Avoiding Sales Tax

[CarlF]

Well, it is still pretty much a button push search for the tax guy from whichever state you use as the hailing port in the documentation. You'll usually get a letter from that state if they can't find a sales tax payment record as part of a state registration (which is now required by most states of documented boats).

If your hailing port is a no sales tax on boats state such as Rhode Island then you are of extra special interest to the dock walking revenue agents in every state ( since they know that you haven't paid any sales tax to any other state). There were reports last summer that Maine was sending letters to every newly documented boat seen in Maine waters with a New Hampshire or Rhode Island hail port asking for proof that the boat hadn't stayed more than 30 days in Maine (e.g. prove the negative).

Carl

[John A]

Originally Posted by savoir

Registration outside CA is only part of the equation. If that is all you do then the tax man will get you. There is lots of detail in this thread and the links.

If you find a true bargain, a fixer-upper of the first order, one that you bought for 5 cents on the dollar, be prepared for the tax man to appraise the boat at its top dollar value.

[Dulcesuenos]

Originally Posted by hellosailor

"If you bring the boat to FL, you will pay florida tax -- either as a use tax or a sales tax."
I know Florida CAPPED THE TAX this year. I think the maximum sales tax on a boat purchase there is $18,000 now. This was done expressly because folks were taking legal steps to avoid the sales tax entirely, and the pols finally figured out that if they made it cheaper to just pay the tax...the megayachts would pay it to Florida.

I wish they would make this a cap per person per lifetime, not per boat.

[denverd0n]

Originally Posted by Dulcesuenos

I wish they would make this a cap per person per lifetime, not per boat.

Well, THAT'S not going to happen! If it were a per person cap then multimillionaires would be able to buy another mega-yacht every other year and never pay anymore sales tax. The cap already makes it a seriously regressive tax, as it is. Making it a per person cap would only further penalize those who buy less expensive boats.

Right now, if you buy a yacht for a million dollars in Florida, you will pay less than 2% in sales tax. If you buy a boat for anything under $300k, on the other hand, you pay the full 6%. How is that fair!?! What they OUGHT to be doing, instead of capping the sales tax, is exempting the first $100k from any tax. That way those of us with meager budgets would get the benefit, instead of most of the benefit going to the very rich, as it is now.

Oh, and by the way, you don't necessarily have to pay sales/use tax if you bring your boat to Florida. If you have used your boat for more than 6 months, elsewhere in the United States, then you owe no sales or use tax when you bring it to Florida.