Join Date: Jan 2001
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seek advice on offshore cruiser
There is a "sales tax" in most states. It''s referred to as a "use tax." No sales tax in the USVI, New Hampster, and several other states BUT . . . say you live in Maine and buy a boat in the USVI where there is no sales tax. Then you document the boat. The State of Maine has a cross-reference with the USCG Doc station in Falling Waters and in Boston. You MUST register your boat in it''s state of residence. (Although some of these islands down here wouldn''t know what to do with a properly state registered but undocumented boat trying to clear in.) You need not DOCUMENT the boat with the USCG. However, once you do, if your home state carries a sales tax, or the state where you keep the boat carries a sales tax, you''ll be charged either the sales or a "use tax." The "use tax" recognizes that, although the boat may not have been bought in the taxing state, it''s "used" there - typically located there 6 mos a year or more. Generally, you DO get a dollar for dollar offset for any "sales" or "use" tax paid elsewhere. The import tax to the USVI from the BVI is generally only for foreign built vessels, I believe, and I think it''s about 4%. The Good ''Ol State of Maine henpecked me for several years after I bought my boat. I lived in NH at the time, but the boat had been located in SW Harbor, Maine. They discovered the transaction through the Maine Tax Bureau''s hookup with the Coast Guard, since I documented the boat naming Deer Isle, Maine (parents live there). These people are worse than the IRS. I finally told them, after about 4 years of screwing around, that I was "moving to the Caribbean" and if they wanted anything, they better make up their minds. Offer and compromise for the tax amount of 5.5% of the purchase price. Jeesh, they wanted over $5,000. DEMANDED it. I paid $1,760.00 for a release letter. If you are a domiciliary of a taxing state, that state wants sales tax from anything purchased within the state. Buy the boat elsewhere and bring it home, your state will want "use tax." Boy. I''ve even confused myself. Check with each state''s taxing authority, but use and alias.