Property Taxes

[Hoosiersailor]

So this probably isn't best place to ask this question but I figure someone may have run in to the same thing. Wife and I currently live in Indiana and will remain residents there (have an IN drivers license, an address and pay state taxes). We will be buying a boat this summer. Several that I like are in NC. Assuming that is where we purchase it, we will most likely register it there as well (we have to register it somewhere). We will not be staying at a marina. We will be constantly on the go, FL/Bahamas in the winter and SC/NC/VA in the summers. Except for maybe a few weeks in the fall the boat may be at a marina in NC while we visit family.

The boat will be USCG documented (if it isn't, it will be) and I'm assuming that I will not be liable for any NC county property tax since the boat really won't be in any particular NC county for any length of time. It will also not be anywhere near NC on January 1st. The address on the registration will be our mailing address in IN. Am I correct in my assumption?

The property tax in North Carolina is a locally assessed tax, collected by the counties. The N.C. Department of Revenue does not send property tax bills or collect property taxes. For almost all the segments of the property tax, January 1 is the tax lien date. In other words, an individual owning property as of that date is liable for property taxes in the county where the property is located.

https://www.ncdor.gov/taxes-forms/pr...%20lien%20date.

[psk125]

Many states assess taxes or fees on boats that frequent their waters for more than a specified number of days. In Connecticut, for example, it is 60. They check the registry lists of Marinas and boatyards looking for such boats, and send bills to the owners if they haven't already paid. They get your address from the marinas. Of course if they don't find you you won't have to pay.

[Kettlewell]

I suggest you don't "register" your boat in NC, but instead get Coast Guard documentation using your home address. CG documentation does not absolve you from paying property taxes where they may be due, but it does take a target off your boat that will prompt NC tax folks to look at it as taxable. Be sure to be out of the state on January 1. Yes, your Indiana people may now look to collect whatever taxes they think are due, so be aware of that. Keep track of where the boat is, marina bills, fuel bills, etc. I had to supply many years of bills to New York to prove my boat had never been in New York. But, legally, property and sales and use taxes are due in the place where the boat spends the majority of its time, though there are many different state rules and exceptions. Florida theoretically requires your boat to be state registered as well as CG documented, but that law is only sporadically enforced.

[Orion Jim]

Originally Posted by psk125

Many states assess taxes or fees on boats that frequent their waters for more than a specified number of days. In Connecticut, for example, it is 60. They check the registry lists of Marinas and boatyards looking for such boats, and send bills to the owners if they haven't already paid. They get your address from the marinas. Of course if they don't find you you won't have to pay.

I can recall when this was standard procedure. No such thing has existed since 2006 in my marina. There are numerous large boats registered in Rhode Island present and they have never had their status questioned by any state authorities. Nor has this been the case where several of these large yachts winter over, on the hard and in the water, in surrounding marinas which can accommodate them.
There are times I wish it were true as I would prefer these tax cheats were shouldering some of the burden which I bear.
I do remember state tax authorities visiting the office to ferret out tax cheats where I kept a previous boat in the 70’s and early 80’s.

[Hoosiersailor]

Thanks for the help. I am really not trying to cheat or get out of paying taxes. I simply don't really plan to be anywhere for more than 90 days. In NC the tax is levied at the county level and I certainly don't plan to spend any significant length of time in any particular NC county. I have heard that at most marinas the local NC county government will require marinas to send a list of boats on Jan 1st and then they will send tax bills to every owner.

I don't mind paying for the state registration to some state but I wouldn't know what county to pay property tax to anyway. And I really thought it was required to have it state registered somewhere but the more I research, the more I am beginning to think that may not be required for a USCG documented boat.

[Montanan]

If your vessel remains in any state for a defined period of time then that state can become the State of Principal Use, in which case it may need to be registered in that state. Note that the State of Principal Use can change during the course of a year if you go voyaging into other states and thence those states may require that you register your vessel with that state.

Some but not all States impose personal property taxation on vessels and those typically are incurred it the boat is present on a specific date, e.g., January 1.

50 States, fifty different taxation rules and registration rules.

It is a simple matter to determine what the rules are for each specific state into which you bring your vessel.

When you cross a state or national border you become subject to the laws of that jurisdiction. Learn the laws. All of the laws.

If the vessel is documented with the USCG then there will be no titling of the vessel by any state of the USA. Not all states are titling states but basically all are registration states.

Some states impose a privilege tax in the form of a sales and / or use taxation of vessels. And / or an excise tax. Again determine if you will be in the state and then learn the laws associated therein.

As to North Carolina.

Registration / titling and sales/use taxation link:

https://www.ncwildlife.org/Boating/Registration-Titling

A reference link:

https://forst.tax/north-carolina-boa...oogle_vignette

If you own a boat in North Carolina, you’re going to have to pay property taxes. Here’s how it works.

What is the North Carolina boat tax?
North Carolina doesn’t have a specific tax on boats, but boats fall under personal property. North Carolina does have a property tax on individual personal property.

What is the NC boat property tax rate?
The North Carolina property tax rate varies based on where you live. It’s typically between 0.6% and 1.5% of the boat’s current value.

You can view rates by county and municipality here.

https://www.ncdor.gov/2021-2022taxra...xratespdf/open

The rates are listed as dollars per $100. So a rate of $1 is effectively a 1% tax rate.

How is your boat’s value determined?
Your boat’s value for property taxes is typically based on its current value in the ABOS Marine Blue Book (

When you buy a boat, you’ll also usually have to pay the NC boat sales tax. The statewide sales tax rate on boats is 3% with a maximum tax of $1,500. Additional local and transit sales taxes do not apply to boat purchases.

Individual personal property includes boats, jet skis, boat motors, aircraft, hot air balloons, mobile homes, other unlicensed vehicles, and more. Personal property generally doesn’t include property that isn’t vehicles such as your household belongings.

The counties will receive notification from the USCG of boats listed as having home ports in their jurisdiction and the state will provide the information from the registration data base, also marinas typically are required to provide an inventory of boats on the specific date for property taxes.

Wishing Bon Voyages!

[Montanan]

Note that some states will require your dinghy to be registered seperately from your vessel, especially if it is motorized and / or more than a specific length overall.

Again 50 states, 50 rules.

Google it.

[Montanan]

Note that a vessel may have as an unpaid liability the property tax associated with the vessel which will need to be paid before registration or titling can change. It can become a significant sum if it has not been paid for a number of years.

Be sure to have such encumbrance identified and paid by the prior owner BEFORE closing your purchase and also require that the seller in writing as part of the closing documentation represent and covenant with guarantee that all liens and encumbrances are paid and clear and that they assume liability for any that may be asserted against the vessel when you acquire it. Liens follow the boat; if you are the owner the lien becomes your burden, unless you have contracted to have such be that of the prior owner.

[Island Time O25]

Since the OP will not be sailing in all 50 states it would make sense to learn the applicable tax rules and regs in the most likely travelled states, about a dozen altogether. Then make an excel spreadsheet that is easily viewed and compared. I'm surprised tax accountants/attorneys on CF have not done that already. At least for the Eastern seaboard. Doesn't have to be free also, some reasonable charge to cover one's professional time.

[Montanan]

North Carolina Registration and Titling:

What Vessels Must Be Registered:
All motorized vessels used on public waters must be registered, including jet skis.
US Coast Guard Documented Vessels operating in North Carolina for over 90 consecutive days must be registered.
All sailboats used on public waters must be registered if longer than 14 feet at the load waterline.
If a vessel registered in another state is brought into North Carolina for over 90 consecutive days, the registration must be transferred to North Carolina. Active duty military, temporarily stationed in North Carolina, who have a valid out of state registration for their vessel are exempt from this requirement.
If you choose to title your vessel, it must be registered as well.


What Vessels Must Be Titled:
Anyone who purchases or transfers a motorized vessel or sailboat 14 feet or longer or who owns a personal watercraft (jet ski), will be required to title the vessel effective Jan.1, 2007. In most cases, lenders require a title as a condition for granting a loan on a vessel.

What Vessels Are Exempt From Registration:
Vessels that are unused and kept on dry land.
Rowboats, canoes, kayaks, and rafts moved only by oars, paddles, or the current.
A vessel used only on a private pond.
Ship's lifeboats or dinghies do not need to be registered if they are used only for emergency lifeboat purposes. However, if they are motorized and used for non-emergency purposes, they do require registration.

[Montanan]

As to the designated property tax lien date [e.g. location on January 1] the county will assess a liability assuming it is in their county to which you have registered it. You will need to provide proof it being elsewhere to dispute the assessment, in which case the boat will likely need to be reregistered in the other county and thence subject to that county's taxation. Basically. it is owed until it proved it isn't. The onus is on the owner.

Devil is in the details. Go read such in the published State legislative codes.

[Montanan]

If the vessel was / is documented with the USCG be sure to obtain an abstract of title on the vessel from the USCG before purchasing. That way you will gain a title history and a recorded lien history.

Not all liens are recorded but the one's that are, well it is good to know what they were and / or are and if such need to be released.

Of course pursue release of all recorded liens else title / documentation will not be transferred.

[Hoosiersailor]

Montanan,

I appreciate you providing all that detailed information. However, I think maybe you are missing my what I am asking. Let's suppose that I buy the boat in late summer fall of this year. It USCG documented and I register it in the state of NC. I spend a couple of months gunk holing around NC and depart for FL and the Bahamas in late November/early December. I spend maybe a month in FL then go over the Bahamas returning in May. I make my way back up to NC and spend a few weeks here there all over (Oriental, Beaufort, Ocracoke, etc). Then depart again and go south in November.

As you have made clear, the personal property tax in NC is a county tax. It is not state. So exactly what county would you suggest I pay taxes to since the boat never spent more than 2-3 weeks in any of them?

[Kettlewell]

By the way, many states do not levy a property tax on boats. However, many states impose sales and use taxes, and some states (Massachusetts and Maine) have excise taxes on boats.

[Montanan]

Pay the tax that is due when it is due. Can't make tax guidance simpler than that.

Determine what and when a tax is due based on your specific circumstances at the time of such circumstance(s).

Registration similarly.

If one opts to not utilize a privilege of use in a state then one can avoid taxation within the state.