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Old 29-08-2008, 18:24   #1
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Sales Taxes - Proof of being out of state??

I almost regret starting this tread since I have already read a couple dealing with sales tax and it is obvious that it is unaminous "We all hate taxes and we really hate tax men!"

Anyway here is Situation:
I live in Missouri.
I want to by a boat in Florida
I can keep it anywhere (ie. Albama, Mississippi, LA, Tx, etc.)
Will use it only part time for two years then use it more often when retired.

Here is the question:
What is the cheapest way to buy the boat to minimize my tax liability?
IE. BUy boat and take it Some place and then return - if so where - and how do you prove I was there for X amount of days?

Or - Just bite the bullet and pay the almost $14K in taxes!!!!!
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Old 29-08-2008, 19:24   #2
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Suitcase full of tens and twenties?
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Old 29-08-2008, 23:43   #3
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I would call a tax consultant or CPA in the state where you want to buy the boat.
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Old 30-08-2008, 02:58   #4
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We bought and brought it to RI (where we live and no sales tax). Proof - if you're going to stay in a marina, you'll have your contract with them (just make sure you have them put the VIN # on it). If you plan to stay on a mooring, reciepts for your fuel will work (also need VIN # on receipt).

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Old 30-08-2008, 17:39   #5
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Florida will require you to pay sales tax unless you can prove you took it out of state withing the time period allowed. When I received their letter, I replied and proved I had moved the boat by supplying a fuel receipt from an out of state marina. Not difficult at all.

Some states have reasonable sales tax rates on boats, some don't so where you keep it may drive what you pay.

In NC we have a "property tax" on boats that you must pay regardless of where it is registered if you are an NC resident and the boat is in the state on Jan 1 each year. If it is out, and you can prove you have paid tax somewhere else you don't have to pay. We are either in or on the way to the Bahamas each year and consider our cruising permit to be our "out of state taxes". We have never been challenged on this.

I believe Texas has favorable taxes in most areas as compared to other states. You might take a look at keeping it there.

George
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Old 10-09-2008, 14:29   #6
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No sales tax in Oregon, but it's uphill from where you are and probably from where you want to be.

We plan on buying here and then shifting residency across the river in another year or two. Washington doesn't have a state income tax, which we're hoping works out for us down the road, err, rode?
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Old 10-09-2008, 18:11   #7
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"I can keep it anywhere (ie. Albama, Mississippi, LA, Tx, etc.)"
Sounds like just the Gulf states fit your purpose, that's a lot less than "anywhere".
You need to find ou tthe MO rules on sales tax and use tax, you may need to pay use tax plus penalties and interest dating back to the sale, if you ever bring the boat into your home state. Or not. Pretty much every state has their sales tax, use tax, boat registration, on the web there days and if you can't find it there--send 'em a letter in writing. Whatever you get, get in writing.

If you take the boat out of FL and register ti someplace else, odds are you will need a mailing address in that place. Then you may find yourself called up for jury duty or taxed as a resident of that state--based on your new address.

Check the sales, use, and property taxes, and vehicle registration requirements, for each state that you would consider keeping the boat in. Doublecheck the residency "requirements" that may impose on you. Then ask an accountant how that might affect your taxes and all.

Documenting things is easy. You have a log, which you will keep in a bound book. You'll have receipts, which you should be keeping. You just have to remember, there's a fine line between tax avoidance (which is legal) and tax evasion (which allows them to take your boat, freeze your bank account, and then ask you to explain).

When there's any doubt, or you can't get something in writing, just remember that tax men are wise to every trick in the book. The longer it takes them to catch on--the higher the penalties and interest they can charge.
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Old 10-09-2008, 20:51   #8
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Taxes

I recently when through the tax deal. I purchased my boat in Maryland, since I lived in Tenn. no sales tax was collected. I moved the boat to Arkansas. Arkansas does not title documented boats, therefore no sales tax. A few years later I moved the boat to Louisana. Louisana also does not title documented boats, therefore no sales tax. Unfortunately, I moved to soon and ran into Katrina. Moved back to Tenn. to repair. Three years later moved to Florida.

In Florida no matter how long you have owned the boat you will pay sales tax on sale to register in Florida, unless you can prove you registered in another state and paid tax in that state. I purchased my dingy over internet, was ten years old, had to pay Florida sales taxes to register.
You can register your boat in just about any state on line, pick the state with the lowest tax rate. Beware, states with low sales taxes usually have a personal property you will be hit with later.

Usually the states that do not have income tax go after the sales taxes more aggressively.
You know what they say about death and taxes.
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Old 13-09-2008, 20:07   #9
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I think you're wrong about Florida. If you have owned the boat for more than 6 months before bringing it to florida thay will not collect sales taxes.
You have said 'title a documented boat'. NO state can title a documented boat. The documentation IS the title and it is illegal to have 2 titles. Most states require REGISTRATION. Some of those states don't supply a sticker and when entering other states it is not apperent you are registerd anywhere which can cause issues in the new state.
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Old 13-09-2008, 20:59   #10
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I think the Florida exemption is for a boat you have owned more than xx months AND which has been registered or titled in another state. You can't just buy the boat, take it to sea, and bring it back in six months later. Even in FloriDUH, the tax men ain't that easy to get rid of.<G>
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Old 14-09-2008, 11:45   #11
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We have been working through the same questions. The unfortunate thing is that the officials in different states all give different interpretations. One option that we thought about for a short time is to incorporate in Delaware and then register the boat there. If you sail her to Delaware there is the additional advantage that it will save you a boatload on insurance (hurricanes).

In the end, we are keeping our boat on the hard in Fl and doing some repairs and upgrades. Early in the year we will put her in the water and sail the thorny path to Puerto Rico. Then we'll have to deal with Puerto Rican registration. It's hard to tell what we'll have to do to get the registration in PR.
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Old 14-09-2008, 11:55   #12
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Quote:
Originally Posted by gettinthere View Post
silver
I think you're wrong about Florida. If you have owned the boat for more than 6 months before bringing it to florida thay will not collect sales taxes.
You have said 'title a documented boat'. NO state can title a documented boat. The documentation IS the title and it is illegal to have 2 titles. Most states require REGISTRATION. Some of those states don't supply a sticker and when entering other states it is not apperent you are registerd anywhere which can cause issues in the new state.
We have a documented vessel with a Maryland title and registration. Most states that title and register a boat will do so on a documented vessel.
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Old 14-09-2008, 13:27   #13
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"One option that we thought about for a short time is to incorporate in Delaware and then register the boat there. "
Bear in mind that a corporation is, by definition, a business entity and that may require you to get BUSINESS insurance, i.e. a commercial policy.

The reason that all states give different "answers" is that the US is a republic of 50 States. A State, like France or Spain, makes its own regulations and answers to no one--except the Federation, and that only sometimes. Each State is supposed to do things differently in most ways.
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Old 15-09-2008, 04:06   #14
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If you are documented and titled in Maryland, you are violating federal law. This is a common problem in Maryland. Get the maryland officials to remove their title from the boat and ONLY register.
A boat with 2 titles can run into legal snags and can also be sold twice!

An LLC corp will usually not run into the type of issues a regular corp will. And most states will allow a 1 person LLC. But there are benefits to having 2 people own the LLC...do some homework if you are considering this option.
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Old 15-09-2008, 08:34   #15
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Do you buy a cruising boat and try to get out of paying for the sails? Do you own your boat and try to only find 'free' fuel? Taxes are just another cost of owning a boat. You can run but you can't hide and eventually the mere challenge of keeping 'the Man' at bay becomes to time consuming and tiring. Roll over, pay the tax, sleep well... it's too much money you say? Buy a cheaper boat!

You'll probably find more and more 'deals' that will save you far more money than what you'll pay in taxes in the next few months and years.
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