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Old 05-05-2014, 18:09   #16
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Re: Hailing Port and Tax Implication

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Guess I wasn't sure if the Coast Guard docs would somehow be sent to the hailing state.
We first bought our boat in Dec 2010 in the Moorings charter program. Traded it in for our current boat in March 2012. Haven't had any issues and it is coast guard documented with our home town in MA.

I have read of stories where towns look through the coast guard registry for new boats in their town and then send out tax notices..etc, but I don't think they have any right to collect anything if the boat isn't in MA. So as long as you can document that the boat isn't in MA for the necessary time (seen 6 months - 1 year now) I would think that would be enough proof to ensure no taxes would be required. In our case it will be very easy to show that for at least 5 years the boat never made it to MA.
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Old 05-05-2014, 18:36   #17
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Re: Hailing Port and Tax Implication

GG-en noted, this has come up here on a very regular basis. As a tax attorney in WA, I deal with it all the time. The Cliff Notes version-, sales and use tax is based on the physical location of the boat. If you buy it in a state, that state will want sales tax unless you move it out of state in pretty short order (time period varies by state). When you bring a boat into a state, virtually all states that have a sales/use tax will want to assess you the use tax. The state's assumption is that if you bring the boat in their state, you intend to keep it there. Again, there are time periods that vary by state on how long you can stay in-state without paying the use tax. In your case, if you bought the boat in Fla, and certify that you are leaving the state within 60 days, they will not collect sales tax. When you bring it into Mass, if that is where you will dock it, they will want to collect their use tax. Many states require even a documented vessel to at least register with the state, that is their means of collecting the tax. Home port is irrelevant.
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Old 05-05-2014, 19:08   #18
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Re: Hailing Port and Tax Implication

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Guess I wasn't sure if the Coast Guard docs would somehow be sent to the hailing state.
The simple answer to your original question is yes. The CG does notify the state, but it takes a while. It took 2 years for me to get a sales tax bill from California (the boat was in the Caribbean).
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Old 05-05-2014, 19:14   #19
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Re: Hailing Port and Tax Implication

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The simple answer to your original question is yes. The CG does notify the state, but it takes a while. It took 2 years for me to get a sales tax bill from California (the boat was in the Caribbean).
Are you sure the CG notified the State, or did it just take two years for the State to read the CG website?

Real question, not trying to be kidding.
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Old 05-05-2014, 21:10   #20
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Re: Hailing Port and Tax Implication

GG. Simple! just document the boat somewhere else ! Like Portland OR. no state sales tax in OR. Ya just need a po box and a forwarding outfit ! All our boats are documented in OR. have been for years, Connies cousin lives there and forwards for us ! And we keep up with stuff like that ! LOL
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Old 06-05-2014, 06:43   #21
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Re: Hailing Port and Tax Implication

Use a RI hailing port (Newport, RI??). Register the boat in RI. No sales tax and annual registration is inexpensive. If you bring the boat into MA within a six month to one year period, you technically may not owe the tax but the monkey is on you to show that you did not intend to keep it in MA. The MA tax people are focused on "intent". Hard to convince them otherwise if you have arranged docking etc. Best plan is to find a RI dock for the first year or two. Close to MA but no tax, then move to MA if you are not off cruising. Also as previous, talking about it on this site may not be the smart thing to do!!!
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Old 06-05-2014, 09:33   #22
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Re: Hailing Port and Tax Implication

Separated grey area is buying/registering the boats as charter which might defer the Sales tax, but you may have to pay property tax and sales tax on any revenue. We were so houses, condo, children, grandchildren, RV, motorcycle poor we originally bought the Eagle as a bare bone charter which deferred the sales tax 8.4%.

However we did have to pay property tax and use tax on revenue which was a lot cheaper then the sales tax one the boat. We never did actually charter the boat so we alone had to pay property tax, a couple hundred bucks. One of the other reason as a registered charter we also got preferential treatment doing though locks and bridges. Since we were moored on Lake Union we had to go thru the locks to get into Puget Sound. We would call as we approached the lock a head and motor straight into the lock We PISSED a lot of pleasure boaters, but hey we had the tabs and registration.

I figured if they caught us the worst was they would make use pay the sales tax. So you might want to check out the grey areas and maybe defer the Florida tax for a year. I like the grey areas!


OH! I almost forgot being a charter you can open up wholesale business accounts so you can buy at cheaper whole sale prices and defere the sales tax on the purchaes. Win Win Win!
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Old 07-05-2014, 07:47   #23
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Re: Hailing Port and Tax Implication

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Use a RI hailing port (Newport, RI??). Register the boat in RI. No sales tax and annual registration is inexpensive. If you bring the boat into MA within a six month to one year period, you technically may not owe the tax but the monkey is on you to show that you did not intend to keep it in MA. The MA tax people are focused on "intent". Hard to convince them otherwise if you have arranged docking etc. Best plan is to find a RI dock for the first year or two. Close to MA but no tax, then move to MA if you are not off cruising. Also as previous, talking about it on this site may not be the smart thing to do!!!
The Mass law clearly says 6 months so where does your "six months to one year period" come from? Or even "first year or two?"

Maine law says 1 year. Since my intent is that my boat will eventually be kept in Maine and I am a Maine resident, I called Maine state tax people about 3 months ago and asked for them to clarify. The guy first told me that I would owe use tax even if I kept it out of the state for a year but I politely asked him to double check that and he did and then said that if the boat was actually used out of state (not just stored to wait out the one year time period) that I would not owe use tax. I asked how they would know whether I used it or just stored it and he said they would ask to see some receipts for fuel, dockage, etc. I went through this same thing about 15 years ago and about 2 years after purchase Maine sent me a tax bill but I just wrote a letter to them explaining where the boat had been, including a receipt for a mooring in Gloucester, Mass on my 366th day of ownership, and never heard anything more about it.

This time around, I bought my boat in Annapolis in November and quickly moved it to Delaware where it's been in winter storage and having some work done, but now that it's finally summer, and (truly) coincidentally I have owned it for 6 months, I plan to cruise southern New England including Rhode Island and Massachusetts this summer. Yes, I am aware of Maine tax law but I also have always wanted to cruise southern New England waters instead of just hurrying on through enroute to somewhere else and since the boat is currently south of there, this seems like a good time to do it. I will haul/store in Mass next winter and then enjoy taking her "home" to Maine the following season.

There's been a lot of mention of "intent" in this thread but the "intent" the Maine tax people are concerned about is NOT whether I eventually intend to bring the boat to Maine, but whether my arrival date ( more than 1 year after purchase) was just to thwart the tax law or did I actually use the boat elsewhere. They already know I "intend" to bring it to Maine and I own a mooring in Maine, but as long as I use it elsewhere (not just store it for a year), then I am legal in not owing them use tax. I also think there are misplaced fears about discussing it on this site or anywhere else. If you are attempting to ascertain both the letter and intent of the law so that you can comply with it, there's nothing at all wrong with that. If you came on here and announced that you were going to store your boat outside of Mass (except for normal winter storage) for 6 months just to avoid the tax, then if the tax people noticed that, it could be used against you. But you're not doing that, just trying to know what the law is so that you can comply. One cautionary note though, several friends have suggested to me that I bring my boat to Maine this summer because "how will they know" if you just visit for a few days and stay out of major harbors? I don't intend to do that. I intend to strictly abide by the Maine tax law so that if it ever becomes more of an issue than it was last time I will be able to swear under oath, with no fear of perjuring myself, exactly where my boat was and how I was actually using it outside of Maine. No worries.

Both boats will have had my home town in Maine as their hailing port but that is not a factor at all when determining use tax liability.
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Old 07-05-2014, 08:18   #24
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Re: Hailing Port and Tax Implication

The state (and Boston) tax people will search the CG online database and find it.

You will pay an annual "excise tax" in any case. For an old boat this is very low as the town uses a table to figure out the value of the boat that hasn't been updated for years. It varies by town but here's an example:

Town of Newbury, MA - Boat Excise Tax

The sales tax (which can be called a "use tax" if after the sale), is complicated. One factor is evidence of your "intent" to use the boat in Massachusetts when you bought the boat. Remember, the state can search this forum too. They also check boat yards and marinas.

I'd just pay the Mass sales tax -- or get help from a source better than than an internet forum to figure out a defensible plan for when the tax people come knocking - and they will. Otherwise you're going to spend the next five years arguing with the them and possibly paying a lot in penalties.
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Old 07-05-2014, 08:42   #25
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Re: Hailing Port and Tax Implication

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The state (and Boston) tax people will search the CG online database and find it.

You will pay an annual "excise tax" in any case. For an old boat this is very low as the town uses a table to figure out the value of the boat that hasn't been updated for years. It varies by town but here's an example:

Town of Newbury, MA - Boat Excise Tax

The sales tax (which can be called a "use tax" if after the sale), is complicated. One factor is evidence of your "intent" to use the boat in Massachusetts when you bought the boat. Remember, the state can search this forum too. They also check boat yards and marinas.

I'd just pay the Mass sales tax -- or get help from a source better than than an internet forum to figure out a defensible plan for when the tax people come knocking - and they will. Otherwise you're going to spend the next five years arguing with the them and possibly paying a lot in penalties.
Just because it is the CG database as the hailing port in MA does not mean that is where the boat is used or is docked etc. For a documented boat, you can pretty much put any U.S. city as your hailing port. As mentioned, this has nothing to do with where the boat is.

If the OP is actually trying to use the boat in MA and evade paying the taxes due, then that is a whole other story.
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Old 07-05-2014, 08:49   #26
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Re: Hailing Port and Tax Implication

GG,
Here is a link for state tax rules:
State Boating Information Home - Government Affairs - BoatUS
Each state has their own way of collecting....
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Old 07-05-2014, 09:29   #27
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Re: Hailing Port and Tax Implication

The baffling complexity of these taxes - and the apparent ease with which they are avoided - must surely make them so costly to collect as to result in a net loss to some States?
My expertise in this area is limited to what I've just read here though... or rather what little I can remember of it

I live in the UK - do I owe MA any tax yet?
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Old 07-05-2014, 10:07   #28
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Re: Hailing Port and Tax Implication

comes down to one simple thing. being caught. Here is the deal. if you live in MA. and operate in MA even if you are documented, they also want you to register the vessel in MA. if you register it, then you have to pay taxes or prove that you have paid taxes in the past. end of story.

so for us, we have a mooring in Newport RI. that is our home port. we put Newport on the boat. Newport has no sales tax on boats, nor does it require registration if you are documented. We also have a mooring in Nantucket. If the powers at be see us in Nantucket for 3 months straight they may ask questions, but the fact we have a mooring in Newport also clears us. We also go south to miami in november for the winter so we are in fact not in MA waters as a primary base.

Here is a little article on our now secretary of state John Kerry taking advantage of the situation... a beautiful boat he has btw.

John Kerry Saves $500,000 By Docking 76-Foot Luxury Yacht Out Of State
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Old 07-05-2014, 10:09   #29
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Re: Hailing Port and Tax Implication

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I live in the UK - do I owe MA any tax yet?
Nope. We didn't pay your tea tax 250 years ago, so you don't owe MA anything either. lol
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Old 07-05-2014, 10:10   #30
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Re: Hailing Port and Tax Implication

Sure you have to offset the cost of the revolution.
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