Sales Tax in Michigan

[carwash11147]

I am in the process of purchasing a used boat that is coast guard documented in Arizona. Does anyone know if I register this boat in Michigan will I have to pay state sales tax? How do I title this boat so it is in my name?

[GordMay]

Greetings and welcome aboard the CF, carwash.
Congratulations on your new (to you) boat!
Goto ➥ DNR - Boat Registration

[captain58sailin]

Welcome carwash11147.

[tallyhorob]

welcome and yes you will need to title it in MI and that means sales tax. And you will have to change the USGC doc's also.

[gettinthere]

If you keep it CG documented, the federal law says you cannot title the boat in any state...the documentation IS the title and you'd be double titling.

If you register the boat in Mi, you will be required to pay sales tax to Mi. Are you keeping the boat in Mi? Then you have 60 days to register in Mi. If you are a resident of Mi but not keeping the boat in Mi you do not have to register in Mi

Mi will give you MC numbers regardless, but if you are CG doc you do not put those numbers on the boat, only the registration sticker

[MC01]

Welcome. You can choose to keep it as a documented boat, or you can have it titled in MI instead. Either way, if you intend to keep it in MI, you'll need to register it there and pay the MI tax. If one attempts to avoid this, it's a matter of time until the omission is found, then the new owner is not only taxed but also penalized.

[Palarran]

Great question, and relative to me also. I just purchased a boat registered in the Marshall Islands. I was looking at forming a Delaware Corporation and documenting the boat there. But, the more I've thought about it, if I never bring the boat back to Michigan, do I need to pay sales tax? Can I get a cruising permit in Florida?

[gettinthere]

If you are not bringing the boat to Mi for more than 60 days you don't need to register in Mi, even if you are resident of Mi.

Florida is pretty aggressive about enforcement. If you haven't paid sales tax elsewhere, they will try to ding you for 6%.

The exception to that is that if you bought/registered the boat elsewhere, with no intention of bringing the boat to Fl and stayed in that state for minimum 6 months, you can come to Fl and register there without the tax liability. I think they have a nose for DE registrations. Try TX or NH instead. Again, Fl is pretty aggressive about enforcement. If they see a NH reg and a Mi Dr Lic, they will likely dig deeper.

[SariTimur]

I do not wish to hijack this thread but it brings up some topics that are going to become an issue with us as well. We are Singapore registered and I am from Michigan my wife is Singaporean but has an immigrant visa. We are getting reading to sail back to the USA via Japan and Alaska and hope to work in the States for a while in various places to top up the kitty and keep moving. I want to sail the Great Lakes and since I am from S.W. Michigan probably will mean a winter over or a lot of quick moving. We do not wish to de register the boat from Singapore because we intend to head back that way and cross the Pacific the right way the second time! We have heard California is touchy about the boat being in state for more than 60 days but didn't know others were. Are we going to have to pay sales tax in every state we visit for more than 60 days? If so it means we will have to earn a lot more at our temp jobs than we expected. It also seems like a pretty stiff penalty to put on boats that travel. Any advice is welcome. If we do not want to hijack this thread anymore you can PM me.

Cheers

Mark

[Palarran]

When you enter the US the first time you will need to get a cruising permit. It last for one year and after that you need to leave the US for two weeks. After two weeks, you can re-enter the country and continue your cruise.

If your in the Great Lakes area, you will need to use Canada as your exit, re-enter point. Just figure out the timing and it should be easy. Canada, Mexico, Bahamas, Bermuda are the usual spots to dash to for the two week exit.

I've decided to form a BVI company and flag as BVI. Tax avoidance is first of all, legal, and second of all, smart.

[gettinthere]

All states have reciprocity. That means that once you pay tax, you show proof of the tax and you won't have to pay again...except that if you pay 4% in the first state and state #2 is 6% you would pay the 2% difference.

You need to research Canada/Ontario. They used to have a policy that if the boat was left in storage and had Canadians doing work on the boat, it could be left for 6 months duty free. So you leave the boat in storage in Ontario over the winter and have some minor work done like polishing the hull, changing oil, filters, etc. Your winter stay in Canada also gets you the 2 week reset on your cruising permit. You definitely need to talk to Canada customs & immigration on all this.

Most states have 60 or 90 day limits before you need to REGISTER. Registration MAY lead to taxation.

[SariTimur]

Thanks Guys it sounds like it is possible but will need to be careful.

Cheers

[Saaabb]

[QUOTE=gettinthere;412870]If you are not bringing the boat to Mi for more than 60 days you don't need to register in Mi, even if you are resident of Mi.

Gettingthere! After 7 years a question

Do you know if the 60 days is consecutive or if It is the total of days in Michigan per year, means if you exit Michigan you reset the 60 days?

Thanks

[Diesel Bill]

I bought my boat in Mexico and kept it there for 6 months while fitting it out for the trip north to San Pedro, Ca. I thought after 6 months no tax due. Found out last month they changed it to 12 months so I got nailed for 9 % rate sales tax for Los Angeles. Ouch.

P.S. Welcome carwash to the forum. The man always gets his share.