Question about California Sales Tax

[bumblevi]

Hello! My husband and I purchased a used boat in California earlier this year in March. We plan on keeping it in California. Our broker had stated that we should be receiving a bill for California sales tax. Our boat is documented with the USCG. We haven't received this bill yet and my question is for those of you that have purchased a used boat in California - do you receive this bill from the state of California? If so, when did you receive it after your purchase? I have also read that you can "self report" and pay the sales tax to the California Board of Equalization, has anyone ever done this? Thanks for your help in advance!

[Shrew]

California Boating Information - Government Affairs - BoatUS

Most states don't tax you until you've registered the boat. Documenting the vessel with the USCG really only moves the Title to the Federal Level.

California requires that you register the boat if in the state for more than 120 days.

The State would have no idea whether you are moving the newly purchased boat to another state or not. Therefore, I wouldn't expect the tax process to be triggered until the registration is done.

Have you registered the boat in Ca. yet?

[Training Wheels]

We purchased a boat out of state and brought it to CA. No, you don't have to register the boat if it is documented. You have one year to pay the sales tax. We never got a bill, but went in and payed it. We figured it would come up eventually, and didn't want to pay any late fines.

[bumblevi]

Hi Shrew,
Thanks for the link, I will read up on the info. We have not registered the boat with California. This is a first boat purchase for me, so sorry if I am asking naive questions or using incorrect terminology! Our broker had instructed us to hire a company called Dona Jenkins for documentation with the USCG. We received a USCG certificate in the mail in May of this year. I was under the impression that since it is registered with the USCG, that it did not need to be registered with the State of California. My original question about receiving the sales tax bill somewhat correlates with this, how would the State even know to send us a bill? Which is also why I was wondering if I should self report and pay the sales tax...

[bumblevi]

Hi Training Wheels, thanks for the reply! I agree with you and know that it will come up eventually and don't want to pay any fines or interest. I will look into going in and paying it, as you did. Thanks!

[Shrew]

Originally Posted by Training Wheels

We purchased a boat out of state and brought it to CA. No, you don't have to register the boat if it is documented. You have one year to pay the sales tax. We never got a bill, but went in and payed it. We figured it would come up eventually, and didn't want to pay any late fines.

http://www.dmv.ca.gov/portal/dmv/detail/boatsinfo/

That link is contained within the link I provided.

This is an interesting addition:

A documented vessel is registered and issued a marine certificate by the U.S. Coast Guard. It does not require DMV registration. Please see the previous note.

What is funny is the previous note lists conditions which DO NOT require registration. It only mentions this:

Vessels currently and lawfully numbered (registered) by another state that are principally used outside California.

[Calif.Ted]

Yes you should contact and pay use tax to Board of Equalization, they will eventually send you a bill but it may take them over a year and they may add interest and penalties at that time. A documented vessel does not have to be registered with the state at DMV, California is either documented or registered, not both. This happened to me a couple decades ago, I bought documented vessel thru broker, 2 years later tax bill arrived with interest. You are responsible to pay the tax, they are not responsible for sending a timely bill.
Tax Guide for Purchasers of Vehicles, Vessels, & Aircraft

[zeehag]

in cali the only one to pay the tax is board of equalization UNLESS it is state registered. documented you pay equalization board only. they WILL contact you. dmv you pay sales tax when yoiu get title. documented you pay when they bill you. it will be soon.

[gamayun]

I have some experience in this. I never tried to hide from paying this tax, but I ended up in a lien situation because the bills were going to a bad address and I didn't think to call about it after the first year.. It is usually initially assessed on purchase, which I paid when I bought my boat and the rate varies depending on where you say you plan to keep the vessel -- different counties have different rates. They will eventually find you, particularly if you are in a marina. At least in the bay area, I believe the marinas report their berthed vessels to the tax office. You should contact the tax office in the county where you are located. It is taxed as "unsecured property" and is based on the price you paid. It is due Aug 31. If you're late, there will be a 10% penalty, $55 administration fee, and interest of 1.5% per month that goes unpaid. If you live on the boat, and it's your primary residence, you can file for homestead exemption. If you don't pay, they will file the lien fairly soon after delinquency (like, by November or so) though I suspect that each county might be different from my experience. I have a bill sitting on my desk right now for Alameda County and a reminder in my calendar to pay by the deadline....

[Training Wheels]

Now you're talking about the personal property tax, not sales tax. Two entirely different things.

[Capt.Don]

You are responsible for both use tax (sales tax) and property tax. Also, depending on your marina, they may charge you property tax on the mud under your slip.

[gamayun]

Originally Posted by Training Wheels

Now you're talking about the personal property tax, not sales tax. Two entirely different things.

Potato/potahto. Please provide more info to help the OP, if you would, as this issue keeps coming up here. I paid the sales tax when I bought my boat so I didn't need to contact anyone at that time. I understand you could also take it to Mexico and avoid the sales tax, but that seemed like a lot of hassle to me. The bottom line is, if a buyer plans to keep their vessel in California, then they will eventually pay the state/county taxes due, either on time or with the penalties and fees tacked on when they're late.

[Flyingriki]

Originally Posted by gamayun

Potato/potahto. Please provide more info to help the OP, if you would, as this issue keeps coming up here. I paid the sales tax when I bought my boat so I didn't need to contact anyone at that time. I understand you could also take it to Mexico and avoid the sales tax, but that seemed like a lot of hassle to me. The bottom line is, if a buyer plans to keep their vessel in California, then they will eventually pay the state/county taxes due, either on time or with the penalties and fees tacked on when they're late.

That info is all easily available with a little googling on the subject. Better sources come up than a forum. Actually the OP question has been answered a couple times quite clearly already here....
Post #3 was the complete answer and was the end of the thread, or should have been.

The discussion often confuses sales/use tax with personal property tax as it again has been here. Completely different things.

[zeehag]

the sales/equalization tax goes to cali bureau of equalization UNLESS you donot document.
titled via dmv you pay the sales tax to dmv.
DOCUMENTED boats pay CALI BUREAU OF EQUALIZATION.
i have done this with 2 of the boats i bought in cali, my ericson and my formosa.
property tax is county assessor.
BOTH will find you.
equalization locating you depends on when the papers are filed by the broker or individual from whom you bought boat or uscg nvdc.
they WILL find you.

[iliohale]

We purchased a used boat in California and the boat was a documented vessel. What was surprising is the California Broker was not required to collect the sales tax in escrow. They are only required to collect the tax for California registered boats. We understood from the Broker that we had 12 months to pay the sales tax or it would be subject to interest and penalties. So we proactively paid the sales tax.

Gary