What issues what State - SailNet Community
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post #1 of 25 Old 3 Weeks Ago Thread Starter
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What issues what State

I trying to figure out if their is an optimal place and time to purchase a boat depending on the state.

I know that some states charge sales tax some property tax.

You can keep a boat in many states for 90 days per year before you have to pay the state.

Any tax you have paid to another state may be counted so you don't have to pay twice.

What I can't figure out is how to turn all of this information into strategy.

I live in CT for example. We pay 6.35% sales tax on boats plus a licence fee.

If I want to own a boat here in CT for a year or so then decide I want to live in North Carolina for a few months then move to Florida for a few months

Does it matter where I buy the boat?

Is their any strategy that makes sense to engineer if I have the flexibility to execute it.

I'm not trying to get out of paying tax due but what I would like to know is how the rules work so I don't do something stupid. I want to be legal I couldn't stand the uncertainty of trying to evade the tax man.

It would be annoying for example if I found a boat in Fl, worked on it for two months in fl then moved it to CT for more work and paid the CT tax and then found out if I kept it in FL for one extra month and paid the FL tax it would have cost me 10k less. Or maybe that scenario would make more sense comming from Rhode Island.

I think this has to do with what you call your home state. I've heard that FL is a good place to make your home state as they don't have the high CT income state tax. I may have the flexibility to adjust my life style if it makes sense to do so.

This article answers some of my questions.
http://www.boattax.com/avoid-boat-taxes/

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Last edited by davidpm; 3 Weeks Ago at 11:20 PM.
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post #2 of 25 Old 3 Weeks Ago
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Re: What issues what State

The way I understand it is that where you buy a boat is the determining tax rate factor. Once you have paid sales tax in a state, that amount is subtracted from any tax due when you register in another state. When I registered my boat in Florida, I had to present evidence that I had paid sales tax in NY. If that NY sales tax had been lower than the tax in Florida then I would have been charged the difference. Documented vessels sometimes avoid paying any sales tax because they never register in any state. There seems to be no way for states to check on change of titles of documented vessels. That doesn't mean you don't owe the tax and if the state involved finds out, they can bill you YEARS after the fact, with interest!

Some states have low sales/use/property, etc. taxes. I think that must be why many are registered in Delaware.

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post #3 of 25 Old 2 Weeks Ago Thread Starter
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Re: What issues what State

So far I can't see that it makes much difference unless the boat is very expensive like a million dollars. The real tax breaks seem to kick in in most places only for the very high end boats.

Ct is 6.35, FL is 6 if you pay the tax at a 3% state you have to pay the difference if you go to CT or FL.

Unless of course your boat is very expensive then the maximum tax will save you.

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Last edited by davidpm; 2 Weeks Ago at 10:45 AM.
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post #4 of 25 Old 2 Weeks Ago
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Re: What issues what State

Yes, not really much difference. One difference I can see is if you're in a state like NH with very high asset taxes and no sales tax. Yearly boat registrations are likely very high in similar states. Governments get their money one way or the other. I know when I lived in NH that registering a car was very expensive. Real estate tax is sky high. Lacking revenue from sales tax, they hit you with large fees if you're responsible enough to own anything, including a house. NH offers tax free liquor to Mass. residents while essentially sticking the NH homeowners with the bill.

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post #5 of 25 Old 2 Weeks Ago
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Re: What issues what State

RI is your best bet for finding a boat. There is no state sales tax on boats in RI. Keep it there for the required (I believe it is 3 months, but check for yourself) number of months, then register it in CT.

That is IF you plan on registering it. You can simply document it, but you will be required to move from state to state depending on each state's laws.

Ultimately, you will have to find the right boat first. Purchasing the wrong boat in the right state will make for a sad ending. It will really depend on what you are looking for and how rare finding a good model will be. The "sales tax" decision will only come into effect once you find the boat. Then other things will come into play, like transporting the boat home, rigging/derigging if needed, travel to and from to survey, purchase, get it ready, deliver, etc.

Unless you have two or three boats perfect boats in mind that are in different states, you might be putting the cart before the horse.

One the other hand, if you are looking for a late '80's Catalina 30 (or other popular, plentiful make/model) look no further than RI.

eidt: In CT, to avoid state sales tax, the boat must be registered in another state for the required number of months (but don't take my word for it, check for yourself).

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post #6 of 25 Old 2 Weeks Ago
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Re: What issues what State

In NY even if the boat is documented, you must register it if you keep it there and then they get you for the sales tax. My boat is documented and registered in NY. I get a sticker (which is how they can check it's registered) but no state registration number.
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post #7 of 25 Old 2 Weeks Ago
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Re: What issues what State

The deciding question is not really where you buy a boat, but where you keep it. The state where you keep the boat will primarily determine what sales/use tax you need to pay on it, as that state will be best able to pin your ownership down. Unusually you can buy a boat in a state and duck that state's sales tax, by claiming delivery outside the state, or by departing within some time window.
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Re: What issues what State - Just FYI

It is probably out of the question for you but Alaska has no sales or property taxes and sailboats are dirt cheap (Because sails are pretty useless up here) We have seen several sailboat hulls downrigged and set up for hand trolling.


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Re: What issues what State

If you live in Mass and purchase a vessel in RI which does not charge sales tax, you will end up paying both sales and property taxes to MA even after owning the boat for more than three months. On two occasions we purchased and documented boats but never registered with the state. In both cases we had to pay sales and property tax after mooring the vessel in a local harbor. I think the harbor masters will track down ownership of the vessel and report its seasonal presence in local harbors to town and state authorities. It is difficult if not impossible to avoid taxes.
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Re: What issues what State

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Originally Posted by msogin View Post
If you live in Mass and purchase a vessel in RI which does not charge sales tax, you will end up paying both sales and property taxes to MA even after owning the boat for more than three months. On two occasions we purchased and documented boats but never registered with the state. In both cases we had to pay sales and property tax after mooring the vessel in a local harbor. I think the harbor masters will track down ownership of the vessel and report its seasonal presence in local harbors to town and state authorities. It is difficult if not impossible to avoid taxes.
In addition to the difficulty of avoiding sales/use taxes it's also difficult to avoid interest and penalties that are applied if you don't first volunteer to pay the full sales/use tax when first due. Don't wait for the state to find your boat, walk in and write the check on a timely basis.
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Originally Posted by sailingfool View Post
The deciding question is not really where you buy a boat, but where you keep it. The state where you keep the boat will primarily determine what sales/use tax you need to pay on it, as that state will be best able to pin your ownership down. Unusually you can buy a boat in a state and duck that state's sales tax, by claiming delivery outside the state, or by departing within some time window.

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