Maryland Taxes

[PalmettoSailor]

I'm close to pulling the trigger and moving my boat to MD, but paying more tax to MD than I did in my home state just for the privilige of paying twice as much for the slip and probably every other service I need is sticking in my craw.

So all you MD guys, tell me how worth it it is, to help me rationalize making this move. It will save me about 200 miles each trip to the boat so that covers some of the added expense and I won't have personal property tax on the boat but the excise tax amounts to over 5 years PP tax and I might not stay in the area that long.

[JohnRPollard]

Just amortize it!

Seriously, I agree, no one likes to pay it. But it's one of those price-of-admission taxes where it's best just not to think about it too much.

And saving 200 miles of driving each time I went to the boat would be worth A LOT to me -- almost a no-brainer.

Also, if you ever buy another boat in MD, and you work out a "trade", then you can get credit for the prior amount paid and only have to pay the difference.

Where are you thinking of moving?

[PalmettoSailor]

Originally Posted by JohnRPollard

Just amortize it!

Seriously, I agree, no one likes to pay it. But it's one of those price-of-admission taxes where it's best just not to think about it too much.

And saving 200 miles of driving each time I went to the boat would be worth A LOT to me -- almost a no-brainer.

Also, if you ever buy another boat in MD, and you work out a "trade", then you can get credit for the prior amount paid and only have to pay the difference.

Where are you thinking of moving?

HHS

[sailingfool]

Originally Posted by midlifesailor

HHS

I you have already paid any sales/use tax to another state you can deduct that amount from the 5% Maryland wants.

Some state exempt you from their sales/use tax if you have owned the boat for a certain period of time...you might investigate whether maryland permits that grandfathering.

Otherwise, it just a lousy situation, for sure..but deal with it, dont ignore.

[PalmettoSailor]

Originally Posted by sailingfool

I you have already paid any sales/use tax to another state you can deduct that amount from the 5% Maryland wants.

Some state exempt you from their sales/use tax if you have owned the boat for a certain period of time...you might investigate whether maryland permits that grandfathering.

Otherwise, it just a lousy situation, for sure..but deal with it, dont ignore.

I'll get credit for the 2% paid to VA but will still "owe" MD 3% of the 5% they charge.

They don't exempt and they use the sales price unless you've owned the boat more than 3 years (in whcih case they use book), so I'll be probably end up paying about 5% of what the boat is worth in the current market.

[JohnRPollard]

Originally Posted by midlifesailor

HHS

You'll like it there. Besides the shorter drive, you'll be within EASY striking distance of a lot of fine sailing destinations -- Solomons Island, Oxford, St. Michaels/Wye River, Annapolis, etc. Great sailing (and good fishing out there if you're into that).

Yeah, the tax is aggravating. And I personally believe that Maryland has really overstepped in the attempted enforcement/collection against transient cruisers. But it is "one time", and if you keep the boat long enough it does not smart quite so much.

Also, they will catch up with you if you don't pay it -- with hefty fines and interest.

[NCC320]

Unless it's changed, MD is a good deal. You pay an initial tax that's higher than other states, but once it's paid, you don't pay an annual property tax. After a few years, you are ahead of the game......at least as compared to NC. We pay a sales tax on new boats (not sure about used), then an annual property tax every year forever.

[PalmettoSailor]

Originally Posted by NCC320

Unless it's changed, MD is a good deal. You pay an initial tax that's higher than other states, but once it's paid, you don't pay an annual property tax. After a few years, you are ahead of the game......at least as compared to NC. We pay a sales tax on new boats (not sure about used), then an annual property tax every year forever.

Same in VA. However MD's plan only becomes a decent deal if you are there long enough to amortize the costs. I'm hoping I'll be able to retire early and will leave the area for warmer latitudes. If so, I'll be here long enough to break even. We're close enough that we decided if either of us were to loose our jobs, we'd go ahead and move south to look for new employment.

Its the "trapped" feeling that goes along with the big payment up front that's troubling me, but I'm not about to try dodging it. I guess its mainly just a vestige of my typical guy "fear of commitment".

[eryka]

As I understand it, MD will charge the sales tax (or difference between what you paid in another state and the MD rate) if your boat spends more time in MD than any other single state. They might not charge you if you spent 5 months in MD and 7 in VA, for example - might be worth looking into?

[lancelot9898]

Originally Posted by JohnRPollard

Also, if you ever buy another boat in MD, and you work out a "trade", then you can get credit for the prior amount paid and only have to pay the difference.

I'm not understanding how this works, but it sounds like something worthwhile to know!! Anymore details??