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Old 01-07-2008, 19:40   #1
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State Sales Tax 22 yrs on

What's the deal with the state demanding sales tax 22 yrs after the ouchase was made out of state on a documented boat? And interest and penalties too. Is there a way to beat this or reduce it?
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Old 02-07-2008, 07:18   #2
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It may help if you can prove that the boat was kept out of the state for a while after it was purchased. In Calif it used to be 90 days and there was no tax, but you had to state something like "I did not purchase the boat with the intent of taking it to Calif."

I think the thing is negotiable, and the interest and penalties were their opening gambit. If the dollars are significant, you might be better off getting a profesional to help argue your case.
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Old 02-07-2008, 08:35   #3
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There is likely a statue of limitation on it... As noted above, if the dollars are significant, I'd get a pro.
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Old 02-07-2008, 09:18   #4
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Nobody yet asked the key question: Did you pay the sales tax when you bought the boat? Documentation is NOT a way to avoid state sales tax. Where you made the purchase really doesn't matter.

If you buy a car out of state you still owe sales tax. It varies a bit from state to state, but the basic rule is that if you had registered the boat instead of documenting it and owed tax, you owe tax on the documented boat.

If you owed the tax and didn't pay, the deal is pretty obvious, isn't it?

If you do owe the tax you really should have a local tax lawyer help negotiate down the interest and penalties. If you DON'T owe the tax than a lawyer is even more important. The total bill has to be rather large by now...
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Old 02-07-2008, 09:47   #5
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It's enormous. I don't recall the line item of sales tax when the boat was purchased. I assume the sellers do the tax collecting and paying. I suspect that this company didn't collect sales tax as I was from out of state and technically I might be liable for it. But who thinks to go pay money to the taxman when you buy something.

The internet purchases are similar as are many out of state purchases so this is more than confusing to a consumer.

I think i'll look for a tax lawyer.
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Old 02-07-2008, 10:38   #6
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jef, are they asking for SALES tax or USE tax?

If you mean NYS, the rules governing both should be available from state web sites, and the tax departments usually have toll-free numbers for assistance on things like finding where to read the codes--or mail/fax you a copy. The tax lawyer sounds like a good idea, if nothing else they can often negotiate down a settlement IF the claim is valid.

Sellers don't have anything to do with tax--unless they are dealers. If you are the "taxee" the state normally holds you liable for paying the taxes, regardless of who else is involved.

If there is a statute of limitations, or the locations/transactions just don't qualify for taxation, a simple letter stating the facts (and documenting them) may be enough to turn off the tax dogs. In NYS they are very fast to demand very loudly--but also very civil about following the rules, if you can document things and state your case quickly and politely.
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Old 02-07-2008, 14:01   #7
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Depends how drastic you want to be. If you are willing to no longer be a part of NY, you can always have been "visiting" for few months at your dock.

If you are well settled, I'd definitely find a tax atty.

The reason NY is all over you is because like many states, they're probably going broke and trying to wring every penny out.

I don't recall... did NY have a sales tax, or just a use tax back then on the boat?

Ask the atty about that. The atty could at least probably have most (if not all) of the penalties and interest removed from the bill.

Stuff like this makes me angry. It's nearly criminal for the state to be trying to collect on a boat that most likely wasn't even under any "use tax" or "sales tax" law way back when.

Best of luck dealing with the jerks.
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Old 02-07-2008, 14:39   #8
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If you are well settled, I'd definitely find a tax atty.
I agree if you can move than move and let the Tax Pricks come find you.
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Old 02-07-2008, 15:22   #9
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Funny how we all collectively seem to hate the taxman, yet he works for us, doing our direct bidding via elected officials. Just a curious human nature observation. I'm with ya though... screw the tax pricks. Where's my pitchfork....?
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Old 02-07-2008, 15:26   #10
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http://www.tax.state.ny.us/pdf/publi...pub774_208.pdf
probably covers the answers.
Sales Tax Publications
lists more publications that may also help.

"
The following are examples of when you, as a New York State resident,
must pay tax directly to the Tax Department. These examples apply
when the vendor from whom you purchased the property or service did
not collect New York State or local sales tax from you, or did not collect
the local tax using the rate for the locality in which you live.

-
You buy furniture in Massachusetts and you bring it back to New York State to use in your residence."
IOW, unless there is an exemption involved, if a NYS resident bought a boat in Tahiti and then stopped in NY for a few weeks on his way back around the world, that short stop in NY might toll the use tax requirement. Possibly due from the time of purchase, although a dual resident might successfully argue "Well, I had no intention of bringing it into NY, it was used elsewhere".

Jef, that tax lawyer might be a good thing unless you can document the boat as having been elsewhere all these years. I know some states waive the use tax if you've owned and operated a vehicle out of state for a certain period of time, but it looks like NYS doesn't do that. Ouch!

However, they also say:
"Example: You are a New York State resident and you buy and register
a boat in Florida in September. You use the boat in Florida
and then bring it to New York State and register the boat in
New York the following May. When you register the boat in
New York State, you may compute your tax based on the
lower of cost or fair market value of the boat."

So you may be able to argue the AMOUNT of the tax, based on a lower value of the boat when you finally did bring it back into NYS. Dunno if they'd compute back to the purchase date (assuming you were only a resident here) or if they'd value it at the entry date's value, but a tax lawyer should know that without looking it up.
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Old 02-07-2008, 15:32   #11
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Originally Posted by anotherT34C View Post
Funny how we all collectively seem to hate the taxman, yet he works for us, doing our direct bidding via elected officials. Just a curious human nature observation. I'm with ya though... screw the tax pricks. Where's my pitchfork....?
Can I suggest a book?

Please pick up "A People's History of the United States" by Howard Zinn.
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Old 02-07-2008, 15:39   #12
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Sean,

Don't make us work so hard! What does it say? Give us the "Cliff's Notes" summary.
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Old 02-07-2008, 15:47   #13
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Sean,

Don't make us work so hard! What does it say? Give us the "Cliff's Notes" summary.
Sorry, Hud.

It's mostly for anotherT34C. We have had some interesting talks on here and I thought he might benefit from the book. It has nothing to do with DefJef's tax situation. It's a thread drift. I'll be quiet now.
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Old 02-07-2008, 16:20   #14
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It appears, from this case (if you read into it...) the State of New York has a 3 year statute - whether to pay a refund, or to send notice of demand...

Thomas R. Flory

And here is a similar case:

Income Tax > I bought a documented Morgan 33 sailboat in 1985/ > - Just Answer

HOWEVER... You HAD to have filed an ST-130, otherwise there is no statute of limitations. Also noted on a search that Ct. has a 15 year statute. Texas, is 4 on boats...
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Old 02-07-2008, 17:32   #15
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Defjef,

Some years ago, NYS wanted a 'use' tax on my newly purchased boat. I had to prove the boat was never in NY State.
After I finally convinced them of this fact the following day Maryland was at my marina looking for the sales/use tax. I bit the bullet.

Good luck.

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