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Old 01-02-2015, 10:39   #16
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Re: Ca use tax question

And I also forgot to mention, if you don't pay the assessed property tax or the think you paid it late, they will slap a lien on the boat and on your credit report, which they ended up doing to us in error even after we sent them the check for $2600. We had to contact the credit bureaus to get the invalid lien taken off our credit report. Need I say more. I think avoiding California is a good idea personally.

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I just went through this with California. Talk about a complete rip-off for visitors. Here is what happened to me. We bought a Hake Seaward 32RK which is trailerable. The boat is USCG registered with home port Dover, DE. We trailered the boat to California and put her in a slip beginning in October. A few months later we received notice that because we had the boat in California waters on Jan 1 (one day only), we were required to pay a full year of property tax on the boat to LA County Tax Authority. It was 1% of the boats "assessed value". Also, they could hit you for sales tax also, but I don't know the time period that would trigger that. We didn't stick around to find out. Boat is now moved to San Carlos Mexico where we don't have to deal with the People's Republic of California.

Chris
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Old 01-02-2015, 10:42   #17
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Re: Ca use tax question

Chris, knuckledragger and others,

If I was in a position to apologize for the State of California, I certainly would.

I do not support the onerous and ridiculous tax rules that my state has enacted.

I am truly sorry it has inconvenienced so many skippers. A friend who sailed his boat from Vancouver, BC down to Mexico came to visit us. I told him I was glad he came to visit for a month in October and not January 1st!

It's a royal PITA.

That said, the rules are in WRITING and you can learn about them BEFORE you plunge into this sorry-a$$ed morass.

But every year many, many skippers sail their boats down from the PNW, for example, on their way to the Baja HaHa.

They do their homework before they leave and understand the issues.

I am also sure their are transient boats here in California on January 1st of any given year. If they're cruising, it would seem based on the rules that all they have to do is go anchor out from December 31st to January 2nd. IIRC, the marina harbormasters are required to list all boats in their marinas, with their registrations/documentation and send them to Sacramento. You can't blame the harbormasters, can ya?

The folks who post these questions have valid reasons for asking.

All we're doing is telling them the rules.

We didn't invent them, nor do we support them.

But that's the reality.

Good luck, fair winds, safe journey.

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Originally Posted by wgoodbye View Post
I just went through this with California. Talk about a complete rip-off for visitors. Here is what happened to me. We bought a Hake Seaward 32RK which is trailerable. The boat is USCG registered with home port Dover, DE. We trailered the boat to California and put her in a slip beginning in October. A few months later we received notice that because we had the boat in California waters on Jan 1 (one day only), we were required to pay a full year of property tax on the boat to LA County Tax Authority. It was 1% of the boats "assessed value". Also, they could hit you for sales tax also, but I don't know the time period that would trigger that. We didn't stick around to find out. Boat is now moved to San Carlos Mexico where we don't have to deal with the People's Republic of California.

Chris
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Old 01-02-2015, 11:14   #18
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Re: Ca use tax question

I get where you are coming from. I'm not ragging on anyone that wants to keep their boat in California and is willing to pay the piper but you shouldn't have to hire a tax consultant to figure out what your tax liability is when you are cruising in CA waters. We thought we had done our due diligence because we asked the marina if we would have ant tax problems and they told us (incorrectly) that if we left before March, we wouldn't owe any taxes. So shame on us for not doing our homework but shame on the California system for ruining boating for visitors in such a beautiful state.
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Old 01-02-2015, 12:33   #19
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Re: Ca use tax question

Stu and Chris,

I agree it's incredibly confusing, at least for me. We have called a friend who is a international tax attorney as well as my Ca based CPA ( I used to live here years ago) and neither could tell us much!

As of this writing it is my belief I need to keep the boat out of Ca for 6 months and 1 day to avoid use tax during the first year of ownership, and leave the marina on January 1 to avoid the property tax. Again, I am not 100 positive on either of this issues, yet..
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Old 01-02-2015, 18:18   #20
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Re: Ca use tax question

We're talking three different subjects so let's look at each.

As to Use Tax, it is not required if you are a resident of another state, in this case Oregon, and kept the boat there at least 90 days before bringing it to California.

As to property taxes, if California is the primary location of the boat they are due. If you're just passing through on January 1, that does not subject you to property taxes. Now, that's not saying you won't get billed, but you can show the evidence of where you were before and after, and how long you were temporarily in California. We went through this in San Diego this year. We actually went to the taxing agency and got exemption before the inspector came and then showed it at that time. He still recorded the boat but took a copy of our documents.

As to registration, a documented vessel is not required to be registered in California. An undocumented vessel coming to the state is required to be registered 180 days after entry. This is the longest time of any state we've visited.

Boat registration is inexpensive in California. Use tax is high if required. And property taxes are the highest of any state I'm aware of.
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Old 01-02-2015, 22:19   #21
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Re: Ca use tax question

Thanks BB,

I appreciate that info! I think they changed it from 90 days out of the State to a majority of the year (for the first year of ownership that is). Still trying to confirm that with the tax man which will mean a call to him and 45 minutes on hold.. Stand by for further!
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Old 01-02-2015, 23:50   #22
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Re: Ca use tax question

If you're in a slip in California on Jan 1 and your marina is not private, there's a good chance you'll get an extra property tax bill for the mud under the water under your boat as well.
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Old 02-02-2015, 08:48   #23
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Re: Ca use tax question

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Thanks BB,

I appreciate that info! I think they changed it from 90 days out of the State to a majority of the year (for the first year of ownership that is). Still trying to confirm that with the tax man which will mean a call to him and 45 minutes on hold.. Stand by for further!
There are two different rules. One is for a non-resident and the other is for a resident. If a non-resident then the 90 day rule applies. If a resident, then the majority of the year rule applies.

Now to further complicate it in the mid 2000's they had a two year period where the rule was changed from 90 days to a year. Then the rule changed back.
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Old 02-02-2015, 09:05   #24
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Re: Ca use tax question

One more comment about the property tax issue. We all know the risk of being charged if your boat is in a marina on January 1. If you're just passing through and that isn't where it's going to be kept, then go to the local tax assessor in advance. Put them on advance notice in writing as to your circumstances. Get their agreement. Then if a bill is sent, remind them and show the evidence.

We knew our boat would be in San Diego on Jan 1. Arrived in California on October 7. Arrived in San Diego on December 7. Leaving California on January 11. Documented boat. Registered in Florida. Sales tax paid in Florida. On the way to Florida. We went to the San Diego Tax Assessors office in advance, met face to face, had a clear understanding and the assessor even contacted the person who would be surveying the marina. We were by no means alone as the boats beside us in the marina weren't even from the US. We'd learned enough just reading here to know the potential issue. We have in writing from the assessor that based on the information provided our boat will not be subject to property tax.

Yes, I know from decades of experience the best ways to deal with tax authorities. But what I know best is you talk to them, you document, and you respond to any and every notice completely. Under no circumstances do you just ignore them and think the problem will go away. A discussion of how things should be isn't really relevant to handling the issue. This is how they are.

And convenience. The San Diego County Tax Assessor's office is located on the harbor, right in the middle of all the marinas. It was just over a mile from our marina.

One other thing I learned long ago and that is face-to-face people will be much more helpful and cooperative.
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Old 02-02-2015, 09:58   #25
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Re: Ca use tax question

Well said, thanks!


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Old 02-02-2015, 14:54   #26
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Re: Ca use tax question

Jan 1, eh?
So poor ol' Hot Rod Lane will be getting a CA tax bill from (presume) Marin County soon? For a boat now at the bottom of the Pacific. That guy just can't catch a break.
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Old 02-02-2015, 15:06   #27
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Re: Ca use tax question

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Jan 1, eh?
So poor ol' Hot Rod Lane will be getting a CA tax bill from (presume) Marin County soon? For a boat now at the bottom of the Pacific. That guy just can't catch a break.
Well, if they place a lien it will be most difficult for them to actually recover then, won't it?
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Old 04-02-2015, 16:00   #28
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Re: Ca use tax question

Wait until you get a property tax bill for something that you do not own and have never owned or seen, and which is registered to another person in a state on the East coast, where you have never been. You will have the fun task of proving a negative--proving that you did not own that item of personal property.
The FAA's online registry showed that the airplane had been owned by a person other than me for the past 20 years, including the year they assessed me for the tax.
Of course, the Orange County Assessor's office said that the FAA's online airplane registry was not reliable proof that I did not own the airplane.
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Old 05-02-2015, 07:33   #29
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Re: Ca use tax question

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Wait until you get a property tax bill for something that you do not own and have never owned or seen, and which is registered to another person in a state on the East coast, where you have never been. You will have the fun task of proving a negative--proving that you did not own that item of personal property.
The FAA's online registry showed that the airplane had been owned by a person other than me for the past 20 years, including the year they assessed me for the tax.
Of course, the Orange County Assessor's office said that the FAA's online airplane registry was not reliable proof that I did not own the airplane.
And that's one that you have to jump through whatever hoops it requires to resolve it. Might not be fair or right, but just have to do it. If I was in that area, I would definitely request a face to face meeting where they would bring their information and you bring yours. Make sure they understand you're just trying to help them as ultimately it doesn't matter to you a bit if they put a lien on that plane. And my face to face would be with someone with authority which means might well be someone above the person who called. Not excluding the one who called but recognizing he might not be in position to resolve correctly.

And, yes, it's a total waste of a few hours. Irritating as can be. But I seriously doubt that any of us haven't wasted a few hours sometime in life and often for things worse than this.
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