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Old 27-12-2009, 08:57   #1
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Can this Be Right? Dinghy Registration in New York . . .

Ok, so in late 2007 I bought an inflatable dinghy over ebay from an out of state seller.

Last year, I bought an outboard to use with it, and therefore had to register it in NY state.

At the time of registration, I paid the reg fee, and the NYS tax on the dinghy.

Now, I get a nasty letter from NYS claiming that I owe them interest and penalty from the purchase date (2007). Is this so?

It's not a tremendous amount of $$, just the cost of a dinner out, certainly not enough to hire a tax attourney, but what's the law on this? Is it tax on purchase date or tax on registration date?

I'm a bit worried, because there was also a lag of about 8 months from back when I purchased my sailboat and when I registered her, a few years ago. Now I'm worried that interest and penalty bill will soon arrive on my door.
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Old 27-12-2009, 09:28   #2
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Now, I get a nasty letter from NYS claiming that I owe them interest and penalty from the purchase date (2007). Is this so?
Strictly speaking yes you do owe the penalty and interest. Many states are going after unpaid use tax on items they can track down. Failure to pay within the window after date of purchase subjects you to this extra penalty. The fact that they are coming back after you paid it seems a bit odd since the process of paying it in the first place should have automtically detected the problem. They would have known then the date of purchase since you must have supplied it.

It won't cost you extra to call them and ask them to explain why.
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Old 27-12-2009, 10:33   #3
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I registered both at the DMV, no problems whatsoever.

Like I wrote though, what I'm really worried about is the sailboat. 8 months of interest and penalties there will hurt for sure. Plus, the longer it drags out, the more the interest will pile up. That was also an out of state purchase. I dunno. Do I hope for the best, or try and contact a tax auditor to nip this thing before it balloons?
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Old 27-12-2009, 11:03   #4
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You could always file a Certificate of Non-Operation and stop the yearly registration fee.

In my state, any vessel over 8 feet that is not human powered requires registration.

I think you owe the back penalty.
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Old 27-12-2009, 11:16   #5
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The other approach is to contact them and agree to pay the corrected amount that you should have paid and ask to have the penalties and interest waived. if you start off agreeing to that then they can collect some money quickly and move on. If that goes well then add the boat to the mix at that time with the same offer since it could come back again later on.

I had a use tax issue not boat related come up 5 years later once but not in NY. I had moved away from the state 3 years prior. The state had a special division that tracked down use tax collections. Just in case it comes up you need to know moving out of the state won't get you off the hook either if they decide to come after you down the road.

If you take the position that you did pay the use tax and were given every impression that is was fully paid and that this mistake is shared with the DMV for failure to compute the proper tax when you did come forward and agreed to pay it when you did.

You may stand good chance of asking them to accept any difference that you would have paid at the time you paid the DMV had it been disclosed to you what the correct amount was. That amount could include any penalties and interest due up to the time you did pay. This isn't a case where you attempted to dodge the taxes totally and now got caught.

Tax collectors can waive interest and penalties when the situation shows a case where it is warranted. They don't have the latitude to just forgive the whole tax. Offering to pay the corrected amount is not an unreasonable request. It also would be a good idea to pull together any records that can document the time of the sale and the exact amount you did pay and when you paid it just in case that becomes an issue. Being prepared before you call them would be advised.
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Old 27-12-2009, 12:25   #6
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Thanks for the responses. Good advice, and much appreciated.

I wonder though... If one purchased a boat out of state at the end of the boating season, then the boat sits until the following summer in the out of state yard, then the following summer the new owner brings the boat into his own state, does the new owner owe the use tax to his state from the time of purchase, or from the time the boat spends the appropriate number of days in his state?
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Old 27-12-2009, 12:35   #7
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HA! I can do better than that when it comes to NY state tracking you down for back fees. 2 years ago I went to renew my NC drivers License. They told me I could not renew till I paid a parking ticket I got in NY.......

In 1974!

At least they did not charge interest

SOBs will get you I swear!

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Old 26-01-2010, 09:37   #8
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fight bureaucracy at every opportunity.The best way is to starve them out by resisting all these taxes and "fees". N.Y. is going under just like Calif. and the U.S. dollar. Sorry, but it won't be pretty, but in the long run we may all be a little freer.
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Old 27-01-2010, 22:04   #9
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Accountant friend says NY State is getting horrible to work with,
worse than IRS...they are running out of money...it's only going
to get worse...suggest one comply or move out of state...
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Old 27-01-2010, 23:21   #10
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NY is one of three places on Earth where the facilities exist to do my work. The other two are landlocked.

Check sent.
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