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hellosailor · 09-03-2014, 13:33

"Personal property between individuals is exempt . "
And that's actually a fairly well-known and legal means of legal tax avoidance.

Let's say you buy a boat "as is where is" for $30,000. You pay sales tax on the whole thing.

But, if the seller is willing to help out, you can offload all the exempt personal property. Remove the instruments, remove the sails, offload the anchor and chain and bimini and outboard from the dink. Strip off everything that increases the value of the bare hull.

Now you buy the bare hull, perhaps for $18,000, and only pay sales tax on that. The rest is legally paid for as a separate "personal property" sale, with separate payment, and then you are free to add it back on board the boat--or not.

In most cases probably not worth the fuss, but if you've got an old boat with $6,000 in two new first-rate sails...that's a fast way to reduce the taxable sale price of the boat by six grand.

All nice and legal.

The Garbone · 09-03-2014, 15:51

Don't forget the tender if one is included needs its own title and bill o sale.

Pay $1000 for the boat, the difference for the sails and gear.

I have never had the DMV folks here in Florida even look at a vehicle, vessel, trailer etc except 1 time in 1997. Just so happens a car we bought new in 1993 in Virginia and shipped overseas and back to Florida had a mistake on the title/ vin #. What a pain to get that fixed.

Doodles · 09-03-2014, 16:31

Quote:

Originally Posted by hellosailor

"Personal property between individuals is exempt . "
And that's actually a fairly well-known and legal means of legal tax avoidance.

Let's say you buy a boat "as is where is" for $30,000. You pay sales tax on the whole thing.

But, if the seller is willing to help out, you can offload all the exempt personal property. Remove the instruments, remove the sails, offload the anchor and chain and bimini and outboard from the dink. Strip off everything that increases the value of the bare hull.

Now you buy the bare hull, perhaps for $18,000, and only pay sales tax on that. The rest is legally paid for as a separate "personal property" sale, with separate payment, and then you are free to add it back on board the boat--or not.

In most cases probably not worth the fuss, but if you've got an old boat with $6,000 in two new first-rate sails...that's a fast way to reduce the taxable sale price of the boat by six grand.

All nice and legal.

I'm quite skeptical of this. Boats are personal property themselves so why wouldn't the entire boat be exempt then ?

Where does your quote come from?

denverd0n · 10-03-2014, 11:42

Quote:

Originally Posted by Doodles

Boats are personal property themselves so why wouldn't the entire boat be exempt then ?

Because Florida law specifically says that sales/use tax must be paid on vessels. But Hellosailor is correct, in that if the seller is willing to structure it as two separate sales--one for the vessel, and another one for all of the other personal property--then you can reduce your tax bill.

letsgetsailing3 · 10-03-2014, 11:59

While you're at it, you can just lie to the state about how much the sale was for. But a 6% tax isn't worth selling your ethics over.

smj · 10-03-2014, 12:02

Quote:

Originally Posted by letsgetsailing3

While you're at it, you can just lie to the state about how much the sale was for. But a 6% tax isn't worth selling your ethics over.

Or being charged for tax evasion!

tomfl · 10-03-2014, 13:14

Quote:

Originally Posted by denverd0n

Because Florida law specifically says that sales/use tax must be paid on vessels. But Hellosailor is correct, in that if the seller is willing to structure it as two separate sales--one for the vessel, and another one for all of the other personal property--then you can reduce your tax bill.

I would call Florida DOR and confirm that.

letsgetsailing3 · 10-03-2014, 13:51

Quote:

Originally Posted by Jerry Woodward

Just to make sure I understand correctly. If I buy a boat in Florida and intend to keep it in Florida, I will owe about 6% sales tax depending on the county. Since the boat will be USCG documented, I will not owe anything else, correct? So, if I buy a $100,000 boat, I will pay the state of FL $6,000 and be done with it? Will I owe them anything else on a yearly basis?

This is the original post. So the answer is yes, you'll pay sales tax once, and be done with it. You'll pay a registration fee, but that really isn't very much.

The question was about paying taxes, not how to weasel out of them.

smj · 10-03-2014, 13:57

Quote:

Originally Posted by letsgetsailing3

This is the original post. So the answer is yes, you'll pay sales tax once, and be done with it. You'll pay a registration fee, but that really isn't very much.

The question was about paying taxes, not how to weasel out of them.

I don't think it's about weaseling out of paying taxes more about doing your due diligence and not paying more than you have to.

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letsgetsailing3 · 10-03-2014, 14:02

Quote:

Originally Posted by smj

I don't think it's about weaseling out of paying taxes more about doing your due diligence and not paying more than you have to.

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No, pretending that every furnishing on the boat (like sails) is "private property", and assessing a hull value much lower than the price of the boat is definitely "weaseling". I doubt seriously if it would hold up if you explained to the tax authority that this is what you're doing.

This is like deducting the value of tires from an automobile purchase price.

smj · 10-03-2014, 14:06

Quote:

Originally Posted by letsgetsailing3

No, pretending that every furnishing on the boat (like sails) is "private property", and assessing a hull value much lower than the price of the boat is definitely "weaseling". I doubt seriously if it would hold up if you explained to the tax authority that this is what you're doing.

This is like deducting the value of tires from an automobile purchase price.

When I say due diligence I mean something that is obviously legal. Whether deducting "private property" is legal, I don't know. But if it is it may be a way to save a few thousand.

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hellosailor · 10-03-2014, 14:26

Boats are also generally titled property, which is not simple personal property. In some states you pay sales tax on toilet paper, but not on bread. It all depends on your state laws. Buy a new major appliance (air conditioner, refrigerator, washer) out of state and you usually owe use tax on it. Buy a used toaster oven online...not. There's a word for a person who doesn't understand the tax laws of the place they live in: RUBE.

As to lying about value...that's got nothing to do with how you split off the property. In most if not all states, the tax folks have the Blue Book. State a value that is less than book value, less than common or obviously justifiable, and they are usually allowed to charge you sales tax based on the book value--until you can and do prove otherwise.

So, "bare hull, no engine, no sails, no auxiliary equipment, as is where is" will be accepted way below book value. Where "30 year old Masterful Yacht" is going to get charged based on book value, as typically equipped in ordinary condition.

Yes, it really is that simple. And these days, anyone who has ever dealt with "tax value" on any type of goods, ought to know well enough that it is YOUR problem to substantiate the value, with photographs, estimates, contemporaneous sales reports, or a note from your mommy.

Which is also why you literally UNLOAD everything that is being split off, so you can show that it physically was not present in/on the boat, with your pictures. And no one has to lie about it.

But as I said, other than the sails? What has any significant value, and won't cost a fortune to uninstall, offload, reload, and reinstall? There are limits to what you can save, even if you stretch the values. Maybe if the mast is out for the winter, and you buy the hull but split off the mast and rigging...and if you're lucky, the engine was out as well. :-)