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  #21  
Old 06-23-2012
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Re: State Registration of Documented Vessels

I don't see any ambiguity at all.


From USCG National Vessel Documentation Center, FAQ Page : [[

IS A DOCUMENTED VESSEL EXEMPT FROM STATE JURISDICTION?

No, all documented vessels must comply with the laws of the state in which they are operated. The vessel's document must be shown to state law enforcement personnel upon their demand. States may require documented vessels to be registered (but not numbered) and to display state decals showing that they have complied with state requirements.

]]
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  #22  
Old 06-24-2012
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State Registration of Documented Vessels

If you use the waters of the state, you should pay the tax and the reg fee. In Maryland all the tax/fee amounts go toward the services and health of the waterways. Paying your fair share is the correct way to be a responsible boat owner. Why do you think you are exempt from paying your fair share? There is no free ride.
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  #23  
Old 06-24-2012
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Re: State Registration of Documented Vessels

Interesting...water belongs to the state??? I don't think so. What was once in Canada now heads to Ireland. Water evaporates in one place an falls in another. The governments want money, just for their pleasure. To think the way the thread is headed, perhaps you need to establish a one world order with everybody paying their "tax" for being alive. Absolutely ludicrous that people will willingly enslave themselves, alas, history tells me that is the norm. Idiocracy anyone?
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  #24  
Old 06-24-2012
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Re: State Registration of Documented Vessels

I recently registered in NY as well as being documented just to avoid the potential hassles. There is no requirement to have large, intrusive state registration numbers on a documented vessel in NY, just a little sticker. In NY there IS a state reg. requirement but I've never heard of anyone enforcing it. I understand that FL is indeed writing tickets. Surprise! Even if you can beat the ticket, I'm not prepared to hire a constitutional lawyer to contest it or to waste my valuable time on idiots. Just one more little example of losing freedoms bit by bit. It's inexpensive to register. You gotta pick your battles.

Stumble, I have a friend who bought a documented boat in NY (this was years ago)and moved it immediately to NJ. It was a private sale. The NY Sales tax office sent him a bill long afterward. They did find out somehow that the sale had taken place. He placed the bill in the circular file and never heard anything more but there is some way NYS got the info., apparently through the transfer of documentation. It would seem that there is some state notification when a transfer of documentation takes place.
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Last edited by smurphny; 06-24-2012 at 07:13 AM. Reason: more info
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Old 06-24-2012
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Re: State Registration of Documented Vessels

I'm no lawyer, and didn't even stay in a HolidayInn Express last nite, but it seems to me that unless you like socializing with law-enforcement on the water, have a HUGE legal slush fund, and lots of headache tablets........I'd pay the $10 and make this go away.
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  #26  
Old 06-24-2012
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Re: State Registration of Documented Vessels

Smurphny,

There can be notices given when a documented vessel is re-registered, and states are getting a lot more sophisticated due to the lost revenue. People may complain, but honestly what has been going on in the marine industry for decades is really tax evasion, if not tax fraud. The fact states are cracking down when there are potentially millions of dollars at stake doesn't surprise me at all, though it is starting to effect boat prices.

For instance I just handled a case for two new owners that bought a 250,000 used sailboat out of Mississippi, about 2 years old. When they brought it to Louisiana and tried to register it, the state asked for proof of sales tax having been paid... But the original buyers never paid it (nominally bought in Virginia, documented in Mississippi), and Mississippi never became aware that the boat was in that state.

So my clients wound up with a $30,000 sales tax bill to make the boat legal. We of course immediately threatened to sue 1) the former owners, 2) the boat broker, 3) boat manufacturer. By the time it was all said and done the former owners refunded $25,000 and the broker $5,000.

Had the new owners known that the boat had never had sales tax paid, their offer price would have been oh, about $30,000 less than it was, since that was an immediate cost they would have had to pay (slightly more since the 30k couldn't be financed).

If you live in a state where registration is required be very careful to ask for sales tax records before buying a boat, or you may wind up paying them. Even if you don't live in one, more and more states are going to require it since it has been proven now to raise revenue, without requiring increased taxes, just better enforcement of laws on the books.


I you want to fight the $10 registration costs, go for it. I think you will loose. But the real justification from the states POV is not the fees from registration, but from people finally paying sales taxes they avoided the first time.
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Old 06-24-2012
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Re: State Registration of Documented Vessels

I don't understand that at all. Sales tax gets paid every time a boat is sold, not just the 1st time, every time. Based on the above account, the new owners got a $30,000 discount, and the original owner still hasn't paid the sales tax due for the original purchase. Am I missing something?
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  #28  
Old 06-25-2012
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Re: State Registration of Documented Vessels

Sales tax is only due the first time a boat is sold, not every time. Just like used cars when sold from person to person are not due sales tax (they are if the title was from a used car lot though).

In this case the first owner should have paid sales tax but didn't, by documenting the vessel and never reporting the sale to the state in which it was documented. The second owner then got hit with a tax bill based upon the original purchase price of the boat.

There are some other complexities like the age of the boat, and if the boat was a dealer buy or private sale, ect.
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  #29  
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Re: State Registration of Documented Vessels

Stumble,
Sales tax is due when you sell a car if the state has a sales tax. You don't pay it, you don't get tags or a title. Same for a boat... It depends on the state.
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Old 06-25-2012
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Re: State Registration of Documented Vessels

Sail life,

You are correct... But not quite.

Let me go through an example of a boat I just cleaned up the paperwork on...
1) Owner 1 (01) buys a boat in Louisiana
2) O1 tells Louisiana the boat will be registered in Wisconsin. So no sales tax is owed to Louisiana
3) 01 never tells Wisconsin he bought a boat so Wisconsin doesn't know they are due sales tax
4) 01 documents the vessel, thus allowing him to get a boat mortgage, and insurance. With the boat located in Louisiana, but titled in Wisconsin.
5) 01 sells the boat to owner 2 (02)
6) 02 want the boat to be legal, so he calls up Louisiana to see what he needs to do.
7) Louisiana says well if it's here more than 90 days you need to register it in Louisiana. To do so you need proof of sales tax being paid, or will have to pay it
8) since 01 never paid sales tax, 02 is stuck with a tax bill he never expected to pay
9) 02 calls me, we sue 01.
10) 01 settles for amount taxes owed
11) 02 registers the boat legally

Yes you are correct that 01 was supposed to pay the taxes, but he didn't. And with no revenue department looking for him, he was fine. Had he been caught he likely would have been subject to tax evasion charges, but he was never caught.

In reality a huge percentage of boats did this, because it was a very safe way to avoid a large tax bill. And since there was no way to check if sales tax had been paid until the boat was stopped, and you can't search a boat without probable cause... The states didn't have much to go on.

Enter our current situation.

Some states have begun to require registration even if a boat is documented. So if you don't have a sticker on your boat the officer has probable cause to investigate you for operating without registration. Since all states to my knowledge require proof of sales tax being paid to register a boat, there is now an enforcement mechanism that works. I expect more and more states (particularly costal states) to adopt this policy.
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