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TakeFive 01-14-2010 06:48 PM

Where to document/title/register?
I will be buying my first keel boat shortly and soon will need to decide what state to declare as my boat's "home." I live in PA, and plan to keep it nearby in PA for a year. If I like the Delaware River more than I think I will, it could be longer. But Plan A is to take it to Maryland (upper Chesapeake, maybe Rock Hall) in 2011 and thereafter. So I'd like some advice on the possible choices:
  • Document and register in PA (per state requirement), pay 6% sales tax to PA. In a year move it to Maryland and buy the MD sticker that they require. I've heard MD is notoriously strict about collecting excise taxes. But they don't demand excise tax if I can prove I paid to PA already, do they?
  • Document in MD, and pay 5% sales tax there (save 1% vs PA, I think), and be a "visitor" in PA for a year, hoping PA enforcement does not notice. This could save me 1% sales tax, and I do not believe PA is as strict with enforcement as MD is.

    Has anyone tried the second option? Is it too risky? For anyone who has moved their boat from PA to MD, how did that process go for you? Were you able to show proof of PA sales tax and avoid MD excise tax?

chuck53 01-14-2010 07:01 PM

One thing you need to know, you can put any hailing port you want on your boat. Doesn't have to be the port you actually keep it in.
If you live in PA, put PA on it and keep it PA even if you move it to another state.
My first documented boat had the town I live in which isn't even close to where I kept my boat. Second boat actually had the town I kept the boat in.
It really doesn't matter.
You do know you do not put any state numbers on a documented boat. State sticker maybe (depending on the state) but no state numbers.

I might add, I've known lots of people that bought their boats in other states, brought them to VA and never changed the hailing port. I would say that happens often.

webdood 01-14-2010 08:08 PM

Think about international registration
If you're into saving on sales (and other) taxes, think about registering it as a documented vessel in international waters. Copy paste this text into Google and go to that website. (this site will not let us post links?) (lame)

Copy/paste this into Google

Offshore boat registration. Registering a yacht in advantageous offshore jurisdictions

catamount 01-14-2010 08:39 PM

If you buy the boat in a state that collects sales (or excise) tax on the purchase, you usually have a limited grace period to get the boat out of state in order to avoid paying the tax in that state -- but you will have to pay the tax in the state you take the boat to (assuming state 2 collects such a tax). Once you've paid the tax in that state (2), and if you keep the boat in that state long enough, then when you bring the boat to a third state, they (probably) won't expect you to pay the tax again, but they will expect you to register the boat with their state (if you keep in the state long enough). All that matters is where the boat is physically, and for how long. It does not matter what you claim as the hailing port when you document the boat -- the hailing port can be any place in the US.

catamount 01-14-2010 08:40 PM


Originally Posted by webdood (Post 560009)
(this site will not let us post links?) (lame)

You need to have posted more than one or two times before they will let you post links -- I think it's 5 or 10 posts.

chuck53 01-14-2010 08:42 PM

I don't know anything about international registration but I'm guessing it's good for expensive mega yachts as most of them you see are registered offshore.
For the typical boat that most people own, the advantages probably aren't there. In most states, the biggest tax issue in owning a boat is yearly property tax. Unless you move your boat around a lot to stay one step ahead of the tax man, and most of us don't, the local taxing authorities will find you and it doesn't matter whether your boat is documented or not.

TakeFive 01-14-2010 08:57 PM

Does PA have property tax on boats? I've never heard of one, but this is my first boat. Waitaminute, I actually own 2 boats, but they might be "under the radar." This next boat will be my first 5-figure boat (aka "yacht" lol).

I know that VA has property tax on boats, which I suspect is why people register their boats in other states.

I suspect the reason MD is so strict is due to proximity to DE, where people register to avoid sales tax.

chuck53 01-14-2010 10:18 PM

Actually, VA doesn't have property taxes, but the local cities and counties do. At least most of them. There are a few localities that don't charge property tax on boats. But the ones that do, check state boat registrations and check marinas for documented boats to make sure all are paying property tax.
Back to your original question, chances are the tax man will find you one way or another whether your boat is documented or not.

TakeFive 01-14-2010 10:25 PM

I do realize that the "by the book" way to do this is pay sales taxes to PA and do required paperwork in PA, since I will keep it there for at least a year. When I move it to MD, follow their requirements.

The other option was skirting the rules a bit.

I just need to confirm that if I can prove that I paid 6% to PA, MD will not come after me for even more sales/excise tax a year later. I do realize that I would still have to buy the MD recreational sticker.

sailpower 01-14-2010 10:51 PM

The dollars you are talking about saving are so small, why not just be legal?

MD and most states will credit what you have paid elsewhere.

Good luck.

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