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Go Back   SailNet Community > On Board > Boat Review and Purchase Forum > Move boat to Maryland: Did you pay excise tax?
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Thread: Move boat to Maryland: Did you pay excise tax? Reply to Thread
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Topic Review (Newest First)
05-04-2010 10:17 PM
hellosailor "And what is wrong with this?"
What is wrong with this may be nothing--but it conflicts with traditional rights of passage and navigation. While other states have demanded that their own boaters meet certain criteria, no other state has said "You may not enter our waters unless you have" some type of license or certification, which some states don't even issue!
Then there are federal issues to be raised, potentially including interference with interstate commerce or failure to recognize the laws of other states (i.e. states that require training only for youngsters, and grandfather in older boaters.)
Do I think boaters should have some basic competencies? Sure. Do I think NJ has the right to raise an iron curtain on their waters? No. If they want federal boater competency, let them do it through the fed. (Oh, wait, DHS wants to do that anyway...)
05-04-2010 02:24 PM
dschwenk
Maryland Boat Tax

Blancke -- If the boat is in the water in Delaware for 183 and in the water in Maryland for 150, it should not be subject to tax, at least so long as you can prove to the State's satisfaction where the boat was. If it was out of the water in Delaware, I would be less certain. Either way, 150 Maryland days will put you at risk for being assessed, and will leave you in a position to have to prove that you are not taxable. 90 days or less would be safer.
02-03-2010 11:51 PM
reillyjd It is scientifically proven that sailors who keep their boats in a state's waters but fail to pay the proper tax to the state treasury are twice as likely to find themselves aground in a channel that has not been dredged for many years because..... drumroll please.... the state is short on funds to do the dredging in part because sailors who keep their boats in a state's waters have failed to pay the proper tax.

Paying a tax like this isn't much fun, but sailing is.

Enjoy not running aground. Its more fun to watch other people do so.
02-02-2010 10:12 PM
TakeFive
Quote:
Originally Posted by hellosailor View Post
Maryland is the state which, last year, established three "school zones" in areas where there are no schools OR school children, as a clever way to set up speed cameras and then send out the tickets at higher rates because a "school zone" was being violated.
While I also disagree with this practice, I think you are stretching the truth by saying that Maryland created these. Actually it is the municipalities, not the state, that are collecting the revenue.

Here in PA municipalities were banned from using radar detectors and cameras for decades. It's only within the last year or two that the state allowed municipalities to use them, but the state takes such a huge piece of the action that there is no profit in it for the municipalities. So the towns will only buy the equipment if there is a true safety hazard. This is one of the only things that the PA legislature has ever gotten right.

Quote:
Originally Posted by hellosailor View Post
And as of 1/1/2009 NJ became the first state to require a boating safety course or similar certification for ALL boaters in NJ waters, including folks transiting across from the neighboring states. Either a NJ course, or one from your home state, no grandfathering no age exemptions.
And what is wrong with this?

After reading Chapman's as a kid I never took one of these courses. However, just as a refresher, I completed the PA course two days ago. I did not realize that NJ required this for transient traffic. But it's a good thing I have it since I'll be on the Delaware River.

And it's a good thing for me that those other nut cases will have some training.
02-02-2010 08:52 PM
hellosailor Maryland is the state which, last year, established three "school zones" in areas where there are no schools OR school children, as a clever way to set up speed cameras and then send out the tickets at higher rates because a "school zone" was being violated.

I kid you not.

And as of 1/1/2009 NJ became the first state to require a boating safety course or similar certification for ALL boaters in NJ waters, including folks transiting across from the neighboring states. Either a NJ course, or one from your home state, no grandfathering no age exemptions.

When in doubt with tax authorities, the safest course is to ask them for an official advisory opinion, which may be worthless when a new commissioner or new policy comes into effect the next year anyway.

They're all getting very very hungry with all the budget shortfalls, it is not paranoid to assume they'll try to find new ways to get revenue, or higher rates, in the next year or two.
02-02-2010 02:03 PM
ToddLochner
Quote:
Originally Posted by Blancke View Post
My question deals with documented vessels purchased in Delaware and Documented. If the vessel is kept in Delaware for more than 183 days is it subject to the Maryland Excise tax if it sails in Maryland waters for 150 days?
I preface with the infuriating lawyer answer “it depends.” Theoretically if the purchase occurred in DE and you have more days in a single other state than you have in MD then you should be ok, but…… I have seen DE residents who have dockage facilities in both MD and in DE. The slip rental in MD is a yearly contract so on its face it looks like evidence that the vessel is kept in Maryland for a year. Remember that the burden of proof rests with the tax payer and if you receive an assessment letter that is considered prima facia evidence that you owe the tax. The state’s initial burden has been met by printing the letter. YOU MUST PROVE WITH THRID PARTY EVIDENCE EVERY DAY THAT YOUR VESSEL IS IN BOTH STATES.
Furthermore, the MD, DNR has never actually taken the position that they can count time “in MD” from the moment you slip the mooring lines in another jurisdiction but the way the regulations are written they could take that position. I think the only reason they have not is because, as a matter of common sense, it is ludicrous, however; I never rule out the possibility that someday one of the state of MD’s attorneys will take such a position. I once heard an attorney for MD, state on the record that the comptroller of MD’s position is “Everything is taxable.” The result of taking the regulations to their absurd conclusion can be seen when a vessel slips its mooring lines in Bermuda and comes to MD. Theoretically, some attorney for the state could make the argument that all the time in the Atlantic counts as time in MD for the purposes of the tax. I am not sure that attorney would be able to do so with a straight face but stranger things have happened.

Todd Lochner
Proctor in Admiralty
Lochner Law Firm, P.C.
182 Duke of Gloucester Street Phone: (443) 716-4400
Annapolis, Maryland 21401 Fax: (443) 716-4405
02-02-2010 01:29 PM
sailingfool
Quote:
Originally Posted by Blancke View Post
My question deals with documented vessels purchased in Delaware and Documented. If the vessel is kept in Delaware for more than 183 days is it subject to the Maryland Excise tax if it sails in Maryland waters for 150 days?
Excise tax...probably yes (I live in New England...).

But you should be asking about the sales/use tax, as typically that's the big one. And the general answer is...you will pay the sales/use tax in a state where you have the boat, less whatever you paid in a different state. The whole tread above considers some of the ifs and buts in actual PA/MD practices.

One clarification, if while a resident of a state with a sales/use tax you buy a boat in a different state, and pay sales/use tax to that different state, be extra careful to retain legal proof of the boat's "non-residency". Should you subsequently bring the boat to your residency state, that state may demand their sales/use tax, with no credit for the previous payment, unless you can prove the "non-residency" of the boat at the time you paid the other tax.
02-02-2010 12:58 PM
Blancke
Documented vessels in Delaware

My question deals with documented vessels purchased in Delaware and Documented. If the vessel is kept in Delaware for more than 183 days is it subject to the Maryland Excise tax if it sails in Maryland waters for 150 days?
01-20-2010 10:07 PM
TakeFive I have gotten clarification from both PA and MD's boat registration offices, and I have their assurance that I will have no problem moving a boat from one state to the other (either direction). I will pay sales tax to whichever state I choose to moor my boat for the first year, then be able to move it to the other state with no payment (if the taxes are the same) or only pay the difference if moving to a more expensive state.

They insisted that the horror stories I have heard all involve boat owners who had attempted to evade paying any taxes to any state, and were therefore hit with penalty and interest many years later.
01-18-2010 12:34 PM
ToddLochner Typically, MD and PA have a reciprocal relationship. The reality is that reciprocity is done on a "state by state basis" and although the answer rarely "officially" changes the practical ease of taking the exemption can vary based upon the relationship between the vessel tax enforcement administrators. I have heard of one state bureaucrat giving a different state's bureaucrat a hard time over reciprocity and an individual taxpayer has been caught in the middle. Remember that it is all about money and which state keeps the tax dollar. Budgets are tight all over. There is an organization which tries to smooth over some of these common issues and you may find their site useful. It is the National Association of State Boating Law Administrators.

As for PA and MD in particular, they have always had a good relationship. This can be a real blessing on one hand but on the other it is a huge problem for the vessel owner. When the vessel tax officials are "too chummy" they have one another on speed dial. If you escape tax in one state they call their compatriot who often goes for penalty and interest.

You should also consider whether your vessel may be a good candidate for offshore flagging. It is not as expensive as people think. Depending upon a number of circumstances, the break point for cost savings is usually with a purchase price in the $150,000 to $200,000 range. There is info available on a site that I am not allowed to post due to forum rules.

Since you have two threads I will post the answer in both.

Todd Lochner
Proctor in Admiralty
Lochner Law Firm, P.C.
30 C West Street Phone: (443) 716-4400
Annapolis, Maryland 21401 Fax: (443) 716-4405
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