?? Where to Buy Take Delivery ??

[Flyingriki]

Any thoughts on where is the cheapest place to buy a boat in America based on taxes and fees? I know CA is out given the ridiculous sales tax. How about Florida, South Carolina, Texas, Maryland.....?
Are there other large costs in the purchasing process that one should consider based on location? Perhaps documenting with the Coast Guard instead of with a state?
Thanks for any first hand knowledge.

[Dirty Sailor]

Originally Posted by Flyingriki

Any thoughts on where is the cheapest place to buy a boat in America based on taxes and fees? I know CA is out given the ridiculous sales tax. How about Florida, South Carolina, Texas, Maryland.....?

Are there other large costs in the purchasing process that one should consider based on location? Perhaps documenting with the Coast Guard instead of with a state?

Thanks for any first hand knowledge.

Take everything I say with a grain of salt as I've only looked online, but it seemed to me that the best places to buy boats were on the upper East coast, maybe because of the long tradition of boatbuilding out there. Anyways maybe I'm wrong but it seemed like that was the best place as far as the shape of the board to the price ratio.

[mocha]

I'm not going to suggest that I'm an expert, but I'm sure many possible responders to your post will want to know where you live.

I live in FL,, sales tax is 7% --- depending on the age of the vessel, I believe it is over 30 years, qualifies as an Antique, for registration purposes, and VERY inexpensive, I think mine was $5 per/year ,

Good luck!

[Kenomac]

Take delivery in New Hampshire and document the boat in New Hampshire, Oregon or Rhode Island. Then no taxes, unless you live in a State like most other states including California which expect the taxes to be paid regardless of where the boat is if you happen to be a resident of the state.

If you live in California, there's no way other than creating an LLC to avoid the state taxes.

[leboyd]

Watch this (somewhat long) video:

https://www.youtube.com/watch?v=hJMIKNOnim4

There's some discussion about Delaware being the best place to register.

In my opinion, it really depends on the how much you're spending as to how complicated (and costly) you want to avoid taxes. I think the video is for those buying $250,000 boats and up, since having "companies" that own the boat requires annual tax filings for the company, etc., etc.

But it's a start. If you're spending that kind of money I'm sure the broker (can't remember his name) would be happy to help you out.

[YachtBroker]

Texas is hard to beat.
No sales tax to out of state buyers. Just like florida there is a "use" tax but it's never been enforced.
All floating slips are less than anywhere in the country. $10-11 per ft per month and most marinas are like yacht clubs.

Also 3rd largest concentration of boats in the US. 7000 slips in 5 square miles. Plenty of boats to chose from and you can see more boats in one day than any other part of the country.

We'd be glad to help you.

[skipmac]

East coast in general will be the cheapest place to keep a boat, as long as you stay away from south Florida and central New England.

Taxes. Main ones to consider are sales tax(6-7% typically) and annual ad valorem taxes. As noted, a few states do not charge a sales tax on used boats, like Rhode Island. HOWEVER, if you buy and/or keep the boat in another state (doesn't matter where the boat is registered or if Coast Guard documented) you may still be hit with the sales tax.

Example, if you buy a boat in FL, no matter where your official residence or where you register the boat you have to take the boat out of the state within 90 days or pay the sales tax. Same if you buy a boat elsewhere and move it to FL. Unless you meet certain exemptions you will be liable for the sales tax. Most states have similar rules.

Registration fees are small and I wouldn't worry about those.

[sailing_gal]

Yes, you can avoid sales tax on the sale by registering the boat in a sales tax free state (as mentioned earlier, DE, TX, OR etc. However, if you keep the boat in another state, you will have to pay the equivalent of that state's use tax if sales tax has not been paid already. And if you think they won't notice- think again. I personally have known Illinois state tax employees who would spend time inventorying boats with "sales tax free state" registrations at Chicago Marinas and keeping tabs on how long they were at the marina- after so many days, they were sent a bill--- plus penalties. Every state in the US that has a sales tax, has a use tax for out of state "tax-free" purchases

[Shrew]

Taxes are paid to the state where the boat is registered, not where the sale occurs. NH and RI both do not have sales or use taxes on boats.

[Wendi]

BVI is a great choice. Setting up your corporation costs about $1500, then no sales tax on the purchase, no property tax each year. You need to renew your corporation each year. You get the protection of the British navy or something like that, as well. Check it out. It worked great for me.

[skipmac]

Originally Posted by sailing_gal

Yes, you can avoid sales tax on the sale by registering the boat in a sales tax free state (as mentioned earlier, DE, TX, OR etc. However, if you keep the boat in another state, you will have to pay the equivalent of that state's use tax if sales tax has not been paid already. And if you think they won't notice- think again. I personally have known Illinois state tax employees who would spend time inventorying boats with "sales tax free state" registrations at Chicago Marinas and keeping tabs on how long they were at the marina- after so many days, they were sent a bill--- plus penalties. Every state in the US that has a sales tax, has a use tax for out of state "tax-free" purchases

Totally correct BUT there are some exemptions. In Florida if you own a boat outside of the state for a minimum of six months and can prove you legitimately used that boat in that state then later move the boat to Florida you will be exempt from the sales or use tax in Florida.

Florida law isn't specific about everything they consider "legitimate" use in another state but one things that does qualify, you are a legal resident of another state; buy, keep and use the boat in that state then later move to Florida then you're exempt from FL sales and use tax.

If you are a Florida resident, buy a boat and keep it in a marina just across the border in GA for six months and a day then bring the boat home then you're paying the tax.

[skipmac]

Originally Posted by Shrew

Taxes are paid to the state where the boat is registered, not where the sale occurs. NH and RI both do not have sales or use taxes on boats.

If you buy a boat in Florida and keep it there for 90 days you are liable for the sales tax to the state of Florida and FL doesn't care where the boat is registered or where you live.

Even if you are a citizen of another country and register the boat in your home country. 90 days and they want their pound of flesh.

[SV Bacchus]

Flyingriki, I realize you are not looking for a loophole to beat any state out of tax, I take you at your word you are looking for the cheapest state to legally buy in, tax wise based on your own statement.

It can be tricky to walk that line and please be careful. Most states have heard and/or seen almost every trick out there. Most states are probably as serious about it as Florida is.

Excerpt from the Florida Department of Revenue:

A purchaser who attempts to evade tax by submitting a fraudulent affidavit is subject to the tax due, interest, and a mandatory 200 percent penalty (according to section 213.29, Florida Statutes). The purchaser is also subject to a fine of up to $5,000 and up to 5 years in prison.

[denverd0n]

What's more important to you: To get use out of the boat? Or to minimize your taxes? If minimizing taxes is the most important thing then my advice would be to not buy a boat. If you want to use it, then buy it wherever you can get a good price on a boat you like, and move it to a location where you will use it. Putting it someplace inconvenient, just to save a few dollars on taxes, seems very backwards to me.

Beyond that, most states will require you to pay a use tax, even if you bought the boat elsewhere, if you move it to their state within a certain amount of time. They always (as far as I know) will credit you for any sales tax already paid. So where you actually buy the boat may not matter all that much.

Most states will also require you to pay a registration fee, even if the boat is USCG documented. You don't have to display state registration numbers, but you have to pay the fee anyway.

If you really want to know the cheapest place to buy a boat, it's probably Wyoming. No sales tax, low registration fees, no personal property tax, and they don't even have an income tax, if you live there.

Good luck, whatever you decide to do.

[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.