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I want to buy a boat in Massachusetts but I am a resident of New Hampshire. I will be using the boat in New Hampshire almost exclusively. Will I have to pay tax on the boat at the Mass dealership or will I just pay the NH tax at my local agency when I register the boat?
Many apologies if this has been addressed already, but in the forums I mostly found Q & A's about living outside of NH and trying to avoid tax altogether on a purchase. I'll pay the tax, but not twice to two states! :)
 

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You should only have to pay tax where you are going to register the boat.
 

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Farr 11.6 (Farr 38)
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It is not cut and dry. In most cases, if you buy a boat in one state, that state will expect you to pay the sales tax in that state. There is typically an exception for the case where you buy a boat in one state, but remove it from that state within a stipulated period (somewhere between 30 and 90 days depending on the state law).

This is not as bad as it sounds however, because many states have reciprocity, so that if you pay the sales tax in one state when you buy the boat but move it to another, the state that you move it to will not require you to pay the sales tax over again, except in the case where the state where you bought the boat had lower sales tax than the state where you moved it in which case you typically have to pay any difference between the lower sales tax and the one in the state where the boat will be kept.

Since these laws vary from state to state, you need to research this with the individual states involved.

Jeff
 

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especially since NH has no sales tax
 

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This should answer your questions, you should also visit the site as there is a form you need to complete with-in a certain time frame.

Sales for out-of-state delivery:
Sales where the purchaser accepts title to and possession of an item outside Massachusetts generally are exempt. Similarly, if a vendor is obligated to deliver to an out-of-state purchaser’s address or to an interstate common carrier for such a delivery, the sale is not taxable in Massachusetts. Generally, however, any taxable item brought into the state within six months of purchase for use, storage or consumption in Massachusetts s subject to the use tax.

Check this site A Guide to Sales and Use Tax
 

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Just recognize that one way or the other, the tax man is gonna getcha! We purchased new in Maryland and registered in NJ and paid the NJ tax when we got the boat up there.

Loree
Aboard SeaWolf
CruisersLife.com
 

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If you are getting a loan, ask a knowledgable boat lender. Trident funding steered me around a few pitfalls and I avoided a few fees, legally.

NH exempts boat sales tax. You might have to complete the sale in NH. Mass will have some sort of 60 or 90 day rule that says no matter what, if you are here longer than that you must register and then the tax rules kick in. Lucky you to be in NH.
 

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If as stated, NH does not have a sales tax, Ma does, you should be able to do as OR residents do when buying Wa st, and that is have a form/card that shows you are a non resident, you do not pay the tax, get the boat home, and pay appropriate NH tax. Or also as mentioned, if both have STax,, you pay or collect back the different once in your home state.

Just look things up tomorrow with you state tax agency to find out the rules. And as seawolf says, and you seem to know, the tax man will getcha! So plan to see him before he comes looking for you!

marty
 

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Of course you know Massachusetts is going to have some sort of trickery up their sleeves to get some money out of you. If the title is in ma then youre probably going to have pay to get the title in your name to get it to nh
 

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NH does not have a sales/use tax, so you will not need to pay a NH tax.

Mass does nave a sales/use tax and will want to get 5% from you, if they can claim it.

As a non-resident you can legitimately avoid the Mass tax, but apparently only if you take "possession" outside of Mass. If the boat is in a yard, you would need to have it transported out of state before/ at the time of the purchase. Your dealer should be well aware of how to play this game...Mass residents with Florida homes do it at the Mass car dealers...they buy a car...then drive off in the new car with a form from the dealer, where the dealer certifies the dealer delivered the car all the way to Florida.
 

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I have a sailboat that I purchased in Florida and sailed up to RI last year where I moored her. She is documented.

If I move the boat next summer to MA, will the state ask me to pay sales tax? I need not register her in MA (exempt as a documented vessel), so what if anything would trigger a requirement to pay sales tax?

Appreciate any insights...


Bill
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I have a sailboat that I purchased in Florida and sailed up to RI last year where I moored her. She is documented.

If I move the boat next summer to MA, will the state ask me to pay sales tax? I need not register her in MA (exempt as a documented vessel), so what if anything would trigger a requirement to pay sales tax?

Appreciate any insights...


Bill
s/v Toodle-oo!
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Bill,

This is a good one, best of luck. I've been there myself.

I believe if you bring the boat into MA for 60 or more days, if and when MA finds that out, MA will say the use tax is due. If you can prove, conclusively by reference to contemporary documents and records, that the boat was not in the state for 60 days, you may be able to have the tax claim released. If you can't make that proof, you will need to pay the tax.

If you bring the boat into Massachusetts (MA) for 60 days, you would owe the use tax.

Should you not submit the use tax on/about the day you bring the boat to MA, when MA finds out the boat is/was in MA. MA will demand the use tax plus penalties and interest going back to the day that you purchased the boat. For anytime since your purchase date that you can conclusively prove the boat was not in MA, MA may forgo the penalty and interest for that period.

Now a key question - were you a resident of MA when you purchased the boat in Florida?

If you were, then I believe when you pay the MA use tax on bringing the boat into MA, MA will assess penalties and interest back to the date of purchase. I am not sure whether you can get out of the penalties and interest even if you can prove the boat was not in MA until the time you submitted payment, you would have to see a good tax accountant on this. Note most accountants dont know squat about boat matters...

So in net, if you are a MA resident, the question is not whether to pay the use tax, the question is the penalties and interest. MA assumes you are guilty and owe everything, only subject to your proving otherwise...
 

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bill, you really have two choices. Contact the Taxachussetts tax department and motor vehicle department, and get their written opinions and laws. That should be on a web site that you can dig up in 30 seconds or less.

Second choice, ask folks on the web or elsewhere, don't get the actual written laws and professional opinions, and you could wind up like one forum member did.

After 20 years he brought his "bought it out of state, never thought we'd be bringing it back" boat back into NYS waters. Shortly after got a bill for compounded taxes AND PENALTIES for the 20 years that had gone by since he SHOULD originally have paid use tax on the purchase of the vessel. Last heard of, asking forgivance with a tax lawyer in tax court, where "I didn't know" doesn't buy any.

Taxes can get VERY NASTY especially since the tax court can SEIZE THE BOAT and then very undemocratically, tell you that it is your problem to prove they are wrong. You rwally need to deal with the authorities directly, and your state citizenship and residence will be critical factors.
 

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Interesting. Thanks for the responses.

I am a resident of MA.

When I purchased my previous boat (also documented) I sailed her out of Rhode Island (was not even aware of the tax implications). However, we moved her to MA and sailed her out of Mattapoisett for three seasons. Nobody ever came after me for tax - and I wasn't aware I was dodging it. I even paid the local harbor tax...

Is there perhaps a time-frame that one owns a boat for after which if it's transferred to another state, tax is not liable?

It's not a big deal - we can certainly continue to moor in RI another year - we're headed off on a circumnavigation in 2013, so this shouldn't be an issue then!


Bill
s/v Toodle-oo!
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"Is there perhaps a time-frame that one owns a boat for after which if it's transferred to another state, tax is not liable?"
In a very few states there is. Again, that will be on your state web site.
 

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Interesting. Thanks for the responses.

I am a resident of MA.

When I purchased my previous boat (also documented) I sailed her out of Rhode Island (was not even aware of the tax implications). However, we moved her to MA and sailed her out of Mattapoisett for three seasons. Nobody ever came after me for tax - and I wasn't aware I was dodging it. I even paid the local harbor tax...

Is there perhaps a time-frame that one owns a boat for after which if it's transferred to another state, tax is not liable?...
MA will want its use tax on any vessel brought into the state for sixty days, less any tax paid in a state with a reciprocity agreement.

The state now has the towns tied into checking for use tax. Towns all want their annual boat excise tax ( a minor amount), so the harbormasters, police and other agents look for the annual town mooring stickers on all boats in marinas or mooring areas. To get a sticker you need to have paid the annual excise tax which gets you and your boat details on the tax roles. I forget how the state closes the loop on boats on the excise tax lists and whether it has a record of a sales/use tax - whether they do it after the fact or as part of the excise tax application....
 

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Right - I had to pay harbor fees in Mattapoisett with the last boat - still nobody asked me for sales tax - implies there's a timeframe of ownership the trumps a state asking for sales tax.

I'll search through the state's tax website - but that's a task!
 

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Right - I had to pay harbor fees in Mattapoisett with the last boat - still nobody asked me for sales tax - implies there's a timeframe of ownership the trumps a state asking for sales tax...!
The regulation for cars is still is six months, but the state changed it in 1991 to exclude boats from the six months..boats thus becoming forever...If you avoided a use tax after 1991, don't say anything more about it!
 
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