Use Tax / Documented Vessels?

[mikehradecky]

Are documented vessels exempt from county and/or state use taxes?

We bought our boat in 08 and have not received any bill from the county or state. We paid sales tax when we bought her.

If we don't report to the state or county can we continue to fly under the radar?

When we sell, will be be forced to pay back taxes and penalties?

[labatt]

It's all dependent on the county or state - every one is different. It appears as if you're in CA and if that's the case then your requirements are listed here: FAQ - Use Tax on Purchases of Vehicles, Vessels, Aircraft - Board of Equalization (fairly easily found using a google search for "state boat sales and use tax california").

[Minnewaska]

Check with your state. Being documented will have nothing to do with whether you owe them use taxes. USCG documentation is your form of title only, as opposed to a state title. Many, if not most, states require you register with them anyway if you keep the boat there. If you are documented, you don't need to display state registration numbers.

It seems like you bought the boat out of state. If so, most states also give you credit for sales taxes you paid elsewhere against the use taxes you might owe them. If there were a small balance due, it would make much more sense to pay it than run up the penalties too. Eventually, an inspector shows up at your marina and takes down names. In some states, the marinas themselves are required to list any vessel on their premises for more than a period of time.

[hellosailor]

Mike, you really need to do some local research.
"We paid sales tax when we bought her."

In the US, "use tax" is what is levied on folks who have not paid sales tax because they bought a big ticket item out of state, or other specific situations. As documented online by your state tax authorities.

Normally if you paid sales tax you have no concern with use tax, unless you crossed state lines at some point in the process.

However, if you are in a state that did not require you to register the boat, and that normally collects sales tax only during registrations or by self-payments...If you didn't pay something that you were supposed to pay, generally the penalties, fines, and interest are levied all the way back to the date of purchase.

Check the rules for your state. Online if you can. In person or by phone if you can't find them online. And then get them documented and confirmed, don't just think some clerk on the phone really knows, because if they're wrong, you'll still owe the tax. Written confirmation is best.

If you boat the boat through a broker, usually they are required to collect and forward applicable taxes, so that all may have been done for you.

[capttb]

They will catch up to you eventually, they check DMV records etc. I sold my boat last June and just received annual notice from assesor. They asked if I still owned on Jan. 1 and if not I had to send copies of bill of sale etc. Even after owning and paying taxes on my last boat for several years they discovered they missed the first year and added interest to the bill.

[windward54]

I see that you are in California..

In California, the owner of a boat on January 1st, documented or otherwise owes the personal property taxes. On a documented boat, you will get a letter from the county where you keep your boat, requesting information. The County Tax Assessor will then send you a bill, payable in full and due no later than August 31st.

The Assessor's Office has dock walkers to check on marinas. Los Angeles County is very active, others might not be as active. Bottom line is some day they will catch up to you.

[mikehradecky]

When they catch me, then I will pay the taxes. Until then, I'm sticking it to the man.

Hopefully, our harbor master won't let the assessors on our docks.

[hellosailor]

Oh, mike, you may be in for a rude surprise. Harbor masters MUST allow the tax men access to the docks, and they've long learned not to obstruct government officials on official business.

[treilley]

Even if you do not owe it in your state, other states may impose the tax on you. If you did not pay sales tax in your state and bring the boat to Maine and stay here more than 30 days, you will owe Maine 5% of the purchase price.

This applies to both boats and planes and they have been catching people.

[travlineasy]

Tim,

The same rule applies here in Maryland. Try to skip out on paying the tax and they'll levy all kinds of nasty fines and penalties on top of the tax.

Gary