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post #1 of 5 Old 02-14-2005 Thread Starter
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property taxes while cruising

I''ve been living on my boat for the last few months, swinging between Florida and Georgia with the whimsy of the tide and am ready to go cruising. I have no Georgia address, no Florida address. Seems unlikely the taxman will not find me somehow. Will I be charged any property tax while cruising? My boat is USCG documented. If taxed, how can I make it the cheapest? I''m cruising on a sailboat...I am as cheap as they come!

Thanks in advance for any advice.
Paul G.
S/Y Carmen
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post #2 of 5 Old 02-14-2005
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property taxes while cruising

Paul, you''re talking about the tax on your boat, correct? Your question is not about real property or intangible assets (savings & investments) or cars/trucks, right? And certainly not about Uncle Sam and any pension, investment or other income you have. As you suspect, Uncle has a long memory.

If we''re talking only about the boat, the issue for the Southeast U.S. is Use Tax. This is a tax assessed by the state in which you use the boat. In most states, use tax is wavied if you have paid a comparable sales tax on the boat when you purchased it; you have to prove this payment. If you paid less e.g. in NC when buying it than the FL tax rate permits, then FL would assess you the balance that they would see you owing them. OTOH if you paid no tax when acquiring the boat, they will attempt to collect the full amount.

Now that we understand the concept, the issue (for you) is how is it enforced. Usually, this is done via the state''s boat registration process; registering your boat obligates you to pay the tax. For U.S. documented boats (which yours apparently is, absent state registration) this is enforced by on-the-water state and county employees (e.g. marine police). They will look for a sticker you are supposed to display that shows you have ''registered'' your documented vessel and paid a small, annual fee...and the sticker is actually validating that someone in the state govt. has had the chance to check their records and confirmed (via info from another state or from you directly) that you owe no use nor sales tax. (Why is this an annual sticker & fee; why not a one-time fee? Well, even tho'' documented, they want a little revenue for your boat to be benefiting from the state''s services).

Computation of use tax is done differently by each state, tho'' the forumlae are pretty similar. If interested, talk to a local tax collector''s office ("I''m thinking of bringing me and my boat down here; what tax would I pay...etc."); don''t just rely on advice from folks like me on BB''s like this.

For you, the critical issue is where will you be cruising and how often (and where) will you be returning to the States. If you''re gone indefinitely, you are absent tax liability indefinitely. E.g. I register our documented boat in FL and have been told not to pay any annual fees nor file any paperwork until I return the boat to FL. Some parts of each state are more heavily patrolled than others; so far, you''ve been lucky. If stopped, you will be cited for violating the law (unless you have fuel, marina or other receipts proving you have not been in that state longer than the state allows before imposing tax liability, usually 60 or 90 days). If you can''t prove that, then accept the citation and - assuming you are leaving that state or the USA soon thereafter - pay the fine (maybe $50) but not the tax. OTOH if you will be in that state''s waters indefinitely, it''s time to face the music.

Jack
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post #3 of 5 Old 02-15-2005 Thread Starter
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property taxes while cruising

Jack,

Thanks for the great information. I don''t think I will be in Florida (or any U.S. state) for too long (more than 90 days) I am anxious to explore the islands south. My "real" address, if I have to have one, will be my parent''s ranch in Oklahoma. I talked to the OK Tax Commission yesterday and they told me that I wouldn''t be required to "register" my boat in Oklahoma because it was USCG documented and would not actually be in Oklahoma at any time. I sure hope the guy understood what I was asking.
Well, I just play dumb and take my fine if issued someday!

Thanks Jack.

Paul
S/Y Carmen
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post #4 of 5 Old 02-15-2005
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property taxes while cruising

Chopsy
This link may help you to understand what your documentation really means and will give you a leg to stand on. I have copies of it so I can site the law and chapter to the Marine Patrol who are not very friendly and want to tell you what you are going to do. I give them a copy and tell them no this is what you are going to do which is follow the letter of the law. I find it very interesting that they get very upset when you know your rights.http://assembler.law.cornell.edu/uscode/html/uscode46/usc_sup_01_46_06_II_08_B.html
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post #5 of 5 Old 02-15-2005
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property taxes while cruising

Your specific question is, "Will I be charged any property tax while cruising?" Generally, you must have some significant connection with a state before that state can tax you. States can''t tax you just because you are passing through on a superhighway or on a waterway.

The types of connection that usually justify the imposition of such a tax are that (1) you are a resident of the state, or (2) that you use the property primarily within that state.

Generally, your legal residence can be anyplace that you intend to live for the indefinite future, even though you might be temporarily absent from that place.

Therefore, if you want to avoid tax liability, you should establish your legal residence in a state that doesn''t have a property tax, and you should avoid any lengthy stays in any state that has a property tax.

For more specific information, you need to know the specific law of the specific state that might be applicable, and discuss it with local counsel.
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