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Go Back   SailNet Community > On Board > Boat Review and Purchase Forum > Skipping CA tax ?
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Topic Review (Newest First)
06-02-2014 10:50 AM
denverd0n
Re: Skipping CA tax ?

6 months!?! I'm surprised to hear that California allows you 6 months to move your boat before you have to pay use tax on a purchase. Of all the states that charge a use tax on the sale/purchase of a boat, this is the first that I have heard of that allows more than 3 months. I have to wonder, are you sure about that?
06-01-2014 07:37 PM
thevdeub
Re: Skipping CA tax ?

Catching up.

First, not a full year, I was stating next summer, I meant THIS summer, I.e. 3-4 months.
My bad.
As out off state resident, it is legal to do an offshore delivery, keep the boat less than 6 months in CA and move it out of the state. I won't discuss if this is fair or not for Californian tax payers, but it is legal.
CA brokers seem to be used to offshore deliveries, it looks like common practices.

Sidetrack: you can moore your boat on the west side, in Lahaina. It can be tricky as any mooring, but if you pay attention, it is safe and feasible.
06-01-2014 03:06 PM
glassdad
Re: Skipping CA tax ?

The OP states "keep the boat until next Summer (full year) in CA and sail it" That is use in California. He does not want to pay the tax but he wants to use the CA facilities. Pay the tax! Who should pay for the breakwater maintenance, the dredging, the bouys, the harbor patrol,... If it is too expensive at Marina Del Rey, buy it elsewhere and maintain it elsewhere. Buy the boat in Nevada to avoid the ax; of course there are problems with that.
05-28-2014 07:38 PM
davidpm
Re: Skipping CA tax ?

You can usually find out both the right way the wrong way and the grey way to deal with taxes by talking to an active broker in the state you have in mind.

Even if you are interested in a private sail their is no reason you can't talk to a broker and give him a shot at selling you a one of his boats. He may get lucky you never know. During that discussion ask about the taxes.

Talking to the taxing authority would authoritative but they will not give you any creative ideas.
05-28-2014 06:07 PM
Minnewaska
Re: Skipping CA tax ?

Quote:
Originally Posted by MarkSF View Post
.....It seems you can't even hire a delivery crew.
Having purchased several boats and aircraft in other states, I can say that is a very strict application of the out of state exemption. In most cases, you simply need to remove the property from the state. The only stress I've ever had is that some State's make a deadline very clear, while others use vague language like "immediately" remove and you don't really know if you complied.

It would seem that CA intends to aggressively collect their use tax. Buyer beware.
05-28-2014 05:38 PM
MarkSF
Re: Skipping CA tax ?

This is an interesting paragraph from Minnewaska's link :

"For a purchaser to qualify for the exemption from use tax, title (ownership) and possession of the vehicle or vessel must transfer to the purchaser outside of California. When a purchaser exercises control over the vehicle or vessel in California prior to the planned out-of-state delivery, ownership transfers to the purchaser in California. Therefore, if any person other than the seller, or an agent acting on behalf of the seller, delivers the vehicle or vessel from California to the purchaser at an out-of-state location, ownership transfers to the purchaser in California, and California use tax applies. For example, if a purchaser asks a friend or hires a common carrier to deliver the pr operty from California to him or herself at an out-of-state location, use tax applies."

It seems you can't even hire a delivery crew.
05-28-2014 05:31 PM
MarkSF
Re: Skipping CA tax ?

I would most definitely not suggest evading a tax that is due. However, I believe the original poster's question was about buying a boat in CA, as a resident of HI, and not having CA sales/use tax become due. There may be some circumstances in which this is the case, but I'd strongly suggest getting the info from the horses's mouth so to speak, ie the tax franchises of HI and CA.
05-28-2014 02:25 PM
sailingfool
Re: Skipping CA tax ?

The CA personnel responsible for collecting use taxes are a lot more expert at tax evasion than any SN posters. So to the OP, if you buy the boat in CA pay the 8% use tax immediately and enjoy your new purchase, or buy the boat in HI.

Even if you fudge a bill of sale, attempts to hide the value can run aground on the USCG Bill of Sale, your insurance policy's declared value, plus if any financing is involved. For example, I believe the USCG B/S is a public document and you will need to provide a copy of your insurance binder to any CA yard or marina you enter.

Failure to pay promptly (based on the purchase date) will result in assessment of penalties and interest, which start accumulating on the use tax due date, not when CA discovers your debt.

A personal experience - back in the mid-90s while a MN resident I paid off a four year old MA demand for a use tax for a boat I hadn't owned for six years, one purchased in ME while I was a MA resident. MA discovered my name in a audit of the builder. MA had no evidence I ever brought the boat to MA, their attitude was I had to prove that I had not... Eventually I used my out-of-state remoteness to get the state to waive the penalty and interest in return for the tax. Otherwise it was getting dicey even to return to MA for vacation...
05-28-2014 10:22 AM
christian.hess
Re: Skipping CA tax ?

very good link...
05-28-2014 03:26 AM
Minnewaska
Re: Skipping CA tax ?

Overboard..... Great link. It clearly says that Use Tax is also due on documented vessels.

Quote:
.........purchasers of aircraft or documented vessels from any person other than a person required to hold a seller's permit by reason of the number, scope, and character of the person's sales of documented vessels or of aircraft, as the case may be and not otherwise specifically exempt shall report and pay tax to the board.

http://www.boe.ca.gov/lawguides/busi...sutr/1610.html
However, you are exempt under this circumstance......

Quote:
However, a purchaser is not required to pay California use tax if the only use of the vehicle purchased from a private party in California is to remove it from the state and it will be used solely thereafter outside this state.

Ref: http://www.boe.ca.gov/pdf/pub52.pdf
The nuance is what they define as use. I would assume taking her for a sail is use. I still wonder if keeping her on the hard until removed from the state is considered use.
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