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Old 01-04-2013, 13:37   #1
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Sales Tax on Purchase

I'm planning on buying a boat in NJ and using it in DE or MD. Do I have to pay sales tax in NJ? What other fees are there in DE/MD? Any insight appreciated.
Bob
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Old 01-04-2013, 13:53   #2
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Re: Sales Tax on Purchase

Generally, a sales tax is due on a purchase in the state where you purchase it, but some states allow an exemption if you move the boat out of the state shortly after purchase--like within 30 days. Each state is different. Here is one link to some information on NJ sales tax on boats.

A lot of states have a use tax, usually equivalent to the sales tax, that becomes due if you begin keeping a boat in that state for some certain period of time, usually 60 or 90 days. I know that Maryland has such a tax, and they will grant credit for a sales or use tax paid elsewhere. Maryland is fairly aggressive at collecting this tax if you do something like rent a boat slip for the season. I don't believe Delaware has either a sales or use tax on boats bought and kept in the state.

All of these states have various rules on registering the boat in the state, even if it is Coast Guard documented. There will be a registration fee.

It can get complicated. Here is one company that has articles on how this all works.
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Old 01-04-2013, 13:55   #3
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Re: Sales Tax on Purchase

If NJ is anything like NY you will not have to pay sales tax unless you bring it into NJ waters. Just went thru this with NY tax folks. They made me prove the boat I own never left Florida. They sent me a letter demanding payment plus penalties without ever checking if I brought it to NY. I was soooo happy to tell them that I will NEVER bring it to NY. You can check the requirements on the NJ tax site.
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Old 01-04-2013, 19:01   #4
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Re: Sales Tax on Purchase

bob, you will also need to take a boating safety course in order to legally operate any motor vessel in NJ waters, even if you are just passing through. FWIW. Only expensive if you get caught without one.
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Old 01-04-2013, 19:05   #5
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Re: Sales Tax on Purchase

A boating safety certificate from any state will cover you while in NJ waters--luckily!
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Old 01-04-2013, 20:27   #6
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Re: Sales Tax on Purchase

when I was looking at registration, states can look to make sure sales tax was paid first. I was looking at doing the registration in a different state than the one the sales tax was paid. If the sales tax paid was lower than in the registration state, then the difference would have been paid but if the tax paid was higher, then it was still good.

Everyone wants to get their piece out of you.
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Old 03-04-2013, 12:43   #7
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Re: Sales Tax on Purchase

U got that right!!!
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Old 03-04-2013, 12:54   #8
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Re: Sales Tax on Purchase

Quote:
when I was looking at registration, states can look to make sure sales tax was paid first. I was looking at doing the registration in a different state than the one the sales tax was paid. If the sales tax paid was lower than in the registration state, then the difference would have been paid but if the tax paid was higher, then it was still good.
Again, it's different in each state. Some states, like Florida, won't try to extract sales or use tax if you purchased the boat out of state while an out of state resident and owned it out of state for more than six months. Massachusetts has something similar, but I think you have to have owned it out of state for a year before entering Massachusetts waters.
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Old 03-04-2013, 12:57   #9
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FYI Maryland does not look kindly on DE registered boats residing in MD slips. Don't think that you can pull that off to avoid paying MD sales tax because they WILL come after you and the penalties are severe.
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