1968 Pearson Wanderer 30
Join Date: Apr 2010
Location: Richmond, VA
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Which tax are you talking about? Sales tax on the purchase, or a property tax on the value of the boat? There are different state taxes.
I practiced state and local tax law for several years.
I can't give you legal advice and I'm not going to research the details of Maryland's tax laws, but most states' sales taxes work very similarly.
If you're talking about the sales tax, first, many states have a separate sales tax for boats that applies in lieu of, or in addition to, the general retail sales and use tax.
The sales tax applies to any "sale" occurring in that state. If the transfer of title or possession takes place within the state, then the sale has been made in that state and that state's sales tax applies. You cannot simply choose to pay Michigan's sales tax instead, because Michigan has no connection to that sale.
What your broker is getting at is the notion under the Uniform Commercial Code (UCC) of when the transfer of title or possession takes place. If it is a "delivery" contract, which specifically calls for the seller to deliver the item at a specific location, and the seller retains the risk of loss during transportation, then title and possession do not transfer until delivery. In your case, if that is the arrangement, and delivery does not occur until you receive the boat in good condition in Michigan, then that is where the "sale" takes place and you pay Michigan sales tax, not Maryland.
If you buy the boat in Maryland and use it there, I have no doubt it will be subject to Maryland's sales and use tax. It also very likely would be subject to local property taxation, to the extent that Maryland imposes such taxes on pleasure boats (which I don't know - but Virginia does).
- Bill T.
- Richmond, VA
"Twenty years from now you will be more disappointed by the things you didn't do, than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover."
- Mark Twain