The BIG question about the original post - WHAT tax are you describing?
- USE (sales tax due at the time of purchase)
- PROPERTY (due annually on all boats in California unless you pay a similar tax in another state)
I am currently involved in a similar California tax exercise.
only limits the need to pay USE tax (sales tax) - it has no impact on the payment of annual California property tax. It sounds like the OP's "a boat buck" is $1,000 which is most likely the property tax on a boat assessed at about $100,000. Sales tax due of $1,000 would be a purchase price
of about $12,000 which is not likely.
Looking at the Property Tax issue (ignore all this if you are talking about USE tax):
The key issue is your DOMICILE (not residence)
Domicile is a complicated legal concept
that allows California to claim taxing authority over many vehicles (vessels being one of them) that would seemingly be outside their authority. Domicile is where you have the closest personal attachment, where your heart, family
, and future intentions place you. If, for any subjective reason the tax folks decide your domicile is California you will be responsible for the tax.
It is your responsibility to PROVE to California Board of Equalization
that your domicile is not in California. There are 29-factors that determine domicile and any one or combination of them can be used to bring you under their taxing authority.
Some of the obvious factors that establish a domicile in California:
- registered to vote
- drivers license
- another vehicle registered in California
- own property
- spend more than 181 days a year in California
Another consideration is that IF you were a California resident and you leave California but do not establish a domicile in another US State then you are still a California resident and probably owe the tax. This happened to my brother who moved out of California (where he had lived for 30+ years) and purchased a boat. He then went sailing in Mexico and did not return to California. Years later he tried to purchase a home in Florida
and found that California had a lien against him because he did not pay sales and property tax on the boat.
WHY - because he kept his California drivers license
and left his IRA with his long term broker in California. Therefore he owed taxes
for the entire time he was out of the US and while on the boat in Florida
but not yet a Florida resident.
Other factors are less obvious but can be used against you. The great thing is that the hearing officers who will listen to your appeal to determine if the tax is due are employees of the taxing authority. We found out that we probably would owe the San Diego property tax if we turned in our California drives licenses, sold our California car and broke all other relations with California BUT kept our storage
unit in San Diego. That would show our domicile was still San Diego because we kept our heirlooms and valuables in the storage
unit and did not move them to another state.
The San Diego county assessor just sent me my annual property tax bill and here is what it says about proving I am no longer responsible for the tax:
- provide registration
and property tax bill from another state
- provide home residential tax bill or lease
from another state
- proof that boat is moored or docked in that other state
document showing address where boat is docked in another state
IF the boat is permanently removed from the US I must provide
- TIP or Port of Entry document for another country
- Receipts for 12-months slip fees
paid in another country
If I do not provide at least one of the above - I owe the tax to San Diego. I am not sure I believe the document because my brother had a TIP for his boat in Mexico and marina receipts for Mexico but he still owed the tax because the hearing officer said his domicile was clearly California due to his CA drivers license and IRA being in California. They also pointed to the fact his children
and ex-wife were in California as well as his credit union. Therefore he owed property tax for three-years even though he was never in California.
He DID NOT create a new domicile outside California so his domicile remained in California despite him not being in California.
Here are some links to help you understand:
California Offshore Delivery Law Firm - The Law Office of Weil & Associates - Lawyer - Law Firm - Attorney
Sales and Use Tax Annotations - 585.8000
- you owe the tax until you prove to Equalization
Board you don't
- they get to decide if your proof is sufficient