?? Where to Buy Take Delivery ??

[UNCIVILIZED]

What happens if say you're an Oregon resident, buy a boat in CA, & then move it to OR. Will CA still hunt you down for taxes? And at what rate/costs?

[marlin driver]

Originally Posted by jeagles

My perspective is that the tax or duty is so low as to be irrelevant. There are far greater price differences based on location and condition. Over the past few years prices seem lowest in Florida for used sailboats in the 30 foot range for example. There is some thought that this is due to high usage and storm damage. Second lowest prices are further up the East coast. Deals are far rarer on the West coast.

That is true on the lower priced boats. Do the math with even a $600K boat ($45K sales/use tax and $6K per year personal property tax in CA) and it becomes pretty significant. Now look at a nice new boat for $1.5m and the numbers get pretty big.

[SV Bacchus]

Originally Posted by marlin driver

Do the math with even a $600K boat ($45K sales/use tax and $6K per year personal property tax in CA) and it becomes pretty significant. Now look at a nice new boat for $1.5m and the numbers get pretty big.

Florida does have a cap on vessel sales tax which certainly helps in the above scenario. $18K max tax regardless of vessel price.

TIP #10A01-07
DATE ISSUED: June 22, 2010

Sales and Use Tax on Boats or Vessels Capped at $18,000
Effective July 1, 2010, the maximum tax on the sale or use of a boat or vessel is $18,000. Purchases made on or after July 1, 2010, are subject to the maximum $18,000 tax. Taxpayers using boats or vessels in Florida on or after July 1, 2010, who are subject to Florida use tax pursuant to Section 212.06, Florida Statutes (F.S.), will owe a maximum $18,000 use tax.


I never studied that angle much as I knew it would never apply to me.

[denverd0n]

Originally Posted by marlin driver

That is true on the lower priced boats. Do the math with even a $600K boat ($45K sales/use tax and $6K per year personal property tax in CA) and it becomes pretty significant.

True. But if you live in California is there really any point in buying your boat in South Carolina, and keeping it there, just to save on the sales tax? How are you going to use it!?!

Sure. If you live near the border of California and Oregon, maybe it makes sense to buy the boat in Oregon and keep it there. Maybe. Then you just commute a little way to get to your boat, while saving some taxes. But going to extraordinary extents to save taxes, while ending up with a boat in a location where it is a major pain in the backside for you to actually use it, is just STUPID!!!

[savoir]

For most states the place you buy the boat and the place you live means nothing. California is an exception. What is important is the place that the sale takes place and the place that you keep the boat. Florida is an example of this in that there are no taxes on the sale itself PROVIDED you get the boat out of state within time.

The bottom line is that buying in Florida raises no tax issues provided you have a boat moving plan. The requirements for Florida residents and out of state residents are a little different. Even so, paying Florida taxes is a pretty good deal. You only pay once unlike the states such as California with an annual use tax.

If you like a boat in California the taxes can be avoided if you are OK with paying for an offshore purchase and then remove the boat from the state within the allowed period. This tax free period varies between the states but will be in the 30-90 day range.

Documenting with USCG has no effect on tax.

[GrowleyMonster]

In Louisiana there is now a 5% sales tax. It costs $55 every 3 years to register my 27' boat. My slip is $495 a quarter. Not a month, a quarter. (Long waiting list for slips in my marina, but even cheaper slips are open in South Shore marina with no waiting.) So for a fairly small boat, Louisiana isn't bad. A decent apartment in New Orleans in a decent neighborhood is min $900/mo so it is way cheaper for me to live on the boat, plus you can't sail your apartment but you can live on your boat.

[marlin driver]

Originally Posted by denverd0n

True. But if you live in California is there really any point in buying your boat in South Carolina, and keeping it there, just to save on the sales tax? How are you going to use it!?!

Sure. If you live near the border of California and Oregon, maybe it makes sense to buy the boat in Oregon and keep it there. Maybe. Then you just commute a little way to get to your boat, while saving some taxes. But going to extraordinary extents to save taxes, while ending up with a boat in a location where it is a major pain in the backside for you to actually use it, is just STUPID!!!

Again, it depends on the boat value and the owner's budget.

I know a couple of guys that have bought big boats from Florida, taken delivery offshore, then have it moved to Cabo. They would fly down there regularly to fish and/or vacation and left it there for 6 months. Once the 180 period had passed, they brought it up to home in SoCal and legally avoided the tax. One of the boats cost $650K and one was $1.75mil. You do the math; they considered it worthwhile. At worst, the tax savings paid for all their trips to Cabo. Seems okay to me.

Originally Posted by savoir

If you like a boat in California the taxes can be avoided if you are OK with paying for an offshore purchase and then remove the boat from the state within the allowed period. This tax free period varies between the states but will be in the 30-90 day range.

In California the boat has to be out of the state for a minimum of 180 days or more to avoid the sales/use tax.

[David M]

Is it a trailer boat? I talked to a California boat dealer recently in the SF Bay Area who said they drive boats to Nevada frequently to take delivery to avoid California's ridiculous taxes.

[Cheechako]

A state with no sales tax. Oregon has no sales tax.

[savoir]

Originally Posted by marlin driver

Again, it depends on the boat value and the owner's budget.

I know a couple of guys that have bought big boats from Florida, taken delivery offshore, then have it moved to Cabo. They would fly down there regularly to fish and/or vacation and left it there for 6 months. Once the 180 period had passed, they brought it up to home in SoCal and legally avoided the tax. One of the boats cost $650K and one was $1.75mil. You do the math; they considered it worthwhile. At worst, the tax savings paid for all their trips to Cabo. Seems okay to me.



In California the boat has to be out of the state for a minimum of 180 days or more to avoid the sales/use tax.

Not quite right. It depends on where the owner is resident. If the owner is not a resident of California then the boat must be out of California for more than half the year (183 days or more) to avoid use tax. If the owner is a resident then this exemption does not apply during the first year of ownership but can apply in the second.

[denverd0n]

Okay, if this discussion is about people who can afford to buy a million dollar boat, and then fly back and forth every time they want to use it, then I need to bow out. As they say, this is beyond my pay grade!

(Though as a parting shot I might point out that people in that situation do not get their tax advice by asking a bunch of strangers on a public internet forum!)

[Stu Jackson]

Originally Posted by UNCIVILIZED

What happens if say you're an Oregon resident, buy a boat in CA, & then move it to OR. Will CA still hunt you down for taxes? And at what rate/costs?

CA is admittedly a PITA. However, all you need to do is prove that you keep the boat in OR so there is no yearly property tax. You'd still have to pay the onetime sales tax.

When we moved up to Canada last year, I provided the tax man the appropriate documents showing we'd moved.

[Kenomac]

Originally Posted by marlin driver

That is true on the lower priced boats. Do the math with even a $600K boat ($45K sales/use tax and $6K per year personal property tax in CA) and it becomes pretty significant. Now look at a nice new boat for $1.5m and the numbers get pretty big.

Buy the boat in LA County and you're looking at $60k in sales tax.

[Lost Horizons]

Originally Posted by denverd0n

But going to extraordinary extents to save taxes, while ending up with a boat in a location where it is a major pain in the backside for you to actually use it, is just STUPID!!!

I am going to retire soon, buy a boat and cruise full time, including oUS. Would it still be stupid to save $18k or so on a state sales tax in a state I do not intend to remain at?

Circumstances can be different. Some people buy boats to sail around, rather than stay in a marina.

[Kenomac]

Originally Posted by Stu Jackson

CA is admittedly a PITA. However, all you need to do is prove that you keep the boat in OR so there is no yearly property tax. You'd still have to pay the onetime sales tax.

When we moved up to Canada last year, I provided the tax man the appropriate documents showing we'd moved.

If you keep a boat in a California marina, it doesn't matter where you live or where the boat is documented. The tax man goes to the marina office sometime between November and February (surprise visit) and inventories the entire marina, then the property tax bills go out. They know where to find you, the marina office gives them your information. You also have a "bottom tax" or "mud tax" in California, where you pay a property tax based on the square footage of the ocean bottom your boat hovers over, and this is all on top of the 10% sales tax.

It's a horrible tax state.