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Old 16-01-2010, 07:22   #1
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Sales Tax and Use Tax - What the...?

Okay, I thought Australia's tax system was up the creek until I started looking at the U.S.
In Australia there is no tax on used boats. But if I want to buy a boat in the U.S I have to navigate 51 different tax systems. Then each county has its own little thing happening. I can eliminate a few states like Nevada that don't have coastlines and maybe not Alaska. That still leaves plenty of web surfing to do.
I've worked through 3 states and I'm still not sure where I stand if I try to buy a boat there.
Florida- foreign buyers sales tax exemption for 180 days ?
California- no tax exemptions and 8% sales tax ?
Oregon- no sales tax (does everyone in California sell their boats in Oregon) ?
Someone help me out here. Which states allow sales tax exemptions for foreign buyers ?
And what the hell is surtax or discretionary surtax ?

Are sales tax and Use tax the same thing ?

Jim
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Old 16-01-2010, 09:54   #2
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Discretionary sales surtax is a sales tax imposed by most Florida counties. The surtax applies to most transactions subject to the sales or use tax. The tax is also called a local option county sales tax.

Sales tax is imposed on all retail sales, leases and rentals of most goods, as well as taxable services, purchased in the state.

Use Tax is the counterpart to the sales tax. It is applied when merchandise (tangible personal property) is purchased from outside the state, and imported into the state for use or consumption.
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Old 16-01-2010, 13:27   #3
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Clear as mud.

We bought a boat in California, got a fake receipt, registered it out in the desert where the DMV wouldn't know any better, then high tailed it out of town to Mexico.
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Old 16-01-2010, 14:48   #4
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Thanks Gord
So if I am exempt from sales tax then I am also exempt from Use Tax because the latter is just the former in disguise. And if I am exempt from Sales tax I am also exempt from the discretionary surtax or county sales tax because the latter are like a remora and attach themselves to the shark...er..I mean sales tax.

dana-tenacity
So, at 8+% sales tax I won't be buying a boat in California unless I want to play "Butch Cassidy and the Sundance Kid" out in the desert somewhere. You mean, every time you sell the same boat you pay 8% over and over again. How do you guys put up with this sh....?
Where am I ?
If I find a boat in Portland, Oregon, I'm laughing.
If I find a boat in California, well....it better be a bloody good buy.
If I buy a boat in Florida, I've got 180 days max.

Anybody know anything about the other southern and eastern states ?

Jim
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Old 16-01-2010, 17:34   #5
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jp, whether you are subject to tax when you buy the boat, will depend on were you are keeping it, how you are registering and titling it, and whether you are taking it out of that jurisdiction (and out of the US) promptly. If you get it out of state, out of the US, within 90 days of purchase, it probably will not be subject to any US taxes. But, you may still need to pay import duty or other fees when you get back to Oz--or wherever it is going.

And fwiw I think Florida charges you sales tax at 90 days, but doesn't require state registration until 180 (?183) days.

We put up with this stuff because, by and large, we find it less onerous than paying a whopping huge VAT up front, or some other form of tax. Boats don't change owners very often, and boaters usually don't buy a lot of expensive boats very often.
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Old 16-01-2010, 21:14   #6
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Hellosailor
Thanks for the reply. I have just read these two threads.
http://www.cruisersforum.com/forums/f76/sales-use-tax-enforcement-on-east-coast-8901.html

http://www.cruisersforum.com/forums/f57/changing-us-boat-to-foreign-reg-then-cruising-us-26999.html


I notice you posted many times on this topic. And after reading those threads I wouldn't want to put anybody through that again.

Quote:
And fwiw I think Florida charges you sales tax at 90 days, but doesn't require state registration until 180 (?183) days.
Exemption Extended for Large Boats Sold to Nonresidents
Effective July 1, 2009, a nonresident purchaser may purchase a boat of 5 net tons of admeasurement or larger (a qualified boat) exempt from tax and keep the qualified boat in Florida for a period of 180 days under certain conditions, rather than 90 days as previously allowed.

This is a recent change.....

I have a good understanding of the issues now. When I find a boat I will just ask about tax requirements in that particular state. And make a decision to proceed based on that. However, it is not an issue to take lightly.
BTW, when the Australian constitution was drawn up by the states 200 years ago. Only the federal government was given the power to levy taxes. Sure makes life simpler.

Jim
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Old 17-01-2010, 10:50   #7
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"BTW, when the Australian constitution was drawn up by the states 200 years ago. Only the federal government was given the power to levy taxes. "
AH, that's the difference. Most folks even in the US don't realize that we are on our second national government--the first was dissolved. And our States retained some rights as Sovereign States, including the rights to their own military forces and taxation. Much as our federal government has tried to make people think otherwise, for many years now.
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Old 18-01-2010, 22:04   #8
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- - Sales tax is simply the tax a local jurisdication wants when you purchase a boat or anything else. The local jurisdiction can set a basic sales tax and then exempt many items like food or clothes, etc. If you are not a resident of the local jurisdiction and remove the boat from the local jurisdiction then you will not have to pay the sales tax.
- - If you purchase a boat or other item in a different jurisdiction and then bring it into the local jurisdiction and "use" it there for a period of time (normally about 90 days - sometimes less, sometimes more) then the local jurisdiction want money from you for "using" the boat in their jurisdiction - - That is the "Use Tax/Fee". You may have avoided paying a sales tax by buying the boat in another State, but when you bring the boat back into your "home" State and register and keep it there - then they want money. Sales and Use taxes are two different animals - but sometimes they are the same sized animals.
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