Beating the Tax Man - East Coast

[scottv2004]

I’m real close to buying a new production boat over on the east coast. Depending on where I buy it, say like New Jersey for instance , there is an exemption on the sales tax as long as I remove the boat from the state and am not a resident of that state,

(form ST-10Vwhich notifies California that I bought a boat in NJ and didn’t pay a tax, California will levy a use tax only if I bring it in the state within 365 days of the sale). I plan on eventually keeping the boat in the Sea of Cortez, Mexico, once I get it there (no sales or use tax). My questions are several .

• If I keep the boat over on the east coast for a couple of years sailing it down the east coast and thru the Bahamas and Caribbean (on the move), would I be able to effectively dodge the tax man (sales or use tax) legally, before getting it to Mexico? I would only want to sail it one to two months at a time and then come home for one to two months each time. I could leave it in Grenada the first trip down.
• Do states such as NC, SC, FL, ect have a time limit for transients storing their boats thru the hurricanes season before sticking it to them (me) (the use tax).
• I know states such as RI do not have a sales or use tax on boats but I would prefer not to have to sail it all the way back up there just to beat the tax man!
• I would eventually either ship by truck or Dockwise or sail it around to Mexico.

Thanks in advance for any info and advice
Getting ready to begine the dream

Scott
Ps.. this is a great Cruisers Forum and I have gained much knowledge from it. Thanks!

[Vasco]

The best information you can get on this matter will be from a large reputable dealer. As you're buying a new boat they may be able to include all the equipment you need in the purchase price. In SC the maximum tax on a new boat was $300 when I bought mine a few years ago. If you're not a resident you don't even have to pay that. Again I would recommend talking to the dealer who has experience in these matters rather than relying on information from strangers, myself included.

[AnchorageGuy]

SC tax is max $300.00 then you pay personal property tax on it from that point on as long as it is registered in SC, they don't care where the owner lives. Every state on the eastern seaboard will want the boat registered after a period of time, usually about 90 days, and if you have not paid the tax somewhere else they will want it. You must have valid proof of ownership to take the boat out of the US and usually they want a USCG documentation. The Bahamas will accept state registration but you will need to register it AND that means paying the taxes. Stop trying to fight it, bight the bullet and pay the taxes. It is going to catch up to you sooner or later. Good advise to talk with your dealer, they can give you some advise since I would bet they have been ask before.

[scottv2004]

I just figured out how to do a search on the subject and found a wealth of info, sorry for the post!
scott

[wstu]

Well, don't stop posting, share what you learn with the rest of us. I too live in Calif and I too do not want to pay sales tax if I don't have to.

[Badsanta]

Scott what link did you use??? inquiring minds want to know

[scottv2004]

Use the search function above
In the keyword(s) type-- "taxes, property, sales, use"
Under that where it says "search posts" change that to "search titles only"

You should get 19 different topics with all the info one needs to begin their own research.

I've come to the conclusion that the only way to 'beat the tax man" for my purpose would be to keep the boat on the move if I purchase it on the east coast, not leaving it in any one location for any length of time, depending on each of the States laws (60-90 days for transients) until I could get it over to Mexico which would then be MY cruising grounds. This way I would be able to experience the east coast, the Bahamas and then the Caribbean before taking her to her eventual cruising grounds. No taxes in Mexico.

Scott

This is a great forum and I wanted to thank all of you whom are regular contributors.

[CarlF]

I have heard the following but am certainly no expert in this area. Could anyone confirm whether any of following are correct and would work for Scott?

1: He could document the vessel outside the US and obtain a foreign vessel cruising permit. A popular option is the Marshall Islands. This costs about $2000 the first year and less in subsequent years. The vessel has to leave the US for 15 days each year to renew the US permit. There are no US taxes due on foreign boats. Obviously, this only makes sense if he is buying a fairly expensive boat.

2: Florida ( and maybe some other states?) does not assess sales or use tax if the boat does not enter the state's waters for the first six months after purchase and the use of the boat in Florida was not contemplated at the time of purchase.

3. Just this year, many counties in South Carolina have voted to extend the time that boats can stay in the state and be exempt from the very high property taxes from 90 days to 180 days.

Carl

[bene505]

I looked into the NY laws. You only have to register your boat in NY if you are in NY waters for 90 consecutive days. Every couple months, go to CT or RI for a visit.

[camaraderie]

Bene...I believe the requirement for the 90 consecutive days exemption in NY is that you ARE registered in another state. If you are NOT registered in another state then you could be grabbed and forced to pay both registration and sales tax.

"
What to Register

Any boat that is motor-driven, partially or wholly; and used on public waterways.
What Not to Register

• Kayaks.

• Non-motorized canoes.

Exemptions

• Lifeboats.

• Any boat registered in another state and not kept in New York for more than 90 consecutive days.

• Commercial boats with either U.S. or foreign documentation.

• Boats racing in competition.
• From: New York Boat Registration, Licenses, Forms, & Information - DMV.ORG

[Chief Engineer]

Why should we encourage this....we pay our taxes...he should too....cb

[CarlF]

Tax evasion is completely unacceptable. Tax avoidance creates healthy competition. I like states to compete for the cruiser dollar. Rhode Island doesn't tax boats because they want to encourage the boat business in the state. It's worked.

When I was looking up the recent changes in SC concerning property tax I came upon a newspaper report of a county commissioner meeting :

"..Committee Chairman XXXX said he couldn't see a downside after speaking with the harbormaster of Harbour Town on Hilton Head Island, who was supportive, confirming that many boaters leave prematurely to avoid taxation and sharing a enticing factoid: Some of the bigger boats' owners will spend $10,000 a day while in town. "That's a lot of bourbon," quipped Council Vice Chairman YYYYYY."

I'm afraid my spending is a good bit short of the $10,000 mark but I'm glad that Hilton Head would like my business for longer than 90 days.

Carl

[AnchorageGuy]

Originally Posted by Chief Engineer

Why should we encourage this....we pay our taxes...he should too....cb

Yes we all pay taxes Chief, but you are probably the same as the rest of us and want to pay as little as possible.

[bene505]

I stand corrected. Cam is right. He's good, really good.

(Cam I tried to give you another rep point for a previously helpful post. It wouldn't let me.)

Originally Posted by camaraderie

Bene...I believe the requirement for the 90 consecutive days exemption in NY is that you ARE registered in another state. If you are NOT registered in another state then you could be grabbed and forced to pay both registration and sales tax.

"
What to Register

Any boat that is motor-driven, partially or wholly; and used on public waterways.
What Not to Register

• Kayaks.

• Non-motorized canoes.

Exemptions

• Lifeboats.

• Any boat registered in another state and not kept in New York for more than 90 consecutive days.

• Commercial boats with either U.S. or foreign documentation.

• Boats racing in competition.
• From: New York Boat Registration, Licenses, Forms, & Information - DMV.ORG

[Catamount]

Originally Posted by scottv2004

Use the search function above
I've come to the conclusion that the only way to 'beat the tax man" for my purpose would be to keep the boat on the move if I purchase it on the east coast, not leaving it in any one location for any length of time, depending on each of the States laws (60-90 days for transients) ...

I think you will still have to have the boat registered, somewhere. Documenting the boat with the USCG alone will likely not satisfy most of the states through which you transit -- they will expect registration in some state, if not their state. But just because you register the boat in some state like Rhode Island doesn't necessarily mean that you ever have to take the boat to that State's waters (so long as you abide by the 60 to 90 limit for transitting the waters of other states).