If you consummate the sale in New York and/or try to register the boat in New York State, they will require a 7% tax. Of course, if you consummate the sale in Rhode Island and/or Document the boat with the USCG you will pay no tax. Good luck.
I have heard other people say that you can avoid state sales tax by documenting the boat and others have said this is not true. Make sure that you research this well before proceeding. In my state you still have to pay sales tax if you document. Your accountant is probably the best person to ask. I just bought a new boat from out of state and am waiting to hear from my accountant whether I have to pay sales tax on the transportation of the boat. The company I bought the boat from transported it and itemized this cost into the total cost of the boat. Whether I document the boat or not, I still have to pay sales tax on the boat in my state.
Good luck with the new boat.
Documentation in lieu of paying sales tax is a myth. If the boat is home ported or spends a majority of its time in a state which requires sales tax the tax man will come calling--sooner or later. If you move the boat to another taxing jurisdiction proof of payment of tax will be required upon registration. Documentation does not supplant registration in most states. Buy the boat in Rhode Island and home port it there as a suggestion.
Typical reasons for documentation are;
1) provides a clear chain of ownership
2) most bank''s, if providing financing,
will require documentation so that a
a clear title may be provided.
3) there are benefits to being a U.S.
documented vessel if traveling in
In New England, most of the marinas are contacted on an annual basis by their respective taxing authorities, to provide a list of out of state boat owners and/or non state registered boats. This is typically followed up by a letter to the boat owner requesting proof of payment of sales tax. There is no free lunch!
Sorry, my previous post was not entirely clear. I purchased my boat in MD and had it shipped to RI. I documented the boat with the USCG. The state of RI has no sales tax on boats and, as I keep my boat in RI, I have no issues. Also, I am not required to register my boat with RI because it is documented. Sorry about the confusion. Of coruse one could always register his or her boat in an offshore tax haven like Grand Cayman and avoid any taxation issues.
Nice icea, Cayman. Enough people in Connecticut tried that so the lawyers in Hartford changed the rule and now require a ''usage fee'' of boats moored in state waters for more than a specified amount of time. Not even an free breakfast.
Those lawyers in Hartford are the same ones who were putting together tax shelters for boaters back in the 1970s & 80s and charging as high as 3500 to do it. I know from personal experience, what a sham and an expensive lesson!!
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