into effect this week.

"It had been putting Maine boats at a disadvantage, so in the last legislative session we were able to change the sales tax to make that adjustment so we could compete and bring more business here," Baldacci says.

Maine Built Boats, a trade organization, credits the Maine Marine Trade Association for working with the Legislature to reduce the sales tax. Jane Wellehan, president of Maine Built Boats, says the price of buying and registering boats in Maine is now comparable with its biggest competitors - Rhode Island and Florida.

"If people buy their boats here they keep their boats here," Wellehan says. "The way the law was structured, you had 30 days to stay in Maine and after that you got a very large tax bill."

Wellehan says the sales tax reduction will encourage nonresident boaters to keep their boats docked in Maine, and spend tourist dollars. She points out that Rhode Island does not have a sales tax on new boats, and Florida has a cap on boat sales tax.

"I think it caps at $18,000 or $20,000, so if you buy a million dollar boat, you're about even with Florida. That's not bad," Wellehan says.

Buy the sales tax reduction wasn't created with million dollar boats in mind, Wellehan says. Rather, she says, it's an effort to create more boat-building jobs.

Cuyler Morris says his business saw an all-time high of 128 employees in 2007. He now employs 80 people. "And we'll probably be bringing on another 15 by the end of the year just to fulfill the committments we have right now. We've sold 10 boats in the last 90 days. The weather's been fantastic so people are boating in Maine this summer. We're all breathing a little easier."

For Maine residents, however, the new boat sales tax remains at five percent. A so-called "use tax" could be applied to boats purchased out of state if no sales tax is paid in that state.