Avoiding Sales Tax

[sailorboy1]

take it from me, no sales tax (except for prepared food) AND no income tax in NH.

I live here fora resaon! Live Free or Die!

[Doodles]

Originally Posted by hellosailor

No, doodles. I said NH because the OP asserted they have no boat sales tax, and I said RI because the RI state web sites say they have no sales tax on boats. I'm not confusing sales and income tax. A fast web search on NH says "$10 to $1761.40 depending on size and propulsion with some exemptions" from How to Avoid Boat Tax - Legally which conveniently compares a number of states.

How and whether a boat can reside someplace without residency of any owner, is a whole other question and whoever wants to play the sales tax venue game needs to research that one on their own, for whatever magic solution they come up with.

As I've said on forums before...some states send out UNWAIVABLE jury duty notices based on vehicle registrations. You register a motor vehicle in them, and you will be required to physically appear for jury duty every several years, with no exemptions. Other states don't.

There are all sorts of gotchas once you step up to play in the big leagues with the tax men. Odds are that even a tax attorney won't be familiar with all of them.

I agree completely with the last paragraph in the link you quote above:

In the meantime, if you are buying or have purchased a boat for a significant amount of money, you should seek specific legal advice about how to conduct your affairs. Avoiding sales tax is only the first step, but if done improperly, can bring far worse consequences such as penalties, interest, liens, etc. A good lawyer can provide advice about how to maintain your boat in a situation in which it does not owe tax, and if you follow that advice, you can save a significant amount of money.

I think you will see that this advice closely mirrors my post earlier in the thread.

[Doodles]

Originally Posted by Don Lucas

take it from me, no sales tax (except for prepared food) AND no income tax in NH.

I live here fora resaon! Live Free or Die!

No income tax on W-2 wages, but there is a tax on interest and dividend income. I'm quite sure about this since I'm a CPA and I have NH clients that pay income taxes unfortunately.

What is the Interest and Dividends Tax?

The devil is always in the details.

[hellosailor]

Doodles, didn't NH have some kind of dodge on the dividend & interest taxes, something about setting them up to pay into a limited liability corporation, and then having the sole owner take the money out as wages and salary instead? Or have they plugged that one?

Seems most peculiar to have no income tax, and then to sock what is effectively a 5% income tax on any retirees who might be living on interest & dividends from nest egg payments. No wonder folks retire to FL instead of NH.<G>

[markpierce]

Originally Posted by hellosailor

As I've said on forums before...some states send out UNWAIVABLE jury duty notices based on vehicle registrations. You register a motor vehicle in them, and you will be required to physically appear for jury duty every several years, with no exemptions. Other states don't.

There are all sorts of gotchas once you step up to play in the big leagues with the tax men. Odds are that even a tax attorney won't be familiar with all of them.

I was once disqualified (not exempted) for jury duty because I was called to a court whose jurisdiction did not include my residence. (I had recently moved.) Certainly, there are exceptions to "unwaivable."

I'm the kind of fellow (intelligent, etc.) where at least one of the opposing attorneys doesn't want me as a juror. Thus, a jury summons only results in one or two days of boredom at the court.

[JanetGroene]

Boat US has a wonderful site listing state by state how long you can stay there without paying sales tax. Ranges from 30 to 120 days depending on state. If the boat is trailerable, consider South Dakota. Understand you can spend one night there so you'll have an address (e.g. campground or motel receipt), sign a promise that you aren't a legal resident of another state, and walk off the next day with a boat title, SD driver's license, PO Box and your untaxed boat. I have no personal experience with this, so verify details for yourself.

[markpierce]

This letter gives one a clue as to the complexity of the issue.

http://www.boe.ca.gov/sutax/annotati...f/325.0220.pdf

[sww914]

Tax evasion is illegal, tax avoidance is perfectly legal. There are rules to follow, if you follow them as outlined here and you avoid paying the highest possible taxes, you've done nothing wrong, legally or morally.
I'm not lining up at the "pay more taxes here" door, that's for sure. I'd rather stand in the "pay what you're legally obligated to pay and no more" line.

[snort]

Originally Posted by sww914

Tax evasion is illegal, tax avoidance is perfectly legal. There are rules to follow, if you follow them as outlined here and you avoid paying the highest possible taxes, you've done nothing wrong, legally or morally.
I'm not lining up at the "pay more taxes here" door, that's for sure. I'd rather stand in the "pay what you're legally obligated to pay and no more" line.

Here, here!

[nes]

My thanks to all who have voice an opinion on this subject. My intent is to retire in about 3 years, and leave this state behind. I am tired of getting to pay coming and going. Sales tax on the boat would be reasonable if no property tax, property tax would be reasonable if no sales tax, but both? Not fair, and given a choice I will leave the state and stop paying the ~10% income tax, and ~10% sales tax as well. While I am sure that where ever I wind up, I will still have some tax bill to pay, I can tell you one thing for sure, it will be something less than I currently deal with on a regular basis here.
Where ever I wind up it will be after some serious research on several issues taxes near the top of the list. Part of the research will be by paid professionals as has been suggested before. As I said much earlier in this thread, I will not be buying a boat in this state. I also will not be living here, nor have a residence here, and as such intend to remove myself from having to pay this state anymore tax.

[savoir]

If you plan on leaving California then your options narrow enormously:

1. Buy a boat anywhere but CA, take it to Mexico and leave it there. A young man could to a lot worse than hang out on his floating condo in Cabo, Mazatlan, Cancun or wherever. You can peruse tax advices at your leisure and, in between sips of your margharita, select a new home. Tough gig.

2. Buy a CA boat via offshore purchase and when it returns put it directly into a boatyard until your bags are packed then launch and leave the state.

It might be fun to pay a chase boat to go out with you on the offshore purchase, step aboard after the deal is closed, wave bye bye and just keep sailing. That one definitely wins the style points.

[daddle]

Originally Posted by savoir

If you plan on leaving California then your options narrow enormously:

1. Buy a boat anywhere but CA, take it to Mexico and leave it there.

For a California residents it is not this simple. They must prove that the boat is not for use in the state. Complicated. See my link (far) above. I bought my boat in Singapore and yet must prove I did not buy the boat for use in California.

[savoir]

If you had taken the boat directly to Mexico and left it there for a while (variable depending on when this happened) you wouldn't have had to prove anything.

[Liam Wald]

If you don't want to pay your fair share of tax go somewhere that doesn't have tax and stay there.
We already have enough people in this country who don't pay their fair share of tax but want all the resources and services.

[savoir]

You mean people like John Kerry ?