Join Date: Feb 2012
Location: New Orleans Louisiana
Thanked 124 Times in 118 Posts
Rep Power: 5
Re: State Registration of Documented Vessels
Sales tax is only due the first time a boat is sold, not every time. Just like used cars when sold from person to person are not due sales tax (they are if the title was from a used car lot though).
In this case the first owner should have paid sales tax but didn't, by documenting the vessel and never reporting the sale to the state in which it was documented. The second owner then got hit with a tax bill based upon the original purchase price of the boat.
There are some other complexities like the age of the boat, and if the boat was a dealer buy or private sale, ect.