Previous owner tax liability?

[stevec195]

We are considering a new to us vessel that has not only been X-USA for 13 years, but by the owners own admission, never had sales tax paid in the state it was sold-or any other state for that matter. According to her documentation, she has a hailing port in FL, but was never state registered there.
The VAT tax for the country she is in is straight forward, but a potential liability for sales tax unpaid in the US would be a bummer. Any of you sea lawyers out there have any real information on how this affects liability to a subsequent owner?

[shadow]

Not a lawyer but any means, but I think any decent broker and their firm will be able to do the proper research with anything pending on it and/or liens, etc.. Not sure if this helps, but yah, this boat seems to need a bit more attention as it doesn't sound straight forward at all... good luck though!!

[redneckrob]

Originally Posted by stevec195

We are considering a new to us vessel that has not only been X-USA for 13 years, but by the owners own admission, never had sales tax paid in the state it was sold-or any other state for that matter. According to her documentation, she has a hailing port in FL, but was never state registered there.
The VAT tax for the country she is in is straight forward, but a potential liability for sales tax unpaid in the US would be a bummer. Any of you sea lawyers out there have any real information on how this affects liability to a subsequent owner?

Boat sales tax doesn't work like buying a TV or even a car. In states that have it, it's only triggered by registering the boat there, which is required only if the boat physically spends a certain number of days there in a year. If it has always been kept outside the U.S., no U.S. sales tax would be due. Not to mention any tax liability triggered by the original owner only applies to them. Again it's unlike property tax that stays with the property. And "hailing port" is irrelevant although it's reported that CA makes you show the boat isn't located in CA if you're a documented vessel with a CA hailing port.

Note that you may very well have your own sales tax obligation if you ever bring the boat back to the U.S. but that's based on your purchase, not the original owner's purchase.

[BillKny]

This is a very complex question, and has 50 different answers: one for each state.

We never paid sales tax on our boat, not because we cheated anybody, but we were never in a position where it was required to pay. The previous owners sales tax obligation is gone. If you import the boat to the USA and register it there, you need to do the research for the state you will be keeping it in. If you will be permenently transient, the situation is more complex and asking the internet for an answer will only get you confused.

[gonesail]

if the boat is CG documented then an abstract of title might help to uncover any liens against the boat.

[Manateeman]

The blue fish is correct. Call the US Documentation office first.

[Bill O]

Originally Posted by gonesail

if the boat is CG documented then an abstract of title might help to uncover any liens against the boat.

Yes it is a good idea to call USCG to determine if there are any liens on the boat. Not paying a state sales tax would not be a USCG concern or lien.

Not a lawyer but have done a decent amount of research ahead of moving our boat to FL soon.

Several states come to mind that do not require a sales tax on boats. If you didn't pay a sales tax then moved it to FL then you would be on the hook for the full 6% (?). If you paid a sales tax of 5% in another state and moved it to FL then you would owe them 1% of what you paid previously. Not all states do reciprocation for previous taxes paid in a different state, so in the example above you'd want to look up the east coast states that apply.

If you bought a boat in FL and keep it there you would need to pay a sales tax even if a previous owner paid a tax before (it's a new sale). I wouldn't see how the state tax liability (that they didn't pay) would be your burden. It would be on the state to go after that previous owner for not paying that tax, but you will need to pay a tax (if required) for this purchase.

The only "dodge" reduce/exempt from registration fees in FL is to register it as an antique vessel (if you meet the requirements). https://www.flhsmv.gov/pdf/forms/87243.pdf

[Cpt Mark]

Tax liens don't show up unless you look for them. I made sure my title/escrow company did that and they found $5000 of unpaid tax liens. This was in CA.

I immediately moved the boat to Oregon, a no tax state where she's been ever since. I'm a WA resident and as long as the boat doesn't go into WA waters I'll never pay the tax.

[Bill O]

CA is it's own beast of burden when they smell taxes, especially property taxes.

That tax lien you found may not have been legit (if you moved the boat out of there in the time frame). Even if it isn't legit, they still attempt to tax someone and then throw a lien on the boat when they don't pay it. This creates a real hassle to get rid of the lien and usually pay vs. fighting it.

[Cpt Mark]

CA is the worst and Alameda CO is the very worst of the worst. If you wait long enough, like 7 years or so so the liens eventually get dropped but meanwhile they show up on your credit report. I had a bunch of liens that I successfully got them to admit shouldn't be there and they were dropped. To remove the liens tho I had to $15 per lien.

[redneckrob]

Originally Posted by Cpt Mark

CA is the worst and Alameda CO is the very worst of the worst. If you wait long enough, like 7 years or so so the liens eventually get dropped but meanwhile they show up on your credit report. I had a bunch of liens that I successfully got them to admit shouldn't be there and they were dropped. To remove the liens tho I had to $15 per lien.

I'm struggling to grasp how they would put something on your credit report for a boat you bought from a previous owner who incurred the lien. First, a lien by definition it attached to a piece or real or personal property, not a person. Second, there would be no way for them to get the information needed to file a negative credit report on you based on a previous owner. How exactly would that work again?

[Cpt Mark]

Originally Posted by redneckrob

I'm struggling to grasp how they would put something on your credit report for a boat you bought from a previous owner who incurred the lien. First, a lien by definition it attached to a piece or real or personal property, not a person. Second, there would be no way for them to get the information needed to file a negative credit report on you based on a previous owner. How exactly would that work again?

Agreed. I owned that boat and ha an argument for several years re tax valuation. I'd gone in to pay the tax as soon as I took possession. They said, no. You'll get a bill in the mail. That took almost 2 years and then they demanded interest. Process took forever before I got them to see thibgs my way

[jmschmidt]

Check with the USCG National Maritime Center to see if the boat is USCG Documented, which is entirely different from "state registered". If so pull a title search from that same USCG agency ($75 I think). This will tell you if there are any outstanding liens, like an unpaid loan or service provider bill. If clean, go for it if your are otherwise satisfied with the boat itself.
A previous poster is correct. if the boat has not spent any significant time in any US state or territory that taxes boat owners your should be good to go.