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Location: Narragansett Bay
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Re: State Registration of Documented Vessels
Generally speaking, Sales Tax is due upon sale inside a jurisdiction, like a State. However, many States have different rates by County. It is due each time a new Sale is made, except between commercial vendors when trading inventory and some State's exempt sales between individuals, under certain conditions. Use Tax is due upon using an item in the jurisdiction for a defined period of time and is typically the same rate as Sales tax. Use Tax is designed to collect an equivalent of Sales Tax, if you buy in another State and bring the item home.
How these apply to each State differs dramatically. For example, many will waive Sales Tax, if you removed the purchased property from their State within a period they define. Many will give you credit against their Use Tax, if you paid another State's Sales Tax. But, not all do this and none define it the same.
Registration is only a license to use use your boat within a jurisdictions waters for more than a defined period of time. Many States use registration as a way to determine if you've paid the appropriate Sales or Use tax.
Before anyone gets energized on trying to make sense of this, or argue about waters that flow to Ireland?, tax code isn't designed to make sense or be right or wrong. It's only designed to collect revenue. Period.
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Last edited by Minnewaska; 06-25-2012 at 08:08 AM.