Cruisers Forum
 


Join CruisersForum Today

Reply
 
Thread Tools Rate Thread Display Modes
Old 18-02-2011, 12:39   #1
Registered User

Join Date: Mar 2010
Location: North Florida
Boat: 29 phoenix The Last Hour
Posts: 11
Confusion About 'Use Tax' and 'Sales Tax'

I'm purchasing a used sailboat in Connecticut, I live in Florida, I want to keep the boat in Maryland for 2years. The boat is a Documented vessel, what tax do I pay and to whom. Connecticut sales tax, Fl sales Tax, or Maryland "use tax". If I pay sales tax at the time of transaction, do I pay another tax in Maryland after 90 days? Please explain how this works, because it may change my plans of storing it in Maryland.
Steve
__________________

__________________
thelasthour is offline   Reply With Quote
Old 18-02-2011, 12:53   #2
Registered User
 
Cotemar's Avatar

Join Date: Dec 2007
Boat: FP, Helia 44 Evo
Posts: 5,717
You will only have to pay Maryland "use tax". As long as you take it out of CT before 60 days
__________________

__________________
Cotemar is offline   Reply With Quote
Old 18-02-2011, 13:13   #3
Senior Cruiser
 
Captain Bill's Avatar

Cruisers Forum Supporter

Join Date: Apr 2008
Location: On the boat
Boat: Endeavourcat Sailcat 44
Posts: 2,313
In most cases you'll recieve credit for your sales tax paid in another state against the use tax. Connecticut has a sales tax of 6% and maryland has a boat excise tax of 5% with credit for the sales tax in Connecticut so you would pay 6% to Connecticut and nothing to Maryland though you will have to provide proof of the slaes tax paid in Connecticut. No they will not refund you the 1% difference. Some states allow you to remove a vessel from a state without paying sales tax if you reside in another state and remove the boat from the state within a short period of time. Connecticut seems to be one of these states, so if you remove the boat from Connecticut immediately you will only owe the 5% excise tax in Maryland. Be careful, because if you don't report this to Maryland within 30 days they up the tax to 10% and tag on a 1.5% per month interest penalty. If you keep it in Maryland for 2 years you will not owe Florida anything as you have owned the boat in another state for more than 6 months. If you bring the boat to Florida for any reason in less than 6 months you will owe the balance of sales/use tax to Florida.
__________________
Captain Bill is offline   Reply With Quote
Old 18-02-2011, 15:18   #4
Registered User
 
S/V Illusion's Avatar

Join Date: Oct 2007
Location: Lakewood Ranch, FLORIDA
Boat: Alden 50, Sarasota, Florida
Posts: 1,692
As explained to me when we bought a boat in Connecticut and immediately took it out of state, I owed them a fortune in tax.

Ct is a use tax not to be confused .

Regardless, do you really want to solicit and depend upon tax advice from a bunch of strangers on the internet? Opinions fly around this board and usually differ, many are stated as fact when flat wrong and usually based upon nothing more than supposition.

All states have tax info readily available on their web sites. If you need to hear it, you can also speak directly with them. Even than, they sometimes make mistakes so double check but you certainly are better off there than here.
__________________
S/V Illusion is offline   Reply With Quote
Old 18-02-2011, 16:12   #5
Registered User

Join Date: Jul 2006
Posts: 3,949
I will second what Illusion said above--do your own research and go right to the source documents on the state Web sites. Be wary of the answers you get even from state officials--check the actual laws. And of course each state is different.
__________________
Kettlewell is offline   Reply With Quote
Old 18-02-2011, 16:57   #6
Registered User
 
callmecrazy's Avatar

Join Date: Jun 2010
Boat: Tartan 30
Posts: 1,548
Images: 1
I bought my boat in MD while residing in OH.
You can take your bill of sale (or whatever) to a MD DMV and apply for your MD title with no hassles (even while your boat is still in CT). You'll pay an "excise" tax, I think it's about 5%, maybe even less... And pay for the 2 year registration, which is like $20. That's it. You'll get the Title and registration in the mail.

I bought my boat in November and the DMV encouraged me to wait until January to register it because they don't pro-rate registrations.

Depending on how soon you'll be moving the boat down to MD, just get the 2011 MD sticker on the boat and it should be fine for whatever specified period of time CT allows (several months I'm sure).
No probs.
__________________
My Blog
callmecrazy is offline   Reply With Quote
Old 18-02-2011, 18:39   #7
Senior Cruiser
 
Captain Bill's Avatar

Cruisers Forum Supporter

Join Date: Apr 2008
Location: On the boat
Boat: Endeavourcat Sailcat 44
Posts: 2,313
We may in fact not know what were talking about, but here is a link to the form that must be filed with the Connecticut department of revenue for the sales tax exemption.

http://www.defender.com/ftp/cert-139.pdf
__________________
Captain Bill is offline   Reply With Quote
Old 18-02-2011, 18:50   #8
Registered User
 
callmecrazy's Avatar

Join Date: Jun 2010
Boat: Tartan 30
Posts: 1,548
Images: 1
Just read back through... Let me clarify.

Don't pay CT anything. Go directly to MD (because that is where you're keeping the boat) and get MD Title and Registration. FL needs to know nothing.

You can put your MD sticker on your boat, while in CT, then move the boat to MD within the "use tax" time limit (60 days according to this).

You do not need to hire a lawyer for this transaction.

MD will not charge you sales tax, but they will charge you an "excise" tax, which is lower than sales tax and 100 percent (so they say) goes directly to waterway management.
__________________
My Blog
callmecrazy is offline   Reply With Quote
Old 18-02-2011, 19:16   #9
Registered User
 
Cotemar's Avatar

Join Date: Dec 2007
Boat: FP, Helia 44 Evo
Posts: 5,717
callmecrazy,

Perfect summation.

thelasthour, sign the papers and lets go sailing.

Mark
__________________
Cotemar is offline   Reply With Quote
Old 18-02-2011, 19:30   #10
Senior Cruiser
 
Captain Bill's Avatar

Cruisers Forum Supporter

Join Date: Apr 2008
Location: On the boat
Boat: Endeavourcat Sailcat 44
Posts: 2,313
You probably want to be careful about filling out Connecticut's required paperwork or they could come after you anyway. I bought my boat from Florida and moved it immediately to NC. Florida had a similar form to that in Connecticut, plus I had to send them proof I had left the state within the required time period. The form was no big deal and it saved me from having to argue with the state of Florida.
__________________
Captain Bill is offline   Reply With Quote
Old 18-02-2011, 23:01   #11
Registered User

Join Date: Mar 2010
Location: North Florida
Boat: 29 phoenix The Last Hour
Posts: 11
Thanks to all who responded. Thanks for that link to the form Bill. I think I understand it now.
__________________
thelasthour is offline   Reply With Quote
Old 19-02-2011, 00:07   #12
Moderator Emeritus
 
FrankZ's Avatar

Cruisers Forum Supporter

Join Date: Sep 2006
Location: Chesapeake Bay
Boat: Bristol 35 Bellesa
Posts: 13,565
Images: 1
Maryland has a 5% excise tax.

Registration is $24.

Maryland DNR boat registration.
__________________
Sing to a sailor's courage, Sing while the elbows bend,
A ruby port your harbor, Raise three sheets to the wind.
......................-=Krynnish drinking song=-
FrankZ is offline   Reply With Quote
Old 22-02-2011, 11:04   #13
Registered User
 
denverd0n's Avatar

Join Date: Jun 2008
Location: Tampa, FL
Posts: 3,948
Images: 6
Re: Confusion About 'Use Tax' and 'Sales Tax'

Quote:
Originally Posted by Captain Bill View Post
If you keep it in Maryland for 2 years you will not owe Florida anything as you have owned the boat in another state for more than 6 months.
Not necessarily true. You must also use the boat in the other state. That is, if the evidence indicates that you bought the boat, and then simply stored it in another state for some period of time in an effort to avoid Florida taxes, but never really intended to use it anywhere but Florida, then you will indeed be assessed a use tax by Florida. Doesn't really matter how long ago you bought it.

So, if you buy a boat in another state, use it there, but bring it to Florida less than six months after the purchase date, Florida will tax it. If you buy a boat in another state, never use it there, and then bring it to Florida after any period of time, Florida will tax it. If you buy a boat in another state, use it there, and then bring it to Florida after more than six months has elapsed, Florida will NOT tax it.

Of course, not many people are going to buy a boat and then just let it sit for two years, but in case anyone else is reading this and thinking that they can avoid the Florida tax by just storing their boat outside the state for six months and a day... Nope, sorry, doesn't work that way. If the tax man figures out what you are doing you will be in very deep trouble.
__________________
denverd0n is offline   Reply With Quote
Old 22-02-2011, 11:49   #14
Registered User

Join Date: Sep 2010
Posts: 329
Send a message via Yahoo to joey69
Re: Confusion About 'Use Tax' and 'Sales Tax'

Just move to CT.
__________________
joey69 is offline   Reply With Quote
Old 09-03-2011, 19:39   #15
Registered User

Join Date: Mar 2011
Posts: 11
Re: Confusion About 'Use Tax' and 'Sales Tax'

i moved my documented vessel from IN to MD, where it has been for the past 11 years. MD will charge you a 5% excise tax on the purchase price or book valueof your vessel, whichever is greater. MD will not issue a DMV registration for a USCG documented vessel. The bi-annual sticker is $24.
__________________

__________________
sloop6312 is offline   Reply With Quote
Reply

Thread Tools
Display Modes Rate This Thread
Rate This Thread:

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Avoiding Sales Tax pdnervo Dollars & Cents 78 27-08-2013 07:38
Sales Tax and Use Tax - What the...? jpemb7 Dollars & Cents 7 18-01-2010 22:04
Sales Tax Sandero Dollars & Cents 5 24-04-2008 12:06
US Sales Tax and Mexico Colorado Dreamer Rules of the Road, Regulations & Red Tape 18 08-07-2007 19:39



Copyright 2002- Social Knowledge, LLC All Rights Reserved.

All times are GMT -7. The time now is 21:37.


Google+
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.
Social Knowledge Networks
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.

ShowCase vBulletin Plugins by Drive Thru Online, Inc.