USCG Documentation and Which State to use

[Brown7477]

I have been searching for an answer to this question.
I am going to document a vessel but need to choose a home port to use.
I hate to admit this, but I really can not afford the taxes so I am looking for someplace that does not or will not charge taxes on the State Side registration. I believe the previous Home Port was Wilmington Delaware.
I'm basically trying to keep my costs at a minimum so I can get this boat ready to sail.
I bought the boat through a broker, and got only a USCG Bill of Sale.
The previous owner passed away and I bought it from his son, and he hadn't received the permanent Documentation, however there is no sales price on it.
I know there are some other posts on this subject but they are a few years old and really haven't been addressed in some time.

[2Hulls]

As for state taxes, Delaware is a good choice to register. But this is wholly separate from the home port. The home port basically has nothing to do with how you might be taxed. Think of home port as just an extension of the vessel's name. States taxes depend on where the vessel is physically located, when, and for how long.

Dave

[sanibel sailor]

allowable home ports are either where the vessel is physically located (eg home ported) or the location of the owner of record. The Delaware thing is typically done thru an LLC based in DE. same with Cayman Islands, etc. There is no sales tax in DE either. I did it and "got away with it" but found that the LLC expense added on top of the worry about legitimacy was not worth it. The best reason is for asset protection. The local authorities are also on the lookout for out of state registered boats that are in their jurisdiction for a long duration in which case they can impose fees and I presume fines. Here in FL, 90 days is the limit without going to another state at least overnight. But my boat is over 25 years old so is considered an antique and annual registration is a painless $6.

[brantleychuck]

NOT CALIFORNIA !!!!!!!!!!!


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[markpierce]

You can letter your boat for any US location, but taxes will be based where the boat is berthed.

[belizesailor]

Originally Posted by markpierce

You can letter your boat for any US location, but taxes will be based where the boat is berthed.

Ding! Ding! Ding!

A Federally registered recreational vessel can display any hailing port you choose, doesn't matter, but...the State in which the boat physically resides will still want their take.

If it doesn't reside in a State then no problem. Many cruisers display hailing ports from their shore base. Mine still shows "Bradenton, FL" though the boat hasn't physically been there in over a decade.

[belizesailor]

Originally Posted by Brown7477

I have been searching for an answer to this question.
I am going to document a vessel but need to choose a home port to use.
I hate to admit this, but I really can not afford the taxes so I am looking for someplace that does not or will not charge taxes on the State Side registration. I believe the previous Home Port was Wilmington Delaware.
I'm basically trying to keep my costs at a minimum so I can get this boat ready to sail.
I bought the boat through a broker, and got only a USCG Bill of Sale.
The previous owner passed away and I bought it from his son, and he hadn't received the permanent Documentation, however there is no sales price on it.
I know there are some other posts on this subject but they are a few years old and really haven't been addressed in some time.

Just to clarify, it sounds like you are concerned about State sales tax...right?

If so, this gets very State specific and thus depends heavily on where the transaction took place, where the boat is physically located, and when (how many days ago for example)...where it is registered or which hailing port you display may be largely irrelevant.


What is relavant is what State was the boat in when the transaction was completed?

[skipmac]

Hi Brown7477,

If you are trying to avoid state sales tax on the purchase then that can involve several issues.

The biggest issue, in what state is/was the boat when you purchased it? Many states, Florida for example, will require you to pay the sales and use tax on any boat sold in the state of Florida unless you are not a legal resident of Florida and you remove the boat from the state by the deadline, 90 days if I recall. This is the same in many east coast states.

After this you will have to address the laws in the state where you are a legal resident.

[Brown7477]

Originally Posted by belizesailor

Just to clarify, it sounds like you are concerned about State sales tax...right?

Correct

Originally Posted by belizesailor

What is relavant is what State was the boat in when the transaction was completed?

Sales tax is paid at the time of registration, so sales location would be irrelevant if you reside or register it in another State.

[Brown7477]

Originally Posted by skipmac

Hi Brown7477,

If you are trying to avoid state sales tax on the purchase then that can involve several issues.

The biggest issue, in what state is/was the boat when you purchased it? Many states, Florida for example, will require you to pay the sales and use tax on any boat sold in the state of Florida unless you are not a legal resident of Florida and you remove the boat from the state by the deadline, 90 days if I recall. This is the same in many east coast states.

After this you will have to address the laws in the state where you are a legal resident.

I am actually a resident of Wisconsin.
I plan to head south this fall with a few stops and visits in Alabama, and Florida, then around the Caribbean over the winter.then maybe back around the East Coast and across the Great Lakes next spring or sometime later. Obvious travel plans can change with the wind, so I have no concrete travel itinerary as of yet. The boat I purchased turned into a bit of project and has cost more than I had anticipated. but don't they always? lol

[Dsanduril]

Originally Posted by Brown7477

Sales tax is paid at the time of registration, so sales location would be irrelevant if you reside or register it in another State.

Hate to say it, but sales tax in just about every US jurisdiction becomes due and payable at the time of the transaction. The fact that you end up paying it at the time of registration has no bearing on when it became due.

Many states have a grace period, where if you buy the boat and then remove the boat from that state they will waive the tax. In Florida that is 90 days (and Florida is pretty tax friendly to boats in general). In Wisconsin it is 60 days. If you took possession in Wisconsin and have had possession in Wisconsin for more than 60 days then you owe sales tax already. Doesn't matter if you have it registered or not.

So, the timeline and locations of the boat are critical to evaluating sales tax.

[Jman]

So there is sales (use) tax, one time, or perhaps when you relocate to another state. More or less honorary, at least here in Massachusetts, since there is no policing force for it. Since it is documented, there is no state registration.

Then there is excise tax, which I believe in most states is so negligible as to be irrelevant. We pay Hull MA $5 a foot per year. They get you because if you want a mooring, you have to pay it, if it is a trailer boat, not sure how they would ever know.


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[Brown7477]

Mine is a 35' Sailboat. It's only been 3 weeks since purchase.
Isn't kind of strange that a state can charge sales tax for something every time it is bought and sold?

[Cottontop]

You can document the boat with any recognized municipality for a home port. You could pick Casper, WY, if you want. But . . .

Many states now watch private plane and boat purchases, to get their sales (use) tax. So if you document the boat with a California home port, you might get a bill from California for sales tax. You then have to prove the boat hasn't been in California.

[cburger]

Originally Posted by Jman

So there is sales (use) tax, one time, or perhaps when you relocate to another state. More or less honorary, at least here in Massachusetts, since there is no policing force for it. Since it is documented, there is no state registration.

Then there is excise tax, which I believe in most states is so negligible as to be irrelevant. We pay Hull MA $5 a foot per year. They get you because if you want a mooring, you have to pay it, if it is a trailer boat, not sure how they would ever know.


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In NY documented vessels still have to be registered
although they do not display registration numbers and have to pay sales tax regardless if a new or used boat. State Department of Taxation has a department that just deals with boats, even has had guys out walking our docks looking for revenue, ask me how I know my tax was not irrevelant but substantial.