Sales tax on a boat that will be leaving the country

[redneckrob]

Originally Posted by Cynara

Have you ever paid sales tax on a car. That is where you owe it

Actually the rules are quite different for cars and boats in most states.

[letsgetsailing3]

Originally Posted by denverd0n

That is why I specifically create a scenario where you used the boat in Georgia for two years before bringing it back to Florida. In fact, if you own and use a boat outside of Florida for more than six months, then you will not owe Florida any use tax when you eventually bring it here. The law in Florida specifically says that if you own and use (the "and use" part is important) something for more than six months, elsewhere in the U.S., then they will NOT consider that it was bought specifically for use in Florida.

I mention the "and use" part because there are people who have bought a boat in Florida, parked it in Georgia or Alabama for six months, and then brought it back -- and then tried to argue that they did not owe tax because it had been more than six months. Nope. The state is familiar with that dodge, and will require you to present some evidence that the boat was being used. Otherwise, you're paying the tax.

This is the wording I was referring to:

FloridaDepartmentofRevenue,SalesandUseTaxonBoats,Page3

This exemption does not apply to a Florida resident, an entity in which the controlling person is a Florida resident, or a corporation in which any officers or directors are Florida residents

[thataway41]

There are ways in some states, which include LLC in another state where there is no sales tax or personal property tax (that should be a decision). Most states you sail thru, unless go up the SLW directly to the Atlantic and to the Caribbean, will require that your boat is registered in some state (usually where you paid tax). This may be true even if you document the boat. For example if you bring your boat into Florida, they want a state registration as well as federal documentation.

It is easier to check in and out of foreign ports with a documented vessel. I believe that is mostly just because officials are used to, and know how to handle documented vessels. Consider going from port to port in a foreign country, is much different than going state to state or town to town...There copies of crews lists, inventories, Zarpe's, health and customs declarations.

Another way is to take offshore delivery, and not officially bring the boat back into that state where it was sold. For example in Calif. It is not too unusual to take offshore delivery, sail the boat to Ensenada, keep the boat there until you leave for the voyage. I have done this. It not only avoided sales tax, but also some serious personal property tax. At that point I no longer owned property of any type in Calif. Also Calif. at various times, has allowed the boat to avoid tax, if it is kept out of state for a year (some time frames it was 6 months.). I got caught on that once, where I was a couple of days sort of the 6 months(as it was in that time period).

[Cynara]

It is expensive to take an offshore delivery. Depending on the boat you won't be able to get any warranty work done either. You have to be saving a boat load of money to make that worth while

When we left California in 1985 to go cruising we had to be gone for 2 years to avoid property tax

[BBill]

If buying a used boat and Florida is an option, consider this: Florida only requires sales tax on how a new boat originally came from the factory. Additional equipment isn't taxed on used boats...but you need to get two receipts, one for the boat and the other for the additional gear. This is totally legal and you only need to present the boat bill of sale. Also, Florida has an antique registration which costs just a couple dollars. Most clerks have been unaware of these laws in my experience so be ready to challenge. Florida has zero personal property tax too. All of this can add up to more than few cheeseburgers in paradise and might be worth investigating for your purchase.

[Dave9111]

There is a lot of bad info in these responses.

You generally pay taxes to the state in which you register the boat, and this can be different (often the case) than where you live. The determining factor seems to be where the boat will be docked. (not necessarily where it IS docked)

For instance I have purchased several boats and some of them have been in Ohio. They were registered in Ohio and I paid Ohio sales tax when I FIRST registered them. That was because the boats were located in Ohio at a marina. ( And yes, they asked ) Did they check? No.

Hint: Make sure you have the address of the marina where your boat might decide to dock for a while!

Say your boat is registered in Michigan and it is docked in Wisconsin.
What will happen?

IF Wisconsin checks boats in the local marinas for the duration of time in the marina they "might" tag you and tell you that you have to register the boat in Wisconsin. (How likely is that?? - ask the local marina where you want to keep the boat. They will know )

If the boat was already registered in a different state, that means you must change registration from the previous state to the new state. Since you already own the boat, and you are not buying the boat, no tax will be due to the new state.

I have no idea where you live or where the boat is. But I would consider your plans carefully.

FWIW, I live in Indiana, my most recent boat was purchased in Ohio, and its docked in Michigan.
The marina where my boat is located is 5 miles from the Ohio line.
Many of the boats in my marina have Ohio or other registration stickers.
No one cares. Its common to move boats between marina's and between states.

There are some good reasons NOT to register your boat in state where it is docked. Do a comparison between states and the reasons will become quickly apparent. Some states are difficult to deal with. Others quite easy.

The same applies to trailer boats. You are supposed to register the boat in the state where it is primarily used. But its a trailer boat. So you get to decide. :-)

[BBill]

Originally Posted by Dave9111

There is a lot of bad info in these responses.

You generally pay taxes to the state in which you register the boat, and this can be different (often the case) than where you live. The determining factor seems to be where the boat will be docked. (not necessarily where it IS docked)

For instance I have purchased several boats and some of them have been in Ohio. They were registered in Ohio and I paid Ohio sales tax when I FIRST registered them. That was because the boats were located in Ohio at a marina. ( And yes, they asked ) Did they check? No.

Hint: Make sure you have the address of the marina where your boat might decide to dock for a while!

Say your boat is registered in Michigan and it is docked in Wisconsin.
What will happen?

IF Wisconsin checks boats in the local marinas for the duration of time in the marina they "might" tag you and tell you that you have to register the boat in Wisconsin. (How likely is that?? - ask the local marina where you want to keep the boat. They will know )

If the boat was already registered in a different state, that means you must change registration from the previous state to the new state. Since you already own the boat, and you are not buying the boat, no tax will be due to the new state.

I have no idea where you live or where the boat is. But I would consider your plans carefully.

FWIW, I live in Indiana, my most recent boat was purchased in Ohio, and its docked in Michigan.
The marina where my boat is located is 5 miles from the Ohio line.
Many of the boats in my marina have Ohio or other registration stickers.
No one cares. Its common to move boats between marina's and between states.

There are some good reasons NOT to register your boat in state where it is docked. Do a comparison between states and the reasons will become quickly apparent. Some states are difficult to deal with. Others quite easy.

The same applies to trailer boats. You are supposed to register the boat in the state where it is primarily used. But its a trailer boat. So you get to decide. :-)

If you paid 6% in Florida and moved it full time to a state with 7% you may be paying a 1% upcharge to that state.

[Dave9111]

Depends on the state and how long you have owned the boat.

You can't generalize like that. Well, you can, but your chances of being wrong are great!

[Montanan]

There are really only two simple ways to avoid paying a sales / use tax on a boat purchase: Buy the boat in a state without a sales tax and keep it there, or buy the boat in a state without a sales tax and never cruise, anchor or dock it in waters controlled by states with a sales or use tax long enough to trigger the tax. There are exemptions and waivers, e.g., time tolling 6 or 12 months.

FYI:

Florida counties impose personal property taxation on vessels registered in their county. The rates vary by county.

[BBill]

Originally Posted by Montanan

There are really only two simple ways to avoid paying a sales / use tax on a boat purchase: Buy the boat in a state without a sales tax and keep it there, or buy the boat in a state without a sales tax and never cruise, anchor or dock it in waters controlled by states with a sales or use tax long enough to trigger the tax. There are exemptions and waivers, e.g., time tolling 6 or 12 months.

FYI:

Florida counties impose personal property taxation on vessels registered in their county. The rates vary by county.

Florida makes it confusing when they say "sales" tax and "use" tax. It's called "sales" tax if the dealer collects it but called "use" tax if a buyer pays at registration time.

But don't confuse county discretionary surtax with other states annual personal property tax. Discretional surtaxes have an expiration date and change values often. Specific items may or may not be included in the surtax. It's a purchase tax like sales tax.

Florida has a 6% sales tax + discretionary surtax on purchase. You pay an annual registration fee for boat renewal. Some counties have an additional fee included in the renewal based on boat length, not boat value. Evidently they don't consider boat renewal as a "purchase". I renew 3-4 boats every two yrs and no surtax is paid. On the otherhand I pay a monthly 1% county surtax + 6% sales tax for commercial property rent collected.