NY State Sales Tax Question

[cburger]

Purchsed our boat in 2005, the vessel has been on the hard ever since with no mast or engine. I received a letter from the NY State sales Tax Commission today stating that they want sales tax to be paid on the vessel. I had been told that due to non use of the boat, (Not in water) that no tax should be paid until she is floated?????

[cburger]

I am potentially facing a large bill with this and could sure use some suggestions.

[Highlander40]

Well, sales tax is paid at the time of purchase.
In CT they collect it when you apply for registration. Which would imply that no tax is payable untill that time. The state is hard up for funds too.

You need a profesional opinion.

[CarlF]

I'm no expert on the issues of New York and states are different. Anyplace that the boat spends more than 90 days or so (it varies by state) curing the during the first six to 12 months after purchase will think they deserve the tax. The state where you have legal residence may claim the tax if the boat is in the state at all during this time (but each state has slightly different rules).

The fact that the boat was on the hard probably won't help. A fellow in Maine was just taxed on a boat that he brought to a Maine boatyard immediately after purchase for a major refit. Maine taxed him even though it was in the boatyard being rebuilt the whole time. He went to court and lost. As you can imagine, the Maine boatyards are a little upset about how this might impact their business.

If you paid the tax somewhere else, you are all set (you don't have to pay twice!). If you carefully documented that the boat was in Rhode Island (which has no tax on boats), you have a good argument. But it sounds like neither applies to you.

Again - if you want to fight this, you really need a New York tax expert not an internet forum full of guys like me with just enough knowledge to be dangerous.

Carl

[Pblais]

The fact that the boat was not in the water was not a reason you could use to avoid the tax. Best not to mess with tax people. Taxes are the only situation where you are guilty until you prove otherwise. They found you using a paper trail. It';s in a file and they know they have you. You might consult an attorney for legal advice but I would not blow them off. Tend to this problem ASAP.

In these days of economic problems NYS can afford to hire people to chase down unpaid sales tax and make out quite well with no political outfall. They may offer a deal where you pay up with minor penalty and interest. Contacting them would avoid whatever they can dream up next. Pleading stupid and offering to settle up is the cheap route. Don't worry - it's not personal. Sometimes it really is only about the money. This would one of those.

Taking the boat out of state won't fix it. They can come after you since they already know about it. They can do more to you and they don't have to take you into court to do it. One pencil pusher can make all the arrangements one way or another without leaving the office. Call on the phone, send an email or a letter to find out what the check needs to made out for and fill out a tax form. They can even be nice about helping you fill it out.

I don't mean to scare you but it happened to me but not with a boat and not in NY. I was also living in a different state when they sent the letter 4 years after I moved out of the state that wanted the money. I paid. They were happy.