Tax exemption - SailNet Community
LinkBack Thread Tools
post #1 of 1 Old 12-05-2007 Thread Starter
Wish I never found SN!
SimonV's Avatar
Join Date: Jul 2006
Location: Presently in Gove Harbour NT Australia
Posts: 2,106
Thanks: 9
Thanked 5 Times in 5 Posts
Rep Power: 11
Tax exemption

90 Day Offshore sales are back!
Yacht Sales Tax Exemption Makes a Comeback

Thursday, September 06, 2007

Offshore Delivery? - Buyers shopping for a new boat who opt for offshore delivery and keep the boat outside of California for at least 90 days may be able to take advantage of an attractive sales tax exemption.

SACREMENTO - When legislators finally approved California's state budget Aug. 21 after a 51-day-long impasse, it contained a nice surprise for boaters: the return of a sales tax exemption on the purchase of yachts in California that are delivered offshore.

The new provision allows buyers of a boat, plane or recreational vehicle to avoid paying sales tax, as long as they follow specific guidelines and keep it out of the state for at least 90 days after the purchase. The legal requirements are somewhat complex, so getting the advice of both a tax professional and a yacht delivery firm experienced in offshore deliveries is a must.

This provision replaces a measure enacted in 2004 that had required boat buyers (along with RV and aircraft buyers) to keep their purchased vessel outside California for a full year to qualify for an exemption.

Senate Minority Leader Dick Ackerman, R-Irvine - a boat owner - is credited with spearheading the drive to remove a renewal of the one-year out-of-state requirement from this year's budget. Ackerman told reporters that the 2004 law restricting the sales tax exemption "was going to be an experiment," and he believes that experiment had failed.

Yacht brokers and boat builders statewide had been adversely affected by 2004's tougher requirements for buyers who sought to avoid sales tax, Ackerman said. A return to the 90-day out-of-state requirement for offshore deliveries is expected to provide a valuable incentive for new buyers, resulting in increased sales of larger vessels by California yacht dealers and brokers.

The tax savings will especially be a boon to buyers of larger yachts. For example, while the tax savings on a $250,000 38-foot sportfisher would be around $19,500, the buyer of a $3 million 60-foot motoryacht could save a whopping $234,000 through the exemption. In order to take advantage of the sales and usage tax exemption, buyers are required to carefully follow state tax codes. In addition to taking delivery of their vessel outside California, buyers must keep the boat out of state waters for at least 90 days of the first 180 days of ownership. The boat must actually be used during that time period (not simply stored out of state) and the original intention of the buyer must to use the boat outside of California. Many boaters opt for a slip in one of Ensenada, Mexico's full-service marinas, which some boaters have dubbed "the 90-day Yacht Club." In addition, boat buyers must be able to document all aspects of the vessel delivery and the out-of-state berthing, to prove compliance with state law. Several books are available that describe the process, including Capt. Lonnie Ryan's "The 90-day Yacht Club Guide to Ensenada." While reputable California yacht brokers can explain basic details of the law regarding exemptions, it is wise to engage the services of a professional tax advisor and a company that has experience with the requirements involved in an offshore delivery. The return of the 90-day requirement was approved as one of several budget compromises with Democratic legislators, which resulted in passage of the $145.5 billion budget signed by Gov. Arnold Schwarzenegger on Aug. 25.

Ericson 39B.
To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

I love my boat
present location SE Asia doing a delivery.

To view links or images in signatures your post count must be 10 or greater. You currently have 0 posts.

Drinking Rum before 10am makes you a Pirate NOT an alcoholic
SimonV is offline  
Quote Quick Reply Share with Facebook

Quick Reply

By choosing to post the reply above you agree to the rules you agreed to when joining Sailnet.
Click Here to view those rules.

Register Now

In order to be able to post messages on the SailNet Community forums, you must first register.
Please enter your desired user name, your email address and other required details in the form below.
Please note: After entering 3 characters a list of Usernames already in use will appear and the list will disappear once a valid Username is entered.

User Name:
Please enter a password for your user account. Note that passwords are case-sensitive.


Confirm Password:
Email Address
Please enter a valid email address for yourself.

Email Address:


Human Verification

In order to verify that you are a human and not a spam bot, please enter the answer into the following box below based on the instructions contained in the graphic.

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
Thread Tools
Show Printable Version Show Printable Version
Email this Page Email this Page

Similar Threads
Thread Thread Starter Forum Replies Last Post
boat purchase, taxes, residence -- help for NW sailer? winslow59 Boat Review and Purchase Forum 15 01-14-2007 10:20 PM
Tax on boats brought to Florida faithab Boat Review and Purchase Forum 10 12-21-2006 08:59 PM

Posting Rules  
You may post new threads
You may post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is On
Trackbacks are On
Pingbacks are On
Refbacks are On

For the best viewing experience please update your browser to Google Chrome